Buying an apartment through joining a housing cooperative is one of the ways to acquire your own home. Such an association implies the consolidation of citizens , whose common activities will be aimed at obtaining housing . Such an association is created by approving a charter at a meeting, which sets out all the key aspects of the activities of the future cooperative.
In practice, there are several types of such associations, the purpose of which is aimed at obtaining housing:
- housing (purchase of housing);
- housing construction (home construction);
- housing-savings (construction of apartments is carried out not in one building, but in several);
- consumer mortgage (the transferred housing is encumbered with collateral - a mortgage);
- consumer credit (participants receive loans to purchase housing).
who have reached the age of sixteen can be members of a cooperative . They have various rights and obligations established both by law and by the association's charter. Ownership of the apartment is issued only after full payment of all required contributions.
Participation in such cooperatives involves some risks , which must be studied before deciding to join the association.
What is a housing cooperative (LC)?
A housing cooperative is a voluntary association of citizens (and in some cases, legal entities) based on their membership, created for the purpose of obtaining housing for citizens, as well as for the purpose of managing an apartment building. The legal status of housing cooperatives is established by Chapter. 11 of the Housing Code of the Russian Federation (LC RF). Members of the association participate in the acquisition, reconstruction, and maintenance of an apartment building, which is the purpose of creating such a cooperative.
At least five citizens can take part in the creation of a cooperative , but no more than the number of apartments that exist in the purchased building.
The decision to create a residential complex is made by a meeting of its founders . The specified body approves the charter, after which state registration occurs.
A distinctive feature of a housing cooperative, by which it could be distinguished from other types of such associations, is the opportunity established by law to purchase a house (with possible further reconstruction and management). That is, such an association is prohibited from constructing a new facility. For this purpose, another form of cooperative is being created - housing and construction.
Constituent documents
The founding document of the Housing Code is the charter , approved by the meeting of founders. Approval of the charter, like any other decision of the meeting, must be documented in the form of minutes .
By virtue of the direct instructions of Art. 113 of the Housing Code of the Russian Federation, the charter must contain :
- the name of the cooperative, as well as its location;
- subject and goals of activity;
- procedure for joining and leaving the cooperative;
- the procedure for issuing a share contribution and (or) other payments upon exit;
- the amount of share and entrance fees, as well as the procedure for making them;
- provision on liability for breach of obligations;
- the competence and composition of both the management bodies of the association and the bodies monitoring the activities of the cooperative;
- the procedure for making decisions by management bodies;
- the procedure for covering losses incurred by members of the cooperative;
- regulations on liquidation and reorganization of the cooperative.
The charter may include other provisions not included in the above list, but they must not contradict the law .
Types of housing cooperatives
The Housing Code of the Russian Federation directly provides for only two types of cooperatives:
- housing;
- housing construction.
The difference between the above types is that when creating the first, it is implied the acquisition of a house and its subsequent management (with the possibility of reconstruction), while the purpose of creating the second is not the purchase of a house, but its construction .
However, there are a number of other cooperatives:
- housing-savings;
- consumer mortgage;
- consumer credit.
The housing savings cooperative is regulated by Federal Law dated December 30, 2004 No. 215-FZ “On Housing Savings Cooperatives.” Such an association is created for the same purpose as a housing construction cooperative, however, the construction of apartments can be carried out in different buildings . Another distinctive feature is the “cumulative” nature. In practice, a member of the association pays a certain percentage, after which an apartment is purchased and transferred to him for use. Transfer of ownership is carried out only after payment of all fees .
Unlike a housing and savings cooperative, in a consumer mortgage the apartment is registered immediately, after which a mortgage is issued on the apartment - a mortgage . The activities of a credit consumer cooperative are regulated by the Federal Law “On Credit Cooperation” dated July 18, 2009 No. 190-FZ. The operating principle of such an association is to form a fund from the entrance fees of its members and further provide loans to the members of the association for the purpose of purchasing housing.
Thus, there are quite a lot of types of such citizen associations. There are several options for purchasing housing using this form of association of individuals and legal entities.
Registration
Legal instructions have approved the basic provisions for the construction of apartments. In particular, the articles of Federal Law No. 129 set out the basic requirements for registration of cooperatives. In particular, you will have to go through the following procedure:
- submission of a handwritten application to the register;
- Within three working days, a final decision is made regarding the possibility of creating an organization.
In this case, participants will have to prepare the following package of documents:
- Statement. There is a uniform form for such requests, compliance with which is mandatory. If it was not possible to prepare an application at home, citizens can obtain an application form from the registry.
- Minutes of the meeting of the organization. This is a universal statement that contains information that the participants of a potential cooperative have met and approved the decision to create a housing cooperative. The statement contains a list of members and their signatures.
- Charter – rules of operation of the organization. The document must contain the rules of activity, methods of attracting other participants, possible violations and sanctions for violators.
- Receipt for payment of state duty.
Only after information about the new organization is entered into the register will it be possible to begin the process of registering land and acquiring permits for construction activities.
Who can be a member of a housing cooperative?
Art. 111 of the Housing Code of the Russian Federation establishes a list of persons who can be members of a housing cooperative. First of all, these are citizens who have reached the age of sixteen . In addition, legal entities can also be members of such an association:
- in cases established by law;
- if such a legal entity is the owner of premises in an apartment building, the common property of which is managed by a housing cooperative.
listed in Art. 49 Housing Code of the Russian Federation:
- low-income citizens (recognized as such in the prescribed manner);
- other persons recognized in accordance with the established procedure as needing housing.
Rights and obligations of members of the Housing Committee
The rights and obligations of members of a housing cooperative are established by Ch. 12 Housing Code of the Russian Federation. Based on the decision of the general meeting of members of the association, its member is provided with residential premises in accordance with the size of the share. From this moment on, such a member has the right to the share paid by him as a contribution. Members of the cooperative, subject to prior notice, may allow temporary residents (subject to the conditions established by Article 80 of the Housing Code of the Russian Federation). There is also the possibility of renting apartments for a fee.
If the share belongs to several persons, then they have the right to divide the apartment . However, this can only be done if there is a real possibility of creating isolated premises.
The right of ownership to the occupied apartment arises only after payment of all share contributions (Article 129 of the Housing Code of the Russian Federation). Before this, a member of the cooperative has only the right to use such housing.
A person’s membership in a cooperative is terminated if:
- withdrawal of a member from such an organization;
- his expulsion (by decision of the meeting for gross failure to fulfill his duties);
- liquidation of a legal entity;
- liquidation of the association itself;
- death of a cooperative member.
In the event of the death of a member, his heir has the right to join the housing cooperative. If a member was expelled, then no later than two months he is paid the entire share that he contributed to the cooperative.
In addition, in the event of demolition of a house (on the grounds provided for by the Housing Code of the Russian Federation), members of the cooperative are subject to the rules specified in Art. 32 and art. 86 Housing Code of the Russian Federation. It does not matter whether the rent for the apartment has been paid in full.
A short list of cons
- If you contribute 50%, you need to wait several years. This is stated in the contract. Having taken out a mortgage loan, you immediately move into a new apartment;
- late contributions are punishable by fines and the risk of exclusion from the structure;
- annual fees are not refunded if the housing cooperative is liquidated or you leave it yourself;
- continuing the point above... the cooperative may go bankrupt;
- contracts do not have state registration;
- if you leave the cooperative early, pay a penalty;
- the living space belongs to the housing cooperative until the last installment is paid off;
- defending rights in court is problematic.
We hope that in the article you found answers to all your questions about housing cooperatives in Russia. Are they an alternative to a mortgage or not?
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Author:
Maria Yurievna Sokhan
Date of publicationDecember 21, 2018February 25, 2019
How to join a housing cooperative
In accordance with Art. 121 of the Housing Code of the Republic of Kazakhstan, in order to join a housing cooperative, you must submit an application to the board of such an organization. Such an application is considered within a month and is also approved by a decision of the general meeting. In order for a citizen (or legal entity) to be recognized as a member of an association, an entrance fee . After this, the authorized body enters the new member of the cooperative into the appropriate register.
The procedure for paying further contributions, providing an apartment and other issues are established by the charter of such an association, which already applies to the new member of the cooperative.
All decisions of the meeting, including those on the admission of new members, must be documented in minutes .
Legal status
The Law on Housing Cooperatives states that such organizations are legal. They go through the registry procedure and are treated as legal entities. Therefore, housing cooperatives must have a full package of related documents, these include:
- approved composition of the owners’ commission (information of all owners who wish to invest money in future construction is indicated);
- official permission from the municipality to use the land for development;
- obtaining permission to build a house on a designated plot of land;
- design documentation of the future house (detailed description indicating which of the shareholders will receive which apartment after completion of the work);
- approximate date of completion of construction and transfer of the building into operation.
The specified papers are drawn up in one copy for the entire cooperative, but such papers are kept by the chairman and are provided to the regulatory authorities during the inspection. Also, each participant in the organization must have the right to familiarize themselves with the following package of papers:
- financial papers;
- a personal copy of the document for the land plot;
- regular reports of official votes;
- statements of personal meetings of shareholders;
- registration of the auditor's findings.
Ownership of a cooperative apartment
The ultimate goal of participating in a housing cooperative is to obtain ownership of an apartment. In accordance with Art. 129 of the RF Housing Code, ownership rights are acquired by a member only after payment of all share contributions in full. This provision is also confirmed by Art. 218 of the Civil Code of the Russian Federation.
Example
Korneev V.S. joined a housing cooperative that acquired an apartment building. After a year of using the provided apartment and timely payment of all fees, Korneev was given ownership of the specified apartment, the right to which was registered in the manner prescribed by law. Subsequently, the cooperative, of which Korneev is a member, managed the apartment building.
Registration of ownership of an apartment occurs in the general manner . When registering a right with an authorized body, you will need to provide:
- a document confirming payment of all fees;
- charter of the cooperative;
- minutes of meeting decisions on admitting a member to the cooperative.
Liquidation
The legal dictionary states that liquidation is usually understood as the complete cancellation of the activities of an organization and its exclusion from the unified register. In practice, there are two possible algorithms for carrying out such events:
- voluntary (participants organize a regular meeting, the agenda of which includes the issue of termination of activities);
- compulsory (the decision is made by regulatory organizations based on identified violations).
In practice, the most common reasons for the liquidation of organizations are:
- the registration procedure was violated, and therefore the entire procedure was declared invalid;
- the activities of the cooperative are carried out without the appropriate permission from the competent authorities;
- the work of housing cooperatives violates the requirements of current legislation;
- adoption by the court of an appropriate indictment decision in relation to the considered claim of one of the cooperative participants.
Liquidation is accompanied by the cessation of the activities of the housing cooperative, as well as a full return of funds to the participants. If construction work has already begun, then resolving financial issues will be much more difficult. The return of money occurs depending on the funds invested and the portion of the money used.
Withdrawal from members of the cooperative
According to Art. 130 of the RF Housing Code, along with other grounds for termination of membership, there is the possibility of leaving the cooperative . In this case, the person wishing to leave must provide an application for voluntary exit . Consideration of such an application takes place in the manner established in the charter of the association.
It is worth noting that when a member leaves the organization, he is paid those contributions that he had already managed to pay by that time.
The payment procedure is also established by the charter , but the period should not exceed two months from the date of the meeting’s decision on the member’s withdrawal from the cooperative (based on the considered application).
Structure
The register of all members of the housing cooperative is formed based on the structure of the cooperative. In particular, the organization includes the following categories:
- Joint meeting of shareholders. This means that all participants are included in the list, regardless of the amount of money invested. According to current laws, decisions in housing cooperatives are made only after more than half of all participating owners are present at the meeting. If fewer persons are present, the decision is not approved, but the meeting of participants is reconvened.
- Conference. This form of organization is appropriate if the housing cooperative includes more than 50 people.
- Board of the cooperative. These are elected members who are authorized to represent the interests of citizens. These participants apply to municipalities and other departmental organizations to obtain permits and carry out construction work.
- The Audit Commission monitors compliance with the expenditure of funds, systematizes payment documents and monitors the economic side of the organization’s work.
- The auditor is the chief controller who supervises the activities of the commission.
Depending on the number of participants, as well as on the characteristics of the work, members of the organization can form other structural units, but without registering them in the register. Such forms of collective association are reflected in the Charter.
Risks of participating in a cooperative
The main risks of participating in a cooperative come directly from the very essence of such an association. In the case of a housing cooperative, the acquisition and reconstruction of a house is carried out independently, and in the case of a housing construction cooperative, such an association acts as a developer, then all responsibility falls on the association itself and its members.
Example
An incorrect calculation was made and the share contributions for reconstruction or construction are not enough. In this case, it becomes necessary to make additional contributions by all members of the cooperative.
In addition, risks may arise associated with late payment of cooperative contributions, which may entail:
- increasing the construction or reconstruction time of a house;
- problems with the contractor, the change of which often leads to additional costs.
Also, no one is immune from the mass exit of cooperative members from it. This can happen for completely different reasons. The cooperative will have to return the fees paid, and therefore there may not be enough . Replacing departed members with new people may take a long time, which will also, at a minimum, lead to an increase in waiting times for housing.
The above risks should be taken into account when choosing a method for acquiring home ownership. For some, joining a cooperative and being prepared to take such risks is the only opportunity to purchase an apartment.
