There are many posts dealing with real estate and housing on this blog. But, a topic not discussed yet is co-operative (or co-op) housing. Lets start with some of the basics.

What is a Housing Co-op?

A housing co-operative is, most times, a not-for-profit corporation governed by the co-op act of the province or territory it is located in. Co-ops provide affordable accommodation to its members but the members never own their home and the property is returned to the co-op, if and when they move. A co-operative owned property could be a townhouse with a few units and/or larger apartment buildings with several hundred units.

How does it work?

Since a housing co-operative is a not-for-profit body, certain co-operatives only charge their members to cover costs and repairs and to build a contingency fund. Other co-operatives may also offer homes for reduced housing charges (rent) that are decided based on the member’s income; government subsidies are used to offset the shortfall generated by such reduced charges.

Members are allowed to reside in a co-op home indefinitely as long as they follow the bylaws of the association and pay the housing charges on time. In addition, co-ops offer the chance for developing a good community bond.

Related: How Rent to Own Homes Works in Canada.

What is the difference between a Housing Co-op and a Rental?

A housing co-op is a democratic operation. Every member has the right to vote (including on the co-op maintenance budget, housing charges, etc.) and shape the future of the co-operative.

Co-operatives are legal organizations that are members of the Canadian Co-operative Association and guided by international co-operative principles.  There is no landlord involved in this arrangement and the co-operative board of directors are elected from the membership pool.

In place of a rental lease agreement, co-op members are required to sign an occupancy agreement. Due to homes being offered at cost, or at reduced rates in some cases, the housing is more affordable than the competitive public rental market.

Obligations of Members to the Co-op

Evidently, member obligations include paying monthly housing charges in full and on time as set out in the occupancy agreement. Other charges such as a co-op membership fee and damage deposit may also be collected.

Co-op members are expected to participate in the association meetings and vote on the items dictated by the agenda. A co-op board has the authority to evict or expel a member for failing to meet obligations; the verdict will depend on the severity of the infraction.

Obligations of the Co-op to its Members

A housing co-operative has its own obligations to the members. Usually, these obligations include ensuring that all utilities such as water, heat, and power are available in all households and maintenance of the co-op property. If a member deems that the co-operative staff or board is not doing its job, then they have the right to express their concern(s) in a written form along with a possible solution, if appropriate. Detailed information about filing complaints can be found here.

Do you have more insight into the working of and/or living in a housing co-operative? Do you see any other differences between a rental and a co-op of this nature?

About the Author: Clark works in Saskatchewan and has been working to build his (DIY) investment portfolio, structured for an early retirement. He loves reading (and using the lessons learned) about personal finance, technology and minimalism. You can read his other articles here.

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  1. FT on September 17, 2012 at 10:31 am

    Clark, do you have an example of how much someone would pay in a co-op relative to a rental in the same area?

  2. Clark on September 17, 2012 at 1:43 pm

    Good question, FT! I should have thought of doing a comparison when I wrote the post.

    I did a quick search and Waterloo, ON came up. A co-op costs $596/month (1-bedroom) and $863/month (2-bedroom). A 1-bedroom rental starts at ~$600 and a 2-bedroom starts ~$750. However, I think the locations I chose to compare in Waterloo may not be near to one another. Any other readers want to weigh in?

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