Non Occupancy Charges in a Society

Analysis on: NON-OCCUPANCY CHARGES, IN A SOCIETY:

01. CRITERIA FOR LEVY OF NON-OCCUPANCY CHARGES:

a) A person purchases a flat in a CHS for his own residential usage.  He (as Member) is bound by law to pay the Society Maintenance Charges, for his flat when he is personally residing or even if the flat is  kept locked. 

This means that even if the member is keeping his flat locked at all times, when he stays in Dubai, the member has still to pay the "FULL" Society Maintenance Charges, without any concessions.

UNDERSTANDING IT VERY SIMPLY:

b) Members flat Closed / Locked / Vacant / not occupied for any period = is equal to Self Occupied, WHICH  is further equal to = Regular full maintenance charges and non-occupancy charges cannot be levied.

Criteria = Possession should remain with the Member itself.  Period.

c) Members flat occupied by non-family members, that is Rentees / Leasees / Licensees = is equal to "non self-occupancy"  which is further equal to =  compulsory levy of non-occupancy charges subject to a FIXED  “10% of the consolidated Service Charges”  (excluding Statutory Taxes).

Criteria = Possession should remain with the "Renter / Tenant"

d) Family Member means: Group of persons which includes Husband, Wife, Father, Mother, Sister, Brother, Son, Daughter, Son-in-Law, Brother-in-Law, Sister-in-Law, Daughter-in-Law, Grandson & Grand-Daughter.

Non-Occupancy Charges CANNOT be levied to the above family-members of the bonafide  Member.  However, intermittent joint-stay of other family members OR friends, will not attract Non-Occupancy Charges.

e) FLATS IN THE NAME OF TRUSTS /CORPORATES

In case of CHS Flats owned by Trusts or Corporate’s, Non-Occupancy Charges CANNOT be levied on the Guests staying in such flats.

Guests = Bonafide Staff members (Directors, Executives, Managers and so on)

HOWEVER,  for this the Company should submit a Board of Directors (BOD) resolution, to the Society detailing the name of person who is authorized to stay in the flat.  Besides the BOD resolution, the company NEED NOT submit any other document (means Form-Appendix no. 27 or  Form-Appendix no. 11, or  100/- as Nominal Membership fees or Notarized photocopy of the Leave & License (L&L, Rent) Agreement or Police verification Report of its staff).

A Company-Owned flat cannot be used as a regular Transit / Guest house

f)   Similarly a individual owner-member, may also give his Flat on rent /lease to a Corporate, BUT subject to compliance and requirements of the CHS bye-laws (more specifically detailed in point no. 03, below).

However, here the Corporate CANNOT use this tenanted flat, as a Transit / Guest House, for its Staff members.

02. NON-OCCUPANCY CHARGES FIXED at 10% :

The Society is concerned only with the FIXED 10% extra charges, over the regular service charges, as "Non-Occupancy Charges" and STRICTLY NOTHING beyond this. There is no concept of less than 10% or greater than 10%  non-occupancy charges.  Any amount (whatsoever) collected, besides the FIXED "10% Non-Occupancy Charges", is ILLEGAL, and is duly prosecutable under the Consumer Protection Act and also under the Indian Penal Code (Criminal Acts)

03.  JURISDICTION OF A SOCIETY:

IF a Owner-Member wants to rent /lease out his flat THEN he is obliged to comply with the basic requirement under the CHS bye-laws. A Society is concerned only with compliance of the Bye-Law norms, which means:

a) Prior permission of the Society vide Bye-Law form-Appendix no. 27.

b)  Form-Appendix no. 11, along with cheque of Rs. 100/- as Nominal Membership entrance fees

c)  Certified Photocopy of the Leave & License (L&L, Rent) Agreement, duly Stamped and Registered.

d)  Police verification Report of the Tenant

NOTE:  Even if the above Form no. 27 and Form 11, are not submitted to the Society, it does not "illegalize" the Tenant, nor does the Tenant become a "trespasser", as is hallucinating thought off by various ignorant MC's.

Subsequent to the above and /or irrespective of compliance of Form no. 27 and Form 11, the Society is liable and responsible to levy a FIXED "10% Non-Occupancy Charges", on the regular Society Service /Maintenance charges, in the society bill of its own registered primary member, but to the exclusion of Statutory charges (e.g.  BMC Property Tax, NA Tax, BMC Water Charges).  IT will be illegal on part of the Mg. Committee, to raise CHS Maintenance bills in the name of the Renter /Tenant.

NOTE:  Levy of “Non-Occupancy Charges” are Mandatory and Compulsory.  IF the Mg. Committee (MC)  fails to levy the Non-Occupancy Charges to the member, THEN all the MC has to jointly compensate the CHS, by paying the same from their own pockets, for non-compliance and violation of bye-law no’s. 43(1) & 43(2) & 20

04.  COMMON SERVICES & AMENITIES:

The Society is classified as a "Service Provider", under the Consumer Protection Act, which is further reinforced from several Judgments of the Consumer Court.

The Sole-Responsibility of a Coop. Society, is to provide "Common Services & Amenities", to its members, which also lawfully means "Common Services & Amenities"  to the Tenants of its members, which is more so specifically in lieu of the "10% Non-Occupancy Charges" that the Society has to mandatorily collect from its original member.   Under no circumstances the Society may levy any charges, directly to the Tenant.  Under no circumstances, the Society may stop any “Services /Amenities” to the said Renter /Tenant, which includes Car Parking, irrespective of an resolution passed by the Society.

05.  RENTER /TENANT equals to "NOMINAL MEMBER":

a)  A licensed Tenant of the original Society member, is classified as a "Nominal Member", who by legal default derives rights to reside in a society members flat.    The "Nominal Membership" is to be granted to the Tenant, by virtue of the Rs. 100/- (as nominal members Entrance Fees).  However the Tenant derives no right to have any say in the affairs of the Society.

b)  IF the original member is paying the mandatory "10% Non-Occupancy Charges", THEN the "Tenant", definitely & lawfully derives all the rights to use the "Services and Amenities" that is available to the original member.  This includes Parking, Gym, Club-House & Swimming pool facilities.   The usual rights of  "Services and Amenities", CANNOT be deprived to a Tenant, even if such an resolution is passed by the Society General Body.  This is  successfully prosecutable in the Consumer Court.

HOWEVER, the Tenant (nominal member), does NOT derive any right to have any say in the management of the Society, more so specifically during the Voting / Contesting Elections / Attending AGM /SGM of the Society, as provided under the Society Bye-Law.

06.  SOCIETY “NOT” THE OWNER OF FLAT:

a) The Society does not own the members Flat (ownership property). The Society cannot have a say (whatsoever) nor decide on the type of Tenant that could be allowed to stay in the Society. It is the sole discretion of the Flat-Owner (member) to rent his property out on rent /lease, under the appropriate terms and conditions prescribed by the Law.  ONLY the flat owner can decide the type of tenant he wants to rent out his premises, BUT within the parameters of Law (i.e. cannot rent out his premises for commercial or illegal activities and so on).

b) A Society has no legal jurisdiction to refuse residing rights to a Tenant, under any circumstances, especially in a flat owned by its member.  This is a legal fact, decided in various orders by the High Court and the Supreme Court.

c) A Society cannot refuse a member from keeping a Tenant, even if the member is a defaulter or whatever.  The maximum a Society can do is to inform the local Police Station, about any illegal activities being carried out in the members flat, by the Tenant or the Member.  Nothing more.    Even if the Flat-Owner (Member) has not taken permission from the Society for keeping a Tenant, in his own Flat, it will not amount to any illegality, nor can the Tenant be classified as a "Trespasser".

d) Some nefarious MC's have assumed the role of "investigating" the Tenants, by conducting interviews of the Tenants.  Such interviews or assessment of the Tenants are illegal.

07. CRIMINAL LIABILITY ON THE SOCIETY  MC:

Irrespective of any resolution passed in the Society:

a)  It is a Criminal offence to collect any charges in the guise of "Shifting Charges", or "Tenancy Deposit" or higher non-occupancy charges, over and above the mandatory 10% Non-Occupancy Charges on the Society Service /Maintenance charges.

b)  A Society is not entitled to levy compounding rate of Interest, on any outstanding amount.

c)  False levy of any other amount or charges in the Members bills

d)  Levy of any Legal Charges in the Members bills, without a judicial order.

e)  MC's cannot restrict or restrain or intimidate any Tenant from staying in a Housing Society, subject to compliance of minimum requirements, i.e. Registered Leave & License agreement and Tenants Police verification report.

f)  MC's can be criminally prosecuted for Mischief, Cheating, Restraining, Restricting, Intimidating, Threatening, Insulting, and so on, for restricting /prohibiting tenants, from residing in a Society.

08.  OVER-CHARGING  “NON-OCCUPANCY CHARGES”:

IF the society is charging more than 10% non-occupancy charges THEN the following individual and alternative remedies are available:

a)  Make a written complaint to the area Ward Registrar of Cooperatives, and pray that the CHS may be directed to refund the excess “non-occupancy charges” alongwith with interest  .AND. further pray that the MC may be penalized  for abuse of power and harassment.

NOTE: Only a bonafide member can file this complaint.

ADDITIONALLY ALONGWITH ABOVE:

b)  Make a complaint to the local Consumer Court, alleging "deliberate negligence and deficiency in services and over-charging"  .AND.  for abuse of power and harassment by the CHS Mg. Committee and pray for compensation for causing mental and physical trauma .AND. also for damages to the extent of the over-charged Non-Occupancy Charges” alongwith 18% thereon.

NOTE:  Tenant can file complaint, BUT only with the written consent of the Owner-Member and subject to availability of a duly stamp-duty paid and registered rent /lease agreement

MORE ADDITONALLY ALONGWITH ABOVE:

c) File a written police complaint  .AND / OR.  lodge a “Private Criminal case”  with the local Metropolitan Magistrate’s Court, against all the CHS Mg. Committee members (jointly) for, the various criminal harassments, like:

i)  For Cheating – u/s 418 (IPC)

ii) For Mischief – u/s 427 (IPC)

iii) For Intimidation – u/s 503 , 504, 509 (IPC)

iv) For Extortion – u/s 383 (IPC)

v)  For Restraining (stopping) – u/s 339 (IPC)

NOTE-1: All the options (a, b, c) can be filed individually and simultaneously

NOTE-2: IMPORTANT - Must follow due documentary procedures along with relevant documentary evidences (proofs), before initiating above legal actions.

NOTE-3: The Tenant alone can file this complaint, WITHOUT the consent of the owner-member, but subject to availability of a duly stamp-duty paid and registered L&L agreement.

 09.  PRESUMED NUISANCE, BY TENANTS:

a) Sometimes, the Society does experience nuisance from Renters /Tenants, in the form of Rowdiness, Alcoholism, visiting girl-friends of the Tenants, playing of Loud Music, etc. HOWEVER these can never ever be a ground for restricting /prohibiting Tenants,since all these nuisances are rampant and unchecked, amongst the Society members themselves.  It is a routine feature amongst Society Members, to bicker and fight for petty things, which includes, Ogling, Bitching, Parking, Drunkenness, Gambling, Spitting Pan juice,  Loud music, Abuses & Dada’giri, misappropriating members funds, egoistic power-struggle and what-not's.

b)  On the Contrary, the Tenants who being non-owners of the rented premises, are usually more humble and subdued, keep unto themselves and never interfere in the affairs of the Society or any of its members.

10. LEGAL BYE-PASS:

Subject to duly executing a Registered Leave & License agreement and Tenants Police verification report, the following can ALSO be successfully complied:

a) Under a typical Bye-Law, an Associate Member is not barred from Staying in the Member's Flat

b) Limited to filing Bye-Law appendix no. 7, (along with Rs. 100/- as Associate Member Entrance Fees)  the original owner can make his "Tenant" as his Associate member.

Note: Associate Membership can be withdrawn, by just simply instructing the Society for withdrawing the Associate Membership.  There is no legal-lacunae or legal-risk (whatsoever), since this type of Associate membership, has negligible rights.

c)  A Society CANNOT charge 10% as Non-Occupancy Charges, from an Associate Member.

d) A Tenant can lawfully,  be made an Associate Member.

11. BACHELOR TENANTS CANNOT BE BANNED:

a)  The inbuilt craving to formulate Laws to govern & control other members, lead to ignorant MC's and GB General Body (GB), to pass "illegal & invalid" resolutions, for "Prohibiting /Banning Bachelor Tenant", from staying in a Society. Such "selective & prohibitive" provisions /bye-laws created /amended under a "bye-law" approved /passed by the GB, is also  "illegal & invalid", leading to animosity and discontent in the Society, which also means "failure of the Cooperative Movement".  AS IT IS,  the Society or the MC or the GB is a "nobody"   or say "does not have the "Capacity or Capability"  to decide the legalities of such things for which there are various Laws available.  The Society MC or the GB are not "Lok Sabha" members or Parliamentarians who are empowered to pass Laws.

b) If  ignorant & nuisance GB resolutions have their whimsical ways in a Cooperative Housing Society, then one can also expect that the ignorant GB may pass resolutions for compulsory marriage between the members (as is a custom in some Indian culture) .OR. "compulsory sale" of flats in case the owner becomes a Widow.  This is more so since some nefarious MC's and their cronies, are in a way, controlling  the strings in a GB meeting.

12.  SHYING AWAY FROM COOPERATIVE SOCIETY:

Looking at the consistent nefarious attitude of few MC's and herd-mentality GB's, Investors are avoiding investing in Housing Society properties.  On realizing the nefarious management attitude in a Housing Society,  some people have started registering their group properties, under the concept of a "Condominium",  which truncates out the nefarious management attitude in a Housing Society.  A condominium management is highly flexible and more easily, peacefully & professionally manageable, WITHOUT the usual bickering & bitching that is rampant in present Housing Society’s.

13.  MH Govt. GR No. 20081104172832001 of 01st August, 2001:

BESIDES, the Maharashtra Government’s GR No. 20081104172832001 Dated 01stAugust, 2001, on  “10% Non Occupancy Charges”,  the Coop. Dept., has made no provision for Penalty and /or Penal Action under the Cooperative Laws, on those Society Mg. Committees, who dictatorially collect more than 10% as “Non Occupancy Charges”, from the helpless members of the Society, thus leading to discontent, resentment and gradual failure of the Cooperative Movement.

AUTHOR:  Hemant Agarwal

Email: ha21@rediffmail.com

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