Forming and Running a Housing Co-Op
Obligations of Members to the Housing Co-op
While tenants in private rental housing sign a lease, most co-ops will require new members to sign an occupancy agreement. In Quebec new members will sign both a lease for the rental of their dwelling and a member agreement. The occupancy agreement is a legal contract between the co-op and the new member that sets out both the rights and the obligations of the member.
The occupancy agreement specifies:
- What the new member agrees to do in exchange for the right to live in the unit. Typically the main stipulations are that the member will pay his or her housing charge on time and follow the rules or bylaws of the co-op.
- What the co-op agrees to do for the member as a resident (e.g. maintain the building in good repair, ensure the proper management of the co-op, adequately maintain the reserve fund).
- The notice a member is required to provide when he or she withdraws from the co-op.
Most co-op legislation does not provide much detail on this topic, leaving it up to the individual co-op to define the obligation of members. However, the rules or bylaws must still be reasonable and must comply with the provincial or territorial co-op act
, human rights legislation
, and the principles of natural justice
For example, while provincial legislation does not state that a co-op cannot prohibit members from having a purple front door, a bylaw or rule that allowed a co-op to evict a member on this basis would likely be found to be an unreasonable rule if challenged in the courts.
Note: If the member will receive a subsidy, he/she may also have to sign a form that sets out additional responsibilities. For example, since subsidies are based on a member's income, subsidized members are always required to provide proof of their income.
Member Obligations: Payment of Housing Charges
Members of the co-op must pay monthly housing charges and are expected to make their payments in full and on time.
Most co-ops may also require a new member to pay:
- the first month's housing charge;
- the last month's housing charge;
- a membership fee; and
- a maintenance (damage) deposit.
These payments are normally due when the member moves into the co-op.
Co-ops are allowed to set the amount of the deposit that is collected by the co-op with the exception of Nova Scotia, where the tenancy legislation applies to co-ops (see Your Guide to Renting a Home for more information on rules that govern landlords and tenants).
The maintenance deposit is kept by the co-op to pay for any required repairs, damages or cleaning after the move out. The balance is refunded once the member has moved out of the co-op and the unit has been inspected.
As a democratic organization, members are also expected to participate in the co-op by attending members' meetings.
At a members' meeting, members may be asked to do some or all of the following:
- Elect the board at the Annual General Meeting (AGM).
- Make the final decisions regarding the budget of the co-op. Approve the budget.
- Resolve disputes or disagreements between the board and any committees or individual members.
- Decide what amendments should be made to the bylaws or rules.
When a Member Fails to Meet His or Her Obligations
A member who fails to meet his or her obligations to the co-op may face eviction or expulsion from the co-op. The co-op will respond to each individual situation in accordance with its severity.
Co-ops evict a member by terminating the individual's membership in the co-op. See Eviction/Expulsion of Members.