Every cooperative housing or commercial society runs on a framework of byelaws meant to ensure fairness and transparency. Yet, differences in interpretation often lead to confusion or disputes — especially regarding member rights, associate memberships, or how Societies levy various charges.
 
In this week’s column, I shall address some commonly misunderstood issues. The first examines the legality of Societies arbitrarily increasing non-occupancy and leave & licence charges beyond the limits prescribed by law. Secondly, we look at whether commercial societies can impose maintenance charges on mezzanine areas and under what conditions such levies are justified.
 
These clarifications will help members better understand their rights and responsibilities — and ensure that Societies operate within the bounds of the co-operative byelaws.
 
Legality of Increasing Non-occupancy and Leave & Licence Charges
Question: During the annual general meeting (AGM) held in September 2025, the Society decided to increase (1) leave & licence charges from Rs1,000 to Rs2,000 annually and (2) non-occupancy charges from Rs199 to Rs549. The previous secretary had said that if there is an increase in rent, the Society should also benefit! But when we, the owners, were paying equated monthly instalments (EMIs), the Society did not share our hardships. Now the Society wants a share in our hard-earned income! Please advise.
 
Answer: If your flat is given on rent under a leave and licence agreement, then 10% of your flat’s monthly service charge amount is payable as non-occupancy charges. If your Society demands any amount beyond this, then under bye-law no. 174(A)(v), you should file a written complaint to the deputy registrar of cooperative societies (DR-CS) with documentary proof.
 
Maintenance Charges on Mezzanine Area in Commercial Societies
Question: I am a member of a commercial cooperative society. Can the Society levy maintenance charges on the mezzanine area in addition to the carpet area? If applicable, will it be at the same rate as the carpet area?
 
Answer: All types of maintenance charges are not based on the area of the premises. As per the model bye-laws:
  • Bye-law No. 76(a)(i): Property tax is levied by the local municipal authority.
  • Bye-law No. 67(a)(iii): Expenses on repairs and maintenance of the building — minimum 0.75% of the cost of construction of the gala per year.
  • Bye-law No. 67(a)(v): Sinking fund — minimum 0.25% of the cost of construction of the gala per year.
  • Bye-law No. 67(a)(xi): Insurance charges — as determined by the insurance company, depending on the risk associated with the products manufactured or stored in the gala.
  • Bye-law No. 67(a)(xii): Lease rent — based on the area of the gala, as determined by the lessor of the land.
  • Bye-law No. 67(a)(xiii): Non-agricultural tax — per sqft area of the gala, as prescribed by the district collector.
 
These are the only maintenance heads that can be levied based on the area of the gala, including the mezzanine floor, since that area is also used as part of the industrial unit.
 
NOTE
We will not be answering queries posted in the comments. Only questions sent through the Moneylife Foundation's Legal Helpline will be answered. If you want to seek guidance or ask questions to Mr Shanbhag, kindly send it through Moneylife Foundation's Free Legal Helpline. Here is the link: https://www.moneylife.in/lrc.html#ask-question
 
Disclaimer: The guidance provided in these columns and on our Legal Helpline is on the sole basis of the facts provided by the reader/questioner and does not amount to formal legal advice in any form whatsoever. 
 
(Shirish Shanbhag has an MSc in Organic Chemistry, a Diploma in Higher Education, and a Diploma in French and has completed his LL.B. in first class in 2021. Before his retirement, he was a junior college teacher at Patkar College from July 1980 to May 2012, teaching theoretical and practical chemistry. Post-retirement in 2012, he started providing guidance and counselling to people on several issues, specifically focusing on cooperative housing society-related matters. He has over 30 years of hands-on experience in all matters about housing societies and can provide out-of-box solutions for any practical issue.)