12% Simple Interest Ceiling on Delayed Maintenance Charges
Plain English Explanation
Under Maharashtra’s latest 2026 statutory rules, the maximum late interest any co-operative housing society can levy on unpaid arrears is strictly 12% per annum simple interest (which equals 1.0% per month). Charging interest above 12% (such as 18% or 21%), compounding monthly interest, or levying arbitrary late fines is an actionable statutory defect.
Statutory Calculation Formula
Calculated strictly as simple interest on genuine defaulted dues after the 21-day grace period. Interest cannot be levied on unapproved fines or earlier accrued interest.
Charging simple interest at or below 12% per year on genuine overdue maintenance arrears after the statutory 21-day grace period.
Charging 18% or 21% interest, compounding interest on interest, or levying arbitrary fixed late payment penalty fees.
Official Gazette Wording & Judicial Precedents
Overrules and reduces the previous 21% ceiling under Model Bye-Law No. 72. Compounding interest, monthly cumulative penal interest, or arbitrary lump-sum late fines (e.g. ₹500 fixed late penalty) are strictly prohibited and void under cooperative law.
What to Do if Your Bill Violates This Rule
Demand an itemized amortization schedule from the managing committee under Section 32 verifying that late charges are computed strictly on simple interest at or below 12% p.a. without compounding.
Verify Your Society Maintenance Bill Against This Rule
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