Housing Societies Cannot Charge Extra Fees on Rented Flats Beyond Non-Occupancy Charges

A recent directive has established that housing societies are prohibited from charging additional fees to members who rent out their flats, beyond the legally sanctioned non-occupancy charges. This clarification aims to ensure that societies comply with existing government regulations and do not impose extra levies under any other categories.

No Excess Charges Allowed

The directive explicitly states that housing societies cannot collect fees labeled as “development funds” or any other additional charges from landlords renting their properties. The only permissible charge in this context is the statutory non-occupancy charge, which is capped by government circulars.

Legal Framework

According to the Model Bye-Laws of Cooperative Housing Societies, non-occupancy charges must be levied in strict accordance with the guidelines set forth by the state’s Department of Co-operation. A government resolution from August 2001 clearly prohibits societies from charging more than 10% of the service charges as non-occupancy fees. Importantly, resolutions passed in Annual General Meetings (AGMs) cannot override these government circulars, ensuring that the established legal framework is upheld.

What Charges Can Housing Societies Collect?

Housing societies are allowed to collect certain charges that are government-approved, which include:

• Non-Occupancy Charges (NOC): A maximum of 10% of monthly service charges when a flat is rented out.
• Service/Maintenance Charges: These cover the upkeep of common areas, electricity, staff salaries, insurance, and other operational costs.
• Municipal Taxes/Property Tax: These are charged proportionately based on each member’s share.
• Water Charges: These can either be equally shared among members or based on actual meter usage.
• Sinking Fund & Repairs Fund: These are applicable to all members as mandated under the bye-laws.

Implications for Landlords and Tenants

This directive is significant for both landlords and tenants. Landlords can now be assured that they will not face unexpected additional fees from their housing societies, which can help in better financial planning. For tenants, this means that the costs associated with renting a flat remain predictable, as housing societies are limited to the charges specified by law.

In summary, housing societies must adhere to the legal framework regarding charges imposed on rented flats, ensuring transparency and fairness in the rental process. Landlords should remain informed about their rights under these regulations to avoid any unlawful charges from their societies.