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CO-OPERATIVE HOUSING SOCIETY

CO-OPERATIVE HOUSING SOCIETY

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WHAT IS A HOUSING COOPERATIVE?Housing cooperative has been defined as:

“A legally incorporated group of persons, generally of limited means, pursuing the same cause of meeting the common need of housing or its improvement based on mutual assistance.

In such a cooperative, the membership is voluntary and control is democratic, and members make an approximately equal contribution to the capital required”.

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CO-OPERATIVE HOUSING SOCIETY These societies are formed to provide residential houses to members. They purchase land, develop it and construct houses or flats and allot the same to members. Some societies also provide loans at low rate of interest to members to construct their own houses. Examples of housing co-operative society The Employees Housing Societies and Metropolitan Housing Co-operative Society

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DIFFERENT TYPES OF HOUSING COOPERATIVES

Housing cooperatives at the primary level can broadly be classified into four groups as detailed below:

Tenant Ownership Housing Societies

Tenant Co-Partnership Housing Societies

House Mortgage SocietiesHouse Construction or House Building Societies

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TENANT OWNERSHIP HOUSING SOCIETIESUnder this category the land is held either on leasehold or free hold basis by societies, and houses are owned by members.

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TENANT CO-PARTNERSHIP HOUSING SOCIETIESThese housing societies hold both land or building, either on leasehold or freehold basis and allot flats to their members.

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HOUSE MORTGAGE SOCIETIES

Such societies lend money to their members for construction of houses.

The members have to make their own arrangements for building their houses.

This type of societies are really credit societies as distinguished from other credit societies as per the objects for which they lend, the duration of the loan and the security they demand.

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HOUSE CONSTRUCTION OR HOUSE BUILDING SOCIETIESSocieties of this type spend money on behalf of the members for building the houses, and the houses are handed over to members when ready and the money spent is recovered as loan.

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CHARACTERISTICS OF CO-OPERATIVE HOUSING SOCIETY

Open membershipVoluntary AssociationState controlDemocratic ManagementService motiveSeparate Legal EntityDistribution of SurplusSelf-help through mutual

cooperation

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HOW TO BECOME A MEMBER OF HOUSING COOPERATIVE?

Have necessary qualifications as provided in the Bye-laws of cooperative.

Reside or intend to reside permanently within the area of operation of the housing cooperative.

Have paid necessary admission fee. Have purchased minimum number of shares of the

cooperative and paid other stipulated charges as per the Bye-laws.

Make necessary down payment within the time limit as per the norms laid down in the Bye-laws.

Make necessary declaration whether he/she owns any plot, flat or accommodation in his/her own name or in the name of any other family member.

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GOVERNMENT POLICIES

The Union Cabinet first time approved the National Cooperative Policy, aiming at:

Minimizing the share of the Government in Cooperatives.

Redefining the role of Registrar of Coop. Societies as a facilitator for Cooperative Societies.

Repatriation of the Government’s equity in the Cooperatives by infusion of equivalent cooperative shares.

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COOPERATIVE LAW

Multi-State Cooperative Societies Act- 2002 ensures functioning of Cooperatives as autonomous Institutions on sound Cooperative Principles.

The new legislation reduces the role of Government and provides professionalism in Cooperatives to withstand competition.

Government participation in the equity is allowed only when requested by the Society.

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WHAT IS THE LEGISLATION THAT GOVERNS HOUSING COOPERATIVES?

The activities of housing cooperatives in various States are regulated through

Respective Cooperative Societies Act and Cooperative Societies Rules administered

by the Registrar of Cooperative Societies appointed by the Government.

The national level cooperative organisations and the multi-state cooperative societies are governed by the provisions of Multi-State Cooperative Societies Act and Rules.

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FINANCE A housing cooperative is normally non-profit,

since usually most of its income comes from the rents paid by its residents , who are invariably its members.

There is no point in creating a deliberate surplus except for operational requirements such as setting aside funds for replacement of assets.

It is relatively difficult to start a housing co-op because if the idea is, for instance, to build a building or group of buildings to house the members, this usually takes a significant mortgage loan for which a financial institution will want assurances of responsibility.

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CONTD…… In the lifecycle of buildings, the replacement

of assets requires significant funds which can be obtained through a variety of ways:

Assessments on current owners.Sales of Treasury Stock to new

shareholders. Draw down of reserves. Unsecured loans. Operating surpluses. Fees on the sales of units between

shareholders and new and increases to existing mortgages.

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ADVANTAGES OF HOUSING COOPERATIVES

A housing cooperative is neither a public nor a profit seeking organisation.

Its principal objective is to eliminate economic exploitation as it is controlled by members only.

Contrary to public housing, cooperative housing provides opportunities to its members to control the house designs at the planning stages.

The maintenance of the estate is also in the hands of members, which leads to maintenance at lesser expenses and in a better way.

Cooperative housing satisfies quantitative as well as qualitative aspects of housing.

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• Easy formation• Open

membership• Democratic

Control• Limited Liability• Elimination of

Middleman’sProfit

• State Assistance• Stable Life

• Limited Capital• Problems in

Management• Lack of Motivation• Lack of

Cooperation• Dependence on

Government

Advantages Disadvantages

18?Any query:

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