CCH encourages all housing co‑operatives to update their existing rules. Most housing co-operatives were registered before the Co-operative and Community Benefit Societies Act 2014 and are using rules that pre-date this legislation and are not fit for purpose.

All housing co-operatives should check the provisions in their current rules to understand how to adopt the new model which is best suited to their structure and form.

CCH has produced 5 sets of model rules which have been registered with the Financial Conduct Authority:

• Tenant management co-operative (2016) – for use by co-operatives that do not own homes but manage homes on behalf of one or more landlords
• Fully mutual housing co-operative (2017) – for use by co-operatives that are governed by Management Committee and have freehold or long leasehold ownership of homes
• Leaseholder land co-operative (2018) – for use by co-operatives that have freehold ownership of homes and let them on long leases to members
• General Meeting governed housing co-operative (2019) – for use by co-operatives that are governed by General Meeting and have freehold or long leasehold ownership of homes
• Mutual home ownership society (2020) – for use by co-operatives that allow members to purchase equity stakes in the capitalised value of the co-operative’s homes

These new models have been made available by CCH at no charge under Open Source Copyright.

Ordinarily, the process for adopting new model rules requires the co-operative to hold a General Meeting. If you require assistance, CCH can provide its member co-operatives with advice at our standard rate of £750 + VAT per day. Please contact us at [email protected] to discuss further.

Some items we have assisted our members with previously in relation to rules include:

• discussing the rules in detail with Management Committees and General Meetings;
• explaining the differences between old and new rules;
• the process to update to new rules;
• assisting with the publicity and information to go to the members prior to a General Meeting;
• attending a General Meeting to explain the proposed changes to the rules;
• enabling informed consideration of changes by a General Meeting, ensuring that a proper vote is taken and that the rule change is properly minuted;
• liaising with Co-operatives UK to ensure that they lodge the proposed rule changes with the Financial Conduct Authority once the general meeting has agreed changes.

Key changes in the new housing co-operative rules

 

Changes that are common to all new model rules: 

Inclusion of detail – the new rules include a lot of detail in them for ease of reference for members and to provide greater clarity, with the detail provided based on many years’ experience of the practical ways that co‑operatives work.

Reference to 2014 Act – the new rules ensure that the Act is referred to throughout and the rules comply with it.

Communication and meeting attendance by different means – the new rules permit that meeting notices and other communications can be sent to members by electronic means, provided that they consent to receive communications in this way. The new rules also permit that members can attend General and Management Committee meetings by telephone, video conferencing or by other communications equipment such that the person can hear, comment and vote on proceedings.

Commitment to diversity, equality and respect – a specific clause has been added committing the co-operative to principles of diversity and equality.

Annual General Meeting – the new rules give the co-operative six months after the year end to hold an AGM rather than the three months which reflected previous requirements.

Terminology – old rules used gender specific terms like “committeemen” and “chairman”; this terminology has been updated in the new rules.

Disputes – the new rules direct disputes to the County Court (or the Sheriffs Court in Scotland).

Key changes to Management Committee governance

 

Where the new rules include a Management Committee the changes are:

Size – reduced to between five and twelve members (including up to three co-opted members) to reflect changes to minimum legal requirements and good practice (the absolute legal minimum is 3 members).

Election – members are elected at each Annual General Meeting (unopposed if there are fewer than the maximum permitted number standing with a facility for members to request a vote for one or more individual Committee members).

Nominations – requiring formal nominations process in order to encourage members to take the process seriously.

Removal – in certain serious circumstances, the new rules allow a Committee member to be removed by a vote at a Committee meeting rather than requiring a General Meeting decision.

Quorum – the new rules specify that the Committee quorum is one third of its total number subject to a minimum of three (therefore if the Committee has 9 or fewer members, the quorum is 3 or if the Committee has 10, 11 or 12 members – the quorum is 4).

Defined officer roles – the new rules remove the previously defined role of the Treasurer. A co-operative is legally required to have a Secretary and that role is defined, but is no longer legally required to have a Treasurer.  If a co-operative has one – in the new rules the co‑op is free to define the role as it sees fit.

Special manager provisions – the new rules allow for a special manager to manage the co-operative in the event of it having difficulties in getting enough volunteers to serve on the Management Committee. Where this happens, the special manager provisions allow for a six-month appointment period with a view to trying to reinvigorate the co‑operative. This provision is intended to give a co-operative a chance to renew itself.