Cohousing-L Mailing List: Re: Legal Expenses: Average Cost

[Craig Ragland (craigragland]

Louis,

Are you engaging with the Canadian Cohousing Network on questions like this?

http://www.cohousing.ca

When I once spoke with some U.S. Cohousing Professionals about a different
Canadian issue, they told me that there are a lot of differences in some of
the specifics for developing a cohousing project in Canada. I am excited
about exchanging information internationally, but do feel caution about not
personally understanding much about the significant differences imposed by
different governmental systems, regulations, policies, conventions, etc.

I attended part of the Annual General Meeting (AGM) of the CCN earlier this
month and met some of the fine folk that have been giving so much of
themselves to growing the movement and industry in Canada. It was really
exciting for me to learn about all they've been doing.

I was fascinated to learn about the early history of the "North American
Cohousing Network" - which existed before the CCN decided to create an
independent entity in the mid-90s to more effectively serve the specific
interest of Canadians.

Part of our conversation was about how the internet has changed
international communications about cohousing - how it is just as easy for
any Canadian cohousing group to tap information from any US cohousing group
and vice versa. We didn't make any plans for collaboration (yet), but opened
a very nice exchange that I hope to advance over the coming year. Both
Coho/US and the CCN are curious about what might be possible on an
international level.

As for legal expenses - in general.

Yes, you are absolutely correct that budgeting for legal can be very a
tricky business. In our case, Songaia Cohousing, we ended up spending FAR
more on our legal expenses than we expected...  despite the best advice we
could gather from experienced developers. We had at least 3 different law
firms that specialized in different areas over our 10 year self-development
journey. This was partly driven by our decision to originally organize
legally as a Cooperative. We hold great store by  our idea of being
primarily values-driven. At the time, early 1990's, it was clear to our
forming group that a Cooperative was the legal form that was most consistent
with our values.

We later realized this wasn't the best decision for us to develop our
property and re-organized as a LLC, before forming the HOA that now manages
our property. After learning about the cost differences between owning
property and operating as a HOA vs. a Coop, we also elected not to pursue
the Cooperative legal structure for our operating body. Any change of this
sort multiplies your expenses - try hard to get it "right" the first time
and don't use Songaia as a successful model.

There are still copies of the Songaia Cooperative legal papers out on the
internet - these should NOT be used by any group, except for learning about
what we did by mistake.

Some very high post-development legal expense that we managed to avoid
monetarily was some very time-consuming litigation.

After living in our built cohousing homes for a year or so, we were sued by
a former member.  The circumstances are not important. Fortunately, we had
Officers and Directors insurance (D&O) which fully covered our legal fees
for this sorry episode. We have no idea what the cost to our insurance
company was, but it was about 3 years of legal work and countless meetings
with the various attorneys involved - my guess, low 6-figures. The case was
ultimately thrown out as frivolous, but it was very costly in terms of
energy and time (but not money) from our members. If we had not had the D&O
insurance, we probably would have managed to spend less on the fees paid to
lawyers, but it would undoubtedly of been more stressful.

In the case of New Earth Song, the forming cohousing group I'm involved
with, we do not have firm numbers for our legal budget yet - we're expecting
that our budgeting for this will come from our work with a cohousing
professional. We are, however, choosing the middle-road in our approach. We
could spend less than we are to accomplish our legal objectives by doing
more ourselves. We could also spend a lot more by working with more
expensive attorneys - they vary TREMENDOUSLY in cost - recently, I've seen
recent rates from $100 to $500 per hour.

Others on Coho-L are likely to weigh in with a variety of ideas on this. I
strongly advise that you understand that Apples must be compared to Apples.
For example, a number of us living at Songaia visited Winslow Cohousing
yesterday during the annual NICA meeting/gathering:

http://www.ic.org/nica/

Those of us from Songaia were astounded to hear how high their monthly
assessment was... (more than double ours). Then we discovered that the
Winslow fees included their property taxes, which we at Songaia, pay
individually. Their Apples were much more expensive than our Oranges, but we
at Songaia are also individually paying for Bananas.

In Community, Craig

On Sun, Mar 23, 2008 at 8:11 AM, Louis-H. Campagna <lhcampagna [at] hotmail.com>
wrote:

>
> Hi,
>
> Our project is in startup phase and we are trying to figure out what
> amount to put aside budget-wise for all our legal expenses.
>
> We understand this can vary widely, according to all kinds of events
> specific to a given project (lawyer rates, zoning changes, conflict
> settlements, etc., etc.).  We're just looking for a ballpark figure, as a
> matter of putting aside a reasonnable amount to this end and evaluating
> overall cost of units.
>
> Question : Typically, after a project is done and once the overall cost of
> a project is sorted out, what piece of the spending pie (%) reads 'Legal
> expenses'?
>
> Regards,
>
> Louis-H. Campagna
> Cohabitat Québec, Quebec City
>
>
> --
Craig Ragland

Coho/US executive director
http://www.cohousing.org
craig [at] cohousing.org

New Earth Song project manager
http://www.NewEarthSong.com
craig [at] newearthsong.com

Songaia Cohousing member
http://www.Songaia.com
craig [at] songaia.com

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