Question from Ajay Nannaware

Lot of confusions and misleading information are seen about Non-occupancy charges.

For members who given their flats on rent – is it mandatory for Society to collect the Non-Occupancy charges  from such members?

What if society decides not to collect the Non-occupancy charges? Is there any action taken on society for not collecting the Non-occupancy charges?

Also, in Byelaws 43(2) (d)  “Non-occupancy charges shall not be levied to the flat purchaser who is intending to become a member and who submits the documentary evidence” what does this mean?

I see below note by Society

Levy of “Non-Occupancy Charges” are Mandatory and Compulsory.  IF the Mg. Committee (MC)  fails to levy the Non-Occupancy Charges to the member, THEN all the MC has to jointly compensate the CHS, by paying the same from their own pockets, for non-compliance and violation of bye-law no’s. 43(1) & 43(2) & 20

Is this valid/true? Because I did not see such note mentioned in byelaws

I C Naik

The management committee  of Ajay Nannaware’s housing society is unique.

It’s office bearers are very conscious of loss to their housing society on any count.. They are aware that the Committee members will have to bear themselves any such loss on account of their failure  in their duty. In that they believe “Levy of “Non-Occupancy Charges” are Mandatory and Compulsory”  Unfortunately the model bye-law  lacks clarity [Bye Law No 43(2)(iii)( c ) in Model 2009]. As a consequence the management committee has been led to hold an incorrect view.

In view of diverse practice of levying NOC the Government had issed  an Order U/S 79A. This order was upheld by High Court.See page 69 on following link

https://sahakarayukta.maharashtra.gov.in/site/upload/documents/Housing%20Manual%202012%20English.pdf

A few conditions are as under:

Non-Occupancy charges shall not exceed 10% of service charges. (excluding Municipal Corporation/ Municipal Taxes).

“All  the  housing  Societies  in  the  state  shall  take  action  to  make  proper amendment as above their bye-laws/ sub-rules. However, even if no amendment as above  has  been  made,  non  occupancy charges  should  not  be  charged  more  than maximum limit mentioned in this order from the date of this order.

Bye Law No 69 (a)(x) requires the housing society to charge “Non-occupancy charges : At the rate fixed under the bye-laws-law No. 43(2) (iii)( c ).

Bye Law No 43(2)(iii)( c ) reads as under: he shall pay non-occupancy charges to society. Non-occupancy charges shall be charged in accordance with the circular issued by the Department of Co-operation Government of Maharashtra from time to time.

So where do we see the view held by the management committee as correct.

The 79A ORDER lays down a ceiling of 10%  of service charges. (excluding Municipal Corporation/ Municipal Taxes), but it does not mean that it is fixed at that level. Exact rate lower than 10% is what it contemplates; so how it is to be fixed. Needs to be ascertained.

Bye Law No 69 shifts the onus to Bye Law No 43(2) (iii)( c ). This bye-law reiterates the clause of the 79A ORDER. So where do we go?

The management committee comes back to square one.

The overall Scheme of fixing charges of housing society is in Chapter VIII. LEVY  OF  CHARGES OF THE SOCIETY Bye Law No 67-69. The bye-laws are binding on members,the management committee and general body meeting also. The bye-laws have not laid down the Scheme properly. There is a room for debate but 10% is neither the rate fixed by Government nor it says NOC is compulsory. Suppose a large majority of members have purchased the flats to sub-let and make some money while investment appreciates. This is being encouraged by the Government as is evident in Bye Law No 60 (Latest Model 2014): Individual Member of the Society may hold more than one flat, in the building/s of the Society in his name or in the name of any of the Members of his family subject to the conditions as provided under the provisions of Section 6 of the “Act”.

In fact Bye Law No 43 of this latest Model does not mention NOC at all. But 79A ORDER allows housing societies to levy NOC up to 10% irrespective of bye-laws.

In an example of Investors’ Housing society, the members by resolution in general body meeting decide to leavy “0%” NOC it is still with in 79A ORDER ceiling.

Answers to Questions of  Nannaware, Ajay PUNE:

1.For members who given their flats on rent – is it mandatory for Society to collect the Non-Occupancy charges  from such members? Ans: NO

2.What if society decides not to collect the Non-occupancy charges? ANS: Society Looses revenue up to 10% of Service charges for every flat sub-let.

3.Is there any action taken on society for not collecting the Non-occupancy charges? Ans: No

Last Question: No body has so far spotted this provision in bye-laws 2009.

What is the meaning of provision in  Byelaw No 43(2) (d)  “Non-occupancy charges shall not be levied to the flat purchaser who is intending to become a member and who submits the documentary evidence”

Basic of  NOC is where a  person having occupancy right does not occupy and let somebody else occupy. In this Clause (d) there are many contradictions as such it does not have a practical application.

It is visualized that (i) there is a purchaser of a flat waiting to become the member. (ii) So as of now he does not have “an occupancy right: question of him letting some-one occupy the flat does not arise. One possibility is that the flat having been purchased already it is still occupied by the member who sold it. This transfer took place in violation of provisions of sub-section (2)(a) of Section 29 of the MCS Act 1960  

(2) A member shall not transfer any share held by him or his interest in the capital or property of any society, or any part thereof, unless (a) he has held such share or interest for not less than one year;

 

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