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If you want to start a housing co-op, here are the legal steps you need to take first.
File incorporating documents for your housing co-op
Depending on your province or territory, the legal document that creates a housing co-op will be one of the following:
- articles of incorporation
- memorandum of association
- letters of incorporation
No matter which document is used, it sets out the main objectives of your co-op. It describes how many people will be on the board, for example, and how shares will be distributed. It must also prohibit directors and officers from benefiting financially from their position.
To change the incorporating document, co-op members must pass a special or extraordinary resolution.
Create your housing co-op bylaws or rules
Housing co-ops develop policies and procedures to describe their purpose and how they will be run. These are called "rules" in British Columbia and "bylaws" in all other provinces and the territories.
As there is no one way to run a housing co-op, each one has its own unique bylaws or rules. However, most rules and bylaws will cover how to:
- elect the board of directors
- admit new members to the co-op
- set deposits, fees and housing charges to be paid by members
- deal with non-payments and other situations
- call and give notice of meetings, including annual general meetings and special meetings
- manage a reserve fund for property repairs
At the same time, there are different regulations you’ll need to consider based on where your co-op is located. If you’re setting up a housing co-op, you should be familiar with the co-op act for your province or territory. Your co-op bylaws and rules must also be consistent with all applicable human rights laws.
Make bylaws or rules available to all members
Housing co-ops are democratic organizations, so the bylaws or rules should be available to all members. Members should be able to access the rules or bylaws at any time, either by viewing them or getting their own copy.
In fact, one of the most important things a member can do is review the co-op bylaws or rules carefully. This is because co-op members vote to accept or make changes to the bylaws or rules. In most provinces, housing co-ops must follow a specific procedure to add to or change their rules or bylaws.
Watch for changes in the co-op act and other laws
Housing co-op members, and especially the board of directors, need to keep track of legislative changes that may affect co-ops. When laws change, you’ll need to bring your bylaws or rules in line with the new legislation. If this isn’t done, it could jeopardize the ability of your co-op to continue operating.
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