Regarding house rules
From: Fred H Olson (fholsoncohousing.org)
Date: Tue, 23 Sep 2003 07:03:07 -0600 (MDT)
Rob Sandelin <floriferous [at] msn.com>
is the author of the message below. 
It was posted by Fred the Cohousing-L list manager <fholson [at] cohousing.org> 
because the message included HTML ;      PLEASE do not post HTML, see
   http://csf.colorado.edu/cohousing/2001/msg01672.html  and
   http://www.harley.com/turn-off-html/
--------------------  FORWARDED MESSAGE FOLLOWS --------------------

Mac and Sandy wrote that their membership agreement is not part of their
CC&R's and were doubtful of its legal enforceability. Actually, it
probably is legally enforceable and once the house for sale goes to a
mortgage broker, it may cause you problems.  Most condos have written into
their CC&R's the right of the association and board to make house rules.
These house rules, as long as they were created following the procedure
outlined in your CC&R's are as legally binding as the rest of your CC&R's.
In fact, most banks will ask you for a copy of such rules, and I believe
in most states, if you hold these out, you may find the bank can cancel
the mortgage contract. 

We had to change our membership agreement at the first resale after
creating it, because the potential lender objected to restrictive resale
language which included, reading the cohousing book and being in accord
with our principals and commitments docume nts.  So, if you are organized
as a free market condo, and most cohousing groups are, you may find
lenders not accepting your house rules if they hold any restrictions on
who can be a member, or what somebody has to do to be a member. 

Remember, banks assume that they will have to foreclose on any loan, thus
they have Vice presidents and loan officers who scrutinize your documents
to ensure that their are no barriers to reselling a property they
mortgage. 


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