What a Housing Society Can Legally Charge a Member in Maharashtra — And What It Cannot

The transfer file is complete — share certificate, registered agreement, resignation form, transfer fee of Rs 500. The secretary tells the outgoing member there is one more cheque to write: Rs 3,00,000, "building fund contribution," before the papers move. Nobody in the room can point to the bye-law that allows it. Nobody can point to one that forbids it either — until they open Bye-law 38.

The charges a society may raise — a closed list

Bye-law 65 lists seventeen heads on which a society may collect from members: property tax, water charges, common electricity, contribution to the repairs and maintenance fund, lift repair and running charges, sinking fund contribution, service charges, car parking charges, interest on defaulted charges, loan instalment and interest, non-occupancy charges, insurance charges, lease rent, non-agricultural tax, education and training fund, election fund — and, the only open item, "any other charges" the general body approves under item (xvii), and even that must not contradict the Act, the Rules or the society's own bye-laws.

The 2026 amendment rules restate the same discipline in Rule 106C-12(1): thirteen heads, (a) to (l), plus item (m) for anything else the general body approves, "provided they do not contradict the Act and Rules." Two different documents, one principle — a committee cannot invent a charge because it sounds reasonable. It needs a bye-law, or a general body resolution that traces to one.

Who pays how much, for what

Bye-law 67(a) fixes how each of those heads is split:

• •Property tax: as fixed by the local authority
• •Water charges: by the number and size of inlets in each flat
• •Repairs and maintenance: at the rate the general body fixes, subject to a minimum of 0.75% per annum of the flat's construction cost
• •Lift running and maintenance: equally among members of the building that has the lift, whether or not they use it
• •Sinking fund: at the rate fixed under bye-law 13(c) — a minimum of 0.25% per annum of construction cost
• •Service charges: equally by number of flats
• •Interest on delayed payment: at the rate fixed under bye-law 71

Bye-law 71 is where committees most often get the number wrong. It sets simple interest at 21% per annum on outstanding dues — a ceiling, since the general body may fix a lower rate, but most committees treat it as the default rather than the cap. Rule 106C-12(3) of the 2026 amendment rules cuts that ceiling to 12% simple interest per annum. A committee still charging 21% on today's arrears, because that is what the notice board has always said, is charging almost double what the current rules allow.

Non-occupancy charges: a fixed percentage, not a number the committee likes

Rule 106C-12(3) fixes non-occupancy charges at exactly 10% of the service charge — not 10% of the maintenance bill, not a flat sum per month, and not a figure the managing committee negotiates with a member who has let out the flat. And the charge does not apply at all when the flat is occupied by the member's own family — parents, spouse, children — even if the member does not personally live there. A society billing non-occupancy charges on a flat occupied by the member's parents has no bye-law behind that bill.

The transfer premium — and the donation that is not allowed

This is where bye-law 38 does its most important work. On a transfer of shares, the transferor and transferee owe:

• •a transfer fee of Rs 500 (bye-law 38(e)(vii));
• •an entrance fee of Rs 100 from the transferee (38(e)(viii));
• •a premium, at the rate the general body fixes — but only within the limits set from time to time by circular of the Department of Co-operation, Government of Maharashtra (38(e)(ix)).

The same clause then says, in terms that leave no room to read around it: "No additional amount towards donation or contribution to any other funds or under any other pretext shall be recovered from transferor or transferee." A "building fund contribution," a "welfare donation," a "corpus top-up" demanded as a precondition for processing a transfer is not a grey area — the bye-law names it and forbids it in the same sentence that creates the premium. The one exception: clause (ix) does not apply to a transfer to a member of the transferor's own family, to a nominee, to an heir after death, or on a mutual exchange of flats between members — those transfers carry no premium at all.

A related myth: that a society may withhold a "No Objection Certificate" until the extra payment clears. Bye-law 38(d) says an NOC is not required to transfer shares and interest at all. If one is asked for, the society considers the application on merits within one month — it is not a lever for anything else.

What your committee should do this week

1. 1Pull the current maintenance bill and check every line against bye-law 65's list — anything not on it, or not approved by the general body under item (xvii), has to go or be ratified.
2. 2Check the interest rate charged on arrears against bye-law 71 and Rule 106C-12(3): if it is above 12% simple per annum, place a resolution before the general body to correct it.
3. 3Check every non-occupancy bill: is the flat let to a non-family occupant, and is the charge exactly 10% of the service charge — no more?
4. 4Pull the last five transfer files. If any shows a payment beyond the Rs 500 transfer fee, the Rs 100 entrance fee and the circular-capped premium, that payment was not lawfully demanded.
5. 5Stop treating a "No Objection Certificate" as a checkpoint for a transfer. Bye-law 38(d) makes it optional, member-requested, and decided on merits — not a fee gate.

So — the next time a member asks what the society may charge, the honest answer is: only what bye-law 65 lists, split only the way bye-law 67 and Rule 106C-12 say, with a transfer premium capped by government circular and nothing else added under any name. Everything past that line is a demand, not a charge.