MUMBAI: Maharashtra has instituted a major reform in cooperative housing society governance with amendments to the Maharashtra Co-operative Societies Rules, 1961, implementing numerous member-oriented changes set to impact thousands of apartment owners across Mumbai, the MMR, and the state.
While the focus has been on self-redevelopment and reduced penal interest on maintenance dues, several crucial governance reforms have flown under the radar.
The new Rules, effective from June 18, lower the minimum number of members required to establish a cooperative housing society from 10 to five. They also introduce a formal name reservation process for proposed societies, establish a method for admitting relatives as associate members by original members’ recommendation, and make government-approved model bylaws automatically applicable to all cooperative housing societies in Maharashtra, regardless of individual adoption.
Additionally, nominees of deceased members are now granted voting rights as provisional members, while societies must publicly announce invitations for claims from legal heirs in two newspapers when no nominations exist. The Rules prohibit unauthorized charges, empower the general body for parking allotments, and facilitate virtual meetings for annual and special general body sessions, including those on redevelopment.
Housing experts believe these reforms will minimize litigation, enhance uniformity in society management, and improve transparency on issues often leading to conflicts, such as succession, maintenance fees, parking, and redevelopment.
One notable amendment addresses succession. Nominees can now more swiftly gain provisional membership with voting rights post the death of a member, a marked improvement over previous delays that left them without voting rights. Furthermore, if a member didn’t designate a nominee, societies must now follow a standard protocol of announcing claims for membership in two newspapers before transferring rights, a move expected to foster legal clarity in inheritance.
“The primary challenge facing cooperative housing societies has been securing steady maintenance funding amidst ongoing disputes over service charges. With these amendments, the government provides statutory support for a uniform maintenance structure,” said Ramesh Prabhu, chairman of MahaSEWA.
“These alterations are aligned with the state’s 2000 directive and the Venus Cooperative Housing Society judgment from the Bombay High Court. Although building-related costs may continue to vary based on area, common service fees must be uniformly applied to all members. This would limit disputes, reduce arbitrary billing, and ensure greater legal assurance in society governance,” he added.
Moreover, societies are explicitly barred from imposing any charges outside those allowed by the Maharashtra Co-operative Societies Rules, addressing ongoing concerns of flat owners regarding unauthorized fees.
Parking disputes, a frequent issue in residential societies, are also now managed collectively, as the amended Rules mandate that allotments be determined by the general body rather than solely the managing committee.
In recognizing the challenges for members living away from their societies, the government has also allowed annual general body meetings and special sessions, including those on redevelopment, to be conducted via video conferencing, ensuring greater engagement while complying with legal requirements.
These financial reforms affect every flat owner. Service charges must now be levied equally among all members regardless of flat size, while water charges will depend on the number of taps in each unit. Non-occupancy fees have been limited to 10% of service charges, replacing previous varied practices. Additionally, the maximum penal interest on late maintenance payments has dropped from 21% to 12% per annum.
To reinforce long-term financial integrity, societies are required to maintain a Sinking Fund of at least 0.25% and a Repair and Maintenance Fund of at least 0.75% of the construction cost, as certified by an architect at the time of building. The amended Rules also set limits on annual maintenance expenses, including audit costs, based on society size.
The reforms significantly boost member-led redevelopment efforts, allowing societies engaged in self-development or redevelopment to borrow from banks and financial institutions up to 10 times the government-approved land value, greatly enhancing project funding access.
The notification also extends essential housing society regulations to those with commercial spaces and housing associations, while updating the registration fees according to society size.
Housing law experts assert that collectively, these amendments aim to enhance transparency, accountability, financial discipline, and consistency in cooperative housing society procedures. Beyond redevelopment, they promise to transform the governance of numerous housing societies across Maharashtra by streamlining formation, fortifying member rights, standardizing management, and reducing unnecessary disputes.
