Important changes for cooperatives under the Business Corporations Act


Unrestricted transfer and transition of cooperative shares, due managerial care etc.

Along with changes to company law, on 1 January 2014, through recodification of private law, changes took place in the area of housing cooperatives, which is now governed comprehensively by the Business Corporations Act, including rent adjustment of cooperative flats.

The express absence of restriction in the transfer of cooperative shares and all rights and obligations related to such shares is the most positive change that will be appreciated by most housing cooperative members. In practice, this means that if you wish to buy a cooperative flat and live in it, you need not worry that the cooperative will not conclude a lease agreement with you for any reason after the transfer of the cooperative share, as the law expressly states that the transfer of the lease of the cooperative flat occurs by the transfer of the cooperative share. Similarly, in the event of the death of a cooperative member, the law prohibits any restriction in the transfer of the cooperative to heirs.

Another change that one needs to be aware of when performing the office of member of a cooperative body is the obligation of body members to act with due managerial care, including penalties stipulated under the law for breach of such obligation.

You can find more information in the article written by our attorney Michael Koliha on: