CEILINGS Rule 106C-12(3) Table Entry 8 & Order No. SAGRUYO-1001/C.R.188/14-C

10% Statutory Ceiling on Non-Occupancy Charges (NOC) for Rented Flats

Primary Statute: MCS Act 1960 Section 79A Notification & MCS (Amendment) Rules, 2026 (Chapter XI-B)

Official Gazette: Government Order dt. 09/08/2001 & Mantralaya Notification dt. 18 June 2026 (Gazette 22 June 2026)

Plain English Explanation

When a flat is rented out to a tenant, the society can only charge Non-Occupancy Charges (NOC) up to a strict maximum ceiling of 10% of the routine service charges (excluding municipal taxes). For example, if your flat's monthly service charge is ₹1,500, your NOC cannot exceed ₹150 per month. Charging arbitrary fixed amounts (such as ₹1,500, ₹2,000, or ₹5,000/mo) or charging a percentage of rental income is strictly illegal.

Statutory Calculation Formula

Max Monthly NOC = Monthly Routine Service Charges (excluding taxes) × 10%

Calculated strictly as 10% of routine service charges. Cannot be applied to sinking fund, repair fund, property taxes, or the grand total bill.

What is Legally Permitted

Levying maximum 10% of the flat's monthly routine service charges when rented out to a third-party tenant.

What is Prohibited by Law

Charging NOC based on rent percentage, flat square footage, or arbitrary lump-sum fees (e.g., ₹1,000 to ₹5,000/mo).

Official Gazette Wording & Judicial Precedents

"Non-occupancy charges: 10% of service charges."

Judicial Authority & Case Law:

Upheld by the Hon'ble Bombay High Court Division Bench in Mont Blanc CHS Ltd. v. State of Maharashtra, 2007 (4) Mh.L.J. 595 and Venus CHS Ltd. v. State of Maharashtra (2003). The High Court ruled that General Body resolutions attempting to levy NOC on a per-square-foot basis, as a percentage of rent, or as arbitrary fixed sums are ultra vires, illegal, and unenforceable.

What to Do if Your Bill Violates This Rule

Submit an objection letter citing Section 79A and the Mont Blanc judgment. Demand NOC be re-computed at max 10% of service charges, along with an immediate credit note for excess amounts billed.

Pre-Drafted Note for Society WhatsApp Group or Secretary:

Hi everyone, sharing an important statutory note on Non-Occupancy Charges (NOC): Under Maharashtra Government Order dt. 09-08-2001 (Section 79A), 2026 Rules Rule 106C-12, and the Bombay High Court Mont Blanc ruling, NOC for rented flats is strictly capped at 10% of service charges (excluding taxes). Arbitrary lump sums or sq.ft fees are illegal.

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