What Are Non-Occupancy Charges and Who Pays Them? – Explained Simply
If you own a flat or house in a housing society and rent it out instead of living there, you may have come across something called Non-Occupancy Charges (NOC) in your monthly maintenance bill. But what exactly are these charges, who sets them, and who is responsible for paying them?
Let’s break it down.
🏠 What are Non-Occupancy Charges?
Non-Occupancy Charges are fees collected by a housing society or Resident Welfare Association (RWA) from flat owners who do not live in their own property and have rented it out to someone else.
It’s essentially a way for the society to recover costs or charge a premium for common services being used by tenants instead of owners.
💡 Why Are These Charges Collected?
- Additional Usage of Amenities:
Tenants might use lifts, parking, and security more frequently. - Security and Administration:
Societies incur extra costs managing outsiders, verifying tenant background, and maintaining discipline. - Maintenance Equalisation:
To ensure absentee landlords contribute more fairly to the upkeep of society facilities.
🧾 Who Pays the Non-Occupancy Charges?
➡️ The owner of the property is responsible for paying non-occupancy charges—not the tenant.
However, in practice, many landlords include this charge in the rent amount or add it as an extra fee in the rental agreement.
⚖️ What is the Legal Cap on NOC in India?
As per the Model Bye-laws of Co-operative Housing Societies in many Indian states:
✅ Non-Occupancy Charges cannot exceed 10% of the service charges (excluding property taxes, water, and electricity).
For example, if your monthly service charge is ₹3,000, the NOC can be up to ₹300 per month.
Note: Some states like Maharashtra have clearly defined this limit. Others may vary based on local housing regulations.
📋 How Are NOC Charges Calculated?
Let’s say your society’s monthly maintenance bill includes:
- Service Charges: ₹2,500
- Water, property tax, electricity: ₹1,500
- Total: ₹4,000
If the NOC is 10% of service charges → ₹250 per month is the maximum non-occupancy charge.
🔍 Important Points for Owners
- Check your society’s by-laws or RWA rules before renting your flat.
- Submit tenant details (police verification, rental agreement) to avoid penalties.
- Don’t overpay! Societies cannot randomly increase NOC charges beyond the legal cap.
- Document everything in your rent agreement, including how NOC is being handled.
🏡 Conclusion
Non-occupancy charges are a standard part of owning and renting out property in a housing society. They’re legal, capped, and meant to maintain fairness. As a landlord, it’s your responsibility to pay them—but smart planning can ensure you manage it without loss.
📞 Need help understanding housing society rules or calculating NOC correctly?
Our experts can help you draft rental agreements, clarify charges, and avoid disputes with RWAs. Reach out today!