Is Your Society Charging You The Penalty Right way?
Managing any society is a hindrance job. A society encompasses many divergent denizens in it. When it comes to the collection of maintenance charges, one can observe their conduct is like chalk and cheese. But the management makes the member remunerate the society maintenance charges by hook or crook. Usually, application of penalty is a popular method of recovering the maintenance charges.
Charging of penalty may be in different forms; like it may be a fixed amount or interest on the basic maintenance amount. On carrying a survey it is found that every society has a different method for collection of penalty depending upon their convenience. A fixed amount is preferred over percent interest method because of simplicity on calculation part.
In a survey carried by Upayogee, it is found that around 60% societies in Pune and Navi Mumbai, are using the wrong method for charging penalty. Because of these ill methods members are paying unnecessarily a big amount even when the delay is one or two days. Let's discuss this with various billing method. For monthly billing method, if tenure is 1st Jan 2018 to 31st Jan 2018, and the due date is 15th Jan 2018; if one pays the bill on 20th Jan 2018,i.e., 5 days delay, many societies charge the fine for the whole month. It means there is no difference whether one pays 5 days late or 15 days late; one will have to pay the equal fine. In monthly billing, the amount may comparatively appear smaller but in the case of quarterly or yearly billing, this amount is considerably high.
Many a time, in the yearly billing system for even one day delay, interest for thirteen months is charged and as the paying member finds himself in fault, cross verification is also not done by him.
The question is, why to pay which we should not be paying? And why to pay extra without any reason? Basically, as per Maharashtra Co-operative Housing Society bye-laws, Interest should be charged for numbers of days delayed. It means, if you are paying five days after the due date, you shall be paying for five days interest only.
The calculation of interest is found complicated as it requires to be calculated on per day basis. In fact, it is quite simple if you know two to three simple logical formulae. The daily fine can easily be calculated by the following method:
P0 = [P x I/100]365
F = P0 X N
A = P+F
Rate of interest varies from one society to another. But as per cooperative housing society bye-laws a member shall be required to pay simple interest at 21 percent per annum or such fewer rates as fixed by the general body of the Society, on the dues to the Society, from the date the amount was delayed till its payment remains unpaid by the member within the period.