Ordinance to amend Maharashtra Co-operative Societies Act 1960: All you need to know

By K. K. Ramani (Advocate)

The Maharashtra Cooperative Societies (Third Amendment) Ordinance 2018 promulgated by the Governor of Maharashtra brings about significant changes in the Cooperative Societies Act, mainly to cater to the issues of cooperative housing societies. Maharashtra Cooperative Societies Act, as it stood, is designed to regulate the affairs of cooperative societies, in general, treating all societies, including housing societies in the same manner. It has been appreciated that the affairs of cooperative housing societies, being distinct and peculiar from societies engaged in other activities, needed independent regulatory provisions suiting the special and unique character of such societies. Considering the uniqueness of housing societies a separate chapter XIII-B containing special provisions applicable to housing societies only has been inserted clarifying, rationalizing and synchronizing the provisions with other related legislation.

2. With the coming into force of the Real Estate (Regulation and Development) Act. 2016, the provisions of Cooperative Societies Act, in an ideal situation, need to be in sync with the provisions of RERA in matters where RERA deals with the formation of Association of Allottees, which include the formation of cooperative societies, and conveying the building, land and common areas to such associations.
RERA postulates registration of such societies within three months of the majority of the flats having been booked. The provision is applicable only in the absence of local laws.

Since MOFA remains applicable, Section 10(1) of MOFA will have an application under which steps should be taken for formation of an association of allottees as soon as 51% of allottees subject to a minimum number of 10 have booked the flats. Even if RERA is to be applied, the provisions read with Maharashtra RERA Rules provide for registration within three months of the issue of OC or when 51% of the allottees have booked their apartments, whichever is earlier. The newly inserted provision through Ordinance, in section 154B-2, also prescribes the time period with reference to the majority booking the flats and provide for a minimum number of persons for registration of a society to be five or 51% of the total number of flats/plots as per the sanctioned plan. Making the booking of majority flats a condition for registration under the cooperative societies Act also could be done by providing a separate chapter for housing societies.

3. Further, the Maharashtra Real Estate (Regulation and Development) Rules provide for the conveyance of buildings in a layout plan (except podium basement and common area) to the respective societies within a period of one month from the date of registration of the cooperative society or three months from the receipt of occupation certificate. The basements, podiums and land underneath the buildings are to be conveyed to the Apex Society within three months of the registration of such Apex society. The provision apparently was not in harmony with the provisions of Maharashtra Cooperative Societies Act as the constitution and registration of an Apex organization was possible only with at least five societies as members.

The provision in the Rules was, therefore, unworkable where the number of buildings in the layout was less than five. The deficiency has been made good by providing for registration of “Cooperative Housing Association “which can be registered under the Act with two housing societies or other legal bodies as members. The “cooperative Housing Association “has been defined to mean an association of housing societies or other legal bodies for the purpose of maintenance of common amenities or conveyance of land and common amenities in respect of plot or layout. With the provision for “Cooperative Housing Association”, the conveyance as per RERA Rules which was possible only in respect of projects where the number of societies was minimum five, will now be possible in respect of all multi-building projects. The provision synchronizes with the requirement of Maharashtra RERA Rules and makes it workable.

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