In a major reform initiative aimed at streamlining housing society governance and reducing bureaucratic hurdles, the Maharashtra state government is gearing up to notify new rules for cooperative housing societies. The draft rules, which are in the final stages of review, promise several transformative changes for over 1.25 lakh housing societies that cater to more than 20 million members, with approximately 70% of these societies located in the Mumbai Metropolitan Region (MMR).
Key Highlights of the Draft Rules
1. Interest Rate on Members’ Dues Reduced
One of the standout changes is the proposal to reduce the interest rate on members’ dues from 21% to 12%, aiming to make housing society governance fairer and less financially burdensome for residents.
2. Greater Financial Empowerment for Redevelopment
The draft rules permit societies to raise loans up to 10 times the land cost for redevelopment projects. This move is designed to facilitate self-redevelopment and empower societies to negotiate better deals or execute redevelopment independently without relying heavily on builders.
“The provision of raising loans up to 10 times the land cost will help societies pursue hassle-free self-redevelopment or demand more area if redevelopment is executed by a builder,” said a senior official from the cooperation department.
3. Virtual Participation in Meetings
Recognizing the importance of digital convenience, the new rules allow virtual participation in Annual General Meetings (AGMs). However, certain safeguards have been introduced:
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A quorum of two-thirds or 20 members, whichever is less, remains mandatory.
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If a meeting is dissolved for lack of quorum, it can be reconvened within 7 to 30 days without requiring quorum.
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Decisions at AGMs will need approval from 51% of total members, including those attending virtually.
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Video recording is mandatory for meetings convened for redevelopment decisions, ensuring transparency and accountability.
New Provisions for Membership and Representation
The draft rules introduce critical updates concerning membership and representation:
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Premises Societies: Commercial entities and shop owners within societies are now recognized as integral members, enabling them to receive their rightful share in redevelopment projects.
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Provisional Members: A new category has been added to grant nominees voting rights and provisional membership after the demise of a member, until formal transfer of membership is completed.
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Legal heirs can be given nomination and provisional membership, although they do not automatically acquire ownership rights over the property until formal transfer procedures are completed.
Transparency in Maintenance and Financial Charges
In a bid to remove ambiguity around housing society finances:
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Common service charges will be equally divided among all flats.
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Water charges will be levied based on the number of taps in each flat.
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The sinking fund must be a minimum of 0.25% of the construction cost, while the repair and maintenance fund must be at least 0.75% of the construction cost, both to be collected annually.
“Many clauses such as sinking and repair fund contributions existed in the by-laws, but by bringing them into the rules, we have given them legal sanctity. Once the rules are finalized, we will simplify the by-laws,” explained Kiran Sonawane, Deputy Registrar, who played a key role in drafting the rules.
Aim to Minimize Government Intervention
Officials believe these changes will weed out ambiguities that often lead societies to seek intervention from the registrar’s office, which in some cases results in the appointment of administrators—a situation that causes operational disruption and increased costs for residents.
“Fine-tuning the rules and bylaws will minimize government interference and empower societies to self-manage their affairs effectively,” Sonawane added.
Stakeholder Feedback and Next Steps
The draft rules have received fewer than 100 suggestions or objections from stakeholders, including housing societies, federations, impaneled valuers, architects, and organizations like Sahakar Bharati. Devdatta Boralkar of Sahakar Bharati expressed optimism, hoping the rules would bring about greater transparency and efficiency in society operations.
The draft rules will now proceed to the principal secretary of the cooperation department for review. Once vetted by the law and judiciary department, they are expected to be notified, ushering in a new era of modernized, transparent, and resident-friendly cooperative housing governance in Maharashtra.
