In this section:
Set up a community housing scheme
Setting up your group
When you set up your group you will need to identify what your aims and objectives are. You can then think about which housing model and legal structure is best for you.
You should think about the following:
- if everyone in the group gets a say (democratic) or if one or more people have the final say (hierarchical)
- if the group is for private or community benefit
- whether the directors will be paid
- who will own the property
- if there will be employees
- if profit will be distributed or reinvested
Creating your constitution
A constitution is the agreed aims and rules that your group will use. It's the statement of what your group is going to do and how it is going to do it. Your group must have a signed constitution before applying for grant funding from us.
It should be agreed at the first formal meeting, when officers and or committees are elected. It needs to be signed and dated by everyone at the meeting.
It's important to have a constitution because:
- It will set out the group’s aims, which will help make sure activities are prioritised and have a clear focus
- It will serve as a reference which will help prevent conflict or confusion amongst group members and help resolve any problems
- People outside the group will be able to see that your group is democratic and accountable. Your constitution should include a clear decision making process
It doesn’t need to be detailed but should include:
- name of the group
- group aims and objectives
- membership - who it is open to, how people can join, membership fees, a basic code of conduct
- equal opportunities statement - make clear your group won't discriminate against anyone
- officers and committee - organisation role, how people will be elected, how they can stand down or be removed
- meetings - when and where will you hold them, Annual General Meetings (AGMs), how you will communicate with everyone, how voting will work
- finances - group account, how many signatories will be needed, where the funds will come from
- changing the constitution - agree and formalise the process; the constitution should be reviewed and agreed at the AGM
- dissolution - how, when and why the group can be dissolved, and how assets will be disposed of
You may want to download an example constitution to help you.
Options for legal structures
It's important to incorporate your group. This gives legal structure and clarity, means that directors do not have individual liability, and allows the group to be regulated and enter into contracts legally.
You could use first stage grant funding to get advice on what legal structure you would like to use, and to get incorporated.
Legal structures can include:
- company limited by guarantee or shares - regulated by Companies House; this is a familiar structure to potential funders and lenders
- community interest company (CIC) - regulated by the CIC regulator; must pass the community interest test
- charitable incorporated organisation (CIO) - this is a relatively new free way for a charity to be incorporated, and has more flexibility than the traditional model
- mutual society such as a community benefit or cooperative society - must be run entirely for the benefit of the community; they're regulated by the financial conduct authority and have the highest fees
- commonhold association - regulated by Companies House; this manages the common parts of a multi-occupancy building