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Learn Everything About Co-Operative Housing Societies In India | VZTrack #meetSafe

Updated: Jan 27, 2021

Learn Everything About Co-Operative Housing Societies In India | VZTrack #meetSafe

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Have you recently moved into a cooperative society in India? Perhaps you are a resident in a co-operative society and you want to play an active part in your society meetings. If so, then it is crucial that you learn about how housing societies function as well as the legislation that surrounds them such as the co-operative housing society act and various other state bye-laws.

If you are someone who is in a management position in your residential gated community and are well-versed with how housing societies function, then please feel free to share this article with your new society residents and members who are interested in attending your society meetings.

There are a lot of legal frameworks that govern co-operative housing societies and it is a colossal subject of study on its own. In this article, we will help you understand the basic concepts that you need to know about what are cooperative societies and how do they function. So that you can become a more active and effective member of your cooperative housing society.

What are co-operative housing societies?

The National Cooperative Housing Federation of India defines a housing cooperative body as

“A legally incorporated group of people living together in a gated residential complex, that generally have limited means, who pursue a similar cause with the help of mutual assistance and cooperation. The cause is defined as meeting the common needs of members of the housing society and improving their living conditions.”

It is a legally established association that is both owned and controlled democratically by the members. In cooperative housing societies, the residents/members have voluntary, democratic, and equal control over their membership as well as the capital that is contributed by them for the needs of the society. At its core, a co-operative housing society is a member-based legal entity that comprises of residential apartments and buildings in a society.

Basic characteristic examples of a cooperative society:

Cooperative housing societies are founded on the basis of values such as self-responsibility, mutual help, democracy, equality, and solidarity. The members belonging to the co-operative society are expected to uphold ethical and moral values such as honesty, social responsibility as well as caring for their neighbors.

The following principles are what characterizes cooperative housing societies;

  • Democratic Control Of Members.

  • Voluntary & Open Membership.

  • Strong Emphasis on Autonomy & Independence.

  • Economic Participation Of Members.

  • Mutual Cooperation & Concern for Community.

  • Educating and Training Members With Proper Information.

Objectives of a co-operative housing society:

Here are some of the principal objectives of an ideal co-operative housing society;

  1. Advancing loans to the members of the housing co-operative for the construction of new apartments/buildings or for any additional buildings in the residential complex.

  2. Encouraging the economical interests of the society and facilitating savings as well as self-reliance among the members.

  3. Acquiring land within the premises of the housing society and segment as well as distribute them among the members after determining its value along with other expenses.

  4. Promoting a healthy standard of living by creating an ideal socio-economic environment within the housing society.

  5. Establishing & Maintaining social, educational, recreational, and public health institutions for the residents of the housing society.

  6. Providing the basic necessary infrastructures such as water, roads, lighting, club, post office, etc to maintain the housing society.

Functions of a co-operative housing society:

There are a few key services that a cooperative housing society provides to its residents and the members. They are as follows;

  • Maintaining proper books of accounts and other important documentation.

  • Hearing & managing complaints of the residents.

  • Recovering loans from residents and repay the Housing Society Federation within the time period.

  • Supervising the execution of a construction project.

  • Preparing accurate annual reports such as statements of accounts, society audit, work performance, and complaint reports to place before the general body during meetings.

How did the co-operative housing society act come into existence?

The co-operative societies act in India was initially founded in 1904 by the British. However, it was meant only for farmers. But later on, in the year 1909, the first co-operative housing society was established in Bangalore which was called ‘The Bangalore Building Co-operative Society’.

Then in 1913, ‘The Bombay Co-operative Housing Association’ was formed, which was the first co-operative society to introduce model bye-laws in India. Later on, in an effort to lay down some much-needed constitutional mandates for co-operative housing societies, the Central Government of India formed the 'Co-operative Societies Act' in the year 1912, which proved to be quite effective.

India has since then witnessed tremendous growth in the housing cooperative sector, especially after its Independence from the British. According to a survey done by Shodhganga, the number of registered co-operative housing societies in India has increased from roughly 5,500 to more than 1,00,000 during the period 1960 to 2001.

Housing societies had been forming left, right, and center all over India. With that tremendous rise in construction of housing societies, the government decided to form ‘The National Co-operative Housing Federation’ in 1969. It was created to act as a primary forum that helped housing societies to get funds, obtain general insurance, conduct research, and also to assist the various State Level Apex Co-operative Housing Society Federations all over the country.

How is the housing co-operative structure organized?

In general, the entire housing co-operative structure in India is organized into 4 main hierarchies:

Structure Of Housing Cooperatives Organisation In India
Structure Of Housing Cooperatives Organisation In India

1. National Co-operative Housing Federation Of India - The NCHF was formed in 1969 due to the insistence of the working group on housing co-operatives which was constituted by the Government of India in the year 1962. Ever since its inception, the National Cooperative Housing Federation has guided the entire movement of cooperative housing-related issues in India.

2. State Level Apex Co-operative Housing Federation - Apex Cooperative Housing Federations (ACHFs) are considered to be organizations at the apex level that report directly to the National Co-operative Housing Federation. They act as crucial intermediaries between the district, primary, and the national federation.

3. District Level Co-operative Housing Federation - They also play a significant role in providing financial assistance to primary housing co-operatives that are within their jurisdiction. The district-level housing federations such as Pune District Co-operative Housing Federation are instrumental in assisting housing societies on technical and legal matters as well as general coordination and supervision of their society activities.

4. Primary Level Co-operative Housing Society - Primary co-operative housing societies are the society themselves, who attain this legal status when they register with the Registrar of Co-operative Societies under their respective State Co-operative Societies Act, such as the Maharashtra State Co-operative Societies Act 1960. They provide direct assistance to the members by taking the help of the District Level & State Level Apex Cooperative Housing Federations.

Types of co-operative societies at the primary level.

Primary Level Types Of Co-operative Housing Societies in India
Primary Level Types Of Co-operative Housing Societies in India

1. Tenant Ownership Housing Societies - In this category, the building/apartments are owned by the members. Whereas, the land is held on a leasehold or freehold basis by the housing society.

2. Tenant Co-Partnership Housing Societies - These housing societies have possession of both land and the building/apartments and they can allot flats to their members. This is done on either a leasehold or freehold basis.

3. House Mortgage Societies - Such societies actively lend funds to their residents for the construction of apartments/buildings. The responsibility of construction and other arrangements is on the members and not on the housing society. House mortgage societies are essentially credit societies.

4. House Construction or House Building Societies - This type of societies tend to construct buildings with their own funds and hand over the apartments to the members when the project is completed. The money spent is soon recovered in the form of loans.

How does the management organization structure in a Primary Level Co-operative Housing Society look like?

There could be some variation in the organization structure of cooperative societies depending on the needs and limitations of the housing society. But in general, the management structure of the cooperative housing societies consist of; Special Officer or Board of Directors, Secretary, Accountant, Senior Clerk, Junior Clerk, and Office Assistant - in this specific hierarchy from the most powerful, to the least.

Primary Level Co-operative Housing Society Management Organisation Structure in India
Primary Level Co-operative Housing Society Management Organisation Structure

Requirements / Qualifications of Management: For the post of a Secretary and above, the co-operative society has clearly mentioned the requirements of a degree along with co-operative training as the minimum qualification. However, for the rest of the management personnel, they must have a formal education (equivalent to S.S.C or such Higher Secondary Education, along with basic co-operative training.

How to become a member of a co-operative housing society?

If you want to become a member of a housing society, then you would have to fulfill the conditions that are stated in your particular State’s Co-operative Housing Society Act and the rules that are stated in the State’s Bye-Laws. If the housing co-operative has no capacity to provide services to any new members due to the unavailability of flats or housing units, then the admission of new members can be refused. An individual can only be a member if he or she is competent to contract under the Contract Act, 1872. Applications for memberships are to be taken in writing, and it must be duly signed by the concerned member along with the complete details as well as particulars. There are a few basic necessities that the members must meet, such as;

  1. Have the required qualifications as mentioned in the Bye-Laws of the cooperative.

  2. Reside or intend to reside permanently in the area of the housing cooperative.

  3. Pay the necessary admission fee.

  4. Purchase the minimum required number of shares of cooperative.

  5. Pay all stipulated charges as per the Bye-Laws.

  6. Make down payments within the time period as per the Bye-Laws.

  7. Make declarations whether they own any plot(s), flat, or other accommodation in their own name or in a family member’s name. If so, they must state their reasons to become a member.

Final Thoughts

We hope that you found this article on co-operative housing societies to be helpful. Feel free to share this article with the new members of your housing society. To give them the basic information about what housing society cooperatives are and how they function.

If you need help regarding the workings of your housing society, then please contact your respective state or district housing co-operative federations such as our proud partner; Pune District Co-operative Housing Federation for any kind of assistance.

And if you have any questions regarding this blog, then please feel free to write to us in the comments below (Log-in required).

Pune District Co-Operative Housing Federation Partner With VZTrack #meetSafe

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