Saturday, June 30, 2007

No occupancy verdict in favor or apt-owners- Supreme coutr

The recent Supreme Court verdict on Non-Occupancy Charges (NOC) has put an end to the long-term feud between societies and its members, once and for all. The Apex court upheld the constitutional validity of the notification dated- August 1, 2001, issued by the State government that NOC cannot exceed 10 per cent of the service charges.
Now that the verdict has come out, thousands of flat owners who have let out their flats or who are contemplating renting them out will breathe a sigh of relief with the latest verdict upholding the Mumbai high court order. This verdict will definitely help to curb unwarranted charges levied by bureaucratic societies and release vacant flats in the city for rental purposes. This order will also minimise conflict between flat owners and societies across Maharashtra, which have resulted in litigation.
By virtue of the powers under section 79A of the Maharashtra Cooperative Societies Act, 1960 the State Government issued a NOC circular in 2001, which fixed the ceiling on NOC at 10 per cent of the service charges. However, the government order was challenged recently on 2/3/07, when Mont Blanc CHS at Peddar Road in Mumbai filed a special leave petition (SLP no. 7964, 7965, 7966) and demanded interim relief and autonomous authority to decide upon the non-occupancy charges. This petition was called for hearing on June 19 wherein the Supreme Court upheld the Bombay High court ruling but provided interim relief to petitioners who are entitled to charge 10 % of the monthly rentals and not 10% of the service charges.
The August 2001 notification had clearly spelt out that in case societies have not amended the old byelaw on NOC then they would have to amend and update it. Moreover, even if the amendments are not made societies in the state cannot charge more than 10 per cent of the service charges. Despite this clarification from the government, many societies tend to charge unreasonable non-occupancy charges.
There are more than 58,000 cooperative housing societies in the state, with more than 12,50,000 flats. In Pune, according to a 2002 report of the divisional joint registrar of cooperatives societies, there are 7,711 societies, with 20 per cent of the flats lying vacant.
Earlier, the non-occupancy charges were not regulated and fluctuated according to the whims of societies, who obtained general body resolutions. Many societies charged exorbitantly, making huge profits on this.
Mr. Alwyn D’Souza, Secretary, Alpine Heights, Co-operative Housing Society at Baner argued, “For middle-class societies wherein the maintenance charges are around Rs 500 per month, 10% of it amounts to mere Rs 50, which is unfair, since the sub-tenants also utilise the same amenities as the society members.” Office-bearers of societies also believe that the flat owners charge sub-tenants exorbitant rates and would pay a pittance to the CHS as per the new law.
Advocate D. Vader explained, “The apex court defended its decision and justified its stand that the sub-tenant has no locus standi with the society. The member and the society thereof settle all the matters concerned. The owner pays the maintenance charges for the flat per se and the sub-tenant pays his dues to the owner. So the society recovers services rendered to the occupant, i.e. the sub-tenant. The society should not be concerned with the monthly rentals charged by the flat owner.”
Mr. Lalit Kumar Jain, Chairman, Promoters and Builders Association of Pune (PBAP) and also Chairman of Kumar Builders, points out that it is more important for societies to know who is coming in to stay rather than the monetary aspects. “In fact, by charging more they may be compromising on the quality of the person coming into the premises,” he explains. Also the exorbitant charge does not have any logic. Prior to this, societies were charging exorbitant non-occupancy charges, which ultimately reflected in the high rentals, burdening the end user. This also led to many non-occupied vacant flats not being rented out. This SC ruling will help to curb exorbitant NOC and facilitate the consumer.”
The maintenance charges are funds raised by the society members for maintaining common amenities like elevators, garden and cleaning. The flat owner has to pay both maintenance charges and nonoccupancy charges if he or she rents out the flat, and this amounts to surplus charges for the benefit of the society.
Mr. Rohit Gera, Executive Director of Gera Developments Pvt. Limited, asks, “Why do societies want to put their hands in someone else’s pockets? Why do they want a share in somebody else’s fortune? If the flat owner is making a profit from his own property, why does the society want a share? It is absolutely irrelevant what the owner charges as rent as the services which are being provided are already being paid for in terms of maintenance charges.”
Following the ruling many the nonoccupied vacant flats will be released for licensing and rental, reducing the crunch on rental housing in a city where the demand is constantly on the rise.

15 comments:

Anonymous said...

What exactly is the no-occupancy definition? apartments those that have been leased or those which are not occupied by the owner, i.e. those that remain locked?

Anonymous said...

Rohit Gera is a fraud. He was supposed to give the flat in Dec - 2007. Now is it April 2008, still no commitment on the possession date. Now, he is warning me that he may increase the rate of flat if I keep on pressuring for the possession. He says there is clause in the agreement that flat rates can be increased after registration. Please think twice before buying any property from them.

Anonymous said...

Rohit Gera is a fraud. He was supposed to give the flat in Dec - 2007. Now is it April 2008, still no commitment on the possession date. Now, he is warning me that he may increase the rate of flat if I keep on pressuring for the possession. He says there is clause in the agreement that flat rates can be increased after registration. Please think twice before buying any property from them.

Venky said...

which project is this ?? what was the booking rate at the time you booked as well was what is it right now ? Did you read your agreement closely for the mentioned clauses ? For the benefit of readers can you spell it out ?

Pravin said...

I have entered into a Leave and License agreement duly registered and stampduty paid.
The 11 months period has expired and the Licensee is refusing to vacate and giving irrelevant excuses.
What steps do I have to take?
Which authorities do I apporach?
Can I complain with the Police authorities?

Sagar Mahule said...

i had rented my flat from last 1 year. the societies maintenance charges are Rs.250 per month… but they were asking me to pay Rs. 400 per month…. so could you please guide me that, what amount should i pay per month as per the new rule.

Anonymous said...

I am unable to undetstant the concept of Non occupancy. The society is charging the maintenance from the members. What extra facilities are they providing to the tenant for which non-occupancy charge should be paid. It is very surprising that the owner pays maintenance charge and also non-occupancy charge? What sort of law is this?

Anonymous said...

when a owner charges high rate of rent from the tenants and using it for the profit. where as the co-op law says its for non profit and loss making then why the owner charges high rate of rent and whne it comes to paying the NOC he is defensive.

Anonymous said...

The rent which a owner charges to his tenant is independent of the expenses incurred by the society towards maintenance. The Supreme Court's verdict is loud and clear.

pk said...

can i get the judgement/notificatio of the supreme court on non occupancy charges

pk said...

can i get judgement /notification of thr supreme court on non occupancy charges

rocksolid said...

I stay in a aprtment condo where there are 6 members. Two have let out the flats for almost 13 years now. With charging or only 10 percent of NOn occup. Charges the two members are having a ball of time as they do not take part in any activity of the condo towards maintenance. We 4 resident members keep the accounts, close and open the gate, plant tress, clean the premises etc. Ten percent NOC of maintenance is just a pittance for the benefit they derive from the renting of the flat and basically not contributing anything toward the physical efforts of running a condo. This Supreme court verdict is a injustice to the resident members.

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SEKHAR said...

Can anyone provide a copy of the Order/judgment ?