Re: Agreements to reshare financial burden (was: Per Household or per person?)
From: Diana Carroll (
Date: Wed, 20 Mar 2013 08:24:35 -0700 (PDT)
Sharon, it's a very good question.  We have a similar dilemma on the flip
side of the coin.  Your new resident said to the founders: "You guys got a
free ride and cheap prices."  We have the reverse.  Those of us who bought
in before construction paid more -- up to DOUBLE -- what later buyers paid
(because the housing market crashed right after we all moved in...which is
why we can't pay off our construction loan.)  There's a different
experience for those of us with the "fingers off the cliff", many of whom
ALSO lost money and/or now own a home they paid twice as much for as its
now worth.  I really don't know how the different experiences will affect
the community long term.

(One immediate consequence is that late buyers have the option of selling
their homes if they want.  Early movers who paid top dollar and are now
deeply under water may never be able to sell their homes for enough to
cover their mortgages. :-(  Being stuck here by financial reality in
addition to love surely has an impact on our participation in the
community. )

That said, when I put "real" in quotes, it was not to imply that anyone in
our community sees our legal documents as anything other than real.  They
are very very real.  I meant that industry standards and common practices
and expectations from the outside world often don't work for us, because we
aren't "real" developers...we are (at last in my case) amateurs in way over
our heads!


On Wed, Mar 20, 2013 at 11:13 AM, Sharon Villines <sharon [at]
> wrote:

> > Our individuals of course did form a corporation (LLC), but the lender
> knew
> > it wasn't a "real" company...they (wisely, I guess) required the
> > individuals in the corporation (us) to sign personal guaranties before
> > they'd give us our loan, so any money the project doesn't pay back comes
> > out of the pockets of the LLC members.
> This comment is not directed at any specific community -- many of us have
> operated on the premise that legal documents are for the bank or the
> lawyers, not for "us." This is intended for forming and new communities.
> Assuming that legal documents are not "real" is one of the wrong paths
> that cohousing has taken. Legal documents are real. When push comes to
> shove, calamity to calamity, they will be enforced by outside agencies if
> not inside agencies.
> As time goes by and new people join the group, before move in and after,
> the newer members don't have the same informal expectations because they
> weren't part of those earlier bonding discussions. As time goes by new
> members are taking less risk and have less understanding of how hard it was
> to get started. They are unaware of the fingers hanging off the edge of the
> cliff for sometimes years.
> One resident who moved in a few years after we moved in, at the height of
> the housing market, said, "You guys got a free ride and cheap prices."
> Another who moved in 2-3 years ago said, "We aren't all in this together.
> We are owners in a condominium. All our situations are different."
> New people are given the condominium declaration, bylaws, and the policies
> before they move in. Their purchase is considered acceptance of those
> documents. Nothing else.
> I don't know how to re-create for new residents the bonding of those early
> years, but without it, the community and individual homeowners are
> dependent on good will and legal documents. And good will is in the eye of
> the beholder.
> We've been very lucky since we don't have an extensive pre-move in
> orientation process. Everyone who has moved in has been more involved that
> those who moved out. But that isn't always saying much -- some of the
> people who moved out were fairly uninvolved.
> What I would like to hear about are ways of repeating that early bonding
> without creating a crisis.
> Sharon
> ----
> Sharon Villines
> Takoma Village Cohousing, Washington DC
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