What is the difference between HOA and TSN and housing cooperative: what is the difference, what is it and what is better

The difference between housing cooperatives and residential complexes

The legislation provides for two types of housing cooperatives, these include:

• commercial, that is, whose activities are aimed at obtaining general profit;
• non-profit, aimed at acquiring a single benefit.

Housing cooperative belongs to the second category of organizations.

The law determines that housing construction organizations and residential complexes have a number of common features, these include:

• both associations are voluntary;
• the composition may include individuals and legal entities;
• goal – management of residential buildings;
• lack of commercial grounds, that is, reluctance to earn income.

What is housing cooperative

Housing cooperative is understood as a housing construction cooperative. This is the official decoding of this term. The legislation established that it is not a for-profit company engaged in the joint management of consumer resources. A cooperative is created with the aim of pooling the financial resources of citizens for the construction of houses, dachas, etc. All citizens participate in this association by making a share contribution. Ownership of the building will arise only in a situation where the share is fully paid for.

Subsequently, this office can be transformed into a TSN or into a HOA. This occurs at the request of the owners by holding a general meeting and registering a new legal entity to replace the existing one.

Registration

The Law on Housing Cooperatives states that such organizations are legal. They go through the registry procedure and are treated as legal entities. Therefore, housing cooperatives must have a full package of related documents, these include:

• approved composition of the owners’ commission (information of all owners who wish to invest money in future construction is indicated);
• official permission from the municipality to use the land for development;
• obtaining permission to build a house on a designated plot of land;
• design documentation of the future house (detailed description indicating which of the shareholders will receive which apartment after completion of the work);
• approximate date of completion of construction and transfer of the building into operation.

The specified papers are drawn up in one copy for the entire cooperative, but such papers are kept by the chairman and are provided to the regulatory authorities during the inspection. Also, each participant in the organization must have the right to familiarize themselves with the following package of papers:

• financial papers;
• a personal copy of the document for the land plot;
• regular reports of official votes;
• statements of personal meetings of shareholders;
• registration of the auditor's findings.

Legal instructions have approved the basic provisions for the construction of apartments. In particular, the articles of Federal Law No. 129 set out the basic requirements for registration of cooperatives. In particular, you will have to go through the following procedure:

• submission of a handwritten application to the register;
• Within three working days, a final decision is made regarding the possibility of creating an organization.

In this case, participants will have to prepare the following package of documents:

1. Statement. There is a uniform form for such requests, compliance with which is mandatory. If it was not possible to prepare an application at home, citizens can obtain an application form from the registry.
2. Minutes of the meeting of the organization. This is a universal statement that contains information that the participants of a potential cooperative have met and approved the decision to create a housing cooperative. The statement contains a list of members and their signatures.
3. Charter – rules of operation of the organization. The document must contain the rules of activity, methods of attracting other participants, possible violations and sanctions for violators.
4. Receipt for payment of state duty.

Only after information about the new organization is entered into the register will it be possible to begin the process of registering land and acquiring permits for construction activities.

· Cooperative participant agreement;

· Certificate of purchase of a share;

· All paid receipts;

· A certificate of full payment issued by the cooperative;

· Check for payment of duty (2000 rubles);

· Certificate of acceptance of transfer of property.

As a rule, the procedure takes place within 10 days. As a result, you receive a certificate from the USRN and the originals of all certificates.

Creation of a HOA in an apartment building

Preparation

Preparation of information data and organization of a meeting of house residents :

1. Request to the administration for the issuance of data about the owners (list of apartments, their square footage, as well as form of ownership).
2. Appointment of a representative from the city in the Partnership.
3. Selecting the management of the house , considering the decision on the advisability of further forming a HOA.
4. All residents of the building and a representative from the city must be present at the meeting; they must be notified of this in writing .

Organization of the general meeting

The composition of the initiating residents who will conduct the main work of the Partnership is formed at the preparatory stage.

The purpose of their work:

• development of the HOA Charter;
• creation of minutes of the meeting;
• sending invitations to residents;
• preparation of voting forms.

The meeting is needed for:

• explaining to owners the advantages of HOAs;
• choosing this particular form of leadership;
• approval of the Charter;
• selection of board members.

Voting can be done by absentee voting; residents are given some time to make a decision. The admissibility of absentee voting must be provided for in the Charter.

General voting forms must have 3 answer options:

• behind,
• against,
• I abstain.

Votes are counted by the total area of ​​property owned by residents, and not by the number of participants.

More than half of the residents must vote , then the voting will be considered completed. It will be approved if more than 50% of voters answer “for”.

Carrying out registration

Each of the board members has the opportunity to submit documents for registration of the Partnership.

It is carried out in the Office of the Federal Tax Service , based on the submitted documents:

1. Minutes of the meeting (copies). It contains information about choosing a HOA as a form of government and its creation.
2. The final version of the HOA Charter in 2 copies.
3. A signed management agreement for the HOA with information about the elected Chairman.
4. Application for registration of a legal entity.
5. Receipt of payment of the state duty approved by the Housing Code of the Russian Federation.

A response with registration results will be given within 7 days .

The minutes of the meeting are the most important document when registering an HOA.

Transferring a house and opening an account:

1. The transfer of the house under the management of the Partnership occurs in accordance with the act with the participation of the commission .
2. Changing the form of government does not change the property rights of premises owners.
3. Notifications about the entry of the house under the management of the Partnership are sent to the City Management Department and the Property Management Committee.
4. A bank account is opened for a legal entity (read about the special account for major repairs).
5. It is necessary to notify the former manager and provide him with information about the transfer of the house under the management of the Partnership.

Organizing a meeting, signing various agreements:

1. Division of responsibilities between board members.
2. A selection of responsible persons by area of ​​activity (read about the position of manager).
3. Formation of the rights and obligations of the Chairman of the Partnership (

Is it worth doing?

To find out the answer to this question, it is necessary to examine all the features and pitfalls regarding joining membership, as well as the consequences of these actions.

Advantages of LCD and its various forms

There are the following types of housing cooperatives.

LCD

A peculiarity of housing cooperatives is that its members do not have the opportunity to register ownership of their property until their share is fully paid off.

ZhSK (housing construction)

It is an association of people pursuing the goal of building housing for themselves and capable of bringing this project to life.

The main document of such a cooperative is the charter, which prescribes the manipulation of joint property. Also within the organization there are such local bodies as the board, the chairman of the board and members of the audit commission.

In such a cooperative, general meetings of founders are often held, which initially must be at least five people. Housing construction is carried out through joint efforts by contributing shares to the common cause. Individuals and legal entities can join housing cooperatives.

The main advantage for a future member of the cooperative is the fact that almost immediately he is considered “one of our own”. Unlike a bank, numerous certificates and guarantees are not required here. A passport and a copy of the work book are the entire package of documents.

The advantages of housing cooperatives include the following facts:

• There is no need for authorized capital.
• The amount of the share contribution is calculated according to the estimate for building materials, construction work, etc.
• The overpayment for housing is minimal, since this includes ensuring the activities of housing cooperatives only during construction.
• There are no requirements for the minimum number of participants in housing cooperatives. This means that a project to develop a cottage house or several high-rise buildings can easily be organized by a very small group of people.
• Citizens who have reached the age of 16, as well as legal entities, have the right to join housing cooperatives.

ZhNK (housing savings)

They work on the principle of mutual lending with the condition of accumulating material assets in the accounts. All installment payments must usually be completed by the time the property is put into use.

This version of the cooperative allows members to accumulate the cost of housing by making share contributions. In this case, apartments are purchased within not one residential building, but several. Among the advantages of ZhNK:

• A one-time membership and share fee is required.
• There are no construction risks.
• The activities of the ZhNK are transparent to participants.

Disadvantages of different types of control

The procedure for citizens to join a housing savings cooperative, or ZhNK, and its functioning are regulated by the Housing Code of the Russian Federation and Law No. 215 “On Housing Savings Cooperatives” of December 30, 2004.

Let us outline the associated legal risks for members when joining such a cooperative:

1. Double sales of apartments. The reason is the lack of state registration of contracts with housing cooperatives.
2. If one of the founders has financial problems, then the remaining funds on the balance sheet will have to be contributed by other participants.
3. Entry, membership, target, and additional fees are usually not returned when a citizen leaves the cooperative. The financial obligations of ZhNK are usually limited to the amount of funds contributed by the shareholders themselves, since ZhNK is not a commercial structure.

Common disadvantages of housing cooperatives:

• The owner will have to personally communicate with developers and architects, purchase building materials, hire builders, etc.
• Unfortunately, there is always the possibility of an organization going bankrupt.
• Privatization of housing is possible only after full payment of the entire amount.

Among the disadvantages of housing and communal services:

• Living in such an apartment is possible after paying at least half of the cost of housing, and becoming an owner is possible only after full payment of the entire amount.
• The final costs are significantly higher than those of members of the housing cooperative.
• In order not to fall into serious waste, you need to carefully study the organization’s charter and be aware of the financial statements of the selected cooperative over the past few years.

What is a real estate owners' association: rights and obligations, legislation

TSN is called a real estate owners' partnership. Persons established by the charter can join it. It involves the association of persons who have the entire triad of powers for joint ownership, use and management of their real estate. This organization is abbreviated as TSN.

This cooperative has both its rights and obligations. Since this is a non-profit association, they do not have the rights to engage in profit-making activities. They can only hold general meetings, decide the agenda, and issue internal local legal acts.

This organization is obliged to respect the rights and legitimate interests of the participants of the partnership, carry out management activities, make decisions on concluding agreements with third-party organizations, etc.

This organization has the right to manage property on the basis of internal local legal acts.

The main legislative regulation is carried out by such normative legal acts as:

1. Constitution of the Russian Federation.
2. Housing Code of the Russian Federation.
3. Civil Code of the Russian Federation, etc.

Certain provisions may be enshrined in presidential decrees and government regulations. It is possible to rename TSN to HOA. However, the work of this organization will not change.

Difference from other forms of management of MKD

How does a housing cooperative differ from other forms of management of an apartment building? What are the main distinguishing features?

In fact, there are a lot of differences.

The main one is that other organizations in the form of homeowners' associations, management companies, as well as other organizations receive an already built house and must maintain it properly.

Sometimes management companies receive new buildings that are not in the best condition.

And all because the developer company is only interested in the delivery of the house, but in no case in its maintenance.

In this regard, housing cooperatives are somewhat more profitable. Owners control the construction processes and then manage the property. This means that the developer, who will be under control from the very beginning, will do everything so that the housing cooperative in the form of a management company will not have to redo or complete anything.

Also, members of a housing construction cooperative independently collect funds using a receipt for the maintenance of real estate, hire workers, carry out major and planned repairs.

In other management organizations, such actions are carried out either by invited managers or elected board members.

From housing cooperatives

The main difference between a housing cooperative (LC) and a housing construction cooperative (HCB) is that a housing cooperative is an association of citizens that is interested in maintaining the house.

In a housing construction cooperative, individuals are interested not only in maintenance, but also in construction.

Initially, individuals independently develop a construction plan, invite workers, purchase materials, and coordinate construction with the administration. Thus, we can say that members of housing cooperatives do a lot of work, which subsequently becomes the basis for maintaining housing.

From the HOA

Many people compare a housing construction cooperative and an HOA. In both cases, the management of the house is carried out by the homeowners, or rather the proactive part of them. However, what should you choose?

Actually, this question is quite easy to answer. If residents have the goal of first building real estate and only then managing it, then you need to choose a housing cooperative. This form involves the construction first as the first stage, and then the management and maintenance of the house. If you already have plans for any building, and have become the owners of the space, then you can organize an HOA.

From DDU

The abbreviation DDU is quite rare. And all because this form implies a share participation agreement.

In fact, such an agreement implies a contract drawn up between the developer and the shareholder. In accordance with this act, you, together with other shareholders, purchase real estate from a construction company.

Then you can independently dispose of this property and manage it yourself, or entrust the management to another company. However, DDU is seriously different from housing cooperatives. The thing is that under a shared participation agreement, the owners buy the property from the developer.

With a form such as a housing construction cooperative, the owners build real estate from the very beginning, which means they independently build the property from scratch, without a developer’s company.

Also, in a housing construction cooperative, only members of the association manage the property and its maintenance. In a share participation agreement, the contents can be entrusted to other organizations.

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

The difference between ZhNK and housing cooperative is that it is formed not for construction, but for the purchase, reconstruction and subsequent maintenance of apartment buildings. The rights, as well as all functions, are identical to the housing cooperative.

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.

Read the materials on our website for a complete analysis of the work of such a governing body as housing cooperatives. Find out how to create and register an organization, how to draw up a certificate and application for a housing cooperative, how accounting is kept and the powers of management bodies in a cooperative, including the chairman.

Legal standards

The main regulations that should be relied upon when working with this type of cooperatives include:

• Housing Code of the Russian Federation. In this normative act, articles 110 to 134 are devoted to all issues of the functioning of housing cooperatives as a legally valid association, which include detailed information about the mechanism of functioning of this association from the moment of its creation to liquidation, and also regulates the rights of its participants (Chapter 12 of this normative act) ;
• Federal Law No. 215-FZ of December 30, 2014 “On Housing Savings Cooperatives”. This law regulates issues related to the possibility of the existence and functioning of such associations as housing cooperatives for the purpose of construction and subsequent maintenance of the housing being built. In addition, it is this Federal Law that says that in the Russian Federation it is possible to organize such a form of construction when funds for the construction of an apartment building are contributed by individuals and legal entities by making share contributions, which will subsequently be used to implement plans for the development of the territory;
• since the implementation of share or shared participation in the ongoing construction of apartment buildings without appropriate legal regulation is impossible, the legislator adopted the Federal Law “On participation in the shared construction of apartment buildings and other real estate ...” dated December 30, 2004, number 214-FZ. This Federal Law itself speaks about the possibility of participating in equity in the construction of apartment buildings in the form of making some type of contribution, for example, shares or another type. The need to mention this normative act is due to the fact that the purpose of creating and operating a housing construction cooperative is precisely to carry out housing construction by contributing their part of the financing to its participants in the form of share contributions.

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:

• social;
• cultural;
• public

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:

1. 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”).
2. 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).
3. 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).

What is the difference between accounting in one and another organization?

Homeowners' associations and housing cooperatives are non-profit organizations.

Considering that there is still cash flow there, accounting is mandatory in both cases.

Items that must be taken into account:

• Funds coming from homeowners and other business activities.
• Costs of maintaining the house and surrounding area. Also expenses that will be required in the near future.
• Materials and production inventories.
• Reporting on fixed assets at the enterprise.
• Reports on the results of work done in houses or on the territory.

Attention! For the stable operation of partnerships and cooperatives, full interaction between owners and housing service providers is necessary.

The peculiarity of the account of the non-profit housing cooperative is that the initial savings for working capital are nothing more than the entrance fees of each member of the cooperative. These funds are non-refundable, even if you leave the cooperative. In addition to membership and share fees, cooperatives can resort to borrowing the required amount of funds from banks.

Unit deposits are used for capital investments. This must be provided for in the charter. If the owner decides to leave the cooperative, the targeted contributions will be returned to him. Accounting of funds is not carried out generally, but specifically for each of the owners. Membership fees are non-refundable. The funds are spent on administrative and economic needs. At the time of creation of the cooperative and when registering the charter, everything must be properly documented by an accountant.

When reconciling the balance sheet, excess expenses are reflected in current assets, and if expenses are less than the money collected, they are reflected in short-term liabilities. If there is a shortage of funds in one account and an excess expense in another, the accountant must reflect it in the debit and credit balance.

Housing cooperatives do not engage in entrepreneurial activities and are therefore exempt from paying income and highway taxes. Also, the cooperative does not have to pay property taxes. And according to the clauses of the Tax Code, membership fees and share contributions are not subject to deduction of income taxes. All entry fees until the house is handed over must be reflected in the appropriate records by the accountant.

If the cooperative’s activities are also entrepreneurial, the expenditure and income of targeted funds must be conducted separately. Estimates for targeted needs and for utilities must take into account future payments. Payments for electricity, gas, and telephone are not taken into account by housing cooperatives; members of the cooperative bear the costs themselves. The housing cooperative plans only to pay for hot and cold water supply, heating, garbage collection, etc.

In HOA accounting, things are a little different. One of the main tasks is the generation of financial statements that reflect reliable information about the activities of the HOA. The accountant must provide an estimate of income and expenses for the next year. Reports must be approved at the general meeting. Taking into account the amendments to the law, now, under Article 20 of the Housing Code, residents have the right to submit an application so that the activities are checked whether everything in the Charter is legal (who is responsible for the illegal actions of the HOA, the types of fines and penalties for violation of powers, are described in detail here) .

HOAs must report to tax authorities and extra-budgetary funds. Regardless of the fact that the HOA is a non-profit organization, reporting and calculations are required. Only homeowner contributions are tax-deductible; all other financial transactions are taxable.

Some HOAs found a good solution by choosing the simplified tax system. The system provides some advantages when accounting for receipts. In addition, regional benefits are also provided.

One of the important points is the implementation of a major renovation of the building. These funds received from owners are not subject to taxation. Also, budget money can take part in major repairs. Read separately about major repairs and HOAs, registering a special bank account, collecting contributions to the fund for the major repairs of apartment buildings and other nuances.

IMPORTANT: Real estate market experts state the fact that the cost of housing in an HOA is higher than the market price.

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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

There are other possible manifestations of the differences between a partnership and a cooperative, which cover the housing sphere of activity.

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.

What is the difference between an HOA and a management company?

For residents choosing a management method, the dilemma lies in the determination between the HOA and the management company. As a rule, these two options are confused. Therefore, there is a need to clarify the fundamental differences between these two forms.

1. Form of organization from a legal point of view.

The homeowners association is a non-profit organization. The basis is made up of people living in close proximity. The management company was created to make a profit through the provision of professional services.

1. Limitation on the number of serviced apartments.

The association of owners has the right to manage either one house or several neighboring houses, the number of apartments in which does not exceed 30. In this case, a necessary condition is the presence of a common territory and communications. A management company can combine the management of entire microdistricts.

1. Technical base.

The HOA does not have any equipment at its disposal, and, as a rule, there are no specialized specialists. In contrast, the management company has all the necessary technical means to carry out repairs, as well as a base of workers who are able to competently organize the work process.

1. Saving.

The partnership consists of owners who are interested in reducing utility costs, as this will also affect them. At the same time, the company providing services to residents acts only as an intermediary, so sometimes it chooses not the most successful schemes.

1. Owner interest.

The option of managing a partnership requires the personal participation of each owner, and quite active one at that. The management company makes all decisions independently, only presenting an invoice for its services to residents.

How is an HOA better than a management company?

The immediate advantages of the partnership can be considered:

• saving on payment for the organization, because the cost of an entire staff of workers with a monthly salary will cost much more than paying salaries to several activists with a “floating” schedule and part-time work;
• the opinion of the owners is taken into account through open voting, so everyone can influence the general decision;
• adoption of changes in a short time through meetings of residents and without going to court;
• transparency of the financial system and the ability to check all expenses by any owner upon request;
• obtaining additional income using available material resources (arranging the rental of part of the territory, providing advertising space);
• payment only for really necessary services (if repairs are not required, no money is collected for them);
• contractors are selected by voting, and in case of incompetence or poor quality of services provided, business relations with them are terminated and another company is selected.

Based on the above, we can conclude that the difference between an HOA and a management company is lower costs, but requires greater responsibility from each owner.

Why is a management company better than an HOA?

The positive features of the management company are:

• repair costs are planned and carried out by competent contractors;
• the ability to pay off residents' debts from accumulated funds, so that the provision of utility services does not stop;
• a professional view of the organization of work, knowledge of all kinds of norms and legal subtleties;
• fixed rate of payment and immediate completion of the required amount of work in case of sudden breakdowns;
• responsibility to each tenant, fixed in the contract;
• revision of some items is possible once a year, that is, feedback is organized with the owners.

Ways to solve problems

One of the most important problems is that it is not a fact that you will trust a reliable, or whatever, legitimate partnership. How so? Very simple. Forgery of documents in Russia no longer surprises anyone.

And it may turn out that the organization is already in full swing in the house, and the owners are not even aware that they chose it, and even with a majority vote.

It’s not hard to guess whose interests such a union, so to speak, will put at the forefront. Why? Because most people don't care.

How to avoid getting into such a situation? Obey the law. Be civically active. Attend all meetings of homeowners - in this case, it will be simply impossible to forge your signature.

It is also necessary to regularly request the reporting of the partnership: who is included in it, when was elected, activities, data on inspections, offenses, even what punishment the organization suffered - all this should be open (read about the standards for providing information).

Such information is contained on information stands, stands inside the organization’s premises, and Internet sites. Or must be provided upon request - both oral and written.

Control over the chairman is also necessary.

The inhabitants of the house should pay double attention to the question of who they trust to rule their home. No need to choose a candidate at random

Take a closer look, what kind of person is this? After all, he is the person who can make transactions and sign documents on behalf of the partnership.

We can say that a well-chosen head of the HOA is already half the solution to the problem.

It is also necessary to ensure the work of the audit commission (it is made up of residents). It is necessary to consider the candidacies of the most meticulous and competent residents interested in the business. In essence, these are local auditors.

Replacing the House Board

How to transfer from a house council to an HOA? Instructions for the transition from the House Council to the HOA :

1. Arrange a meeting of residential property owners. The initiator is usually a member of the current council;
2. Bring the issue of leaving the house to the HOA from the Council. The consent of more than 50% of residents will be required ;
3. Collecting a package of documents for the tax service (see section “Creation of an HOA in an apartment building”, paragraph 3).
4. Waiting for registration of the transition in the HOA.

Main pros and cons

There are both positive and negative aspects to this method of property management.

In management

First, let's look at the advantages of managing an HOA:

• More efficient spending of funds. Management companies work with the goal of receiving monetary compensation for managing home property. In the case of an HOA, residents decide for themselves where to spend money first and can reduce costs by finding a more advantageous solution.
• Freedom of choice. In an HOA, the residents and the management body of the partnership themselves decide which company to cooperate with. Accordingly, they may find a more profitable option, or refuse the services of a company whose quality of service leaves much to be desired.
• Possibility of obtaining additional funds. The HOA has the right to make a profit from the common area, for example, by renting it out.
• Responsible performance of duties. Management companies service several houses at once, the volume of work is large, and it is not always possible to monitor the quality of their implementation. In an owner's association, the quality of work performed can be controlled by the residents themselves.

In addition to the advantages, HOAs, like any other form of management, also have their disadvantages:

• Large time costs. To resolve any issue, homeowners need to hold meetings, and only after that make a decision. This takes extra time.
• The difficulty of organizing effective management. In order for the HOA to effectively carry out its work, while being economically profitable, it needs a competent and honest manager, who is often very difficult to find.
• Defaulters. All expenses for maintaining the common property of the HOA are borne by the citizens themselves. If there are defaulters among them, this has a bad effect on the financing as a whole, because their debts have to be paid by bona fide tenants.

In payment

Pros:

Minuses:

• Higher home maintenance payments are possible. Since the HOA independently carries out landscaping of the territory, additional costs may be required to carry out the work more efficiently.
• Urgent expenses. There are unforeseen expenses in paying for HOA services. For example, if urgent repairs to a roof or basement are needed, a large sum of money will be required. If this amount is not in the partnership’s reserves, then the residents will have to urgently “chip in” for repairs.

In service

Pros:

• Possibility of high-quality improvement of the common area. At the initiative of residents, it is possible to create additional amenities in the local area and create coziness in the entrances. Taken together, these measures can raise the market value of apartments in the building.
• Ability to control the quality of work performed.
• Possibility of prompt repair and replacement of utilities.
  By decision of the meeting, residents can replace communications without waiting for serious breakdowns, or the moment when “the turn comes.” Subsequently, this can significantly reduce utility bills.

Minuses:

• Lack of initiative. It often happens that the majority of citizens do not care what the territory will look like, what condition the entrances and communications will be in; they do not welcome the initiative and refuse to pay for the work.
• If funds are distributed incorrectly, it may turn out that the HOA is unable to pay for this or that service, this will again lead to the fact that residents will need to solve this financial problem on their own.

Features of work

HOA

Features of the HOA:

• To switch to a HOA, approval of more than 50% of residents is sufficient;
• The HOA has the authority to regulate the work of the chairman based on the Charter;
• the conduct of affairs in HOAs is strictly approved in the Housing Code of the Russian Federation;
• When voting, the specific share of the tenant's property in the total volume of the housing stock is taken into account. This is how the significance of his voice is determined;
• cannot conduct commercial activities and divide income between participants;
• an HOA may include several houses located nearby;
• To join the Partnership, you need to submit an application ;
• it should include more than half of the home owners;
• The HOA is formed only after the housing has been delivered and the residents have registered ownership;
• The purpose of the activity is to manage common property and solve general economic problems.

You can download samples of the necessary HOA documents, such as estimates of income and expenses and other receipts and forms, from us.

Housing cooperative

What is the difference between an HOA and a housing cooperative? Can an HOA become a housing cooperative?

Features of the work of housing cooperatives:

• the decision to transfer to a housing cooperative must be approved by all residents ;
• leadership is carried out by the chairman and the selection group. Housing cooperatives do not have the authority to regulate their activities;
• management of housing cooperatives is controlled by the Charter, drawn up within the boundaries of the laws of the Russian Federation;
• when voting at general meetings, each participant has only 1 vote, according to the Housing Code of the Russian Federation;
• can conduct commercial activities and share income among all members of the organization;
• the framework of the management of the housing cooperative is within the boundaries of only one house;
• upon reaching sixteen years of age, all residents become members of the housing cooperative;
• a housing cooperative must include at least five people ;
• A housing cooperative is created before the construction of a house begins;
• The purpose of the activity is housing construction.

Comparing the features of each organization, it is clear that an HOA is more suitable for managing houses.

For the successful functioning of the HOA, it is important that all functions are performed correctly in the manner described in the law.