Re: Financial structure advice needed for forming group
From: Sharon Villines (
Date: Tue, 21 Nov 2006 09:40:10 -0800 (PST)

On Nov 21, 2006, at 12:10 PM, Michael Barrett wrote:

So my recommendation is to persist in trying to define firm responses to all cases - specifically addressing the "difficult" cases - what happens when
folks drop out for good reasons and bad, when employment is lost or a
business fails, when folks (or relatives of folks) die, when families break up, when the estranged spouse reappears and disagrees, when illness occurs, and, last but not least, when the whole project takes far, far, far longer than you ever thought possible - such that kids grow up, aging parents get
to need care, etc., i.e. all the events of life occur.

A very good list of things that have and will continue to happen as communities form.

One thing that helps is to write such agreements so that a third party will understand the agreement in case one of the parties dies. I spent many years teaching good business practices to artists (much less business aware group than cohousers). I called this the truck test. Since we all live in Manhattan, they thus had a clear visual image. A typical example:

You have agreed that you will loan so and so $20,000 to open a gallery and sell your paintings. They open the gallery and you have your first show. All your paintings, two years of work are in the gallery. Some on the walls and some in the back room. On the way to the opening, so and so walks in front of a truck. Killed instantly.

The gallery is closed by the authorities to do an inventory and an audit. You have no paintings to sell and no contract and there is no record of a loan. The so and so's mother says the money was a payment for services rendered and the state says all the contents of the gallery belong to the gallery unless there is a contract proving otherwise.

You are now out $20,000, all the rent on the studio needed to do the two years of work, all the painting supplies, all the paintings. And you to start all over again before you can even look for another gallery. Four years of your life, plus the money, lost. You are devastated and the mother is devastated as well. Your allegations have besmirched the reputation of her son and you are trying to take back her only memory of him -- his art collection. You are the bad guy.

If you make this twist to understand that circumstances may mean that you will not be dealing with this warm fuzzy person you trust so much but with another person who has completely other ideas of fuzzy, it makes it easier to see why you need to protect your own interests and that everyone will be happier if you do. Verbal agreements can be remembered very differently by all parties. Even written agreements can ambiguous or lost. Be clear and make lots of copies.

Sharon Villines
Takoma Village Cohousing, Washington DC

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