Table of Content
▲- What Are Non-Occupancy Charges?
- Non-Occupancy Charges vs Maintenance Charges
- When Can Housing Societies Charge Non-Occupancy Charges?
- Who Pays Non-Occupancy Charges?
- Maximum Limit on Non-Occupancy Charges
- When Are Non-Occupancy Charges Not Applicable?
- How to Calculate Non-Occupancy Charges in 2026
- Difference Between Leave & License and Non-Occupancy Charges
- Non-Occupancy Charges for NRIs and Non-Resident Owners
- Can Tenants Pay Non-Occupancy Charges?
- Implications for Owners, Tenants, and Societies
- What to Do If Charged Unlawfully?
- Is GST Applicable on Non-Occupancy Charges?
- Consequences of Not Paying Non-Occupancy Charges
- Conclusion
Non-occupancy charges are an important aspect of housing society fees that often confuse flat owners, landlords, and NRIs. Simply put, these charges are levied when a flat remains vacant or is rented out to non-family members. Unlike regular maintenance fees, these are additional costs meant to cover the extra burden on common facilities and administrative services.
In this guide, we explain what non-occupancy charges are, who is responsible, calculation methods, exemptions, and legal aspects, helping homeowners avoid penalties and disputes in 2026.
What Are Non-Occupancy Charges?
Non-occupancy charges (NOC) are fees charged by housing societies when a flat is:
- Vacant for extended periods
- Rented to tenants outside the owner's immediate family
- Used for commercial purposes
Purpose: These charges compensate the society for additional wear and tear, higher electricity consumption in common areas, and administrative costs when the property is not owner-occupied.
Also Read: What Legal Rights Do Homebuyers Have When Possession Is Delayed?
Non-Occupancy Charges vs Maintenance Charges
|
Feature |
Maintenance Charges |
Non-Occupancy Charges |
|
Applicability |
All flat owners, occupied or vacant |
Only when flat is vacant or rented to non-family |
|
Purpose |
Upkeep of building, staff, utilities |
Extra cost due to vacancy or tenants |
|
Calculation |
Fixed monthly fee |
Capped at 10% of service charge |
|
Mandatory |
Yes |
Only under specific conditions |
Key takeaway: Maintenance charges are universal, while non-occupancy charges are conditional and capped.
When Can Housing Societies Charge Non-Occupancy Charges?
Housing societies cannot levy these fees arbitrarily. They must follow bye-laws under the Maharashtra Cooperative Societies Act, 1960, specifically Section 79A. Typical scenarios include:
- Flat rented to tenants outside the immediate family
- Flat given on Leave & License to non-relatives
- Extended vacancy periods
- Commercial activities in a residential unit
Societies must pass a resolution, inform members, and cannot charge retroactively without notice.
Who Pays Non-Occupancy Charges?
- Legal responsibility: Flat owners are responsible for all society charges, including non-occupancy fees, regardless of residency.
- Co-owners: Share charges based on ownership percentage.
- NRIs / Overseas investors: Cannot avoid charges due to non-residency; charges follow the property, not the owner.
- Tenants: Legally, tenants do not pay non-occupancy charges. Owners may recover it privately from tenants.
Maximum Limit on Non-Occupancy Charges
Many homeowners mistakenly think societies can charge any amount. This is incorrect:
- Most states cap NOC at 10% of service charges (excluding property tax)
- Charges are linked to service charges, not rent
- Societies cannot impose unlimited or arbitrary fees
Always verify the latest model bye-laws to ensure compliance.
When Are Non-Occupancy Charges Not Applicable?
Certain exemptions exist:
|
Exemption Scenario |
Details |
|
Self-use or family occupation |
Owner, spouse, children, or parents living in flat |
|
Occupied by immediate family |
Siblings, grandparents, in-laws |
|
Renovation or temporary vacancy |
Reasonable duration for repairs or work assignments |
|
Medical / emergency situations |
Vacancies due to treatment or family emergencies |
|
Student accommodation for children |
Flat used by owner’s children during studies |
Always inform the society managing committee in writing to claim exemptions.
How to Calculate Non-Occupancy Charges in 2026
Step-by-step example:
- Identify service charges in your monthly maintenance bill (staff salaries, common electricity, office expenses).
- Calculate 10% of this service charge amount → Maximum NOC applicable.
- Exclude statutory charges such as water bills, property tax, or corpus funds.
Example:
- Service charge: ₹10,000
- Maximum non-occupancy charge: 10% of ₹10,000 = ₹1,000 per month
Difference Between Leave & License and Non-Occupancy Charges
|
Term |
Definition |
|
Leave & License |
Legal agreement between owner and tenant, defines rent, deposit, and duration |
|
Non-Occupancy Charges |
Paid by owner to society for vacant or rented flats |
|
Payment Responsibility |
Tenant pays rent; owner pays society charges |
|
Legal Position |
Owner remains responsible for NOC, tenant reimbursement is optional |
Clear understanding avoids disputes during renting.
Non-Occupancy Charges for NRIs and Non-Resident Owners
- NRIs are subject to the same charges as resident owners
- No higher rates or exemptions based on residency status
- Courts consistently hold owners responsible for society fees
- Common challenges: delayed communication, currency conversion, difficulty attending meetings
- Tip: Appoint a local representative to manage society matters
Can Tenants Pay Non-Occupancy Charges?
- Legal stance: Only property owners are liable
- Tenant payment is a private arrangement and does not transfer legal responsibility
- Misconception: Tenants directly paying society → Society still holds othe wner accountable
Also Read: Bhulekh Uttar Pradesh 2026: How to Access & Check UP Land Records Online
Implications for Owners, Tenants, and Societies
Owners:
- NOC increases ownership costs, impacting rental yields
Tenants:
- Must clarify responsibility in rental agreements
Societies:
- Must maintain records, send notices, and follow legal procedures
Dispute resolution:
- Society committee → Registrar → Consumer court → Civil court
What to Do If Charged Unlawfully?
- File a complaint with the society committee
- Raise the issue in the general body meeting
- If unresolved:
- Approach RERA
- Registrar of cooperative societies
- Consumer court / civil court
Is GST Applicable on Non-Occupancy Charges?
- GST applies to maintenance charges exceeding ₹7,500/month
- Non-occupancy charges are part of maintenance; hence 18% GST may apply
- Exclusions: property taxes, water/electricity for units, statutory levies, corpus fund deposits
Consequences of Not Paying Non-Occupancy Charges
|
Category |
Details |
|
Immediate consequences |
Late fees (18–24% p.a.), interest accumulation, reminder notices |
|
Escalated actions |
Legal notices, disconnection of utilities, restricted facility access |
|
Long-term implications |
No NOC for resale, recovery suits, property/bank attachment, credit score impact |
|
Recovery & resolution |
Calculate dues, negotiate payment plan, resolve disputes, obtain clearance certificate |
|
Prevention |
Auto-payments, maintain communication, update contact details, address disputes promptly |
Conclusion
Non-occupancy charges are an essential part of housing society regulations. Understanding their calculation, exemptions, and legal responsibilities helps owners, NRIs, and investors avoid penalties, disputes, and unnecessary financial burdens. Clear communication with societies ensures smooth property management, fair charges, and harmony among residents.
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Ans 1. Non-occupancy charges (NOC) are fees levied when a flat remains vacant, is rented to non-family members, or used for commercial purposes. They cover additional wear and tear, electricity in common areas, and administrative costs.
Ans 2. Maintenance charges are mandatory for all owners to cover building upkeep and staff salaries. Non-occupancy charges are conditional, only apply to vacant or non-family rented flats, and are usually capped at 10% of the service charge.
Ans 3. Flat owners are legally responsible for NOC, including NRIs and non-resident owners. Tenants do not pay NOC unless privately agreed upon with the owner.
Ans 4. Housing societies can charge non-occupancy fees only under specific conditions, such as when a flat is rented to tenants outside the immediate family, remains vacant for extended periods, or is used for commercial activities. Societies must follow their bye-laws and pass a formal resolution before levying these charges. Retroactive charges without prior notice are not permitted.
Ans 5. Most state regulations cap non-occupancy charges at 10% of the monthly service charge, excluding statutory fees such as property tax and water bills. Societies cannot impose arbitrary or unlimited fees, and owners should always refer to the latest model bye-laws to ensure compliance.
Ans 6. Exemptions are allowed in certain cases. Flats occupied by the owner, spouse, children, or parents are generally exempt, as are units temporarily vacant due to renovations or medical emergencies. Student accommodation for the owner’s children may also qualify. To claim an exemption, the owner must inform the society in writing.
Ans 7. Non-occupancy charges are calculated based on the service charge of the flat. The society applies a maximum of 10% of the service charge while excluding statutory levies like property tax. For example, if the monthly service charge is ₹10,000, the maximum non-occupancy charge would be ₹1,000 per month.
Ans 8. Yes, NRIs are treated the same as resident owners when it comes to non-occupancy charges. Ownership of the property, not the residency status of the owner, determines liability. NRIs are advised to appoint a local representative to manage society communications and payments.
Ans 9. Tenants are not legally responsible for non-occupancy charges. Any payment by tenants is a private arrangement with the owner and does not absolve the owner of the legal responsibility to pay the society.
Ans 10. If the maintenance charges exceed ₹7,500 per month, GST at 18% may apply to the non-occupancy component since it is part of the service charges. Statutory levies such as water, electricity, and property tax are not subject to GST.
Ans 11. Failure to pay non-occupancy charges can lead to late fees, interest accumulation, restricted access to society facilities, and legal notices. Over time, unresolved dues may result in recovery suits, attachment of property, and a negative impact on the owner’s credit score.
Ans 12. Disputes can first be raised with the society managing committee. If unresolved, the matter can be escalated to the Registrar of Cooperative Societies, consumer courts, civil courts, or RERA where applicable. Clear documentation of payments and written communications is essential during dispute resolution.
Ans 13. Understanding non-occupancy charges ensures that owners comply with society regulations, avoid penalties, and maintain harmony within the housing society. Awareness of exemptions, calculation methods, and legal obligations also helps protect rental income and prevents unnecessary financial burdens.