Conservation of forests outside protected areas is essential for maintaining forest connectivity, which largely depends on the effectiveness of local institutions. In this study, we use Landsat data to explore the relationship between vegetation structure and forest management institutions, in order to assess the efficacy of local institutions in management of forests outside protected areas. These forests form part of an important tiger corridor in Eastern Maharashtra, India. We assessed forest condition using 450 randomly placed 10 m radius circular plots in forest patches of villages with and without local institutions, to understand the impact of these institutions on forest vegetation. Tree density and species richness were significantly different between villages with and without local forest institutions, but there was no difference in tree biomass. We also found a significant difference in the relationship between tree density and NDVI between villages with and without local forest institutions. However, the relationship between species richness and NDVI did not differ significantly. The methods proposed by this study evaluate the status of forest management in a forest corridor using remotely sensed data and could be effectively used to identify the extent of vegetation health and management status.