WHAT DOES THE HOUSING COOPERATIVE MEANS FOR US?
A housing cooperative, a cooperating company or a residential company is a legal entity, usually a cooperative or a company that owns real estate consisting of one or more residential buildings; it's one type of housing tenure.
Housing cooperatives are a distinctive form of home ownership that have many characteristics that differ from other residential arrangements such as single family home ownership, condominiums and renting.
The corporation is membership-based, with membership granted by way of a share purchase in the cooperative. Each shareholder in the legal entity is granted the right to occupy one housing unit. A primary advantage of the housing cooperative is the pooling of the members' resources so that their buying power is leveraged, thus lowering the cost per member in all the services and products associated with home ownership.
Another key element in some forms of housing cooperatives (but not Finnish housing companies, for example) is that the members, through their elected representatives, screen and select who may live in the cooperative, unlike any other form of home ownership.
Housing cooperatives fall into two general tenure categories: non-ownership (referred to as non-equity or continuing) and ownership (referred to as equity or strata). In non-equity cooperatives, occupancy rights are sometimes granted subject to an occupancy agreement, which is similar to a lease. In equity cooperatives, occupancy rights are sometimes granted by way of the purchase agreements and legal instruments registered on the title. The corporation's articles of incorporation and bylaws as well as occupancy agreement specifies the cooperative's rules.
In the company Zadrugator, the name of the housing cooperative means that individuals are merged into a cooperative (a legal entity consisting of natural persons) in order to provide an apartment at an affordable price that is more favorable than the market one. In that way the cooperative provides an intermediate form of housing between rent and ownership.
The main features are:
• The cooperative is the owner of the real estate and assumes legal responsibility for it,
• cooperatives are tenants and co-owners of a cooperative,
• they are involved in decision making and the management of the cooperative responds to them,
• the residence requirement in a housing cooperative is membership in it. In order to become a member of a cooperative, it is necessary to submit a basic share,
• each cooperative can stand for housing units offered by a cooperative. When moving into a housing unit, the cooperative pays self-contribution amounting to 5 to 10% of the value of the rented apartment,
• a lease agreement between a member of cooperative and cooperative is concluded for an indefinite period of time,
• the housing cooperative itself determines the share of which the population wants to reside in, and takes this into account when accepting new residents,
• The housing cooperative is obliged to work under the seven cooperative principles.
What are the greatest benefits of staying in a housing cooperative?
• A small share of the costs and risks associated with the ownership of the housing unit falls on the individual,
• life there is cheaper than a classical lease due to cost rent,
• a co-operative as a natural person does not need to take a loan to make a real estate, since most of the initial financial burden is taken over by a cooperative,
• cooperatives decide themselves, who they will accept as a roommate,
• higher quality of living in the intergenerational community (families and childcare, elderly and home care ...),
• a lease agreement between a resident and a cooperative is concluded for an indefinite period of time.
Financial aspect
From a financial point of view, it is the largest bet for the cooperative to provide initial financing for construction, since it does not yet have a permanent income. Funding sources are divided into 3 parts. The first part is the self-participation of the prospective residents of the cooperative. The second part consists of loans obtained by banks, individuals and other legal entities (micro loan), other cooperatives ... The third part is financing by public actors - the municipal housing fund and the state housing fund. They can help with the submission of a building plot in a more favorable long-term lease or by providing favorable returns.
In the event of a temporary loss of income to the cooperative, a cooperative abroad has a security fund that helps the cooperative to overcome this period.
Who are the housing cooperatives intended for?
The housing cooperative is primarily intended for people of all generations who can afford to pay the cost of rent, but at the same time they do not have the financial means to purchase their own property at a market price and maintain it. Membership in them is not limited to tenants, but everyone who is interested in the area and the project can join, even though it does not have a personal interest in living in a cooperative.
Source: Zadrugator, Wikipedia.
Source of photo: Mladina.si