Category Archives: Housing Society News

Housing Society Sinking Fund

Sinking Fund Housing Society – Why Society Need It?

Sinking Fund Housing Society – Why Society Need It?

It is risky to continue occupation of a building which has run its life. A provision has been made in the byelaws, enabling a co-operative housing society to collect contributions towards a sinking fund from members at a fixed rate per month. The rate fixed under the bye-laws is 1/2 per cent per annum of the cost of construction of a flat, payable in equal monthly instalments, as provided under bye-law No. 67(b)(i) of the bye-laws from the set revised in 1976. A building sinks in course of time due to its wear and tear but the land remains as it is even if the building collapses.

The basis on which the cost of construction of tenanted structures should be fixed: There are some cases which pose problems to societies in adopting the basis for the purpose of fixing the amounts of contributions from members towards the Sinking Fund. There may be societies which have newly constructed buildings as also old tenanted structures, the tenants of which have joined the structures.

There may be some other societies, in which new flats are constructed over the old tenanted structures and tenants thereof have joined the societies. The cost of these old structures is much less than that the cost of construction of the new flats and the contributions from the members of the tenanted structures based on such cost are practically negligible.

A society having a separate old structure on a part of the plot on which a new building is constructed, should ascertain from an architect the future life of the structure and fix the amount of contribution from each member, taking into consideration the cost of reconstruction of a new building thereon, of equal size, if the tenants do not desire new accommodation of large size, at the time when the structure would become due for reconstruction, the area of each flat and the accumulation of the amount of contribution to the sinking fund invested in long term deposit along with interest at the time of starting reconstruction of the structure.

In the latter case, the members of the tenanted structure, on which new flats are constructed have to bear in mind that the reconstruction of the building would include the reconstruction of the structure.

The rate per sq. ft. of reconstruction of the flats is bound to be uniform for all flats. It, therefore, follows that the value of the old structure, for the purpose of fixing the amount of contribution to the sinking fund should be based on the rate per sq. ft. of construction of new flats on the old structure. This would enable the society to build up its sinking fund equal to the cost of reconstruction of the building in course of time.

Bye Laws for Housing Society in Maharashtra



(a) The name of the society shall be……………………………….. Name of the Society

(b) The society shall follow the procedure laid down under Section 15 of the Act and Rule 14 of the Rules for the change of its name. Procedure for changing the name.

(c) The society is classified under major class “Housing” with sub-class Tenant Co-partnership Housing Society.” Classification.

Address of the society.

2. (a) (i) The registered address of the society shall be as under:

(ii) Address for Correspondence (as decided by the Managing Committee)

(b) Any change in the registered address of the society shall be intimated by it to the Registering Authority and all others concerned within 30 days of such change.

(c) Any change in the registered address of the society shall be made after following the procedure laid down in Rules. Procedure for changing the address of the Society.

(d) The society shall exhibit at a conspicuous place at the main entrance of the building, a Board indicating its name. Registration number and the registered address. Exhibition of Name Board.


(i) ‘Act’ means the Maharashtra Co-operative Societies Act; (MCS Act) 1960.

(ii) Bye-laws’ means by-laws consistent with Act and registered under this Act for the time being in force and includes registered amendments of such bye-laws.

(iii) ‘Chief Promoter’ means the person who is elected by the Promoters, in their first meeting, or in their subsequent meetings in case the post of the Chief Promoter lies vacant, till the first general meeting.

(iv) “Committee” means the Committee of management or board of directors or the governing body or other directing body of a cooperative Housing society, by whatever name called, to which the management of the affairs of a society is entrusted and vested under section 73 of the Act

(v) ‘—– Days’ Clear Notice means the number of calendar days intervening between the day of posting the notice and the day of the meeting.

(vi) Flat’ means a separate and self contained set of premises used or intended to be used for residence, or office, or show-room, or shop, or godown and includes a garage, or dispensary, or consulting room, or clinic, or flour mill, or coaching classes, or palnaghar, beauty parlour, the premises forming part of a building and includes an apartment.

(Vii) ‘Housing Federation’ means the federation of cooperative housing societies, registered and notified under the Act.

(viii) ‘Ownership Flats Act’ means the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act. 1963.

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omplaint Against Housing Society or RWA

How To Register Complaint Against Housing Society or RWA?

How To Register Complaint Against Housing Society or RWA?

Modern-day living is driven by community support and hence, in a housing society, Resident Welfare Associations or RWAs have become inevitable. It seeks to simplify housing complex level issues. Here’s why RWAs today are almost your saving grace:

  • Planning, improving and ensuring better living standards
  • Empowering residents to identify areas of conflict while coming up with solutions
  • Effective fund utilisation
  • Addressing common issues in a practical manner
  • Ease of communication

But what can you do if you are not happy with the way your RWA is functioning?

RWAs can be difficult to deal with if not competent. It turns out to be more of a harassment than help. An RWA or the Apartment Owners Association can be sued by any of the members or group of members. If you see a diversion or conflict of interest with respect to the byelaws of this association, a meeting should be held discussing issues in this regard.

Most RWAs prepare for such incidents and therefore, the byelaws may contain information about how and to whom should issues be directed to in the first place. All appeals against the decision of the Managing Committee is usually escalated to the General Body of the Association. The appeal is given to the Secretary in writing and the same is placed before the General Body. The decision of the General Body shall be final and will be communicated to the member concerned in writing.

If problems persist, residents can approach the Registrar of Societies which has the right to cancel the registration of the association. As a last resort, residents can move the court of law as well. These day various residents have been resorting to online forums to bring issues of concern to the fore.

Similarly, even when the Association is dissolved due to any reason, the course of action thereon is usually pre-decided especially with regard to liabilities, left-over properties/ assets etc.

Provisions under Societies Registration Act 1860 lays down the following:

“Every society registered under this Act may sue or be sued in the name of President, Chairman, or Principal Secretary, or trustees, as shall be determined by the rules and regulations of the society and, in default of such determination, in the name of such person as shall be appointed by the governing body for the occasion.”

What makes RWAs mandatory

RWAs are non-political and non-sectarian which makes it the best channel to take up issues that are affecting the residents of the apartment complex and giving it a voice whenever and wherever needed. All RWAs need to be registered and come under a specific jurisdiction which makes it liable to punishment/penalty in case of defaults or lawlessness.

In short, RWAs usually take up addressing each and every aspect of your community life- promote friendly relations amongst residents, ensure availability of civic amenities like water, sanitation, maintenance of roads, parks, street lighting, take up issues related to enforcement of prohibition of causes like drug abuse, procurement of funds for donations or subscriptions, welfare activities such as cooperative medical stores, medical/educational camps, employ help such as carpenters, plumbers, electricians and fix remuneration, promote non-political legal issues of residents and most of all ensure safety and security of residents besides many social, philanthropic activities. RWA’s can also collaborate with urban local bodies (ULB) to implement the priority projects through ULBs’ funds or through the Councilor /MLA/MP funds.

Therefore, it makes sense to have an effective RWA.

Source: Proertytiger

Annual General Meeting Housing Society AGM

How To Conduct AGM of Housing Society In Maharashtra

How To Conduct AGM of Housing Society In Maharashtra
The bye-laws in Maharashtra prescribe rules for the deadline for holding AGMs, the quorum for such meetings and the business that can be transacted, as well as penalties for members who fail to attend

Every housing society has to adopt bye-laws, for its management and administration. The government of Maharashtra has provided model bye-laws, which can be adopted with or without changes by societies. These bye-laws also cover the rules pertaining to annual general body meetings of the societies.

Time limit for holding the AGM and minimum notice period

As per the model bye-laws for cooperative housing societies in Maharashtra, every housing society has to hold an annual general meeting (AGM) of the society, every year, before 30th September. It is the responsibility of the committee of the housing society, to ensure that the AGM is held within the prescribed period. The notice for convening the AGM, has to be signed by the secretary of the society. The AGM of the society cannot be convened unless a notice of 14 days is given to the members. While computing the 14 days, the date on which the notice is issued and the date of the meeting shall be excluded. Once an AGM is called, it cannot be treated as invalid, unless an order declaring the meeting as such is passed by the cooperative court.

Quorum for AGM

For conducting the business at the AGM, the law stipulates that a minimum number of members need to be present, called the ‘quorum’ of the meeting. A minimum of two-thirds of the total number of members, subject to a maximum of 20, should be present to constitute the quorum for the AGM. Consequently, small societies sometimes find it difficult to ensure the quorum. For big societies, even a small proportion of the total members may add up to 20 members being present in the meeting and constitute a quorum. In case the required quorum is not present within half an hour of the appointed time, the meeting shall be adjourned to a later hour on the same day or to a subsequent date which cannot be earlier than seven days and not later than 30 days from the original date of the AGM. At the adjourned meeting, there is no requirement to have a quorum. However, the mere attendance of one person at the adjourned meeting, shall still not constitute a meeting and therefore, a minimum of two members have to be present even at the adjourned meeting.

Business to be transacted at the AGM

“The main purpose of the AGM of a society, is to adopt and approve the annual accounts of the society by the members and to receive an annual report of the affairs of the society. The auditors of the society are also appointed at the AGM. In addition to the above business, the AGM can take up any other matter, even if the same is not included in the notice.”

However, the members cannot take up any of the following business at the AGM, unless proper notice has been given:

  1. Expulsion of members of the society
  2. Amendment of the bye-laws of the society
  3. Bifurcation, amalgamation, or division of the society
  4. Transfer of property of the society

If the business on the agenda of the general meeting of the society is only partly transacted, then, the meeting can be postponed to any other date decided by the members present in the meeting, which should not be later than 30 days from the original AGM.

What happens if a member does not attend the AGM

If a member does not attend a single general meeting in five years, without the consent of the general body of the society, then s/he will become a non-active member. A non-active member, who does not attend even a single meeting in the next five years becomes liable for expulsion from the society. Moreover, a non-active member does not have the right to participate in the business of the AGM.

Source: (Link)

Housing Society Waste Management

Housing Society Waste Management

Housing Society Waste Management

Office bearers of large housing societies may now face prosecution for not treating their wet waste. The Maharashtra Pollution Control Board (MPCB) will be lodging cases against such defaulters. This will be followed by asking local bodies to cut water supply to the society by 20 per cent.

“We have taken a policy decision that office bearers of large housing societies that have not installed organic waste composters (OWCs) or are not treating wet waste will be prosecuted,” a senior MPCB official.

“We are insisting that housing societies with a built up area of over 2 lakh square feet, which require environment clearances, must segregate and treat wet waste by converting it into compost,” he added, stating that they were conducting a survey of such premises.

The official added that later, local bodies such as the BMC, would be issued instructions to initially reduce the quantum of water supply by 20 per cent. Notices have also been issued to housing societies in Mumbai and Pune.

Another MPCB official said that based on a list provided by the BMC, they had sent notices to around 80 large housing societies in Mumbai for not establishing facilities to treat wet waste. “Many of these bulk generators have given undertakings about establishing OWCs,” he added.

“We can take action against office bearers against the relevant sections of the Solid Waste Management (SWM) rules, 2016, for non-compliance. The quantum of the penalty on these waste generators will be decided by the court,” the official explained.

Building projects of an over 20,000 sqm area are given environmental clearances with a condition that all solid waste should be processed in the premises.

BMC officials admit that though the state had issued guidelines under which premises over 5,000 square meters are to treat their own wet waste for the occupation certificate to be issued, it was found that these spaces were being used for purposes such as parking.

Under the SWM rules, all gated communities and institutions with an over 5,000 square meters area shall segregate waste and source and process, treat and dispose off bio-degradable waste through composting or biomethanation within the premises as much as possible.

It defines bulk generators as buildings occupied by the Central and State government or local body departments or undertakings, public sector undertakings, private companies, hospitals, educational institutions, hotels, commercial establishments, markets, places of worship, stadiums and sports complexes with an average daily waste generation rate exceeding 100 kg.

The Mulund, Deonar and Kanjurmarg dumping grounds see around 7,300 metric tons of garbage being dumped there daily. Processing of wet garbage at source will reduce the waste being dumped there.


Under SWM rules, all gated communities with an over 5,000 sqm area shall segregate waste, treat and dispose off bio-degradable waste through composting or biomethanation within the premises

Source: DNA, 25-Feb-2018

GST on Housing Society

GST Impact on Housing Society or RWA

GST Impact on Housing Societies or RWA

Multiple taxes, even across state borders, has always been known to make trade in India expensive and complicated. GST (Goods and Services Tax) is a fiscal reform being made to introduce a single taxation system across the entire nation. Manufacture, distribution, and provision of goods and services, fields that pay indirect taxes, will be covered by the GST reform. Construction services and housing societies, which will now pay tax only at stages of value addition are to be largely benefited by the implementation of the GST.

Present taxation system and Housing Societies

Service Tax Act covers the housing society charges at present. Under this, the tax is levied separately by the central and state government from all apartment owner association of housing societies whose funds exceed Rs. 12 lakhs.

Applicability of GST on Housing Societies

Before we deal with the Impact of GST on Housing Societies, let’s examine as to whether the Societies are covered under GST or not?

The Central Goods And Services Tax Act (CGST), 2017 is applicable to the dealer-person who is rendering the service or supplying the goods in its regular course of business activity.

Section 2(84) of the above act defines “Person” as follow:-

“Person” includes —

a)    an individual;

b)    a Hindu Undivided Family;

c)    a company;

d)    a firm;

e)    a Limited Liability Partnership;

f)     an association of persons or a body of individuals, whether incorporated or not, in India or outside India;

g)    any corporation established by or under any Central Act, State Act or Provincial Act or a Government company as defined in clause (45) of section 2 of the Companies Act, 2013;

h)   anybody corporate incorporated by or under the laws of a country outside India;

i)     a co-operative society registered under any law relating to co-operative societies;

j)     a local authority;

k)    Central Government or a State Government;

l)     society as defined under the Societies Registration Act, 1860;

m)  trust; and

n)   every artificial juridical person, not falling within any of the above.

Above clause

(i)  Clearly mentions that the co-operative Housing society will be covered under the  definition of “person”

Now the question comes as to whether the activities of housing Societies be considered as “Business Activity”?

To answer this let’s examine the definition of “business” as defined under Section 2(17) of the above Act, which read as follows;

“business” includes;

(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit;

(b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a);

(c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction;

(d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business;

(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members;

(f) admission, for a consideration, of persons to any premises;

(g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation;

(h) services provided by a race club by way of totalisator or a license to book maker in such club ; and

(i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;

The above clause (e) specifically covered a Society, thus the housing society will be considered as carrying out activities in furtherance of business and will be liable for Registration under GST.

Impact of implementation of GST

  1. A.   Applicability:

Society / RWA will be required to pay GST on monthly subscription/contribution charged from its members if such payment is more than Rs 5,000 per member and the annual turnover of society /RWA by way of supplying of services and goods is also more than Rs 20 lakhs.

  1. B.   Do we need change the Billing format of the Society?

Yes, the format will have to be changed and it will be changed as format to be notified.

  1. C.   Impact on the society accounting?

This is certainly going to impact the society accounting, now as the tax paid on the expense side is available under specific scenario, the party-wise details have to be uploaded and the work being done with various type of online / offline programs will undergo a major change to provide for recording detailed expenses in lieu of recording transactions as being done presently, whereby few society are paying collecting and paying taxes inefficiently increasing the cascading effects.

  1. D.   Will the input tax Credit be available on all the expenses incurred by the Society?

On following expenses where the taxes are paid No Input tax Credit will be available, i.e.

a) Electricity Expenses

b) Stamp Duty

c) Property Tax

  1. E.    Taxable/ non-taxable housing society charges under GST
  • Collection of property tax: Non-taxable
  • Maintenance and repair charges: Taxable
  • Parking charges: Non-taxable
  • Water charges:
    • Non-taxable when collected to buy water for residents to fulfill basic requirements
    • Taxable when collected to buy water for luxuries such as swimming pool, gardening, club house, etc.
  • Charges from certain members for additional benefits during the use of Swimming Pool, Clubhouse, etc: Taxable
  • Share transfer fees and donations: Taxable
  • Sinking fund/ Repair Fund/ Painting fund: Non-taxable
  • Non Occupancy Charges: Taxable

 Audit procedures to be followed under GST

If the turnover of a housing society exceeds both the mentioned limits the following audit procedures are to be carried out by the society:

  • GST Audit
  • Statutory Audit
  • Income Tax Audit

Benefits of GST during construction of Housing Societies

  • Removal of cascading effect of taxes by central and state government
  • Ease of compliance to taxes for buyers and developers
  • Increase in competitiveness between constructor’s due to uniformity
  • Provision of better quality as everyone benefits through the lower expenses on taxes

Benefits of GST after registration of Housing Society

  • Reduction of overall maintenance cost of the society due to input credit benefit.
  • GST charged for services such as housekeeping, repairs, maintenance, lift AMC, fire AMC, security, contract staff, accounting and auditing services and others can be claimed as arefund if there is no output liability, with minimal cost deducted for compliance. A provision for arefund as such was not available earlier.
  • Service tax on the amount paid for labor during the construction of only a single unit in the society by the society members is exempted.

Implementation and acceptance of GST by the housing societies, with its reduced burden in the form of tax, is sure to be beneficial to the housing societies. Transparency during payment of taxes, ease of business due to absence control by thestateat borders and improved economic efficiency due to destination-based system of taxation would reduce the cost borne by the service providers and thus maintain the society expenses within a limit.

Getting ready with the registration on a priority basis?

  • Registration
  • Get the details of GSTRN of all the vendors and the detailed HSN or the Service code which they have obtained under GSTRN. This should be in alignment of our services.
  • If your Residential Owner / Industrial Gala owners are going to claim the GST paid on society bill as Credit, then also obtain their Registration details from them, to incorporate in our bills.
  • Take management policy decision in case they have to deal with the unregistered dealer (They would have to pay GST first and then claim the credit of the same), so what are the exceptional situation in which the executing team may purchase goods/services from unregistered dealers.

Income Tax liability for Housing Society

The general perception of the Managing Committee of a cooperative housing society is that the income generated by the society is not chargeable to tax and therefore do not bother to file Annual Tax Return. This is a wrong perception since though certain types of income of cooperative housing society are fully exempted there are other incomes which are chargeable to tax.

The society’s income is generated by the following charges:
(1) Contribution from Members:
This is the most common charges the society collects from its members to run the day to day affairs of the society. They are credited under different heads namely, maintenance, municipal taxes, electricity, lift maintenance, housekeeping, water charges, repair funds, sinking fund. etc. Any surplus generated due to these types of income is not chargeable to tax as its exempted based on the “Concept of Mutuality”

(2) Interest charged on member outstanding dues:
Interest charged by the society on outstanding dues again forms a part of contribution and qualifies the test of concept of mutuality and is exempted.
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Housing Society Safety & Security

This Blog is penned after a spate of violent attacks taking place across Mumbai every other day and we all read it in the newspaper and think this will not happen to us.


This Blog will wake you up and would urge to take active and decisive role in the affairs of the Housing Society and specifically Safety and Security of your near and dear ones.

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Now, ‘Swachha Society’ awards for housing societies

Navi Mumbai: Registered housing societies can participate in ‘Swachha Society Award’ contest launched by a private bank recently. The contest is an extension of Swachh Bharat Abhiyan, started by the bank to recognise, inspire and celebrate excellence in cleanliness, safety and adoptionof green technology in housing societies.

This inter society contest, conducted by ICICI Bank, will reward housing societies which take up environment friendly initiatives in their complexes.

Spanning over 50 days, from July 8- August 31, the contest will include initiatives on energy conservation, rainwater harvesting, segregated waste dustbins, mopping machine, compost pit and more.

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