Re: membership question
From: Sharon Villines (sharonsharonvillines.com)
Date: Tue, 3 May 2005 06:02:07 -0700 (PDT)

On May 2, 2005, at 4:14 PM, Lexi Shear wrote:

not. Right now we're torn between wanting to be open, but wanting to protect ourselves against potentially unsavory folks who might want to join us. In addition, we're torn between wanting to get to know people, but feeling like we might need to move quickly to build equity and so will want people to join us faster.

When you explain the group structure and require that people attend meetings and serve on committees, the unsavory amongst us flee. Criminal and manipulative tactics only work with some degree of secrecy or gullibility. Fooling a whole group of people is hard when you have as much contact as cohousing groups do. I haven't seen any reports of truly deceptive people trying to take over cohousing groups.

That said, you do want legal documents in place to protect everyone.

Third: If a member leaves or is expelled, what process do you have for returning equity? I have heard of some group whose policy is that equity is not returned until the community is built. This is what we had contemplated doing. Is it legal? Do you have different equity policies for folks who are expelled versus those who leave voluntarily?

Not returning money until the project is built is standard in construction. Otherwise all investors would be in danger of losing all their investment because they had to return a comparatively small amount to one person.

Sometimes people can sell their shares mid-stream if there are others waiting to join. This can happen easily when someone finds they must relocate and will not be able to move in. If they have a unit that another household on the waiting list wants, they could sell their shares if the legal documents allow it.

The best way to think about these issues is to look at the construction process and the need for cash at various points in that process. All the investors have to be assured that that process is adequately funded or all is lost. Understanding this makes it much easier to see what is necessary rather than to make decisions on what you would like to be true. We all want to help each other and be nice and flexible and forgiving, etc. But if we do this to the detriment of the project, all is lost.

It is also the advantage of each investor to stay to the end because units do appreciate once they are built, if all is planned well. In Eastern Village in Silver Spring MD, with a short construction time, early investors of some units could have sold their units for $100,000 more than they paid for them before they even moved in. The sweat equity that members of the group put in does, in most cases, pay off later.

Chris ScottHanson and Kelly ScottHanson have just revised The Cohousing Handbook and it contains an excellent section on the construction process.

I feel as though writing bylaws, we're concentrating on all the worst case scenarios, but I think we have to make sure that our bases are covered. I have the feeling that we're never going to look at our bylaws unless we're having problems.

At Takoma Village we actually look at our bylaws more often than you would think. It is very easy after move in to forget what you agreed to in the beginning--or more accurately, some people forget or remember differently. After 5 years we are seeing places where we need to amend them but having them there has helped keep us on track and "settle arguments" over shall we do this or that. The Bylaws also establish a context within which the group functions. They give you a structure.

But trying to think in terms of best case scenarios and the need for the bylaws to produce and protect the best case scenario might be more helpful in creating good bylaws.

Sharon
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Sharon Villines
Building Community: A Newsletter on Coops, Condos, Cohousing, and Other New Neighborhoods
http://www.buildingcommunitynews.org


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