Short Answer

Yes, there are legal limits on how much rental income a flat can earn under society rules.

Detailed Explanation

Section 73 of the Gujarat Cooperative Societies Act, 1961 addresses the issue of profits and income of a cooperative society. This section states that the income and profits of a cooperative society shall be utilized solely for promoting the objectives of the society and for providing benefits to its members. Therefore, any rental income earned by a flat in a cooperative society should be in line with these objectives and cannot be excessive.

Rule 102 of the Gujarat Cooperative Societies Rules, 1965 further elaborates on the utilization of income by a cooperative society. According to this rule, the society must maintain proper accounts of all its income and expenses, including rental income from flats. The rule also emphasizes the importance of using the income for the welfare of the society's members and for the maintenance and upkeep of the society's premises.

In practice, this means that a cooperative society can impose restrictions on the amount of rental income that a flat can earn to ensure that it aligns with the society's objectives. For example, the society may set a cap on the rental amount that a flat owner can charge to maintain affordability for all members. Failure to comply with these limits may result in disciplinary action by the society or legal consequences.

Real-world Scenarios

• Scenario 1: A cooperative society has a rule that limits the rental income from flats to 10% above the prevailing market rates in the locality. This ensures that all members have access to affordable rental options within the society.

• Scenario 2: A flat owner in a cooperative society charges exorbitant rent for their flat, far exceeding the market rates. The society intervenes and enforces the rental income limit to maintain fairness among members.

• Scenario 3: A cooperative society uses the rental income generated from flats to fund common amenities and maintenance activities, benefiting all members collectively.

References

• Section 73 of the Gujarat Cooperative Societies Act, 1961: Official PDF

• Rule 102 of the Gujarat Cooperative Societies Rules, 1965: Official PDF