Non-Occupancy Charges in Maharashtra Housing Societies: The 10% Cap Under Rule 106C-12(3), Explained

A committee bills 25% "non-occupancy," and nobody can point to where that number comes from

A member lets out his flat on leave and license. The society's maintenance bill that month adds a line: "Non-occupancy charges — 25% of total maintenance." The member asks for the bye-law. The secretary says "this is what every society in the area charges." The treasurer says the accountant fixed the rate years ago. Nobody in the room can actually name a provision.

This is one of the most common billing disputes in Maharashtra housing societies, and it survives because two different numbers have circulated for years — a widely quoted "10%" tied to a government circular, and a much higher figure many committees simply inherited from the previous committee. Neither the circular nor the inherited number is where the binding answer actually sits.

What a non-occupancy charge is, and when it applies

Bye-law 65 lists non-occupancy charges among the items a society may collect from members (bye-law 65(xi), described in Marathi as भोगवटेतर शुल्क). It is a charge levied when a flat is not occupied by the member or the member's family — typically because the member has let it out, given it on leave-and-license, or otherwise parted with possession under bye-law 43.

The charge does not apply merely because the member personally lives elsewhere. If the member's own family — spouse, parents, children — occupies the flat, no non-occupancy charge is due. The charge is triggered only when the flat is occupied by someone outside the member's family, such as a tenant or licensee.

Why the 2014 bye-laws left the rate unclear

Bye-law 67(a)(x) — the clause that is supposed to fix how much a society may charge — reads: "Non-occupancy charges: At the rate fixed under the bye-law No. 43(b)(iii)." That is a dead cross-reference. Bye-law 43, as adopted, deals only with a member's obligation to intimate subletting and to give the society eight days' notice before letting the flat (bye-law 43(1) and 43(2)) — it carries no rate-fixing sub-clause at all, let alone a "(b)(iii)." The 2014 Model Bye-laws, in other words, never actually stated a percentage for non-occupancy charges; they pointed to a clause that does not exist.

This gap is exactly why a widely quoted figure — a government order said to date from August 2001, fixing non-occupancy charges at 10% — has been repeated by committees, managing agents and even some auditors for two decades without anyone checking it. This portal's own knowledge base flags that circular as unverified, and it should not be relied on or cited as the source of the 10% figure.

The number that actually governs today

What does bind a society today is Rule 106C-12(3) of the 2026 amendment rules. The apportionment table under this rule fixes, in terms, that non-occupancy charges are to be levied at 10% of service charges — not 10% of the full maintenance bill, and not any higher figure a committee may have inherited.

This distinction matters in practice. "Service charges" under bye-law 66 is a defined, narrower component of the maintenance bill — staff salaries, printing and postage, travelling allowance, sitting fees, audit fees, common electricity charges and similar items — not the sinking fund contribution, repair fund contribution, property tax, water charges, insurance, or loan repayment components that also appear on a typical bill. A society that calculates 10%, or worse 25%, on the entire monthly bill is charging on the wrong base, in addition to charging at the wrong rate.

What your committee should do

1. 1Pull the last twelve months of bills for every let-out flat and identify what base the non-occupancy charge was calculated on.
2. 2Separate service charges from the rest of the bill. Rule 106C-12(2) lists what counts as service charges; anything outside that list (sinking fund, repair fund, insurance, property tax, water) must be excluded from the non-occupancy calculation.
3. 3Recompute at 10% of service charges only, per Rule 106C-12(3), and stop citing any 2001 government order as the source — it is not a verified provision and the 2026 rules now state the figure directly.
4. 4Check occupancy status before billing. If a member's own family occupies the flat, remove the charge entirely; it is not a rate reduction, it is a full exemption.
5. 5Pass a general body resolution recording the corrected 10%-of-service-charges basis, so the figure is minuted and not left to whatever the previous committee did.
6. 6Do not confuse this with the interest cap. Rule 106C-12(3) separately caps interest on defaulted charges at 12% simple interest per annum, fixed by the general body, not the managing committee — a different item on the same table, often mixed up with the non-occupancy line.
7. 7Refund or adjust any overcharge identified, and communicate the corrected basis to affected members in writing before the next billing cycle.

Getting this right protects the society as much as the member — an over-collected non-occupancy charge is a liability on the books, and a member who successfully disputes it before the Co-operative Court or the Registrar can force a refund with interest, plus draw scrutiny to every other line on the bill.