FAQ
Most frequent questions and answers
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Any member of the Housing Coop in good standing can benefit from the Co-op.
- By filling out the prescribed membership form and paying $75 membership fee.
- By paying $2000 for a minimum of 20 shares at the time of joining and maintaining good standing by adding 20 or more shares during each calendar year.
You must have shares equivalent in value to $60,000. Then, your name is entered into the priority list as a potential house buyer according to the seniority in the priority list. Your waiting time is approximately 12 to 18 months according to our experience but it could be sometime earlier than that when members do not avail their turn.
Eligible member in the priority list is informed and given a letter of authorization to start looking and negotiating the price of a house. Once the house is selected, an inspection report by a qualified and certified inspector by the Govt. of Quebec must be submitted to Qurtuba Housing for approval. Eligible member will be given the name of Qurtuba notary to make appointment for signing and the name of the insurance company to insure the house. Eligible member will be responsible for all the expenses related to house purchase: inspection, evaluation, legal fee, and welcome tax.
A separate list is maintained for those members who already own a house and wish to payoff their existing mortgage in favour of Coop financing through Coop purchase of their unit. The eligibility requirements regarding down payment are the same as for new home buyers; in addition, the member must have had shares equal to 5% of the outstanding balance of his mortgage for at least six months. Separate competitions and selections take place for members of this list. The Coop will establish the value of the house at the time of purchase by the Coop.
The house will be evaluated and made available to eligible Coop. members on the basis of right of first refusal. Should it be necessary the house will be sold on the open market. If you own share for 50%, of the cost of the housing unit, you will be entitled to 90% of any gain in the value at the time of sale. If your share value is less than 50%, you still be entitled to 80% of the gain.
Once the Coop has purchased a housing unit for your benefit, you will surrender all your common shares and will be issued special shares of equal value. These special shares are not eligible for dividend but keep track of your share of investment in the housing unit. Housing Coop will establish a rental value of your share of your unit. All taxes and expenses for the property will be deducted from the rent and the balance of rental will be split between you and the Housing Coop according to your share of the total investment.
When you have acquired special shares of the cost of the house at the time of purchase by the Coop, you will become eligible to apply for transfer of the house in your name. The house will be evaluated and you must acquire one class G share at a cost equal to 10% of the net capital gain in the value of the house since purchase by the Coop. You can surrender the shares in exchange of a transfer of the house in your name. The notary fee and welcome tax pertaining to the transfer will be paid by the Coop.
You will be entitled to an annual dividend based on the quarterly balance of shares. Dividends are paid on shares that were held from the beginning to the end of the quarter. Instead of keeping your savings in the bank, you can buy coop. shares and earn Halal income. You can start investment now on behalf of your children, so that they can buy their houses easily when they get married. You can also start investing for your children’s college/university education and marriages.
- Appointment with the notary.
- Proof of house insurance.
- The member occupant will pay notary fee and welcome tax initially and Qurtuba will pay notary fee and welcome tax at the time of house transfer to member occupant.
- Member occupant will be responsible for municipal, school and water taxes. Member occupant will be responsible for house insurance, repairs and maintenance.
To start, on average, members bring in 30% as down payment and Qurtuba puts 70%. At the end, member reaches 100% and Qurtuba is at 0%. Over the life of a contract, Qurtuba’s average share is 35%. In a true Musharakah, Qurtuba would share 35% of profit or loss. However, we felt that it was too high and we consulted the Fiqh Committee if it could be lowered to 10%. Their answer was that we can always be generous to our brothers and sisters without any restrictions. In addition, Qurtuba has promised to pay the notary fees and Mutation Tax at the end of the contract. Mutation Tax increases with the increase in house price. G Shares permit Qurtuba to pay these expenses. If it was not there, Qurtuba would not be able to do this. Qurtuba also noticed that in some cases the increase in municipal evaluation was very high, and charging 10% would put too much burden on the member. So, Qurtuba has limited the G shares to be a maximum of $15,000.
If Qurtuba was to participate, Qurtuba would have to participate in the decision making. What or if the renovations are required? What materials to use, what workmanship and what should be the total limit? As the principle goes: “no taxation without representation”.
Given, that Qurtuba membership is spread throughout the province, Qurtuba has no resources to represent in decision making. Qurtuba simply gives an authorization letter to the members to do the work as they like. In the convention, it says that the house is to be transferred to the member after the loan is paid; thus Qurtuba is temporary owner and recognizes that the member is the ultimate owner of the house.
Also, because of renovations, the market price of the house goes up and to make sure Qurtuba does not benefit from your costs, Qurtuba takes the municipal evaluation to do the calculations of G shares.
As far as school taxes are concerned, they are used to build and operate educational facilities in your community. Only the member who lives in the area benefits from these facilities. Therefore, it is only fair that the member contributes to this.
The same logic applies to the municipal tax. The municipal taxes are used to build roads, parks, libraries, public swimming pools and similar infrastructure. Only the families living in the area mostly benefit from these facilities and not the other members of Qurtuba, who do not belong to the area. The members benefiting from the services should pay for this cost, the other brothers and sisters who are not benefiting from these facilities in your area should not be made to pay for this.
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