A cooperative housing society is a crucial term in the property sector in the country. If you are planning to buy property, then you may consider purchasing a home in a cooperative housing society.
What is a cooperative housing society?
• It is a legal body that comprises one or multiple residential structures and is based on membership of property owners.
• You attain membership by purchasing shares in the co-operative, while obtaining the right to occupy a housing unit like an independent home or apartment within the society.
How did it start?
The origins of cooperative housing societies are fascinating. Some crucial aspects include the following:
• The idea was conceived by the British in India, with the establishment of the Co-Operative Societies Act in the year 1904. This was first applicable for farmer credit societies.
• Bangalore had the first such society in 1909, named as the Bangalore Building Co-Operative Society and then the Bombay Co-Operative Housing Association came up in 1913 with model bye-laws.
• The Co-Operative Societies Act in 1912 was the first constitutional mandate of the Central Government in the country.
• The National Co-Operative Housing Federation was set up in 1969 to help housing societies obtain funding and insurance, helping co-operative housing federations at the state level.
What are the major types of cooperative housing societies?
The key types of cooperative housing societies include the following:
• Ownership Housing Societies- These are organizations holding land on the freehold/lease basis while the members own their properties.
• Co-Partnership Housing Societies- These are societies that hold both the building and land on the freehold/leasehold basis while allotting apartments to members.
• House Mortgage Societies- They lend funds to members for constructing their homes.
• House Construction/House Building Societies- They also offer funds to members for constructing homes and occupying the same. The money is recovered from members as loans.
What are the key features of cooperative housing societies?
These features include:
• These societies are open to everyone, irrespective of their caste, ender, political beliefs, religious beliefs, social status, and so on.
• They are voluntary entities based on self-reliance/self-help concepts.
• They are democratic organizations that choose representatives through a fair election procedure.
• These societies are governed and run by the members while enjoying complete autonomy.
• They also educate and train members on the legal compliance aspects, community living benefits, and management of the association.
• Members have to follow the recommended best practices and strive towards enabling improved living conditions for everyone.
• The welfare of each member is a priority area for cooperatives without any self-interest.
• Every member will have an equal contribution towards maintenance and common properties.
• Expenditure is equally shared for expansion, redevelopment, maintenance, and so on.
• Registered cooperatives are legal entities that are governed by national and local regulations.
How can you become a cooperative society member?
This is the usual procedure to obtain membership of a housing cooperative society:
• You will have to pay the full amount for the number of shares for getting membership and the entrance fees.
• You will have to declare details of other homes owned by you or your family members anywhere within the ambit of the society.
• You will have to provide a guarantee of using the home for the purpose for which you are buying it and no other reasons.
• You will have to declare your own income sources or dependence on others for income sources.
• A certified copy of the agreement (stamped) with the transferor/builder has to be provided.
• Other declarations may be needed as per the societal bye-laws.
Cooperative housing societies can be comparatively affordable options for buyers, since the per-member costs come down for amenities and services. Members get fair financial transactions, while living in secure environments. You can also enjoy tax deductions since you may deduct the portion of mortgage/real estate tax that is paid by the society. Members will also have a say in everything while there is no external intervention. These are some of the biggest benefits of choosing cooperative housing societies for your property requirements.
