The Dark Side of Cooperative Societies: How Committees Legally Loot Residents
Luxury cars for chairmen, broken lifts for members — the cooperative housing scam that thrives on silence
When the chairman of a housing society drives home in a brand-new SUV while the lift remains unfixed for eight months, residents begin to wonder: where exactly are their maintenance fees going? For Flat No. 401, who paid ₹45,000 last year for “urgent terrace waterproofing,” the answer is clear — the same terrace is still leaking.
This isn’t mismanagement. It’s a racket.
The Neighborhood Transformation Racket
Ordinary neighbors morph into powerful committee members, and with that power comes opportunity. What follows often resembles organized crime — inflated bills, kickbacks, fake audits, and creative accounting that turns every housing society into a cash cow.
“Our ₹2 crore corpus fund showed zero balance. The committee said it was ‘invested’ in a relative’s construction business,” recalls one resident from Flat No. 1003.
The Playbook of Exploitation
- The Inflation Game: Bills inflated by 200–300%, contractors linked to committee members, and sham quotations to justify corruption.
- Emergency as Cash Cow: A burst pipe becomes a “system overhaul.” Fire safety compliance worth ₹8 lakh buys only four extinguishers and one smoke detector.
- Weaponizing Trust: Question the committee, and suddenly your parking slot is reallocated or water connection mysteriously fails.
The Invisible Loot
Signatures on routine approvals mask a laundering machine. Audits mention phantom repairs, fake expenses, and vanishing corpus funds. A forensic accountant revealed:
“One society showed ₹15 lakh spent on ‘structural repairs’ for a building already demolished.”
Blueprint for Resident Revolution
- Unite Online: Form WhatsApp/Telegram groups; demand quarterly financial statements with bills.
- Use RTI: File complaints with the Registrar. Housing society fraud is now a criminal offense with seven years’ jail under the 97th Amendment.
- Invoke Section 91: Demand special audits. File FIRs under IPC 409 & 420 (now BNS Sections 316 & 318).
- Document Everything: Record meetings, track transactions, and expose irregularities.
Silence is Expensive
Your absenteeism at AGMs and blind trust become the license for corruption. Each unopened notice or unchecked budget is a blank cheque for fraud.
“Members who don’t participate in society governance become unwitting accomplices to their own financial ruin,” warns housing rights activist Fatima Bharde.
Fatima Bharde
Co-Society
