Bye-Law 46
Bye-Law 46 is the provision in Maharashtra's Model Bye-Laws for Co-operative Housing Societies that mandates the creation and maintenance of a Sinking Fund for capital expenditure.
What is Bye-Law 46?
Bye-Law 46 requires every housing co-operative society in Maharashtra to collect a Sinking Fund contribution from members at a minimum rate of 0.25% of the construction cost per flat per annum.
The fund must be kept in a separate bank account or government securities, and may only be used for capital expenditure approved by the General Body — such as structural repairs, lift replacement, or waterproofing.
Why it matters
Non-compliance with Bye-Law 46 is a reportable audit finding. The Registrar can direct the society to make up shortfalls and can refuse to issue a No-Objection Certificate for flat sales until compliance is restored.
The bye-law protects members against sudden large special levies by ensuring reserves are built gradually over years.
Legal & regulatory context
Bye-Law 46 derives authority from the Maharashtra Co-operative Societies Act 1960 (MCS Act) and the Model Bye-Laws notified by the state government. Amendments to Model Bye-Laws apply to all societies that adopt them.
The auditor must report on Sinking Fund compliance in Form J, including current balance, annual contributions, and any withdrawals with their purpose.
How SocietyBee handles it
SocietyBee's bill template includes a Sinking Fund line item. The system calculates the per-flat annual minimum based on the construction cost entered during society setup and alerts the treasurer if monthly collection is below the Bye-Law 46 minimum.
Try SocietyBee free →Frequently asked questions
Does Bye-Law 46 apply to all Maharashtra housing societies?
Yes, to all registered co-operative housing societies in Maharashtra that have adopted the Model Bye-Laws. Societies with custom registered bye-laws may have different provisions but must still comply with the MCS Act.
Can the society charge more than the Bye-Law 46 minimum?
Yes. The General Body can resolve to collect more than the minimum. Many older buildings with higher maintenance needs collect 0.5–1% of construction cost per annum.