Unpaid maintenance is one of the most common and frustrating issues in cooperative housing societies. While every resident enjoys common facilities, not all contribute equally. Unfortunately, maintenance arrears are not linked to banking credit scores, leaving societies with limited leverage. However, the Model Bye-Laws and the Maharashtra Co-operative Societies Act provide a structured mechanism for the recovery of long-pending dues, including those pending for more than a year.
Why Credit Score Impact Is Not Possible
There is no legal provision in India that allows housing societies to report unpaid maintenance dues to credit bureaus like CIBIL. Since societies are not categorized as financial institutions, they cannot influence an individual’s credit history. Therefore, societies must rely on statutory remedies for recovery.
Importance of Early and Consistent Action
While cooperative housing societies operate on the principle of cooperation, conflicts, ego issues, and lack of communication often worsen the situation. The managing committee (MC) must act promptly to prevent dues from escalating. Delayed action affects society’s liquidity and disrupts essential services like repairs, salaries, and utility payments.
Amicable Resolution: First and Most Preferred Step
Before initiating legal proceedings, societies should:
• Hold one-on-one discussions with the member
• Issue polite reminders
• Offer instalment options if the member is facing genuine hardship
• Document all communications for future reference
• Attempt to resolve misunderstandings that may have triggered the dispute
Using Mediation and Conciliation for Faster Results
The Mediation Act now gives formal legal recognition to mediation and conciliation. These methods are:
• Cost-effective
• Confidential
• Quick compared to litigation
• Less adversarial, making it easier to maintain relationships in the society
Legal Recourse When Mediation Fails: Recovery Certificate
If discussions and mediation yield no results, the society can apply for a Recovery Certificate (RC) from the District Deputy Registrar (DDR).
Once granted:
• The dues become recoverable as arrears of land revenue
• The government may attach and auction movable or immovable property of the defaulter
• The process is powerful and legally enforceable
This remains the strongest statutory tool for recovering long-pending maintenance dues.
Restrictions on Defaulting Members
While defaulters still enjoy basic services, the law imposes important restrictions:
• Cannot contest elections (Section 154B-23)
• Cannot serve on the committee (Section 154B-29)
• May lose voting rights in certain situations
• Cannot obtain a No-Dues Certificate until the entire amount is cleared
• May face penalties and interest as per the bye-laws
Hence, defaulting members do not enjoy all rights available to financially compliant members.
Conclusion
Although maintenance dues cannot impact an individual’s credit score, societies have multiple remedies to handle chronic defaulters. A combination of amicable negotiation, mediation, and legal enforcement through the Recovery Certificate ensures fair contribution from all members, protecting the society’s financial health and community harmony.
