General Regulations and Modalities of Operation

October 19, 2010

1.0  Introduction:

UTAFITI Housing Cooperative Society Ltd. is registered under the Cooperative Societies Act. The registration no. is CS/12767.  Its registration date is 24th September 2010.  The Cooperative has been created by UTAFITI SACCO to cater for its members who need investment in land and property, since the SACCO itself can not engage in such business. Currently, members of the Housing Cooperative must be members of the SACCO.  However, the by-laws can be reviewed as deemed necessary.

Its affairs are regulated and guided by the Ministry of Cooperative Development.

2.0  Our Guiding principles:

The Cooperative has by-laws that spell out – objectives, eligibility, application, share capital, rights, obligations, membership, meetings, committees, office bearers, elections among other issues forming the 81 articles.

3.0  Officials:

During the pre-coop meeting to form the Housing Coop, interim officials were elected. Elections for office bearers shall be held after the members are registered.  The elections are scheduled during the first AGM.

The interim officials are: Michael Arunga, Moses Njahira, Ezra Oyoo, Duncan Chacha and Barack Wanjawa.

4.0  Objectives of the Housing Cooperative:

  • Encourage thrift by affording members opportunity to save
  • Provide living accommodation at fair price
  • To improve economic and social status of members
  • To educate members on proper use of credit
  • To perform all functions and powers as contained in the Housing Cooperative Societies laws
  • Lobby members interest

The above shall be achieved by:

  • Raising funds through deposits from members
  • Negotiating mortgages
  • Mobilize funds for purposes of acquiring accommodation to members
  • Undertake building operations
  • Acquire and relinquish land and buildings by purchase or lease
  • Employ appropriate skills for purposes of developing land into housing schemes

5.0  Membership:

  • Must be registered member of UTAFITI SACCO and over 18-years old
  • Board to vet and approve membership

6.0  Registration fees:

Registration fee, is a non-refundable amount of KShs.1,000/= (one thousand)

7.0  Minimum share capital:

250 shares of 20/= each i.e. a total of KShs.5,000/= (five thousand).  This amount is not refundable.

We propose to make this amount an initial one-off payment on joining.

8.0  Member accounts / deposits:

  • Members are allowed to save regularly onto their accounts for purposes of buying land and acquiring residential property
  • The amount a member saves should be calculated based on the type of property that the members would like to own in future
  • The minimum monthly contribution is 1,000/=, thereafter in multiples of 500/=
  • This amount is refundable in total, as a principal sum, when the member decides to withdraw from the Housing Coop, less any unsettled obligations.
  • Members shall get periodical statements (at least annually) on the status of their deposits

9.0  Modalities of operating the Housing Cooperative (proposed):

The Housing Cooperative is not profit making – its sole purpose is to help the members get houses at the most cost effective method.  However, we still need to undertake operations to enable the society do its duties.  Such operations include:

  • Board meetings and deliberations (cost of venue and facilitation)
  • Member meetings (cost of venue and facilitation)
  • Research costs (engagement of professional advise, visit to land sites)
  • Administrative costs (office rent, communication, ICT, stationery, transport)
  • Staff costs (we need to hire a manager, immediately or at some point)
  • Finance costs (bank charges, loan interests)

We propose that members contribute an annual share capital of KShs.6,000/= i.e. 500/= per month, for the above costs.  There shall be a budget approved and tabled during AGMs to confirm expenditure.

Eventually, the Housing Cooperative shall start getting some income to sustain itself (after 2-3 years).  The income sources may be:

  • Sale of property rights to non-members at a premium
  • Trade in land and property
  • Investment income e.g. house rent, leases

When these income sources are realized, then the Housing Coop can waive the need for annual share capital.  At this point also, the members can be given dividends depending on their share capital contribution.

We propose to make this amount a monthly contribution of 500/= after the registration has been accepted.  This amount is non-refundable.

–          Members shall get information on their share capital contribution as they get their statements of deposits.

10.0  Modalities of land purchase and construction of housing units (proposed):

We propose to generally follow the tried and tested method employed by the Housing Cooperative that we consulted (and who gave a presentation during the 2010 Education day).  The difference may be in how we deal with the construction phase.

Phase 1 – acquisition of land (immediate to 1-year)

  • Board, in consultation with members, shall identify land that is suitable for development by the members, preferably on the outskirts of the city to benefit from good rates.
  • Board shall then undertake necessary study and due diligence to confirm the suitability and availability of the land
  • Board shall communicate to members the outcome of their findings and set out the no. of plots and cost per plot.
  • Members shall be invited to make full payment for cost of plot, within a given period, say 30-days (the amount should ideally be got from the members deposits, which has been accumulating monthly).  Allocation shall be on first come first served.
  • The Housing Cooperative, having the total amount for land purchase, shall engage a legal expert to draw a sales agreement and then pay the total amount within stipulated contract period.
  • The Housing Cooperative shall acquire a title for the parcel of land
  • From our last experience, the cost of ¼ acre plot was about 250,000/= at the outskirts of Nairobi.  Members should immediately build their deposits to this level if they wish to benefit from land when we identify it.  Note that land costs keep going up.  It is important to have the money ready when we start negotiations and the sale agreement.

Phase 2 – planning (after land purchase upto 1 years)

  • Members continue to save monthly, in preparation for cost of construction
  • Members shall decide on the type of accommodation they require
  • The information shall guide the Board into shopping for design and necessary consultancy to achieve the objective
  • Members shall be informed on the outcome of development of designs for their approval
  • Experts shall be engaged e.g. architects, contractors, engineers, surveys to provide preliminary designs and cost estimate
  • The estimated cost of house development per plot shall be communicated to members
  • Members continue saving monthly bearing in mind the cost of construction

Phase 3 – construction (about 1-2 years after land purchase) – may take 2 years to complete

  • Each member in the project is asked to pay a deposit for construction to commence
  • Ground breaking is done
  • Construction starts
  • Members continue saving monthly, with the saved amount now going into construction project
  • The Housing Cooperative weighs its financial position to confirm that it can finalize the project, if it can not, then it negotiates short term credit.
  • Members can also get short term loans to finalize the construction costs.
  • Members are expected to finish payment by end of construction.
  • Members who are not able to finish payment by end of construction are introduced to mortgage providers for long term loans.
  • The Housing Cooperative prepares a final account on the actual cost of construction for information of members.
  • Final additional cost is paid by members or a refund is given to members
  • From market rates, the cost of construction is about 3M. Members should think of this as a long term cost (3-4years) that they need to provide, for the success of the project. The amount can be raised from members deposits, loans or mortgages.

Phase 4 – official opening (about 3-4 years after land purchase)

  • Each members is allowed to move into their own quarters
  • The Housing Cooperative processes title deeds to all those who have finished payments for the construction
  • The Housing Cooperative follows up members who have not finalized payments to ensure regular payment and payment plan
  • Title deeds are issues progressively upon completion of obligations to the Housing Cooperative
  • –          All are happy

Phase 5 – development of next project (to generally follow the 4 phases above)

11.0  Immediate action required

This is what we request interested members to do:

  1. Fill in an application form (found online on UTAFITI SACCCO website under ‘downloads-Housing coop’)
  2. Pay the registration fee of KShs.1,000/= (to UTAFITI SACCO account)
  3. Pay the minimum share capital of KShs.5,000/= (to UTAFITI SACCO account)
  4. Present the application form and the deposit slips to UTAFITI SACCO offices for processing.
  • Those who had already contributed amounts to the Land buying project, may give an official authority to transfer some of the amounts to registration and share capital. They shall need to attach this authority to their application forms.

Applications are now open, with effect from 21-October-2010.

  1. Once your membership is accepted, you shall confirm how to pay up money into your individual deposit accounts and also the 500/= monthly share capital. We expect members to pay monthly, by standing order or payroll deduction.
  2. Members should then attend the inaugural AGM, which shall be held within November 2010, where we shall elect office bearers and approve the modalities of operation.


  1. Maintain regular monthly payments into your Housing deposits accounts
  2. Maintain regular monthly payment of 500/= into operations share capital account

To be followed by:

  1. i) Phase 1 of the project (as described in no. 10 above)


UTAFITI SACCO bank account – CBA ILRI A/C no. 6435960019

Ref. on deposit slip = ‘Housing Coop Reg and Capital’ or ‘Housing Coop Reg’ or ‘Housing Coop Capital’

(as it may apply to the deposit you make)

Your feedback, comments, queries and clarifications are welcome.

 housingcoop[ at ]

Wanjawa, W. B.

Interim Secretary – UTAFITI Housing Cooperative Society Ltd.

* Visit the ‘Download-Housing Coop‘ section for Application forms and other related downloads