On a good day, the system of owning a house through joining a cooperative society in Nigeria has its benefits and advantages, but it also has drawbacks. One of the safest ways to acquire a home in Nigeria right now is to join a cooperative organization.
Despite the fact that it has been around for a long time, it is a road less traveled by many. Personally, I believe this is due to the fact that many individuals are unaware of the system’s fundamental benefits, which is precisely what we would be discussing today.
But, before we get into the potential benefits of this system, let’s have a look at what a housing cooperative society in Nigeria includes.
The Nigerian Housing Cooperative Society: An Overview
A housing cooperative is a form of the cooperative whose social goal is to offer homes, premises, and other real estates to its members, as well as to purchase land on which to develop and urbanize for habitation.
The ultimate goal is to assist members in purchasing land, owning a home or apartment, and effectively investing in real estate and other possibilities.
Housing cooperative societies have emerged in Nigeria in the last five decades or more as a result of the unrestrained growth in housing deficit across the nation, albeit they still constitute a small fraction of the cooperative movement.
Concerned about the country’s massive housing deficit, which stands at around 17 million people, a few cooperative societies are now taking the lead in mobilizing resources to address housing issues while also creating wealth through real estate investment.
Although cooperative societies are not new in Nigeria, they have existed for over five decades. What is new, though, is people’s reawakening to the model’s potential for house ownership and wealth development.
So, until the economy is completely recovered and low/middle-income earners can live comfortably, the housing cooperative society may remain an appealing option for the typical Nigerian to become a landlord.
There has been a resurgence of cooperative housing models among public officials, police, Armed Forces, and commercial businesses to satisfy lodging requirements of members since the inauguration of Cooperative Villa, Badore, CHOIS Estates in Abijo, and Agbowa in Ikorodu.
Cooperative Society in Nigeria
It is no longer news that just 2% of Nigerians participate in real estate, while the rest 98% either lack the financial capacity or lack the expertise to profit from the real estate sector’s economic benefits.
Taking advantage of this possibility, a number of renowned cooperative societies in Nigeria, including BERSAMA Multipurpose Society and Prime Asset Cooperative, are presently exploring the concept for their members and the general public’s housing requirements.
Both of these books are highly recommended.
Benefits of Joining a Cooperative Society in Nigeria
A major benefit of a cooperative society in Nigeria is the pooling of members’ resources to increase their purchasing power, decreasing the cost per member for all services and goods related to house ownership.
Another benefit is that each shareholder (member) in the business is entitled to income from joint investments, cheap landed properties, and the ability to apply for financing for their construction projects, among other things.
It is simple to become a member. The cooperative is a membership-based organization, with membership given through the purchase of shares (the initial membership cost).
Loans with cheap interest rates are available to acquire land, build a house, or develop the property, or renovate existing structures.
It aids in the development of a sound savings and investing habit, which is a hallmark of affluent individuals.
The investments are safe. Because it is jointly owned, each potential member must be approved by an elected board of directors. This is an important component of the co-governance, op’s since it benefits the individuals who are already members and have a stake in the company. The approval process necessitates a thorough examination of each application. Cooperatives aim to make sure that the people who join as shareholders are responsible individuals who will meet their financial responsibilities and will not fail on their debts.
Disadvantages of Joining a Cooperative Society in Nigeria
The other co-owners are harmed if one of the members misses on any of the payments, whether it’s co-op maintenance, taxes, loan repayment, or donations. However, because a strong check and balance system are in place, such events are rare.
Because there are some shady cooperatives out there, it’s important to be cautious and conduct thorough research before committing. Do your research on the cooperatives that are currently promising ‘great’ possibilities, since some are not well-positioned to deliver on their claims.
This might be due to inept, dishonest, or ignorant leadership, or a lack of a real estate professional to assist them with their project.
Precautionary Measures To Be Taken
It’s critical to double-check that the cooperative society you’re interested in joining is properly registered with the Corporate Affairs Commission C.A.C. and other appropriate authorities.
Obtain knowledge on the following topics as well:
-possession of the land or estate they claim to be the proprietors of.
-the cooperative’s structure; -the amount of the required financial commitment; -potential withdrawals and interest rates.
But, above all, it is critical to examine the cooperative’s bylaws. Bylaws are the written regulations that guide members’ behavior once they become members of the organization, and they specify the rights and duties of participation, among other things.
To sum up, many people avoid purchasing homes because they lack the expertise or connections necessary to obtain decent and valuable assets in exchange for their money.
The Nigerian housing cooperative society structure, on the other hand, is built up in such a way that it provides access to both of these key resources.
Purchasing property, a building, or similar items through a cooperative organization is therefore safe and recommended.
Remember to see the two cooperative houses I mentioned previously (BERSAMA and Prime Asset Cooperative).
They come highly recommended, with an established track record and reliability, as I previously said. You may look them up and do your own research on them.