What is the difference between individual and co-operative ownership?

In the case of co-operative ownership, the purchaser owns a share in a housing co-operative, which guarantees him a right to enter into a lease agreement for an apartment, i.e., the right to use a specific apartment. The buyer, in this case the person acquiring a share in a co-operative, becomes a member of the housing co-operative which is the factual owner of the property in which the apartment (subject of lease) is located. A share in a co-operative can, just like an individually owned flat, be inherited, with the same treatment in estate proceedings.

In the case of a purchase of an individually owned property, the buyer becomes the direct owner of the property.

There are several advantages of co-operative ownership as compared to individual:

  • In the case of co-operative ownership, when buying directly from the housing cooperative, only a portion of the price of the apartment, or, more precisely, the share in the co-operative to which the right to rent an apartment is attached, is paid and the rest is paid to the housing co-operative in the form of a fee related to the use of a co-operative apartment, i.e., as one of the components of the tenant’s “monthly rent”. Once the total price of the share in the co-operative is paid up, the apartment may be transferred to the co-operative member’s individual ownership, at his request;
  • The simplicity of transferring one’s share in the co-operative. In the event of a transfer to a third party, the transfer agreement is not subject to registration in the Land Register and the transfer of a membership share is not subject to the co-operative’s consent, it needs only to be reported to the co-operative.