Co-operative Housing: Members' Rights and Duties

From Clicklaw Wikibooks
Revision as of 10:45, 23 February 2018 by Dial-A-Law (talk | contribs)

What is a housing co-operative?

A housing co-operative, or a co-op, 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 an investment, unlike single family homes, townhomes, and condos.

What law applies to housing co-ops?

The rules or bylaws of the association regulate the co-operative corporation and set up procedural rights for members in some cases. Rules usually deal with things like:

  • the qualifications of members
  • the rights of joint members
  • membership obligations to use co-operative services and to pay fees
  • the transferability of members’ interest in the co-op
  • board of director matters
  • financial matters (such as distributing surplus earnings)
  • conditions and procedures for withdrawing or ending membership

The board of directors can set other rules that are approved by the members at a meeting called to do that.

A co-op’s occupancy agreement is like a lease. It sets out members’ rights and responsibilities as residents. The rules of the association set out the membership conditions. Both the agreement and the rules must comply with the BC Cooperative Association Act and Cooperative Association Regulation.

Who are members?

The people who own and live in a housing co-op are the 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, so the BC Residential Tenancy Act does not apply to them. And their payments are not 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. Others pay a housing charge close to market rates. Together, the members own their housing jointly and control the co-op’s governance and management.

If a person paying rent is not a member of the co-op, and the co-op or one of its members is the landlord, the Residential Tenancy Act may apply to those rental units. 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:

  1. attend, speak, and vote at general meetings where major decisions are made, such as changing policies and rules, setting housing charges, and electing directors.
  2. elect the directors, or run for election as one of the directors if they want to help govern the co-op.
  3. live permanently in their unit as long as they need the housing the co-op provides and accept membership responsibilities. (If a co-op ends a person’s membership, the person must leave the co-op. If they don’t, the co-op can apply to the BC Supreme Court for possession of the person’s unit.)
  4. use services provided by the co-op, at as close as possible to the actual cost.
  5. 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 members and between the association and 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 like court, but less formal. 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 must 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 providers and contract for other services like bookkeeping and maintenance.

What do members have to do?

Members must follow the co-op rules, which are made by members. They must:

  1. follow the rules on parking, maintenance of the housing, and participation in the co-op.
  2. attend general meetings and meetings of any committee they belong to.
  3. 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 must pay 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?

Housing co-op evictions must follow the Cooperative Association Act and Cooperative Association Regulation. A co-op can end a person’s membership in any of the following cases:

  • if a person does not pay rent, occupancy charges, or other money they owe for using the premises.
  • if the directors believe that a person violated a material condition in the occupancy agreement, meaning something fundamental to the agreement.
  • for conduct detrimental to the co-op, meaning seriously harmful behaviour.

You should look at a co-op’s bylaws and occupancy agreement to see if they say what behavior will harm the co-op and cause it to end a membership.

A 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 must give the person notice of the directors’ meeting, and let them appear and speak at the meeting. A person whose membership is ended has the right 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 must notify the directors that they plan to appeal. And they must 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 appeal 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 (more than 50%) to end the occupancy agreement.

When the occupancy agreement ends, the person’s membership also ends. They must then leave the co-op. But they can appeal, as described earlier.

If an evicted member does not pay what they owe to the co-op, the co-op can sue them. Claims for $5,000 or less go to the Civil Resolution Tribunal. Claims above $5,000 and up to $35,000 go to small claims court. Claims above $35,000 go to BC supreme court.

More information

[updated February 2018]

The above was last reviewed for accuracy and edited by John Blois

Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Licence Dial-A-Law © People's Law School is licensed under a Creative Commons Attribution - NonCommercial - ShareAlike 4.0 International Licence.

Personal tools