Real Estate Investing Information Blog

Housing co-operative is a lawful entity - typically a corporation - that owns real estate; one or more housing buildings. Each shareholder in the lawful entity is granted the right to occupy one housing unit, sometimes subject to an Occupancy Agreement, which is alike to a lease. The Occupancy concord specifies the co-op's rules.

As a lawful entity, a co-op can contract with other companies or hire individuals to provide it with services, such as a preservation contractor or a building manager. It can also hire employees, such as a manager or a caretaker, to agreement with specific things that volunteers may prefer not to do or may not be good at doing, such as electrical preservation. However, as many housing cooperatives struggle to run self-sufficiently (and recognize the economical competence of doing so), as much work as probable is completed by its members.

A shareholder in a co-op does not own real estate, but a share of the lawful entity that does own real estate. Co-operative ownership is rather distinct from condominiums where people "own" character units and have small say in who moves into the other units. Because of this, most jurisdictions have developed separate legislation, related to laws that regulate companies, to regulate how co-ops are operated and the rights and obligations of shareholders.

In Finland co-op membership is the major form of real estate and home ownership. Except for an extremely limited number of co-ops that follow the severe Rochdale Principles of one vote, all Finnish co-ops are incorporated as (non-profit) limited-liability companies. Membership of a co-op is obtained by buying the shares on the open market, generally often through a real estate agent. No board endorsement is needed to buy shares. In several older co-operatives old members have the right of pre-emption, i.e. the right to buy the shares at the situate market price. The first housing cooperatives were built approximately 1900, many of them in the Helsinki zone of Katajanokka, in the national romantic Jugend style. Primarily many co-ops were set up by the future members themselves, often workers or artisans in the same trade. By the 1920s co-op founding was the business of specialized real estate developers.