co-operative
TRANSCRIPT
CO-OPERATIVE HOUSING SOCIETY
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.”
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
Different types of Housing
CooperativesHousing 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 Societies
House Construction or House Building
Societies
Tenant Ownership
Housing Societies
Under this category the land is held either on
leasehold or free hold basis by societies, and
houses are owned by members.
Tenant Co-Partnership
Housing Societies
These housing societies hold both land or building,
either on leasehold or freehold basis and allot flats to
their members.
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.
House Construction or House
Building Societies
Societies 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.
Characteristics of Co-operative
Housing Society
Open membership
Voluntary Association
State control
Democratic Management
Service motive
Separate Legal Entity
Distribution of Surplus
Self-help through mutual cooperation
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.
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 afacilitator for Cooperative Societies.
Repatriation of the Government’s equity in the Cooperativesby infusion of equivalent cooperative shares.
Co-operative 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.
FinanceA 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.
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.
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.
Disadvantages
• Limited Capital
• Problems in Management
• Lack of Motivation
• Lack of Cooperation
• Dependence on Government
There are many advantages and disadvantages in cooperative
housing society. Though the main aim of these cooperative
housing society is not to earn profit but still they are interested in
knowing whether their current income is more than the current
expenses or not.
They are also keen in knowing the financial position of their
concern.
Co-operative Societies are not charitable societies.
They carry on Economic Activities. The profit is not the motive
but the proper accounts need to be maintained and presented
before the members for their approval in the Annual General
Body meeting.