What Is a Non-Occupancy Charge, and Why Does It Exist
A Non-Occupancy Charge (NOC) is an additional amount a housing society can bill a member who does not personally reside in their flat, most commonly because the flat is rented out to a tenant. Bye-Law 38 recognises this charge as something the society may levy in addition to the regular maintenance bill, and it is distinct from the one-time Transfer Fee charged when a flat changes ownership.
The logic behind it is that a tenant-occupied flat can place a different kind of load on the society, more turnover of occupants, more need for the society to track who is actually living on the premises, and in some societies, higher wear on shared facilities. Historically, though, the amount societies charged for this varied enormously, some fixed it as a flat monthly sum, others as a percentage of the maintenance bill with little consistency from society to society.
The New 10% Cap Under Chapter XI-B
The Maharashtra Co-operative Societies (Amendment) Rules, 2026, effective 30 June 2026, insert Chapter XI-B into the Maharashtra Co-operative Societies Rules, 1961 and cap the Non-Occupancy Charge at 10% of the service charges payable by the member, under Section 79A. This is a significant tightening for societies that were charging a higher percentage or an ad hoc flat amount that worked out to more than 10% of the service charge component.
The cap is expressed as a percentage of 'service charges', not the entire monthly bill. Most society bills bundle several components together, the core maintenance or service charge, sinking fund and repair fund contributions, water charges, parking, and other levies. The exact definition of what counts as 'service charges' for this calculation has not been separately spelled out in the sources available for this post, so if your society's bill structure is not a simple single line item, it is worth confirming with your CA or the Registrar's office exactly which components the 10% should be calculated on before you finalise your revised NOC figure.
A Worked Example
Take a society where a member's monthly bill breaks down as: maintenance/service charge ₹3,000, Sinking Fund ₹500, Repair Fund ₹500, parking ₹300, and water charges ₹700, a total bill of ₹5,000. If the Non-Occupancy Charge base is the ₹3,000 service charge component, the maximum permissible NOC under the new cap is ₹300 per month (10% of ₹3,000), not ₹500 (10% of the full ₹5,000 bill).
A society that had been charging, say, ₹600 or ₹700 a month as a flat Non-Occupancy Charge for this member would need to bring that figure down to ₹300 or less to stay within the new statutory ceiling.
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Any society whose current Non-Occupancy Charge, once expressed as a percentage of the service charge component, works out to more than 10% needs to recalculate and reduce it. This applies whether the existing charge was set as a flat rupee amount, a percentage of the total bill, or a percentage of the service charge component at a rate above 10%.
As with the interest rate cap introduced in the same amendment, a bye-law or resolution that fixed a higher Non-Occupancy Charge before 30 June 2026 does not override the new statutory ceiling, the 10% cap applies from the effective date regardless of what the society's own bye-law document says. The bye-law text should be formally updated at the next General Body Meeting to bring the written document in line with the rule.
What Societies Should Do Now
A few concrete steps to get compliant:
- Identify the service charge component of your billing structure, separate from sinking fund, repair fund, water and parking charges, since the 10% cap applies to that component specifically.
- Recalculate the maximum permissible Non-Occupancy Charge for every tenant-occupied flat and compare it against what is currently being billed.
- Reduce any Non-Occupancy Charge that exceeds the new cap, effective from bills raised on or after 30 June 2026.
- Pass a resolution at the next General Body Meeting to formally amend the bye-law figure, and update your billing software's configuration to match.
Frequently Asked Questions
What is the new Non-Occupancy Charge cap in Maharashtra?
10% of the service charges payable by the member, under Section 79A, part of Chapter XI-B of the Maharashtra Co-operative Societies Rules, 1961, effective 30 June 2026.
Is the 10% calculated on the full monthly maintenance bill or just the service charge component?
The rule caps it at 10% of service charges specifically, not the full bill including sinking fund, repair fund, water and parking. Confirm the exact composition of 'service charges' for your society's bill structure with your CA or the Registrar's office.
Can a General Body approve a higher Non-Occupancy Charge than 10% if members agree?
No. This is a statutory ceiling under the Rules, not a bye-law figure that a General Body resolution can set above the cap. A GBM can only set the charge at or below 10% of service charges.
Does this cap apply retroactively to Non-Occupancy Charges already billed before 30 June 2026?
The cap applies to charges billed from the effective date onward. Charges correctly billed under the society's earlier rate before 30 June 2026 are not automatically required to be revised, but societies should update their billing configuration for all bills raised after that date.
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Yogesh Randive
Founder, SocietyBee
Yogesh built SocietyBee after spending years helping housing societies in Mumbai manage accounts in Excel. He writes about Maharashtra co-operative law, society accounting, and the practical realities of running a housing society in India.