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Cooperative Member Rights And Responsibilities

Housing cooperatives are neither rented apartments nor single family homes. Because of this, new members are often confronted by issues they may not have anticipated. In addition to paying monthly carrying charges, cooperative members will assume some of the responsibilities of a single family homeowner and have some of the privileges of a renter.

The rights and responsibilities that members must be aware of are outlined in the cooperative's organizational documents. Those typically include the Articles of Incorporation, Bylaws, Proprietary Lease or Occupancy Agreement, Subscription Agreement, and House Rules. Members or prospective members should consult these documents if they want to understand the rights and responsibilities that affect them. All members are entitled to copies of these documents. Generally, members acting as shareholders have the right to elect board members, to remove board members, and to amend the bylaws. All members are responsible for paying their monthly charges on time as well as follow all other rules and regulations of the cooperative.

Below are a few examples of how the rights and responsibilities in cooperatives differ from those found in more common living situation like apartments or single family homes:

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Cooperative must decide which services the cooperatives should pay for and which should be left up to individual members.  Many cooperatives will provide maintenance for major systems like heating and cooling, plumbing, sewage, and electricity. The costs for those services are paid for by the cooperative, generally out of the money collected monthly in carrying charges. Some cooperatives, particularly those serving low to moderate income members, will extend the cooperative’s repair responsibilities to include major appliances, carpet, paint and light fixtures. Because expanding the cooperative’s repair responsibility can be very expensive most cooperatives will instead require members to handle minor repairs within their own apartments.

Homeowners Insurance

Cooperators will generally need a special policy (HO-6), which is similar to renter's insurance. Co-ops generally carry a blanket insurance policy that covers damage to the cooperative's property from fire, water, or other disasters. However, this policy generally does not cover any damage to personal belonging inside an apartment. Additional insurance is recommended to cover personal possessions and for personal liability in the event of an accident inside the home.

Unit Modifications

Most cooperatives restrict anything beyond the most basic alterations to apartments by members. The main reason is a desire to protect the value of the building as a cooperative. Sometimes, however, the Board of Directors will allow members to make alterations to individual apartments on a case by case basis.

Property Taxes

Co-op members have tax benefits similar to that of traditional homeowners. They may take their share of the mortgage interest and real estate taxes as a deduction on Schedule A of their 1040 federal income tax return.

Taxes Upon Sale

At the time of this writing co-op shareholders are treated the same as single family homeowners when they sell, and have been for some time. However, tax laws do change frequently and are re-interpreted by IRS and the courts from time to time, so ask your tax advisor for specifics before buying or selling.


Some co-ops allow subletting, but most cooperatives restrict or prohibit it. Before subletting members should investigate what their cooperative’s policy is by checking with their bylaws or asking a board member.