HOUSING COOPERATIVES FOR DEVELOPERS

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:

• approve the statutes and amendments thereto
• elect members of other bodies
• decides on the dismissal of the board of directors of the housing cooperative
• fixes the remuneration of the chairman of the housing cooperative

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

• The governing body of a condominium is mostly made up of people who have never done anything like this before and therefore have no experience in this activity. On the other hand, the management of a housing association is in most cases composed of professionals with experience who, on the basis of their experience, are able to represent the interests of the majority.
• In a housing cooperative, each member has an equal vote, unlike in an HOA (community of unit owners), in which a vote has a strength corresponding to the size of the housing unit.
• Furthermore, a housing association can make a profit compared to a community of units, but only if it does not compromise the satisfaction of the needs of its members
• Another advantage for the members of the cooperative is the possibility to apply for the transfer of the apartment into personal ownership after repayment

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