According to sociological research, about 70% of Russians are interested in acquiring new housing, but for most of them the financial side of the matter seems to be an insoluble problem. Not everyone can get a mortgage loan and secure its repayment. For this reason, the housing cooperative has recently become increasingly important as the only way to acquire housing.
What it is
Before starting a conversation about what varieties of this structure exist in our country, we will give, if possible, a clear definition of what the concept of "housing cooperative" carries in itself. According to existing legislation, this is a non-profit organization, which is one of the varieties of consumer cooperatives, the purpose of which is to provide all its members with real estate in residential buildings built at their own expense.
All actions of this organization are carried out strictly within the framework of the Housing Code of Russia. Members of the cooperative can be both individual citizens who have reached sixteen years of age (individuals) and organizations (legal entities). The organization of a housing cooperative is possible if there are at least fifty people who want to join it. It should be noted that it is not associated with serious procedural difficulties.
Housing cooperative management is regulated by the Housing Code of the Russian Federation. According to this document, it is carried out: by the general meeting of members of the cooperative, its board, the audit commission and a number of executive bodies provided for by the charter of each particular cooperative.
Types of Housing Cooperatives
According to their specifics, cooperatives are divided into three types: housing cooperatives (housing cooperatives), housing construction (housing cooperatives), and housing and savings (housing and housing cooperatives). Despite the fact that each of them has its own characteristic features, the first two varieties have common features, the main one of which is the acquisition by citizens of their particular property of a certain house. But if the shareholders of a housing cooperative aspire to a house already built and put into operation, then the housing construction cooperative assumes the organization of independent construction of a new building. This form has a rich tradition since Soviet times.
And finally, the third variety is a housing funded cooperative. With the first two, it has both similarities and differences. It is also created to provide its members with housing, but in this case, housing is not purchased in a specific, pre-planned house. Due to the savings made up of mutual contributions, apartments are purchased in various houses, both finished and commissioned, and under construction.
Interest-free debt instead of a mortgage
A natural question arises: "How is the amount paid after the down payment is paid, because it can be very large?" This is the feature that the housing savings cooperative has. Its members receive the necessary financing not in the form of a mortgage loan, but as interest-free debt issued for a certain period. Up to this point, the property of the investor is not the apartment itself, but only the share it has contributed, which it can at its discretion sell, donate or bequeath.
Features of debt repayment
Having added the missing amount from its mutual fund, the cooperative acquires an apartment, which it draws up as its property until the shareholder has fully paid off the full amount of the debt. Until this time, he has the right to move in, but housing is transferred to him only for use, and not in possession. According to a pre-agreed schedule, a member of the cooperative is obliged to make payments on the loan granted to him by the cooperative, and as soon as it is repaid, the new owner gets the right to re-register it in his property.
In case of termination of payments until the full repayment of the debt, the shareholder automatically leaves the cooperative, which returns to him the previously paid share. In this case, he is obliged to vacate the premises occupied by him within two months from the date of termination of his membership. If, for any reason, the cooperative is liquidated, the period is counted from the day the protocol is signed.
Establishing the order of purchase of apartments
An important issue is the procedure for the acquisition by a cooperative of certain residential premises for its specific members. It is submitted for discussion to the general meeting of members of a cooperative, or is provided for by its charter. In any case, the determining factors may include: the volume of the contributed share, as well as the period during which a part of the total contribution was paid, giving the cooperative the right to purchase or build housing. According to existing practice, under equal conditions, the priority is given to the shareholder who has less time left until the payment of the share contribution is completed, and if there are several such members, then the length of stay in the cooperative is taken into account.
Possible trouble
It is important to note that, despite the popularity of housing and funded cooperatives, it was they who became the basis for the creation of many financial pyramids. As a result, a large number of deceived equity holders appeared. This suggests that, when deciding to join such a cooperative, one should carefully study its documentation and make sure that it enjoys a good reputation in the real estate market.
LCD advantages
Any consumer housing cooperative, to whichever of the listed types it refers to, has its pluses and minuses. Speaking about the most significant advantages, it should be noted that the housing purchased through a cooperative ultimately turns out to be almost half the price than purchased on a mortgage loan.
This is facilitated, first of all, by the fact that the general cash desk of a cooperative dispenses with finances provided by credit organizations, which establish fairly high interest rates. The relatively low cost of housing is also due to the fact that it is being built or purchased finished, without the participation of intermediaries.
The pluses include the ease with which you can enter into a housing cooperative. In contrast to obtaining a mortgage loan, this does not require the provision of a large number of documents, including those certifying solvency. As a rule, we are talking only about a passport and a work book. The logic is simple: an unscrupulous member of the LCD, having lost everything, will inevitably be eliminated.
LCD disadvantages
However, the housing cooperative as an independent structure has certain disadvantages. These, first of all, include a rather significant amount of the entry fee. It can make up 2-6% of the total cost of the future apartment. Moreover, it should be noted that it is not included in the total amount of accumulation and is not returned if a member of the cooperative wants to leave it. In addition, practice shows that the accumulation period is usually at least two years, and even if the shareholder immediately deposits the full amount, he cannot occupy his home.
For greater objectivity in assessing the merits and demerits of JNAs, it should be taken into account that when a mortgage loan is received, a bank customer immediately becomes the owner of the apartment, with the caveat that until the loan is fully repaid, it remains pledged to the bank.In case of problems with payments, it is more profitable for the bank to find ways to resolve the situation than to take his client’s property from the court. A completely different picture in the cooperative. Here, according to the charter, housing, up to the full repayment of its value, does not belong to the shareholder, and the rights of the housing cooperative allow, in case of failure to pay the full amount, to deprive him of his property.
ZhNK - a popular form of home buying
From the reports of the Federal Service for Financial Markets, it is clear that currently there are ninety-six housing-savings cooperatives in Russia. This indicates their popularity among potential shareholders. Subject to certain rules, membership in them is not fraught with great risk. It is only important to really assess your solvency and choose the housing cooperative correctly, as the fault of all sorts of troubles is their rash choice, and not the very scheme of functioning of these structures.
