Re: tax and legal issues for common house usage
From: Sharon Villines (
Date: Mon, 4 Aug 2008 11:43:57 -0700 (PDT)

On Aug 4, 2008, at 1:29 PM, astromezzo [at] wrote:

We did consult our tax accountant briefly about the tax issues but
weren't entirely satisfied with the answer, which is why I'm asking
here to find out what happens in other cohousing communities.

We take donations and they are taxed as income -- they go into the general pool of income.

The big issues with charging rent are two fold. One is insurance and legal implications. The tax implications may not be so great as liability insurance and laws governing what is required in spaces offered for rent.

The second is the expectations of renters. If the space is free or for donations, they have no expectations. It is take it or leave it. If they are paying rent they may begin making demands that they would not otherwise make. It is extra work, usually unwelcome, for community members to meet these demands by ensuring that the space is as they expected. That flip charts and markers are where they are expected to be, etc.

Once you step over that line to commercial, life changes. My own concern about commercial rentals is that it would change the look and feel of the CH as you adapt the room to commercial use. And I don't want to walk through and see strangers in it all the time. Our dining room is open so we have to go through it to get to the mail room, kids room, etc.

There is also the issue of determining how often you rent, to groups of what size, what kinds of deposits you require against damages. etc.

What we do is allow members to reserve the space for "outside" groups and ask for donations. We have no set amounts. These are often retreats from a person's office or a friend's birthday party with few or no residents attending. The member who reserves the space is responsible for the guests and clean up, and is expected to be in attendance.

If a meeting is to be repeated more than 3 times (a book group every Wednesday, for example), involves money, or some other things I can't remember right now, it must be posted for objections.

Events cannot be announced to the public in any case. This is for security. We have concerns about too many people showing up since we are in an urban area. Or unsavory characters. Everyone who enters the commonhouse walks down our green and through children's play areas. Entry to the dining room also gives access to corridors that are behind a security system. Residents who live on those corridors expect them to be secure.

If a group approaches us about using the space, usually a neighborhood group, someone offers to host them. Neighborhood groups do not generally give donations although they might send a member or two to help on a workday.

When we moved in, people had very different expectations about the CH. Was it a private space or a source of income? One person thought we were building it because it would bring in revenue and we would use it more occasionally. Others thought we would never have outside groups and it would be a very private space.

Use of the guest rooms is also on a donation basis. A member has to host the person and take responsibility for the cleaning, washing sheets, checking out and in keys, etc. There are some people who will host traveling cohousers. Since we don't have a cleaning service doing the cleaning, it is a real responsibility.

Essentially, we have found that looking at the responsibilities involved determines what we do. What will this involve, what are the risks, and who will take responsibility?

Without that person who wants to take something on, it doesn't happen. Commercial rentals would be a lot of work and would require a lot of study to be sure the rentals were reimbursing the community for all the costs to the community.

Sharon Villines
Takoma Village Cohousing,Washington DC

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