Re: Looking for advice on terms with developer
From: Sharon Villines (
Date: Sun, 29 Oct 2006 08:47:10 -0800 (PST)

On Oct 28, 2006, at 9:25 AM, Z. Peter Lazar wrote:

Blue Ridge Cohousing (BRC) of Charlottesville, Virginia is beginning to
work out a Letter of Intent with a nonprofit developer.  BRC and the
developer have been talking for quite some time and there is a lot of
goodwill.  BRC and developer want to share both the financial risks and

The reasons to use a developer are to have (1) access to their professional expertise and (2) their financial leverage.

You need to be sure that "nonprofit" does not mean "not responsible." I have no idea who your nonprofit developer is so this is not a personal reflection on a specific person or company. "Nonprofit" also does not mean that that the developer is not making very bit as much "profit" as a "regular" developer would be receiving. It just means the income is paid as a salary rather than as what is leftover when all the bills are paid.

The word "nonprofit" and "profit" have come to be so emotion ladened that we too often assume that "nonprofit" means something very different than just an IRS designation. It is also understandable that there is a lot of goodwill because there has been nothing yet to result in illwill.

When it turns out that your foundation wasn't poured correctly and is deteriorating, who is liable? When the construction company doesn't schedule the subcontractors properly and delays are costing you $1000 a day, who pays? Who ultimately fixes the problem? Who deals with the inevitable emergencies like when the city drawings showing where the storm sewers are turn out to be wrong and you are paying $500 an hour just for the digging machine to sit there while you decide what to do? Are these costs you are willing to share even you can't do anything to avoid incurring them?

What are your gains from this arrangement compared with using a traditional cohousing developer?

Sharon Villines
Takoma Village Cohousing, Washington DC

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