Introduction
A recent directive has clarified that housing societies cannot impose additional fees on members who rent out their flats, apart from the legally permitted non-occupancy charges. The order reinforces that societies must strictly adhere to government regulations and cannot introduce extra levies under any other heads.

Key Highlights

• No Excess Charges Allowed

  • Housing societies cannot collect “development funds” or any other additional fees from landlords who rent out their flats.

  • Only statutory non-occupancy charges, capped by government circulars, are allowed.

• Legal Framework

  • As per the Model Bye-Laws of Cooperative Housing Societies, non-occupancy charges must be levied strictly in accordance with the circulars issued by the state’s Department of Co-operation.

  • A government resolution issued in August 2001 prohibits societies from charging more than 10% of service charges towards non-occupancy fees.

  • AGM resolutions cannot override these government circulars.

What Charges Can Housing Societies Collect? (Government Approved)

? Permissible Charges:

1. Non-Occupancy Charges (NOC) – Maximum 10% of monthly service charges when a flat is rented.

2. Service/Maintenance Charges – For upkeep of common areas, electricity, staff salaries, insurance, etc.

3. Municipal Taxes/Property Tax – Proportionate to each member’s share.

4. Water Charges – Either equally shared or based on meter usage.

5. Sinking Fund & Repairs Fund – As mandated under bye-laws, applicable to all members.

? Not Permissible:

• Arbitrary levies such as “building development fund,” “tenant charges,” or “extra contributions” linked to renting.

• AGM-approved resolutions to collect such charges do not have legal standing.

Consequences of Misconduct by Housing Societies

Housing societies that violate these rules or collect excess charges may face:

1. Refund Orders from Registrar – Excess amounts collected must be refunded or adjusted in maintenance bills.

2. Fines & Penalties – Imposed under the Maharashtra Co-operative Societies (MCS) Act, 1960.

3. Committee Disqualification/Dissolution – Office-bearers can be disqualified or the managing committee dissolved, with an administrator appointed.

4. Audit & Recovery – Statutory audits can flag illegal charges, triggering recovery proceedings.

5. Consumer Court Action – Members can file complaints for harassment or deficiency in service, leading to compensation and damages.

6. Criminal Liability – In cases of fraud or misappropriation, society office-bearers may face police action or prosecution.

What This Means for Homeowners

• Flat owners renting out their units are liable to pay only non-occupancy charges plus standard maintenance and taxes.

• Any additional levy beyond these is not legally valid.

• Members can seek refunds or file complaints with the registrar, consumer courts, or even initiate legal proceedings in case of repeated misconduct.

Expert Opinion – Sandeep Sadh, Mumbai Property Exchange

“This clarification is crucial for thousands of landlords across Mumbai and Maharashtra. Many housing societies attempt to impose extra charges on rented flats, which is not allowed under law. This regulation ensures fairness, protects homebuyers and landlords from arbitrary fees, and promotes greater transparency in housing society management. If societies fail to comply, they not only risk refund orders but also face penalties, committee disqualification, and even consumer or criminal proceedings.”

Closing
With this directive, the government has made it clear that only statutory non-occupancy charges and regular maintenance fees are valid. The move is expected to reduce disputes between members and housing societies while safeguarding owners’ rights and ensuring compliance with cooperative housing laws. For societies, it’s a reminder that misconduct carries real consequences, while for homeowners, it’s a reassurance of transparency and fairness.