The office of the deputy registrar of co-operative societies has ruled that cooperative housing societies cannot levy additional charges on members who rent out their flats beyond the statutory non-occupancy charges. The directive came after a complaint by a member of Chaitanya Cooperative Housing Society, Pratiksha Nagar, Sion East, Mumbai, against the society’s practice of collecting Rs 5,000 annually as a “Building Development Fund.”
The Complaint
Flat owner A. Shaikh filed a complaint with the deputy registrar, stating that the society was demanding Rs 5,000 per year as a development fund in addition to the non-occupancy charges. Shaikh argued that this levy was in direct violation of cooperative housing society rules and government directives. He pointed out that Section 43(2)(iii)(c) of the Model Bye-Laws of Cooperative Housing Society, 2014 states that non-occupancy charges must strictly follow the state government’s circulars.
Society’s Defense
The society justified its actions by citing resolutions passed in its Annual General Meetings (AGM):
-
In 2014, members resolved to collect Rs 4,000 annually from flat owners renting out their flats.
-
In the 2019 AGM, the amount was increased to Rs 5,000, categorized as a building development fund.
According to Vinayak Adep, secretary of the society, this charge was approved by the majority of members in the AGM, and hence, the managing committee considered it valid.
Deputy Registrar’s Directive
Deputy registrar Abhijit Deshpande (Mhada Mumbai City, Eastern Suburbs and Konkan Board) ruled that the society’s actions were illegal and improper. He stated that a society cannot impose charges under any head other than those legally permitted.
-
Only non-occupancy charges can be levied on members renting out their flats.
-
Non-occupancy charges are capped at a maximum of 10% of service charges, as per the Government Resolution (GR) dated August 2001.
-
Any other additional levy, even if approved by AGM resolution, cannot override statutory laws.
The registrar directed the society to refund/adjust the disputed Rs 5,000 in the complainant’s monthly maintenance bills within two months.
Legal Position on Non-Occupancy Charges
-
Bye-law Reference: Section 43 (2) (iii) (c) of Model Bye-Laws 2014.
-
Government Resolution (2001): Limits non-occupancy charges to 10% of service charges.
-
Societies cannot impose additional development funds or penalties on members for renting out their flats.
Impact on Housing Societies
This case reaffirms that:
-
AGM resolutions cannot authorize illegal levies.
-
Members have the right to approach the registrar if they face unfair charges.
-
Societies must strictly follow cooperative laws and government circulars, rather than imposing arbitrary charges on flat owners.
Conclusion
The ruling against Chaitanya Cooperative Housing Society serves as a reminder that cooperative housing societies cannot misuse AGM resolutions to impose charges beyond what the law permits. Members who rent out their flats are only liable to pay non-occupancy charges capped at 10% of service charges. Any levy beyond this is illegal, and aggrieved members can seek relief from the registrar.
