The growing interest among people in becoming members of a housing association has become a compelling reason for many developers to embark on cooperative housing. The interest in co-operative housing is increasing, mainly due to property becoming more expensive and mortgages becoming less affordable. So, in this article, we will explore the fundamental information that every developer should know about a housing association. This will encompass the process of setting up a housing association, the members involved, the actual management of such association and last but not least, the benefits they offer.
A housing association is a community of individuals established with the purpose of fulfilling the housing needs of its members. Today, housing associations are increasingly popular due to several factors: the affordability of housing, exemption from property tax payments, and the attractiveness to individuals who, for various reasons, do not qualify for a mortgage.
Setting up a housing association
At least three persons are required to set up a housing association, which may be natural or legal persons. However, in practice, we often come across situations where the founding members are investors; in particular, a housing cooperative may be founded by your company, which then acts as a member of the board of directors of the housing cooperative.
Founding members
At the constituent meeting, the founding members approve the statutes, the list of founders and also, for example, the method of meeting the basic membership contribution. New members are admitted to the cooperative on the basis of an application, with the condition that the basic membership contribution, the additional membership contribution (advance payment) and the commitment to pay the additional membership contribution (annuity) are paid. Let us just point out that the basic membership deposit is the same for all members; however, the amount of the additional membership deposits may vary depending on the situation.
Cooperative share
A cooperative share is created when an individual joins a housing cooperative. Each member is allowed to hold only one share. A cooperative share may be associated with the right to enter into lease agreements for multiple cooperative flats. It is possible to transfer such a share to another member of the cooperative or even to a third party, but only with the prior consent of the housing cooperative members
The supreme body of the cooperative is the members' meeting, which decides how the housing cooperative operates. Its powers are broad:
Each member has one vote, which can indirectly influence the management of the cooperative.
Each cooperative elects a statutory body, which then represents it externally. This may be either a natural person or a legal person, who is obliged to authorise a natural person to act as a member of the statutory body of the cooperative on its behalf. The task of the statutory body is the business management of the cooperative, implementation of resolutions of the membership meeting, bookkeeping, etc. It may be the board of directors of the housing cooperative, which in most cases is composed of three members. If the cooperative has fewer than 50 members, it may decide that the statutory body will be a one-member body, i.e. the chairman of the cooperative.
Advantages of a housing cooperative
If you are interested in this topic, please do not hesitate to contact our team specialised in this legal sector, who will be happy to help you with everything, whether it be answering a few additional questions or setting up a housing cooperative itself. We are also able to tell you about the different business models that come with co-operative housing
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