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Approvals / Role of the Regulator
Co-ops with operating agreements may need to obtain approvals from outside the co-op. This can be true of short-term capital plans, but is a major consideration if a co-op is intending to borrow money. Federally funded co-ops will need approval from Canada Mortgage and Housing Corporation (CMHC) and The Agency for Co-operative Housing. This process will involve the co-op obtaining an appraisal from a professional appraiser, and submitting of a package of other documents which CHF BC can assist with.
This process can take some time. Co-ops should anticipate needing at least three months between accepting an asset management plan and proceeding with borrowing.
Internally, the co-op membership must also approve borrowing plans through a borrowing resolution. Your co-op may already have such a resolution in place that would allow the co-op to borrow what it needs. More commonly a co-op looking to refinance will seek affirmation of an existing resolution or adopt a new resolution. These resolutions are special resolutions, and there are specific legislative requirements surrounding notice and voting. CHF BC recommends a co-op consult with its lawyer on the drafting of a resolution.