Understanding the Levy of Charges by Housing Societies in Maharashtra

Introduction

Levy of charges by Housing Societies: For many residents in Maharashtra, the monthly maintenance bill from their Co-operative Housing Society (CHS) can often seem like a confusing list of figures. However, these charges are not arbitrary. They are strictly governed by the Maharashtra Co-operative Societies Act and the specific Model Bye-laws adopted by the society.

Using the official Bye-laws (specifically Sections 65 to 71), this guide breaks down what you are paying for, how it is calculated, and what happens if payments are delayed.

1. The Composition of Society Charges

According to Bye-law No. 65, the levy of charges are categorized into several heads. These are collectively referred to as “Charges.” They include:

• Property Taxes & Water Charges: Statutory payments made to local authorities.
• Common Electricity Charges: For lights in corridors, pumps, and streetlights.
• Repairs and Maintenance Fund: For the upkeep of the building.
• Sinking Fund: A reserve for major structural reconstruction in the future.
• Service Charges: To cover the administrative costs of running the society.
• Lift Charges: Specifically for the operation and maintenance of elevators.
• Parking Charges: If you utilize a parking slot.
• Non-Occupancy Charges: Applicable if the flat is sublet or not occupied by the owner/family.
• Insurance, Lease Rent, and Education Funds: Specialized funds for legal and administrative compliance.

2. How are these charges calculated? (Bye-law No. 67)

One of the most common points of contention in a CHS is whether charges should be levied equally for everyone or based on the size (square footage) of the flat. The Bye-laws provide a clear “Apportionment” formula:

A. Levy of Charges based on Flat Size (Area-wise)

• Property Taxes: As fixed by the Local Authority (e.g., BMC, PMC).
• Insurance Charges: Based on the built-up area of each flat.
• Lease Rent & Non-Agricultural Tax: Based on the built-up area.
• Repairs and Maintenance: The General Body fixes this rate, but it must be a minimum of 0.75% per annum of the construction cost of each flat.

B. Levy of Charges divided Equally (Per Flat)

• Service Charges: Regardless of whether you own a 1BHK or a 4BHK, service charges are divided equally by the number of flats.
• Lift Charges: These are divided equally among all members, irrespective of whether the member uses the lift or not (e.g., ground floor residents must still pay).
• Election Fund: Divided equally as prescribed by the Election Authority.
• Education & Training Fund: Fixed at Rs. 10 per flat/unit per month.

C. Levy of Charges based on Usage/Criteria

• Water Charges: Based on the total number and size of inlets provided in each flat.
• Parking Charges: As fixed by the General Body.
• Non-Occupancy Charges: These cannot exceed 10% of the service charges (excluding taxes).

3. Deep Dive: What are “Service Charges”?

Many members ask what is included in the “Service Charges” component. Bye-law No. 65(g) defines this broadly to include:

• Salaries of office staff, watchmen, sweepers, and managers.
• Printing, stationery, and postage.
• Legal charges and audit fees.
• Traveling allowances for committee members on society business.
• Common electricity charges.

4. Repairs and Maintenance: Who Pays for What?

A common source of disputes is whether a leak or a crack is the responsibility of the Society or the individual member.

The society must bear the cost for:

• External walls, terrace, and parapet walls.
• Structural repairs of roofs of all flats.
• Staircases, lifts, and common passages.
• Compound walls, gates, and internal roads.
• Water pumps, storage tanks, and drainage lines.
• Leakages: Specifically leakages due to rain water or from common pipelines.

Member’s Responsibility

Any repairs not covered by the society’s list must be carried out by the member at their own cost. This includes internal leakages due to toilets or sinks within the flat. Members must intimate the society before starting such internal work.

5. Billing and Defaults

The Secretary is responsible for issuing a bill/demand notice to every member.

The Penalty for Late Payment

If a member fails to pay by the due date, the society is empowered to charge Simple Interest. According to the Bye-laws, this is generally 21% per annum, though the General Body can vote to fix a lower rate.

What happens if you don’t pay?

• Notice of Default: If payment isn’t made within the prescribed period, the member is deemed a “defaulter.”
• Committee Action: The Secretary brings the default to the notice of the Committee.
• Recovery Proceedings: The Society can initiate recovery proceedings under Section 154B-29 (Earlier Section 101he Maharashtra Co-operative Societies Act. This Section is particularly powerful as it allows the society to recover dues as “arrears of land revenue,” which can lead to the attachment of property in extreme cases.

6. The Power of the Society

It is important to remember that once a society is registered, it becomes a Body Corporate. It has a “common seal” and the legal power to enter into contracts, sue, and be sued. The Bye-laws are the “Constitution” of the society, and while the General Body has the power to make certain decisions, they cannot pass resolutions that contradict the MCS Act or the Rules.

Conclusion

This is comprehensive guide to the levy of charges by co-operative housing societies. Living in a Co-operative Housing Society requires a balance of individual rights and collective responsibility. By understanding these Bye-laws, members can ensure they are not being overcharged, and Managing Committee members can ensure they are managing the society’s finances within the framework of the law.

Transparent billing and a clear understanding of “who pays for what” are the keys to a harmonious living environment.

Disclaimer

This post is for informational purposes regarding levy of charges based on the Model Bye-laws and does not constitute legal advice. Always consult with a legal professional or the Registrar of Co-operative Societies for specific disputes.