Purchasers of under-construction flats often face confusion about when maintenance charges become payable and what rate of interest can legally be charged by the society. Your query highlights two important issues — the starting point of maintenance liability and whether compound interest is permissible under the bye-laws.
Below is a clear legal explanation based on the Maharashtra Cooperative Societies Act, 1960 and Model Bye-laws.
When Does Liability to Pay Maintenance Begin?
A society can levy maintenance charges only after a person becomes a member of the society. Membership is not automatic upon booking or registration of a flat.
In practice, membership arises after possession of the flat is handed over and the purchaser is admitted as a member by the managing committee. Therefore, maintenance charges cannot be demanded for any period when:
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You were not in possession of the flat, and
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You were not admitted as a member of the society.
If the society was already registered at the time you took possession, your liability to pay maintenance starts from the date of possession or the date of admission as a member, whichever is later. Any demand for maintenance prior to this period is illegal and unsustainable.
Can Maintenance Be Charged Before Possession or Membership?
No. The society has no authority to levy charges for a period when:
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The flat was under construction, or
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The buyer had neither possession nor membership.
During such period, the developer is responsible for all outgoings, including maintenance, as per Section 11(4)(e) of the RERA Act, 2016.
What Rate of Interest Can the Society Charge on Delayed Payments?
As per Bye-law 71, the society is permitted to charge simple interest only, subject to a maximum ceiling of 21% per annum.
Key legal points:
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Compound interest is not permitted under the bye-laws
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The exact rate of interest must be decided by the general body
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The society must have a specific resolution authorising the rate of interest charged
You are entitled to ask for a copy of the general body resolution approving the interest rate. In absence of such a resolution, the levy of interest itself becomes questionable.
Is Charging Compound Interest Legal?
No. Model Bye-laws do not provide for compound interest on maintenance arrears. Any levy of compound interest is contrary to law and can be challenged before:
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The Deputy Registrar, or
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The Co-operative Court, under Bye-law 174.
What Should You Do Now?
You may:
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Seek a written break-up of maintenance demanded
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Ask for the date of your admission as a member
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Demand a copy of the general body resolution fixing interest
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Object in writing to compound interest, citing Bye-law 71
If unresolved, you may file a formal complaint with the District Deputy Registrar.
Conclusion
Your liability to pay maintenance begins only from the date of possession and membership. The society can charge only simple interest, capped at 21% per annum, and compound interest is illegal under the bye-laws.
