Are you planning to be a homeowner? If yes, then certainly investing in an apartment in a housing cooperative society will land you on a perfect deal. The visible increase of housing cooperatives and their related legal structure all across India seems to be an excellent subject of study. It is indeed necessary to adequately understand the basic ideas of ‘housing cooperatives societies,’ and for which, this blog is a great place to start.
A cooperative housing society is a ‘membership-based’ legal entity which gets created by one or more household/residential buildings in society. If you plan to be a homeowner, you will be converted as a member of the society by purchasing shares or investing in the house cooperatives. From the initial phase, you will get the power as a member of the society to occupy a residential unit/house in society.
It may differ from a residence or apartment or a house. The motto of housing cooperative society is to fulfill the common demand of the housing and improvement of the living standards based on mutual consents. Eventually, cooperative housing adopted the sayings of Alexander Dumas, which is- ‘One for all, and all for one.’
According to the historical aspects, the idea was proposed by the Britishers, who established the very first Co-operative Societies Act in the year of 1904. Although it was not applied to the general population of the land, but it was for farmers only.
The first-ever cooperative housing society was founded in 1909 in Bangalore, which got named ‘The Bangalore Building Co-operative Society,’ supported by the ‘Bombay Co-operative Housing Association during 1913’. The Central Authority established the Cooperative Societies Act in 1912.
What is the history of Cooperative Societies?
In the post-independence era, constant growth has been seen in the housing societies, which was supported by five-year programs. During the year 1969, the National Co-operative Housing Federation was created as a standard panel to help housing societies. It was to make funds and comprehensive insurance, conduct analysis, and to help ‘State Level Co-operative Housing Federations.’
Due to rapid urbanization and government interference, the housing societies have gained a lot of benefits across the state. There was a massive grant of loans and assistance on land construction in extension to revisions in cooperative housing laws. It was mainly more beneficial to small-medium housing societies.
What are the types of housing cooperatives in terms of Ownership?
There are a couple of levels under housing societies which are;
- At the personal level – Primary housing societies
- At the state level-Apex Co-Operative Housing Finance
As the terminology speaks very clear about the meaning, there are broadly two kinds which are at a personal and state level. The rest of the cooperatives are those who receive finances from additional sources that have repaid their loans completely.
All the kinds are as follows-
- Ownership Societies: The Housing Cooperative society operates the residential apartment on a lease basis or on the grounds of Ownership or the societal norms which affiliate the apartments.
- Co-Partnership Societies: These housing societies endure both estate and construction, which are supported with rent or ownership basis and allocate flats/apartments to their members of the society.
- Mortgage Societies: Such communities lend money to their Shareholders for the creation of Cooperative houses society. The members of the society have to construct homes on their own as per there choice and limits.
- Construction or Building Societies: This kind of society gives the fund to the Member of the Cooperative Society to build their own house as per terms. Eventually, the fund spent gets recovered as a loan.
What are the essential components of a housing society?
- Welcoming to all: Notwithstanding with any of your gender, caste, social standing, legislative or religious views, you are competent to enter in a cooperative housing society without any prejudices.
- Wilful organizations: Housing societies are optional in their functioning and purely depends on the concept of ‘self-help’ and ‘self-governance/reliance.’
- Representative Ownership: Cooperative housing society is based on representative Ownership, which enhances the motto by getting the society created ‘by’ the people, designed ‘for’ the people and formed ‘of’ the people. Moreover, the Office bearers and the representatives of society get chosen over a suitable method of election.
- Self-regulation: Cooperative housing societies are administered and supervised by members of society; thus, these societies are genuinely independent and self-sufficient in all aspects of communal living beings.
- Provide Training and learning: Cooperative societies provide Training and instructions to the members concerning all the super visionary, legal compliance, and advantages of a communal living so that they can play their roles and responsibilities excellently.
- Interactive Help/Aid: Amalgamations of various local and national/international structures where cooperatives allow the members to follow the best culture and help them to create healthier living situations.
- Interest for members: Society works for the Welfare, freedom and all the accomplishments of every Member of the communal beings. Society always works on the preferential basis of a cooperative without self-interest and the powers also work within its functioning limits.
- Monetary contribution: Each member shares proportionately to common properties and subsistence.
- Bounded liability: Expenses are distributed equally in support and to the extent of the contribution provided by each Member
- Legal existence: A designated cooperative is a legal entity subjected to local as well as national laws
Read our article:By-Laws of Society Registration: A Comprehensive Guide
What is the procedure to become a member of a housing society?
Once you get determine which cooperative housing society you want to be a part of, you require to apply for membership in the designated form and fulfil the subsequent terms:
- You need to give the total amount of the portioned share number as per shares which are required to access the public domain and the entry fee.
- Give all the credentials and data concerning any additional property/home you own anyplace in the area of the society’s progress.
- Offer a guarantee that the flat/apartment you are funding will be used for the determination for which it is being purchased and for no additional purpose.
- Declare all your roots of income and earnings.
- Provide a certified copy of the stamped contract agreement you’ve entered into between the Promoter or Builders or the transferors.
- Give any such additional declarations needed under any ‘bye-laws’ of the community.
What are the Government schemes and legislation?
As before-mentioned, each state has its own model of bye-laws, which is expected to oblige by all the Member of a cooperative housing society. All cooperative society is regulated under the domain of the ‘Registrar of Cooperative Societies’. Some additional legislation that you can match with are as follows-
- For all the national-level legislation and strategies, the Cooperative Societies Act (1912, 1950) will be in effect.
- For all the National Federation and Multi-State Co-operative Societies, the Multi-state Co-operative Act (2002) will be in effect.
- National Building Code will be in effect for all compliance agendas related to the resistant on buildings accountabilities.
- Societies Registration Act effects on the changes followed between plans from state to state.
What are the benefits of continuing a cooperative housing society?
- Affordable: Housing societies are accessible and affordable because the cost per Member goes down considerably in terms of all duties and amenities/services.
- Fair Financial: It is not a public company, nor is it a profit-oriented drive. The very idea of a housing society is to implement a fair financial settlement for its members, reducing any exploitation and centralized monetary control.
- Safe and protected environment: Housing societies are a safe and secure setting to live in. It is because since each Member is duly screened and examined before granting membership. Any wrongful elements are not at all getting entertained by the cooperative societies.
- Tax inferences: If it is about tax reduction, certainly, it is an asset to be a Member of a cooperative housing society. Your membership will grant you to be a homeowner of the society, and by this means you can also subtract your tax dues upon assets funded by the society.
- Democracy: It is a representative kind of domain where all the members hold rights to present their views and opinions right from the beginning, to redevelopment of society. It can be in terms of design and outlining for which all the preservation and overhead costs are kept at a minimum and get divided proportionately within members.
- Purely internal: External intervention is not allowable, such as Landlords. As long as you wish to be a homeowner, you are secured to get and enjoy the benefits of residency. Even after you leave the premises, your post-occupancy interests will survive intact.
- Diversity: You can be a part of a more meaningful and more diverse population which deliberately encourages friendship, sociability and social recognition.
- Better Livelihood: All the members can avail secured management, amenities and well-maintained buildings in a joint venture such as cooperative housing. Considering the above fact, the members are expected to be quick in their actions and should take care of the needs with a sense of Ownership. It also allows voicing of opinion for every Member as per requirements.
- Reliable: Cooperative societies are stable and secure. Members of the society may not be permanent, but as a society have its legal existence and the means to support itself. It is a long-term settlement which is ideal for investment as well as habitation.
What is the List of Documents needed for registration of Flat owner’s Housing Society?
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- Details with seventh by twelfth extract of the land or property card.
- Obtain Certificate from the competent officials concerning non-agricultural land
- Get the order concerning ‘applicability/non-applicability’ of estate ceiling Act
- Get the Construction Design certified by the competent officials
- Get the Letter of consent for commencing construction
- Get the Certificate regarding completion of construction work
- Get the ‘Development Agreement’ only if the land is obtained for the extension
- Get the report by Power of Attorney of the specific area
- Get the Title ‘search report’ of the land/area
- Get the certified agreement of purchases/investments of the flat with the required stamp duty.
- Get the Architect Certification concerning the construction
- Get the Directory of Members
- The project of the society
- Get the Certificate/application for reserving the name
- At least ten members are required for the registration of society. Yet, the government has also presented their consent subjected to some rare circumstances for the Housing society for less than ten members under specific provisions.
- To get the registration proposal done, sixty per cent of the promoters need to provide their signatures.
- Guarantee letter only if the land is delivered by the government or any Business agency registered under government.
- ‘No objection certificates’ need to be obtained from the Charitable Commissioner.
- Details should be supported with the application for Registering Society under FORM A
- Details should be supported with the demand for Society under B Form
- Furnish all the details from the table given under C Form
- All the financial statements and audited Report of Accounts of the Members under D Form
- Notarized ‘Guarantee letter’ by the ‘Chief Promoter’ of the Society accompanying with stamp Paper- Rs. 100
- Notarized ‘Guarantee letter’ by the ‘Builder’, ‘Promoter’ attending with stamp Paper- Rs. 100
- Get the essential Affidavits of Members witnessing at least 10 Promoters
- Two copies of bye-laws of the society supported by the “Commissioner, Co-operation and Registrar of Cooperative Societies.”
- Get the proof of bank stability of the promoter post
- Get the Challan of ‘Rs. 2500/-‘ to be placed in the Government Treasury as Registration fee concerning the Housing Society of Underprivileged class.
What are the additional documents need to furnish for Tenant Ownership Housing Society Registration?
- If you are registering for Tenant Ownership Housing Society, then, in that case, you need to obtain all the documents listed above, plus the Layout Plan and Zone Certificate from the competent power, reflecting the authoritative area in which land is located.
- If the builder or promoter is not intending to enroll the Co-operative Housing Society later in that event, the application for certification of society should get presented in ‘Form 6’ to the ‘District Deputy Registrar’ of the locality.
- While submitting the said plan, all the layouts should get notarized on stamp paper of Rs. 200 and an Indemnity Bond of the members would be required as well.
What are the types of Members of Housing Cooperative Societies?
Under the Housing Cooperative Societies usually, there are four classes of membership:
- Regular Member: any member shall be named as an Ordinary/regular Member who holds the house accommodation of the housing cooperative societies for his own conduct.
- Associate Member: As stated above, the associate members have to make a report concerning who will be the second associate member. For the reason of the non-availability of the primary Member, the second Member will display the activeness and will step in the shoes of the Primary Member. Still, the responsibility as per the “Act, Rules, and Bye-laws” of the cooperative will bear exclusively and simultaneously.
- Patron Members: As the name implies, this kind of Member gets their membership acknowledged by the housing society on the grounds of compassion or sympathy.
- Suggested Members: The Patron or Nominal Members are not allowed to decide anything processing on the members of any committee. Patron/Nominal members do not hold any apartments or housing accommodations in a cooperative society, except on certain circumstances owned such as a garage, shop, etc. in the housing cooperative.
- The Patron and Suggested members do not hold absolute advantages and rights on the assets which are owned by the regular/ordinary members.
What is a Share Certificate in housing cooperative society?
A share certificate is a legitimate certification supplied by a housing society proving that a particular member is the certified partner of shares in the cooperative-housing society. The Member gets allotted with certain shares of the entire share capital. Here is the Checklist for issuing the Share Certificate
- Should be cleared of lieu.
- The transfer deed from the builder must be in hold of the society.
- It should have the seal of the society and signed by the Chairman, Secretary, and Member of the committee.
- The title and the order of names for primary or associate Member should be visible in the share certificate precisely as the way it is on the original sale agreement signed among the member-builder.
- The Member should repay if the society faces any loans. It should look upon complete paperwork and unblock any arrears that need to be paid the society.
- Member has to furnish an indemnity bond declaring that he/she has not assigned the share certificate to anyone else, or produced any charge or mortgage on the shared document in support of any bank, employer, and any person or investment agency.
- The Member obliged to perform the original sale agreement while assembling the share certificate.
What needs to do if members of housing cooperative society suffer harassment?
- Try to contact the Management Committee of the particular Housing Cooperative Society
- If the management committee does not take appropriate action, approach the Consumer Courts
- If the harassment is severe, contact the Police Authorities
Housing is one of the fundamental needs of humankind in courses of safety, assurance, self-esteem, social standing, cultural connections, satisfaction, and performance. Human growth and improvement in the kind of life are the ultimate intentions of social division planning. Therefore, it guarantees that appropriate strategies and programs are formulated, and sufficient investment is administered by the state so that all sections of the population can obtain essential commodities and tools based on their needs and not on the capacity to pay.
The housing cooperative societies perform many active administration committees to defend their members from any difficulty or harassment in the bases of the cooperative society. It continues even though the members of the administration committee take unfair advantage of their situation and harass the other members by their activities. We at Corpbiz have experienced professionals to help you with the process of the Co-operative Housing Society. Our professional will ensure the successful and timely completion of your work.