Voting backup - help with fine print
From: Jenny Guy (
Date: Mon, 28 Jan 2008 16:20:32 -0800 (PST)
Hi, we want to include a voting backup provision in the Operating Agreement
for our LLC.  We are a well-established group in the site-search mode.

Here's my question: our lawyer, who has worked with other cohousing groups,
wrote it like this:

*"All decisions concerning the management of the Company's business shall be
made by a consensus of the Members.  However, if the Members are
irreconcilably deadlocked, the matter shall be put to a vote of Members. The
Members shall be deemed irreconcilably deadlocked if they have attempted to
reach consensus at a meeting of the Members without success."*

I have read some old discussions on this list about voting backup, and I
gather that:

   - we shouldn't worry too much about this, because we probably won't
   have to use it
   - the operating agreement should be broad and general, because we can
   make more strict internal rules, but it's hard to change the operating
   agreement (and later, the CC&R's)

Our concern is that, if someone took the above wording literally, they could
force a matter to a vote if we didn't reach consensus at one meeting.  In
reality we plan to create internal guidelines that would require lots of
attempts at consensus, except in time-sensitive construction situations.

We need something that will make banks happy when we go to get a
construction loan; we been advised that they'll want to know that we can
make decisions quickly when we need to, but we also need to be able to make
our own rules about how we use consensus, and when we would use a vote.

Does anyone have suggestions for the wording?  We want it to make bankers
happy, but leave us free to make our own internal guidelines.

Jenny Guy
North Oakland Cohousing, California

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