If you are looking to buy an apartment complex in a housing society, it can be confusing to know who exactly owns what. Or what your ownership rights are.
In a Housing Society or Housing Cooperative, the Housing Cooperative owns the land, and the individual apartment unit owners own a share in the cooperative. The Housing Cooperative holds the property title on the land and building, and the housing cooperative members have shares in the Housing Cooperative.
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Cooperative Ownership Owns the Land
The entire cooperative owns the land, buildings, and common areas in a housing cooperative. The member of the cooperative will buy shares in the cooperative.
The housing cooperative members will own the percentage or shares in the cooperative according to the value of the units they own. Larger and more expensive units will hold more of the cooperative, and smaller units will own less.
Housing cooperatives are essential as they can be less expensive than condominiums. A housing cooperative is usually formed when people come together to own and control a building they live in.
Here are a few things to remember about Housing Cooperatives and land ownership:
- Co-op – The name co-op is a shortened version of the Cooperative.
- Common Interest – A cooperative is when each person will own shares in the complex instead of owning an individual unit like a condominium.
- Alternative To Condominiums – The Housing Cooperative is used mainly in cities as an alternative to condominiums. The housing cooperative can provide people the same amenities, security, and even maintenance but many times at less cost.
- Shares Relative To Value – Each person in a housing cooperative will own shares relative to their unit value.
- Members Vote For Board Of Directors – The housing cooperative members get to vote on who will be on the board of directors for the housing cooperative.
- Board Of Directors Manages Cooperative – The Board of Directors manages the cooperative and can decide who can buy into the housing cooperative.
- Usually, More Covenants And Restrictions – Even though housing cooperatives are cheaper than condominiums, they typically have more restrictions. They may restrict when you can renovate an apartment or how you can renovate it.
- You Own Shares, Not A Title – In a housing cooperative, you own shares in the housing cooperative, but you do not own the property title of the land and building.
The Pros And Cons Of Housing Cooperatives
Like many other things to do with real estate aspects, there is no clear answer if a housing cooperative is a good or bad investment.
There can be both Pros and Cons of a housing cooperative.
Pros of Owning A Share In A Housing Cooperative
Housing cooperatives are still very popular, especially in many larger cities. There are some pros to owning a unit in a housing cooperative,
Here are some of the Pros of owning a unit in a Housing Cooperative:
- Costs – Housing cooperatives are usually cheaper than condominiums. The cost aspect is one of the major pros of a housing cooperative.
- Pooling Resources – Housing cooperatives allow all the members to pool their resources to have better buying leverages for services.
- Decide Who Can Join Cooperative – Another significant advantage of a Housing Cooperative is the members of the Cooperative can decide who can join the cooperative. The members of the cooperative can be vetted and screened.
Listen To Our Podcast About Who Owns The Land If You Are Living In A Cooperative Society? by clicking here.
Cons Of Owning A Share In A Housing Cooperative
There are also some cons of owning a share in a housing cooperative. Here are some of the significant cons of a housing cooperative:
- Do Not Hold The Property Title – In a housing cooperative, you do not hold the property title but instead hold shares in the housing cooperative.
- Can Have Restrictions – Many housing cooperatives may have more restrictions than condos. The covenants of the housing association can even decide what you can or cannot do in your unit for things like when and how you can renovate your unit.
- Housing Cooperative And Sale Approval – As a housing cooperative can vet and screen who joins the housing cooperative when you want to sell your share or unit, you will probably need the approval of the housing cooperative.
Housing Cooperatives continue to be famous around the world. Many people who live in housing cooperatives feel they have a better quality of life.
Many people may like the cooperative housing concept as they know their neighbors and can have a say in who can come into the housing cooperative. As the housing cooperatives usually elect a board of directors, the cooperative members have a say in how the cooperative is run and operated.
But in a Housing Cooperative, you do not hold the property title but own the shares in the cooperative. The housing cooperative owns the property title for the land and building of the housing cooperative.
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