Pre-Sold Units as Condition of Membership
From: Janet H. Pelletier (janetpelletiercomcast.net)
Date: Tue, 10 Jul 2007 17:15:26 -0700 (PDT)
        
Hi All,
I am working to re-write/clarify the Membership Agreement for Concord Village. We have 5 levels of membership, with varying levels of commitment and privilege within the group. At the higher levels, we are struggling with the idea of requiring that the member commit to purchase a housing unit. We have been working under the assumption that a developer won't even talk to us unless a certain percentage of units are "Pre-Sold", but lately, one prospective member suggested that perhaps simply a larger non-refundable contribution from members would be sufficient to convince a developer that we are serious.

We are still searching for land, generally in Chester County, PA, but haven't ruled out Cecil County MD, or New Castle County, DE. While some of us would like a more rural setting, others would be delighted with something more urban. Obviously, when land is selected, we will lose some members and gain others, simply because we are still considering so many options.

Given the state of flux, there is hesitation among a group of 3 families (I'm one of them) to sign as Equity Members and commit to purchase a house when we don't know where the house will be, when it would be built or even if we can afford a house that would meet our families' needs. We also know that life throws curve balls, and you never know when there will be one of those life events that changes all the big decisions you thought you had the answers to.

So, how do we make sure that members are committed, yet not trapped into something financially ruinous? What does "Pre-Sold" really mean in a case like this, where we don't have land, architectural plans, or one of those cute scale models with all the lots outlined in yellow? Can a Membership Agreement have contingencies, like that the current primary residence is sold? Would non-refundable cash work as well to convince a developer that we are sincere? Should agreements to purchase a home come later, once there is not so much flux? What have other groups done to balance these concerns?

Thank you for your guidance.
--Janet Pelletier


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