The characteristics of cooperative flats

Housing cooperatives still manage a very large number of properties. Many people buy or rent flats of this type. Interested in a transaction involving such a unit? The text below sets out the characteristics of cooperative flats. Find out more about them in the article below.

A few words of theory

There are really a great many flats built by cooperatives in our country. Until the 1980s this was the main form of housing construction. The cooperative ownership right (spółdzielcze własnościowe prawo do lokalu) is a limited right of possession. It entitles you to use the flat and allows you to dispose of your right. It can also be inherited. However, the actual owner remains the cooperative, even when we set up a land and mortgage register (księga wieczysta). The buyer becomes the entitled person. A natural or legal person who holds the cooperative ownership right to a flat may freely rent it out without the cooperative's consent.

Is a cooperative flat cheaper?

Flats belonging to a cooperative fall within a similar price range to freehold units. Many questions concern loan security. These units can serve as collateral for a mortgage. Transactions involving properties whose title to the land has not been regulated may be more problematic. Cooperative flats are not cheaper. They are subject to market forces.

Differences between a freehold unit and a cooperative ownership unit:

• ownership is the broadest property right – you can manage the property as you see fit
• the cooperative ownership right is a “limited property right”
• when buying a cooperative ownership flat, we DO NOT HAVE the right of ownership or the right of perpetual usufruct (użytkowanie wieczyste) to the land
• every freehold flat has a land and mortgage register
• a cooperative ownership residential unit may, but need not, have a land and mortgage register
• flats with either type of right do not differ in price on the market
• the cooperative ownership right to a property can be converted into the right of ownership. However, this is a paid procedure.

Want to buy a flat but can't determine its legal status? Need other legal advice? To make a good deal on the property market, trust the experienced agents at REMAX Gold. We encourage you to browse our current listings and to get in touch by phone or email.