Co-operative Housing: Members' Rights and Duties

What is a housing co-operative? A housing co-operative, or a “co-op” for short, is an incorporated, non-profit association that owns housing for its members. The members are people who want to live in a mixed-income community where they have a voice and a vote in decisions affecting their housing. Co-op housing is not considered an investment, existing purely for housing purposes.

What law applies to housing co-ops? The rules of the association or by-laws are intended to regulate the affairs the co-operative corporation and to establish, in some cases, procedural rights for the membership. The rules will usually include provisions with respect to the qualifications of members, the rights of joint members, membership obligations to use co-operative services and to pay fees, the transferability of an interest, matters related to board of directors, financial matters (such as distribution of surplus earnings), conditions and procedures for withdrawing membership or terminating membership. In other cases, the rules are to be established by the board of directors and approved by the membership at a meeting called for that purpose.

A co-op’s “Occupancy Agreement” is similar to a lease, setting out members’ rights and responsibilities as residents. The “Rules of the Association” set out the membership conditions. Both the agreement and the rules must be consistent with the BC Cooperative Association Act (referred to as the Act in this script) and Cooperative Association Regulation (the Regulation).

Who are members? The people who own and live in a housing co-op are called “members”. Normally, a member must be at least 19 years old (although a co-op may allow members as young as 16). A member must also own at least one common share in the association and live in one of the co-op housing units. Members are not tenants, meaning that the BC Residential Tenancy Act does not apply to them. Further, their payments are not considered “rent”. Instead, they pay a monthly housing charge for the mortgage, taxes, and operating expenses of the co-op. Some members pay a housing charge based on their income – usually, about 30% of their gross household income—while others pay a housing charge close to market rates. Together, the members own their housing jointly and control the governance and management of the housing co-op.

However, where the person paying rent is not a member of the cooperative, and the cooperative or a cooperative member is the landlord, those rental units may be subject to the BC Residential Tenancy Act.

You should get legal advice from a lawyer if it’s not clear whether BC Residential Tenancy Act applies.

What rights do members have? Members can:

attend, speak, and vote at general meetings where major decisions are made, such as changing policies and rules, setting housing charges, and electing directors. elect the members of the board of directors, or run for election as one of the directors if they want to help govern the co-op. live permanently in their unit as long as they need the housing the co-op provides and accept membership responsibilities. (be mindful that where the co-op ends a person’s membership, the person must leave the co-op upon termination. If they fail to do so, the co-op can apply to the BC Supreme Court for possession of the person’s unit) use services provided by the co-op, at as close as possible to the actual cost. withdraw from the co-op or transfer their share in it to another person with the consent of the co-op’s directors. What if members have a dispute? Co-ops govern themselves. The rules and policies of most co-ops have procedures to solve disputes between individual members and between the association and individual members. Members should follow those procedures to solve disputes. If that doesn’t work, members can seek help through arbitration or the court system. A person with a dispute who is no longer a member has 6 months after leaving the co-op to seek arbitration or go to court. Arbitration is similar to, but less formal than court. Arbitration decisions are final unless the co-op’s rules allow the decision to be appealed in court. If a co-op ends a person’s membership, the person cannot use arbitration to appeal that action – they have to go to court, as explained below.

What happens at co-op meetings? Members of co-ops work together to govern and manage the co-op through an elected board of directors and various committees. The members themselves, as well as the committees and the board of directors, all hold meetings to deal with things like admitting new members, finance, policy-making, and major decisions for members. Co-ops also hire professional management services and contract for other services like bookkeeping and maintenance.

What do members have to do? Members have to follow the co-op rules, which are made by members. That means members have to:

follow the rules on parking, maintenance of the housing, and participation in the co-op. attend general meetings and meetings of any committee they belong to. pay their housing charges and shares in full and on time. All money payable is a debt to the co-op. If a member does not pay, the co-op can put a lien (a charge) on their shares. The co-op can also end a person’s membership for failure to pay. What if two or more people are joint members of a co-op? Only one of the joint members can be a director at one time and only the person whose name appears first on the share certificate can vote – unless the co-op’s rules say otherwise. All joint members are responsible for paying any assessments, levies, dues, fees, payments and other charges relating to membership and the co-op can collect that money from any joint member.

When can a co-op end a person’s membership? Any housing co-op evictions occur pursuant to procedures in the Cooperative Association Act and Cooperative Association Regulation.

A co-op can end a person’s membership in any of the following cases:

if the person does not pay rent, occupancy charges, or other money they owe for the use of the premises. if the directors believe that the person violated a “material condition” in the occupancy agreement, meaning something important and fundamental to the agreement. for conduct detrimental to the co-op, meaning seriously harmful behaviour. You should look at the specific co-op’s by-laws and/or occupancy agreement to see if they set out what behavior will be detrimental to co-op and may lead to end of membership.

The co-op must first give notice of the problem to the person and give them a chance to correct it. A motion to end a person’s membership for one of these reasons needs approval by 75% of all directors in a meeting called for this purpose. The co-op has to give the person notice of the directors’ meeting, and let them appear and speak at the meeting. A person whose membership is ended is entitled to a refund of what they paid for their shares, minus any money they owe to the co-op. When a co-op ends a person’s membership, the person’s occupancy agreement also ends, so they can no longer live in the co-op.

What if a person disagrees with the directors’ decision to end their membership? The person can appeal to the members at the next membership meeting and continue as a member until the appeal is heard. But first, they have to notify the directors that they plan to appeal. And they have to do this within 7 days of when they are notified of the directors’ decision to end their membership.

If the members confirm the directors’ decision, the person can apply to the BC Supreme Court to rule that the termination of their membership wasn’t justified – because the co-op violated principles of natural justice or its decision was not reasonably supported by the facts or authorized under the Act.

There is a 30-day limit to apply to the Supreme Court. People need help from a lawyer before doing this.

When can a co-op end a person’s occupancy agreement? A co-op can end a person’s occupancy agreement for any breach of the occupancy agreement. The most common reason is non-payment of housing charges. The board must first demand in writing that the person correct the problem. If the person doesn’t correct it, the board can pass a resolution by a simple majority (meaning more than 50%) to end the occupancy agreement.

When the occupancy agreement ends, the person’s membership also ends and they must then leave the co-op. However, they have the right to appeal, as was described earlier in this script.

If an evicted member does not voluntarily pay any arrears owed to the co-op, the co-op may go to the courts to sue the member for the amount still owing. Small Claims Court offers the co-op a simple and inexpensive method to collect money.

More information Check the website of the Co-operative Housing Federation of BC at www.chf.bc.ca, or call them at 604.879.5111 in Vancouver and 1.866.879.5111, toll-free, elsewhere in BC. The Federation website has model rules and occupancy agreement, a guide to the model rules, and a guide to the Act. They are under the “Members Resources” link, which is under the “Education” link on the main page. This website also has a link to the Act.

As well, both the Cooperative Association Act and Cooperative Association Regulation are available at www.bclaws.ca – click on “Statutes and Regulations” and then on “C” in the alphabetical list. Scroll down and click on the name of the Act and Regulation to view them. Some public libraries also have copies of BC laws and regulations.

Finally, check the website of the Community Legal Assistance Society at www.clasbc.net.

[updated April 2015]

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Daniel Sorensen, Jack Montpellier and Anna Kurt.

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