Maharashtra Government Tightens Rules for MLA Fund Allocation in Housing Societies
Mumbai, 7th March 2025: The Maharashtra government has introduced stricter regulations for the allocation of MLA funds to cooperative housing societies, making it mandatory for societies to meet stringent audit and financial compliance standards.
As per the new guidelines issued this week, a housing society must have completed a statutory audit for the past three years and secured at least a ‘B’ audit grade—a rating considered difficult to achieve—to qualify for MLA fund support. Additionally, more than half of the society’s members must not have outstanding maintenance dues.
The use of MLA funds in housing societies was first approved in 2022, allowing funds to be utilized for projects such as rainwater harvesting, solar panel installations, internal road repairs, paver block placements, gymnasiums, and small parks. However, under the revised norms, societies must demonstrate compliance with the Maharashtra Cooperative Societies Act, 1960.
“A housing society should have conducted its general body meetings as per the timelines set under the Maharashtra Co-operative Societies Act and Rule 1061 over the last three years,” states the new government resolution (GR). “It must also have submitted meeting minutes along with audit reports to the registrar of cooperative societies. Furthermore, no legal action should have been taken against the society under Sections 83 and 88 of the Act.”
The state government’s 2022 decision to allow MLA Local Area Development (LAD) funds for cooperative housing societies proved to be beneficial across political parties. The move extended fund allocation to housing societies in urban areas under municipal corporations, municipal councils, and nagar panchayats.
During the recent assembly elections, many candidates actively engaged with housing societies by offering to pay property tax bills, lay paver blocks, and support infrastructure projects. Unlike slum pockets, where direct incentives such as cash or liquor are sometimes used to lure voters, housing society residents tend to prioritize community development projects. The MLA fund scheme was seen as a way to ease financial burdens while promoting sustainability in residential complexes.
Under the policy, up to ₹50 lakh could be allocated per housing society for development work, with 75% of the cost covered by MLA funds and the remaining 25% contributed by the society itself.
With the new regulations in place, only societies with a strong financial record and compliance history will be eligible, ensuring better accountability in fund utilization.
