Non-Occupancy Charges
Homeowner often purchase a property and lease it to others. After all, it is a good way to earn extra money. However, if the property under lease belongs to a housing society then you will have to pay non occupancy charges to that housing society. Read on to know more about non-occupancy charges.
What are non-occupancy charges?
Non-occupancy charges are levied when the ownership of the specific property is transferred by the society/developer to the owner; however, the unit remains unoccupied. This is applicable only when the unit is sub-let and does not apply when the unit is occupied by the spouse or family members like parents.
Who pays the non-occupancy charges?
The owner of the flat, who is also a member of the society, is liable to pay for the non-occupancy charges. However, if the tenant and landlord have mutually agreed and mentioned in the tenancy agreement, the tenant may be made liable for paying the non-occupancy charges.
According to the by-laws, non-occupancy charges are levied if the flat is left vacant after possession or if the landlord or their immediate family members do not use the flat.
In which cases are the non-occupancy charges not applicable?
The non-occupancy charges are not applicable in the below-mentioned scenarios:
- The flat is being used by the owner himself for residential purposes.
- The flat is being used by the owner’s close family member.
- The flat is vacant/ unoccupied.
How are the non-occupancy charges calculated?
As mentioned above, the non-occupancy charge cannot be more than 10 % of the service charge. Service charges are included in your maintenance bill. Services charges typically include sitting fees for committee members, allowances for staff, common electricity usage and outgoings from society office.
Services charges do not include property tax, maintenance, repair and water charges. For example, if your housing society’s service charge is Rs. 5000 per month, your monthly non-occupancy fee would be Rs. 500 (10 % of Rs. 5000).
What are Service Charges?
Service charges pertaining to the non-occupancy charges relate to salaries or allowances to employees of the society, fees to committee members, stationary charges, an overhead cost borne by the society and common electricity charges, together form the non-occupancy charges.
FAQs on Non-Occupancy Charges
- What are the consequences of not paying non-occupancy charges?
A reminder notice is sent by the housing society if the landlord of the flat fails to pay the non-occupancies charges. If the non-payment continues for a certain period of time, the landlord can be declared as a defaulter by the housing society. Society will not issue a ‘no-dues’ certificate.
- Who is liable to pay non-occupancy charges?
The flat owner (member of the society) is liable to pay non-occupancy charges.
- Are non-occupancy charges taxable?
No, non-occupancy charges are not taxable.
- Are transfer charges taxable?
No, transfer charges are not taxable.
- What do you mean by non-occupancy charges?
In India, non-occupancy charges are the fees payable to the society when the proprietor of a property does not occupy the property but leases it to other parties.
- What is the circular regarding non-occupancy charges in Maharashtra?
In accordance with Section 79A of Maharashtra Cooperative Society Act, 1960, non-occupancy fees may not exceed 10% of a cooperative society's maintenance charge.
- What is the Supreme court circular on non-occupancy charges?
The society can charge 10% of the service fee as non-occupancy charges as per Supreme court circular.
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