Housing cooperatives and homeowners' associations: similarities and differences, comparative table, step-by-step instructions for reorganization from one form of association to another

In an unusual issue of accounting education, Alexey Ivanov tells why accountants of homeowners' associations are caught dishonestly. Spoiler: there are only four basic schemes and they are all primitive.

Hi all! Alexey Ivanov is with you, the knowledge director of the online accounting “My Business” and the author of the telegram channel “Accounting Translator”. Every Friday on our blog at The Clerk I talk about accounting. I started with the basics, then I will move on to more complex matters. For those who are just preparing to become an accountant, this will help them get to know the profession better. Seasoned chief accountants should look at familiar categories from a different angle.

Today is an unusual release. I’ll tell you about the schemes used by dishonest representatives of the profession in a particular industry. More precisely, it’s hard to even call it a scheme - it’s so primitive that the money of homeowners is transferred into the accountant’s pocket. Accordingly, such swindlers are often caught. Anticipating negativity in the comments, I would like to say right away that I am not projecting the “achievements” of individual characters onto all the accountants working in the HOA: every family has its black sheep. And, of course, I will advocate outsourcing - this is not the first time I have been saying that in small businesses the future lies with it.

Is reorganization necessary in the HOA if the housing cooperative has built a house?

A housing construction cooperative is created to build a house. Whether this form of management of apartment buildings continues to operate when the housing is built or whether reorganization into a HOA , we’ll figure it out today.

Reorganization of housing cooperatives into HOAs

Back in 2004, there were no doubts about the reorganization of the housing cooperative . Article 14 of the Federal Law of December 29, 2004 N 189-FZ directly indicated that this is the responsibility of the housing cooperative. Once you’ve built it and fulfilled your function, move on to a new form.

Two years later, the obligation became a right. And this situation still remains: according to Article 122 of the Housing Code of the Russian Federation, the general meeting of members of the housing cooperative decides whether the housing cooperative will be transformed into a HOA or not.

In the middle of this year, an attempt was made to again oblige cooperatives to transform into partnerships: it was supposed to clarify that the house could be under the management of a housing cooperative only until the last member of the cooperative did not pay the share.

After this, a decision is made to reorganize the housing cooperative into a partnership or a new method of managing apartment buildings. If the general meeting of members of the housing cooperative does not make such decisions, the local government intervenes and holds an open competition for the selection of management entities.

The draft Federal Law appeared on the official portal for the publication of legal acts on March 1, 2021. But things are still there, no progress has been observed, the project is still at the stage of public discussion.

Why would it be nice if the amendment were adopted? It is logical that the next form of management of apartment buildings after the housing cooperative has fulfilled its main function - building a house - should become an HOA. If a cooperative has a cohesive meeting of members and an established effective system of house management, then it can only be preserved by transforming into a partnership.

HOA and housing cooperative

Homeowners' associations and housing cooperatives, despite some similarities, are still different concepts.

The decision to create an HOA is made at a general meeting of the owners of premises in the apartment building. If more than 50% of the total number of votes votes “for”, such a decision is considered adopted.

The housing cooperative is created at a meeting of the founders; all participants in the meeting must vote “for”. Anyone who wants to create a cooperative , including persons over 16 years of age.

The Housing Code of the Russian Federation precisely stipulates the number of HOAs - the number of members must exceed 50% of the votes of the total number of votes of owners in the MKD. The law is not so strict about the number of members of housing cooperatives; the main thing is that there should be at least 5 of them, but not more than the number of residential premises in the apartment building.

Partnerships and cooperatives make decisions differently: in housing cooperatives, one member is entitled to one vote. In an HOA, the percentage of votes is determined according to the share in the common property right.

Income is distributed differently: in housing cooperatives - between members of the cooperative, in homeowners' associations - they go towards general expenses or other goals of the partnership. The nature of the contributions differs: in a housing cooperative these are shares (after full payment of the share, ownership rights arise), in an HOA - membership fees and they are not related to the right to housing.

Another important difference between a partnership and a cooperative: a member of the HOA ; a member of the housing cooperative can be anyone who wants to purchase residential property (this can be minor citizens over 16 years old and legal entities).

If a member of the partnership sells an apartment, he automatically ceases to be a member of the HOA, and the buyer, on the contrary, automatically becomes one, since he acquires ownership rights. You can become a member of the partnership only by writing an application for membership (to leave the housing cooperative, by the way, you will also have to write an application); the transfer of a share when selling an apartment is not stipulated in the law. Moreover, a member of a housing cooperative acquires ownership rights only after full payment of the share, and not upon purchase of an apartment.

The procedure for reorganizing housing cooperatives

The process of transforming a cooperative into a partnership is carried out based not only on Article 122 of Chapter 11 of the Housing Code of the Russian Federation, but also on:

Articles 57, 58, 59 of the Civil Code of the Russian Federation;
Federal Law of 08.08.2001 N129-FZ.

a general meeting of members of the housing cooperative meets and makes a decision on reorganization into a HOA. Then this decision undergoes state registration.

We recommend that the agenda of the general meeting of housing cooperative members include the following issues:

selection of the chairman and secretary of the meeting;
reorganization of housing cooperatives into HOAs;
approval of the charter of the partnership;
selection of the board (and its chairman) and the HOA auditor;
transfer deed.

For state registration of reorganization, according to Article 14 N129-FZ, you will need:

application for state registration of a legal entity created during transformation (form);
HOA charter;
decision of the general meeting of members of the cooperative on reorganization;
deed of transfer;
document on state duty (4000 rubles);
a certificate from the Pension Fund of Russia that the policyholder has provided data on the insured persons working for him, on insurance premiums and on the insurance period.

Registration of the reorganization of the housing cooperative will take 5 working days, on the sixth day a certificate of changes in the Unified State Register of Legal Entities is issued.

1. The competence of the general meeting of HOA members includes:

1) introducing amendments to the charter of the partnership or approving the charter of the partnership in a new edition;

2) making decisions on the reorganization and liquidation of the partnership, appointing a liquidation commission, approving interim and final liquidation balance sheets;

3) election of members of the board of the partnership, members of the audit commission (auditor) of the partnership and, in cases provided for by the charter of the partnership, also the chairman of the board of the partnership from among the members of the board of the partnership, early termination of their powers;

4) establishing the amount of obligatory payments and contributions of members of the partnership;

5) approval of the procedure for the formation of the partnership’s reserve fund, other special funds of the partnership (including funds for current and major repairs of common property in an apartment building) and their use, as well as approval of reports on the use of such funds;

6) making a decision on obtaining borrowed funds, including bank loans;

7) determining the directions for using income from the economic activities of the partnership;

approval of an annual plan for the maintenance and repair of common property in an apartment building, a report on the implementation of such a plan;

8.1) approval of estimates of income and expenses of the partnership for the year, reports on the implementation of such estimates, audit reports (in the case of audits);

8.2) approval of the annual report on the activities of the management board of the partnership;

8.3) approval of the conclusion of the audit commission (auditor) of the partnership based on the results of the audit of the annual accounting (financial) statements of the partnership;

9) consideration of complaints against the actions of the board of the partnership, the chairman of the board of the partnership and the audit commission (auditor) of the partnership;

10) adoption and amendment, upon the proposal of the chairman of the board of the partnership, of the internal regulations of the partnership in relation to employees whose responsibilities include the maintenance and repair of common property in an apartment building, provisions on the payment of their labor, approval of other internal documents of the partnership provided for by this Code, the charter of the partnership and decisions of the general meeting of members of the partnership;

11) determining the amount of remuneration for members of the board of the partnership, including the chairman of the board of the partnership;

12) has become invalid;

13) other issues provided for by the Housing Code of the Russian Federation or other federal laws.

The charter of the homeowners' association may also include the resolution of other issues in addition to the above mentioned within the competence of the general meeting of the association's members.

The general meeting of members of the homeowners' association has the right to resolve issues that fall within the competence of the association's board.

2. A sole executive body (chairman) and a permanent collegial executive body (board) are created in TSN.

By decision of the highest body of the TSN (clause 1 of Article 65.3), the powers of the permanent bodies of the partnership may be terminated early in cases of gross violation of their duties, revealed inability to properly conduct business, or in the presence of other serious grounds.

2.1. The board makes decisions on all issues of the partnership's activities, with the exception of issues falling within the exclusive competence of the general meeting of owners of premises in an apartment building and the competence of the general meeting of members of the homeowners association.

Responsibilities:

1) compliance by the partnership with the legislation and the requirements of the charter of the partnership;

2) control over the timely payment by members of the partnership of established mandatory payments and contributions;

3) drawing up estimates of income and expenses for the corresponding year of the partnership and reports on financial activities, submitting them to the general meeting of members of the partnership for approval;

4) management of an apartment building or concluding contracts for its management;

5) hiring workers to service an apartment building and dismissing them;

6) concluding contracts for the maintenance, operation and repair of common property in an apartment building;

7) maintaining a register of members of the partnership, office work, accounting and financial reporting;

convening and holding a general meeting of members of the partnership;

9) fulfillment of other duties arising from the charter of the homeowners association.

3. The chairman of the board is elected for the period established by the charter of the partnership.

1) ensures the implementation of decisions of the board, has the right to give instructions and orders to all officials of the partnership, the execution of which is mandatory for these persons.

2) acts without a power of attorney on behalf of the partnership, signs payment documents and makes transactions that, in accordance with the law, the charter of the partnership, do not require mandatory approval by the board of the partnership or the general meeting of members of the partnership, develops and submits for approval to the general meeting of members of the partnership the internal regulations of the partnership in in relation to employees whose responsibilities include the maintenance and repair of common property in an apartment building, regulations on the payment of their labor, approval of other internal documents of the partnership provided for by the Housing Code of the Russian Federation, the charter of the partnership and decisions of the general meeting of members of the partnership.

4. 1. Audit commission (auditor)

1) conducts audits of the financial activities of the partnership at least once a year;

1.1) presents to the general meeting of members of the partnership a conclusion based on the results of the audit of the annual accounting (financial) statements of the partnership;

2) presents to the general meeting of members of the partnership a conclusion on the estimate of income and expenses for the corresponding year of the partnership and a report on financial activities and the amount of mandatory payments and contributions;

3) reports to the general meeting of members of the partnership on its activities.

HOAs, housing cooperatives and other forms of housing management and their features

Many people didn’t know, but it turns out that cooperatives still exist today.

In the housing sector there are such organizational forms that, it would seem, should sink into oblivion.

Housing and savings cooperative, Housing and construction, Homeowners' Association.

The legislation of the Russian Federation has been worked out in the housing issue to the smallest detail, but what to do, sometimes, is not always clear.

How not to get confused and choose the right direction? Let's try to figure it out in this article.

Dear readers! Our articles talk about typical ways to resolve legal issues, but each case is unique.

If you want to find out how to solve your particular problem, please use the online consultant form on the right or call. It's fast and free!

Types of housing cooperatives

All of the above forms of government can refer to non-profit organizations. Non-profit organizations do not aim to make a profit . As a rule, they are organized to achieve different goals:

In this case, we are talking about competent management of real estate. However, such associations of residents as homeowners' associations, housing cooperatives and others can receive income from the rental of non-residential premises that they own. For these tasks, there are three types of cooperatives:

A housing savings cooperative (HSC) is a consumer cooperative created as a voluntary association of citizens on the basis of membership in order to meet the needs of shareholders in residential premises by combining members with share contributions. (according to Federal Law 215 as amended on July 3, 2016 “On Housing Savings Cooperatives”).
Homeowners' Association (HOA) is a type of real estate owner's association, which is an association of owners of premises in an apartment building for joint management of common property in an apartment building or several buildings. (according to the Tax Code of the Russian Federation).
A housing construction cooperative (HBC) is a voluntary association of citizens and, in cases established by this Code and other federal laws, legal entities on the basis of membership in order to meet the housing needs of citizens, as well as manage an apartment building. (according to the Housing Code of the Russian Federation).

Is the management company identical to the housing cooperative?

Is the management company the same organization as the housing cooperative or not? From the point of view of house management, the last two organizational forms are identical. If we compare the second and third forms of housing and communal services with a management company, the difference is that the management company employs professionals who, according to the contract, are fully responsible for the management of the house , housing and utility resources, and the board members of the HOA or housing cooperative may be incompetent in these matters.

How does work work in a housing construction cooperative?

Housing construction cooperative in accordance with Art. 110 of the RF Housing Code differs from other forms of management in that it is formed at the stage of construction or reconstruction of a residential building. Housing cooperative and acts as a developer. That is, shareholders are future home owners.

The participants of the housing cooperative act as shareholders, with whose funds the construction , reconstruction, and then management of the residential building is carried out. Individuals and legal entities can join a housing construction cooperative (see Article 111 of the Housing Code of the Russian Federation). Priority for entry is given to persons who do not have their own housing and live under a social tenancy agreement.

The decision to organize is documented in a protocol. Housing cooperative also has its own Charter.

Each shareholder becomes the owner after paying for the share in full .
The share is equal to the sum of the construction cost of his apartment. Until all residents of the house pay their shares, the owner of the house is the housing cooperative. There are two ways to obtain funds to build a house:

one-time and one-time payment for construction by all members of the housing cooperative, made in full;
a long-term bank mortgage loan concluded with the housing cooperative bank as a legal entity is paid by all members of the housing cooperative.

Upon completion of construction, the housing cooperative assumes the functions of managing the house and becomes an association identical to the HOA.

More detailed information about housing cooperatives can be found in the video:

Differences between housing cooperative organizations and housing cooperatives and homeowners' associations

Differences between housing cooperatives according to the housing code and the organization of the HOA:

An HOA is organized by owners to manage existing housing.
Housing cooperative is at least 5 people. HOA – at least 51% percentage of all owners.
The HOA consists only of the owners of residential premises.
Shareholders of housing cooperatives are liable for part of the unpaid share.
In a housing cooperative, unlike a homeowners' association, income from business activities (renting out premises) is distributed among the members of the cooperative.
Any owner can receive information from the activities of the HOA.

Advantages of organizational forms

So, after all, what organizational form to choose? So:

The HOA is deprived of the following advantages of housing cooperatives and housing cooperatives and can only be chosen to manage existing housing. The main advantage of an HOA compared to a management company is the transparency of the costs of maintaining and repairing a home, and for utilities.
A housing cooperative is selected only in the case of new construction or reconstruction of an apartment building (in the case of reconstruction, you can also select a housing cooperative). Advantages:
In a housing cooperative, unlike a homeowners' association, income from business activities (renting out premises) is distributed among the members of the cooperative.

In conclusion, I would like to note that cooperatives have now taken on a new form and are an excellent means for the construction , acquisition and management of housing. This is the best form for people with a managerial approach to their own real estate.

Didn't find the answer to your question? Find out how to solve exactly your problem - call right now:

+7 (Moscow) +7 (St. Petersburg)

What is the best way to manage an apartment building?

HOA	Residential complexes and housing cooperatives	UK
Advantages	The owners' financial resources are in the organization's current account and can only be used for the needs of the house. The ability to independently hire workers for the maintenance, repair and maintenance of the house. Possibility of re-election of the board in case of poor performance. Possibility of conducting commercial activities (renting out advertising space). Collective decision-making approved by the minutes of the general meeting.		Professionalism of the staff. Good material and technical base. The work is being carried out according to schedule. In the event of debt on the part of apartment owners, the management company can pay the contractors money from its accounts in order to continue supplying services to consumers.
Flaws	It is beneficial only for a large house, otherwise the maintenance will be expensive for the residents. An unscrupulous person may become the chairman. The need to do your own bookkeeping. The need to defend your rights in court. If there is a debt to pay for utilities, the missing amount can be distributed among all residents.		There is no transparency in the spending of funds. The management company is not interested in the results of the work. Failure to perform duties in good faith.
Responsibility	The responsibility of members of homeowners' associations and housing cooperatives is not specified in the Housing Code of the Russian Federation, which regulates most of the nuances of the activities of these organizations. All measures provided for by law for legal entities, such as administrative, civil and criminal, are applied to them. You will have to answer: for the low quality of services provided; causing harm to the health and life of people; causing damages due to violation of the rights of owners.		Administrative liability (fines): for maintaining property in poor condition; for violation of the standard for providing residents with resources; for inaction of authorized persons resulting in damage to property; for violating the rules of maintenance and current repairs of the house. Civil liability - compensation for losses to the injured party.

The difference between a HOA and a housing cooperative

What is better: HOA or housing cooperative? Each of these forms, which is established by residents, is intended to provide care for the residential building and help in resolving housing issues. At the same time, it is important to understand the differences between HOAs and housing cooperatives. Despite the fact that, in essence, these abbreviations define similar organizations, there is a significant difference that will be reflected in various aspects of both the organization and the activities of HOAs and housing cooperatives.

What it is

Before we talk about the fundamental difference between one abbreviation and another, it is necessary to understand what they mean. An HOA (homeowners' association) is an organization, namely an example of partnerships, that is created directly by the homeowner. They are necessary in order to organize the management of property belonging to the so-called housing stock of multi-apartment buildings and private sectors. At the expense of such a partnership, the organization of services necessary for the maintenance of housing and the disposal of the property that is in shared ownership also takes place.

Housing cooperatives also represent certain organizations, namely cooperatives, which deal with both housing and construction issues. Accordingly, the abbreviation stands for housing construction cooperative. This form is created for the construction and further use of any real estate. However, it is considered outdated, since most of these organizations were created even before the latest edition of the Housing Code of the Russian Federation was adopted.

The forms under consideration can only be created as a non-profit organization, since they do not imply the main goal of making a profit.

Speaking about the relationship between partnership and cooperative, it is necessary to define several criteria that would reflect their essence and significance:

organizational and legal form;
constituent papers;
the purpose of forming the organization;
formation methods;
deadlines;
members of organizations;
features of carrying out economic activities.

These characteristics will determine the similarities and differences between HOAs and housing cooperatives, and also reflect the essence of the activities they carry out.

In any form that would be used to create this kind of organization, the main direction of activity is focused on ensuring the rights that each of the residents of the house has, be it multi-storey buildings or private sectors. However, it is necessary to understand that the first option, namely the HOA, is more productive and covers a wide range of possibilities, while the housing cooperative is completely outdated and in some situations is not even used.

Correlation and similarity

If we talk about housing cooperatives and homeowners' associations as two independent organizations, then it is important to understand that each of them affects the same area, namely the housing area of relations between citizens. That is why a partnership and a cooperative can be correlated with each other, but in practice this rarely happens, which is caused by a number of differences determined on the basis of the criteria and characteristics of each individual form.

So, the law defines a clear procedure for creating any type of organization, including when it comes to non-profit entities existing in the form of cooperatives or partnerships. All this is regulated by civil law. Speaking specifically about such options as HOAs and housing cooperatives, it would be appropriate to add to the legal framework the Housing Code, which directly establishes rules for participants in such organizations and their founders.

Despite the fact that in most cases, residents independently decide to create and regulate such organizations, there must be strict adherence to the law, otherwise they may be subject to various types of liability.

Differences in forms of organization

An owners' association, which is aimed at resolving housing issues, is only in essence similar to a housing-construction cooperative. However, the main directions, namely goals, participants and other similar points differ significantly, which leads to the fact that the HOA becomes the most preferable form, since it gives more rights to citizens related to it, and at the same time imposes a number of responsibilities on the partnership itself, acting as a certain guarantor.

Homeowners' associations, as a form of organization carrying out housing activities, exist to this day. Housing cooperatives are less stable and applicable, since most of them were created before the current version of the law appeared.[/attention]

Speaking about specific differences between organizations such as an owners' partnership and a residential and construction cooperative, we can identify several main differences:

The period of creation of the organization. Housing cooperatives are always formed at a time when preparations for construction are taking place, since they directly concern the issues of erection of buildings, and only then their operation. The HOA is created only after the house is built, as it provides the services necessary to maintain it.
Purpose of creation. For housing cooperatives, the main thing is to provide all predetermined interested parties with housing, and the HOA provides for property management, its maintenance and provision at the proper level.
Income distribution. Even though both organizations are non-profit, they still have some income. The difference is that in a housing cooperative it is distributed among the participants, but in an HOA it goes to the organization itself.
Number of participants. A housing cooperative must include at least five people; an HOA has no such restrictions, the main thing is that fifty percent of the residents should be included in their number.
Opportunity to team up with other organizations. A housing cooperative can only exist in a specific house that was built under its activities; a housing cooperative allows the combination of several houses together under the management of one cooperative.

When talking about which organizational option is better to choose, it is impossible to give an exact answer. Considering the goals of HOAs and housing cooperatives, one can understand that each of the forms is appropriate in a certain period. The cooperative is created before the house is built, and the partnership after, since management and supervision of the property is required.

They can be established directly in the law, namely in the Housing Code, as well as in the Civil Code of the Russian Federation, which directly establishes the organization and procedure for making all decisions in such forms. All this creates a number of features that may relate to HOAs, but may not affect housing cooperatives, and vice versa.

Thus, homeowners' associations and cooperatives that have a housing-construction nature are characterized by more differences than similarities. This concerns primarily the goals and organization of activities. However, it is impossible to single out one form and exclude the other, since each of them is used at various stages of construction and property management.