Fully mutual cooperatives

Under the rules of fully mutual cooperatives, co-ops must restrict membership to persons who are tenants or prospective tenants, and must preclude the grant or assignment of tenancies to persons other than members. [1] They also must have a minimum membership of three. [2]

Fully mutual co-ops must be registered under the Co-operative and Community Benefit Societies Act 2014. Registration is recorded in the Division of the General Register of Sasines, held in Edinburgh. By registering, an independent legal status for the co-op is created, separate from its members. Tenants of fully mutual housing co-ops are Scottish secure tenants or, in limited cases, short Scottish secure tenants. [3]

All fully mutual housing co-ops have 'par value' status. This means that no member of the co-op has a financial interest in it other than the face value of the individual shareholding, which is normally a nominal sum such as £1. This means that individual members of the co-op cannot be held personally liable for its finances. This arrangement is called 'limited liability'.

Many co-ops have acquired their housing stock through large-scale transfers of tenants of other landlords, such as former Scottish Homes tenants.

The Housing (Scotland) Act 2001 substantially changed the position of tenant of fully mutual housing co-ops. [4]

Prior to 30 September 2002, such tenants had no statutory security of tenure. From this date, a tenant of a fully mutual housing co-op has the same rights in relation to security of tenure as tenants of any other registered social landlord or local authority. The tenancy will be either a Scottish secure tenancy or, in limited cases, a short Scottish secure tenancy. There are also new statutory rights with regard to sub-letting, assignation and succession.

For more information, please see the section on Scottish secure tenancies.

From 30 September 2002, if a landlord is a fully mutual housing co-op, it must comply with the possession procedures that apply to a Scottish secure tenancy or a short Scottish secure tenancy. [5] For more information, please see the section on Scottish secure tenancies.