|Re: Financial structure needed for forming group||<– Date –> <– Thread –>|
|From: David Heimann (heimannworld.std.com)|
|Date: Tue, 21 Nov 2006 19:57:00 -0800 (PST)|
Hi Tom,During our developing time (JP Cohousing) we had two types of membership. These were equity members, who had paid in a capital contribution of 5%-7% of their prospective unit costs, and associate members, who had paid a nominal ($115) fee. Both types of members could participate (and indeed were expected to participate) in general and committee household had a low income and so had trouble coming up with the capital contribution we had an arrangement by which they could pay it in installments.
There was no time limit to associate membership, so a household could participate indefinitely without needing to come up with significant money.
We did not have a cash-call system. If we were going to hit a period of exceptional expenses (much of which could be anticipated), we solicited voluntary member-household contributions, which (unlike the capital contributions) paid interest, and/or solicited outside lenders and investors (including some on this list -- Thanks again!!).
Hope this helps. All the best! Regards, David Heimann Jamaica Plain Cohousing Tom Hammer wrote:
Our forming cohousing group is looking for land, and we are in negotiation with a motivated seller. We are presently financially structured this way: We have 8 "equity households." Some of the households are "full equity members" and pledge to meet future calls for capital up to a limit of 10% of the approximate cost of their future home. The other households are less able or willing to take the risk associated with the project and have stopped meeting cash calls after committing $2000. Our present agreement allows this and classifies this group as equity members with full input on decisions but with no ability to block consensus on "critical issues" as defined by the full equity members. Several of the 2nd group say they are fully committed to the project but cannot take more risk at present, but members of this group would like to have a full say in all consensus decisions. We all recognize a need for more capital in the near future, and the limited equity members recognize that their status puts more of a financial burden on the full equity members. Some folks reason that we will attract more equity members if we maintain our different levels of financial commitment to encourage more to join, especially families with young children. Others say that we would be better served if all equity households made equal financial commitments and all answered cash calls up to some pre-determined cap. We have incentives in place for early full cash commitments and site selection priority for full equity households as well as offers of high interest on loans by early lenders. We very much need advice from successful communities. Did you allow large differences in financial commitment such as we presently have, or did you have a fairly large basic financial commitment that was required of all to be a full decision maker? Could you please inform us how you structure(d) your membership and membership contribution? Please let us know what worked and what you would have done differently. Thank you. Tom Hammer for Concord Village _________________________________________________________________ Cohousing-L mailing list -- Unsubscribe, archives and other info at: http://www.cohousing.org/cohousing-L/
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