Dharmendra Jore: Housing society reforms need more amendments

Growing urbanisation has increased the number of registered co-operative housing societies in Maharashtra to a lakh or so. A housing society is formed when a developer hands over all his real estate stock to buyers to use it as a residential or commercial place. The hand over means the flat owners are henceforth supposed to maintain the building in a cooperative set up prescribed under the state law, that particularly deals with the housing sector.

Of late, the very law had created problems for the people who work in an honorary capacity in housing societies, because it was mandated in 2013 that elections for cooperatives, including housing in the state, must be held under the control of the Maharashtra State Co-operative Election Authority. Those who were forced to take the new route found it tedious and expensive. At times, they were misled by the election officials when it came to charging the fee to conduct elections. Rules were flouted and members pressured into shelling out more money.

Cabinet fixes it
The issue was taken up by housing federations with the government saying that housing societies functioned as non-profit units unlike other cooperatives such as sugar factory and milk units. A sustained follow-up that was backed by some ruling party leaders in Mumbai resulted in a positive response for the government. Last Tuesday, the Cabinet made important changes to the law. Henceforth, housing societies which have less than 200 members will be able to hold their elections in the annual general meeting every five years.

With this relaxation, the Cabinet has ensured that erring management committees were made accountable. Office bearers who do not submit audited accounts and other mandatory documents to the state cooperatives department within the set deadline, would be imposed a fine of Rs 25,000. The members will have to submit a self-declaration and failure to do this will be treated as an offence.

To make matters crystal clear, a separate chapter on governance of housing societies will be created in the Maharashtra Cooperative Societies (MCS) Act, 1960. An ordinance will be promulgated later this month.

Who benefits
Housing societies with less than 200 members will be empowered to conduct their elections in the AGM. According to the co-operation department, about 80 per cent of societies fall in the under 200-member category. Social reservations and a quota for women will continue in the management committee. Along with election reforms, the government wants to ensure that the housing society managements work in a transparent manner, and don't hassle members who seek information and right to service.

An amendment to this effect says that a bonafide member will be entitled to inspect free of cost all records, books of accounts, and correspondence of the society. This decision is expected to keep the management on their toes and desist from misleading the members. Most of the cases that the registrars of societies deal with, are against the managements that deliberately hide information or fabricate it when asked for it.

As a penalty of R25,000 will be imposed for not submitting accounts/documents to the government and society members, the management has been given more powers to deal with a defaulting member to recover dues. Transferring provisional membership to the person nominated by a deceased member has been made possible, because submission of legal documents of succession takes some time, and in the meantime the family gets affected because of lack of rightful membership.

Not fine
The decision to impose a fine of Rs 25,000 on office-bearers responsible for not submitting accounts and other documents to the members and the government is highly contentious. The elected members work in an honorary capacity and it is a known fact that not many residents come forward to take up the responsibility. The penalty clause will surely keep the people away despite their interest. Imposing a penalty should be acceptable if the management does not submit audited accounts and other documents to the AGM. The government should seek these documents only when complaints of irregularities are lodged and inquiry demanded. The existing cooperative law is enough to deal with erring people.

Another issue is inadequate knowledge of housing society law that usually translates into wrong interpretations by both - the people in management and residents. The new law has corrected the flaw. It asks the societies to contribute annually towards training and education of members through the local state housing federation. It would be an additional financial burden, but a useful one, if the parties involved ensure that training sessions are held regularly by the federation, and the cooperation department, which has enforced a new expense head when the maintenance costs are rising.

Dharmendra Jore is political editor, mid-day. He tweets @dharmendrajore Send your feedback to mailbag@mid-day.com

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