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Important Charges to be paid post possession

There are various charges that have to be incurred by the owner of the property post possession. These charges are largely categorized as Maintenance Charges, Non-Occupancy Charges and Holding Charges.

Maintenance Charges

In real estate, the residents or owners of the property in a specific area are charged for maintenance and operations of the commonly-owned property areas. This charge is called Maintenance Charge and sometimes Service Charge.

Generally maintenance charge is levied periodically. It is required to fund operations related to upkeep, maintenance and up-gradation of areas which are not directly under any individual’s ownership.

Maintenance charges are applicable right from the time a flat is occupied by any prospective buyer. However, payment of maintenance charges is carried out on a monthly basis.

Non-Occupancy Charges

Non-occupancy charges become applicable to be paid if the ownership has been transferred by the Society/builder to the owner but the flat/unit is lying vacant even when it is in a ready-to-move condition.

Criteria to levy Non-Occupancy charges

A person purchases a flat in a Cooperative Housing Society for his own residential usage. He (as member) is bound by law to pay the Society Maintenance Charges for his flat whether he is personally residing or even if the flat is kept locked and being unused. The member has to pay the full Society Maintenance Charges without any concessions.

Simple Understanding

Member’s 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.

Member’s flat occupied by non-family members, that is Rentee/Lessees/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 Charges).

Criteria = Possession should remain with the “Renter/Tenant”

Family members means a 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 and granddaughter.

Non-occupancy charges cannot be levied to the above family members of the bona fide member. However, intermittent joint-stay of other family members or friends will not attract non-occupancy charges.

Flats in the name of Trusts/Corporates

In case of CHS Flats owned by Trusts or Corporate, non-occupancy charges cannot be levied on the guests staying in such flats.

Guests = Bona fide 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. Other than the BOD resolution, the company need not submit any other document (means Form-Appendix No. 27 or Form-Appendix No. 11, or Rs. 100/- as Nominal Membership fees or Notarised 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

Similarly, an 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.

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

Jurisdiction of a Society

If an owner-member wants to rent/lease out his flat, then he/she is obligated to comply with the basic requirement under the Cooperative Housing Society bye-laws. A society is concerned only with the compliance of the bye-laws norms, which means:

  1. Prior permission of the Society vides bye-law Form-Appendix No. 27;
  2. Form-Appendix No. 11, along with cheque of Rs. 100/- as nominal Membership entrance fees;
  3. Certified Photocopy of the Leave & License (L&L, Rent) Agreement, duly stamped and registered;
  4. Police verification report of the tenant.

Maintenance Charge vs Holding Charge

Maintenance charges are the charges, either annually or monthly, applicable to be paid by the owner once he/she has taken possession of the property. These charges are paid for the general maintenance and upkeep of the building and/or society.

On the other hand, holding charges are to be paid by owner/holder who is a non-occupying owner (i.e. one who has not yet occupied the property) to the Developer, or Society, or Government Development Agency.

Tags : Apartment Maintenance Charges post possession of property Cost of maintaining apartment Costs to maintain your property Important Charges to be paid maintenance fee

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