What is a housing co-operative?

What is a co-operative?

Co-operatives are member-owned organizations. Through them people work together to meet common needs and goals. There are different kinds of co-ops, for example: consumer co-operatives, credit unions, worker co-operatives, and housing co-operatives. Co-operatives bring their members immediate economic benefits in terms of reasonably priced, quality goods and services. They are also committed to shared ownership and democratic decision-making. There are well over 9,000 co-operatives in Canada.

What is a housing co-operative?

A housing co-operative is a co-operative that provides housing to its members. While there is a number of different types of housing co-ops, typically, the co-operative owns or leases the building and the land, and the members, through their shares own the co-operative. Aside from their membership share, members pay a monthly fee to cover operating costs (including taxes, mortgage payments, and utilities) and to build a reserve fund to cover future repairs and improvements. There are over 2,000 housing co-operatives in Canada.

What are the benefits of being a member of a housing co-operative?

A housing co-operative is comparatively affordable to join. Compared to other types of housing, co-operatives typically have lower down payments, economies of scale, and a longer mortgage term.

Living costs remain affordable. Since co-operatives charge their members only enough to cover costs, repairs, and reserves for future expenses, monthly fees remain comparatively low.

Security. Co-operative members have more security than tenants. Members can live in a co-op for as long as they wish, as long as they follow the rules  of the co-op and pay their montly housing charges on time.

The right to participate. Co-operative members elect the board of directors that sets all significant policies for the co-operative. They also have the right to run for election to the board. Members also vote on the co-operative’s annual budget and its policies.

Membership in a community. People who live in co-operatives have chosen to live co-operatively in a community. A housing co-operative can serve as the base for establishing other community activities such as vehicle sharing and joint purchasing.

Are housing co-operatives regulated by government?

Housing co-operatives are usually legally incorporated corporations. In Manitoba, an incorporated housing co-operative must comply with the provisions of The Cooperatives Act of Manitoba. Member rights and board responsibilities are set out in the Act. Certain provisions of The Residential Tenancies Act of Manitoba apply to Manitoba housing co-operatives. The federal Income Tax Act determines the non-profit status of housing co-operatives.

A housing co-operative is also bound by the provisions of any operating agreement that it enters into with a provincial government housing authority (or any other government agency).

Housing co-operatives must also comply with all laws that relate to their activities in matters such as safety, employment, contracts, privacy, occupiers’ liability, the environment, and human rights.

How is a housing co-operative run? 

Members control the co-operative in a number of ways. The co-operative’s by-laws have to be approved by the membership. The membership also elects the board of directors. Aside from the board of directors many co-operatives have separate committees to deal with issues such as finance, environment, and member involvement.

Who takes care of the building?

Depending on their size, housing co-operatives might hire their own maintenance staff, engage the services of building management company, or share building management with other co-operatives.

How do you join a housing co-operative?

One joins a co-operative by purchasing a share in a co-operative. The price of this share varies depending the nature of the co-operative’s area of economic activity and provincial law.

How are suites assigned in a housing co-operative?

Housing co-operatives usually have membership criteria that govern how apartments are assigned.

What happens when a member moves out?

In most Canadian housing co-operatives, when a member decides to move out, the co-operative buys back the member’s share. Many co-operatives maintain a redemption fund to ensure shares can be bought back in a timely manner.

What do I own as a member of a housing co-operative? 

A member owns shares in the co-operative. The ownership of these shares gives them the right to live in a unit owned by the co-operative.

What are the responsibilities of a co-operative to its members?

Housing co-operatives sign occupancy agreements with their members that outline their responsibilities. Typically, co-operatives are required to maintain the property, pay all expenses related to the operation of the co-operative, ensure the supply of basic services such as heating, cooling, hot water, and electricity.

Where can I get more information on housing co-operatives?

Co-operative Housing Federation of Canada: http://www.chfc.ca/index.asp.

Canada Mortgage and Housing Corporation: “Guide to Co op Housing”.

Government of Manitoba, Co-operation Promotion Board https://www.gov.mb.ca/jec/coop/pdf/cpb-co-op-housing-guide-web.pdf