Suresh Merani
Kindly inform if non occupancy charge of 10% can be collected on water and electricity charge of the maintenance bill of my flat. As per law society is only supposed to collect on service charge other than actual charge of water electric and taxes.
I C Naik
Non-Occupancy Controversy far from over
1.“Non-occupancy charges shall be charged in accordance with the circular issued by the Department of Co-operation Government of Maharashtra from time to time. “ Bye-Law No 43(2)(iii)(c).
2.“Assessment of the non-occupancy charges should not be more than 10% of service charges (excluding the Municipal Corporations taxes).” Latest Circular dated 1-08-2001.
3.This Circular was upheld by Bombay High Court {in Mont Blanc Co-Operative Housing … vs The State Of Maharashtra (Notice … on 2 March, 2007(4) MhLj 595} In Para 14 of the Judgment the Court said “14. The term “service charges” has also been defined in the bye-laws and it does not include the municipal taxes. By and large the outgoings on the common amenities/service could be included within the meaning of service charges. For example house keeping of the premises, electricity charges for the pump and light etc. in the premises, including the stair-cases, security charges, garden maintenance, payment of staff salaries and so on and so forth”
4.Bye-Law No 68 (2009 Model) provides list of 12 heads of society outgoings plus a power to the general body meeting to add any other item as the the general body meeting may decide. In these 12 items a few of the Society outgoings are absent namely
a.Water Charges,
b.Expenses on repairs and maintenance of the building,
c.Expenses on repairs and maintenance of the lift, including charges for running the lift,
d.Insurance Charges.
Society outgoings for items a-d above could be quite substantial as compared to aggregate of Service charges as per Bye-Law No 68.
5.While on the subject it may be pertinent to note that the Bombay High Court also aid that “However, we clarify that Clause 3 of the impugned order regarding exemption from the payment of non-occupancy charges will not be applicable to the near relations like son-in-law, brother-in-law (sister’s husband), sister-in-law (wife’s sister) and sister-in-law’s (wife’s sister) husband”
6.Confusion persists:
a.Services Charges as per Government Circular excludes only the Property Taxes, thereby it creates a confusion that all amounts demanded from members as what is loosely called “maintenance” except Property tax is the basis for reckoning 10% NOC.
b.Bye Laws defines service charges which excludes a large chunk of these demands.
c.The Court referring to bye laws as providing definition of Service charges listed out charges, (saying that Property taxes are excluded) some of which as per bye laws are outside Service Charges.
d.Bye Laws continue giving exemption from NOC in case of flats rented out to certain relatives which the Court held otherwise.