Can Society Charge Interest On Major Repair Fund?

It's true that if a member defaults, a housing society can charge interest on significant repair fund contributions. According to the broad guidelines in the society's bylaws, this is legal. So for those wondering, can society charge interest on major repair fund? The answer lies in the society’s bye-laws. In certain societies, for instance, late payments can be subjected to an annual interest rate of up to 21%.

Can Society Charge Interest on Repair Fund?

To find out the exact cost and conditions, homeowners can consult their society's bylaws. The organisation may impose extra fees on members if the cost of repairs or repainting surpasses the existing repair money. 

However, these need to be approved and addressed at a general body meeting when the repairs' nature, urgency, and cost are reviewed and decided.

The society can begin collecting interest at the predetermined rate if a member fails to make payments on time. 

You can submit a complaint to the Deputy Registrar of Cooperative Societies for review and resolution if you think your society is evading due process or charging unjust interest.

Hey buddy. Structural repairs and exterior repainting are among the continuous maintenance requirements faced by cooperative housing societies (CHS/Society). To pay for these expenses, housing societies usually levy a repair fund that is part of the monthly maintenance payment. So, coming to your question, can society charge interest on major repair fund? Yes. society charges the interest on major repair funds. I have shared more information below.

Does Society Charge Interest on Major Repair Fund?

Yes. A housing society in India can charge interest on delayed payments, including major repair funds, as per its bye-laws and resolutions passed by the general body. However, certain legal provisions and limitations apply.

According to the Maharashtra Cooperative Societies Act and Model Bye-laws, a housing society can charge interest on overdue maintenance and other charges at a rate decided by the general body.

1. This includes contributions towards a major repair fund if it is part of the agreed charges.

2. If the general body meeting (AGM) has approved the collection of a major repair fund, members must pay. However, if the resolution does not specify an interest charge on late payments, the society may not impose one arbitrarily.

3. Any dispute regarding such charge​ Co-operative Court under Section 91 of the Maharashtra Cooperative Societies Act.

4. If a society introduces a major repair fund retro​, attempts to recover funds for past years, it may not always be enforceable unless specified in the bye-laws. Some societies attempt to recover past dues, but such actions can be challenged legally.

Societies can charge interest on delayed payments for a major repair fund if it is approved in the AGM and specified in the bye-laws. I hope you found this helpful.

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