Meaning | Characteristics | Objectives | Types | Forming A Society | Registration | Documentation | Merits | FAQ

You must have heard of the concept of the cooperative housing society. These are one of the most common and affordable housing solutions that are used by tons of people. These houses are mostly formed with the help of cooperation and the consent of the different people who stay there.

If you too would like to buy a house in a cooperative housing society either for investment purposes or even for staying, we are going to share some important details with you. This will prepare you in a better way regarding what to expect out of cooperative housing society and related details.

What Do You Mean By Cooperative Housing Society?

A cooperative housing society is a form of group living where the society is owned by the members who stay in the houses for the sake of their common needs. It is a legal establishment and follows all the rules and norms meticulously.

This society in itself comprises a few members who make it a point to purchase land. They then construct flats on the land and then allot the different flats to the members. The books of law have Cooperative Societies Acts and the registrar of cooperative societies has listed some rules and regulations. All the cooperative housing societies in different states need to adhere to these rules and regulations to make sure they are following the books of law.

Source: Andrey Popov / Shutterstock

These societies are all a part of the National Cooperative Housing Federation of India and they have to follow the bye-laws listed by the Mutual State Cooperative Societies Act, 2022.

The Salient Characteristics Of Co-Op Housing Society

Here are some of the key salient characteristics of a cooperative housing society.

  • Open membership: All individuals who show a common set of interests can choose to opt for membership in such societies
  • Limited liability: Based on the contribution made by the members, the expenses are shared in a proportionate manner
  • Legal entity: These societies are always registered under the Cooperative Societies Act. These in turn become legal entities and they need to abide by state and national laws.
  • Voluntary creation: These societies are made voluntarily as several like-minded people come together. It works in the spirit of camaraderie and self-help.
  • Autonomous: They are pretty independent and autonomous. While they need to abide by the rules, they are free in the way they function.
  • Mutual help: The key objective behind making any cooperative housing society is to make sure that each member is ready to help the other members in whichever way they possibly can.
  • Democratic election: There is a proper election that takes place to choose the representatives in these societies. The election is done in a democratic and transparent way
  • Training: These societies offer the right training and know-how to their members regarding legal compliance, the benefits of living in this way and how to manage the society as a whole.
  • Mutually beneficial: One of the key objectives of these housing societies is that every member thinks of the collective benefits first. It is designed to be mutually beneficial for all members involved and doesn’t encourage sub-grouping, mud-slinging or even power plays.

What Are The Key Objectives?

The underlying aim of making housing societies is to extend support to the members. However, these societies have some well-listed objectives. Let us see what they are.

  • Acquire land, make flats and distribute them among the different members of the co-op housing society
  • Offer basic facilities like water and electricity and ensure that the society is well maintained
  • Offer support to the members of the society by offering loans for house construction or even other structures within the societal boundaries
  • Promoting the spirit of camaraderie and self-reliance among the members of the society
  • Promoting a socio-economic environment and offering the right healthy living standards

In all, a co-op housing society takes into account all the needs and wants of the members of the society. They work like a close-knit family unit.

The Types Of Housing Cooperatives

The housing cooperatives societies can be broadly categorized under the following sub-heads.

  • Housing mortgage societies: These societies function like credit societies. They lend money to the members for the sake of constructing the houses. However, it is important to note that the members are responsible for the entire construction work.
  • House building societies: Here, the societies end up constructing houses on behalf of the members. When the houses have been fully made, they are then handed over to the different members of society. The overall expenses that were incurred in the construction process are then recovered in the form of loans.
  • Tenant co-partnership housing societies: In this category, the society holds the land and building on either a freehold or leasehold basis. The members can choose to have an occupancy right but they need to pay their share and agree to the decided monthly rent as well.
  • The tenant ownership housing societies: This is the final category and the land can be held either on a freehold or leasehold basis. The members become the owner of the houses and they are leaseholders of the land.

They are free to construct their houses the way they deem fit but there are certain pre-set rules and regulations in place regarding the act of house transfer or even subletting it.

To know more about freehold property and its meaning, click here.

So, these are the different categories that you need to know. Let us check some other details concerning the cooperative housing society.

Forming A Cooperative Society- The Details

The co-op societies are all a part of the National Cooperative Housing Federation of India. So, everything is right from the formation to the responsibilities, and the role of the members; all have to adhere to the bye-laws as listed in the Multi-State Cooperative Societies Act, 2002. Along with this, one also needs to be mindful of the Cooperative Society Acts of their specific state as this tends to differ from one state to another.

An important guideline one needs to keep in mind is that at least 10 members need to have a common aim when they are looking to form a society. These members should be the residents of the same locality or at least belong to one single group.

Registering A Co-Op Housing Society

It is compulsory to register a housing society in India and it must be done under the Cooperative Societies Act, 1912. Here are the steps that you need to follow.

  • First of all, you need to select a chief promoter from among the members
  • The next thing is to select the name for the housing society. Always keep two alternatives along with the chosen name
  • Now you need to fill in the registration application with the name and occupation of the promoter listed.
  • Submit the form to the registrar after duly filling the registration charges
  • The bye-laws will then be adopted
  • Every house is going to have a share capital which needs to be paid by all the residents in an equal manner
  • This completes the registration process.

The Documentation Needed

When you are carrying out the registration, of course, you need to offer some documents to validate the authentication. Here is the list.

  • The registration application
  • The account statements and bank certificates
  • Details of the promoter members
  • Copies of bye-laws
  • Four copies of the application form, signed by a minimum of 90 percent of the members
  • Form D account statements
  • Complete details of the working of the society and their objectives
  • Title clearance certificate as filled by the advocate
  • Proof of registration payment fee
  • Any other document that the registrar asks for

So, with these documents, you should be able to complete the registration process and be all set to form your housing society.

Merits Of Living In A Housing Society

Here are some of the obvious advantages that housing societies have to offer.

  • The overall expenses are less in the co-op housing model. Members can regulate the cost per flat for the amenities and services.
  • The down payment is also comparatively less and so are the pre-closure charges
  • Owning a house in this society is considered to be a great investment as there will be no intervention from outside sources
  • These flats have a separate legal existence and therefore the chances of legal disputes are pretty less as compared to the other properties
  • As the members are in charge of the maintenance, one can expect them to keep regular checks on the services and amenities as well
  • Such housing societies select their leader and so, every member has a say in who is going to represent. It bestows a lot of power on each of the members and offers them an equal say in the discussion.
  • This society set up ends up sharing the responsibilities in an equal manner between the different members. This leads to a much more balanced set-up.


Does a cooperative housing society need to abide by the laws?

Yes, there is a definite set of rules and laws that these societies need to adhere to. The bye-laws are particularly very important

Do you need to register for a housing society?

Yes, it is crucial to register a housing society or else it will not be considered legal

Do you need to pay registration fees for society registration?

Yes, you have to duly fill in the registration application and pay the fee to register. You also need to show the payment receipt before the registration is deemed complete.

How can you become a member of a housing society?

When 10 or more people with similar interests come together and they follow the registration process, they can form a cooperative housing society.