106C-10 · 106C-11
Society funds — sinking, repair & more
Rules 106C-10 and 106C-11 establish the borrowing limits and mandatory fund structure for co-operative housing societies. Nine distinct funds are prescribed — from the sinking fund at 0.25% p.a. to the welfare fund for social activities.
Borrowing limit (Rule 106C-10)
A housing society's total liabilities must not exceed ten times the sum of:
(a) Paid-up share capital (b) Accumulated reserve fund (c) Amount contributed by members towards land and building (d) Building fund
...minus accumulated losses.
Exception for self-redevelopment or self-development: the society may borrow up to 10 times the value of the land, as determined by a government-approved valuer's report. This allows much larger borrowing capacity for redevelopment projects.
The nine prescribed funds (Rule 106C-11)
| Fund | Source | Use | Min. rate |
|---|---|---|---|
| Reserve fund | Entrance fees + transfer fees/premiums + net profit allocation + donations | General reserves | — |
| Sinking fund | Member contributions at rate fixed by general body | Heavy repairs approved by general body | Min. 0.25% p.a. of construction cost per flat |
| Repair & maintenance fund | Member contributions at rate fixed by general body | Routine recurring repairs of buildings/property | Min. 0.75% p.a. of construction cost per flat |
| Major repair fund | Member contributions at area-based pro-rata rate | Significant repairs and maintenance work | As decided by general body |
| Education & training fund | Member contributions | Co-operative education and training programmes | ₹10/member/month (Rule 106C-7) |
| Election fund | Equal contributions from all members | Conducting managing committee elections | As decided by general body |
| Welfare fund | Voluntary contributions from members | Social, cultural, recreational activities | — |
| Corpus fund | Maintained by society | As decided by general body | — |
| Any other fund | Equal contributions from all members | Specific purpose approved by general body | — |
Sinking fund — worked example
If a flat was constructed at ₹30,00,000:
Annual sinking fund contribution = ₹30,00,000 × 0.25% = ₹7,500 per year Monthly contribution = ₹625 per flat
This is the statutory minimum. The general body may fix a higher rate.
The construction cost used for the sinking fund must be the cost certified by the architect at the time of construction — not the current market value or sale price of the flat.
Repair & maintenance fund — worked example
If a flat was constructed at ₹30,00,000:
Annual repair & maintenance contribution = ₹30,00,000 × 0.75% = ₹22,500 per year Monthly contribution = ₹1,875 per flat
This covers routine recurring repairs — not major structural work (which comes from the major repair fund).
Reserve fund — what goes in
- All entrance fees received from members — must go entirely into reserve fund.
- All transfer fees, charges, or premiums received when membership is transferred.
- Amounts allocated from the net profit or surplus of that year, subject to section 66(1) and (2) of the Act.
- All donations received, except those designated for a specific purpose.
Frequently asked
No. The sinking fund is specifically for "heavy repairs as approved by the general body" (Rule 106C-11(2)). Routine painting and minor repairs come from the Repair & Maintenance fund.
Need help applying these rules to your society?
This page is for informational purposes only and does not constitute legal advice. For advice specific to your situation, consult a qualified advocate familiar with Maharashtra co-operative law.
Source: Maharashtra Government Gazette, Part IV-B, No. 366, dated 22 June 2026 · Notification No. Sanini 0321/C.R.41/13-C, dated 18 June 2026