Cohousing-L Mailing List: Re: right of first refusal

[Mabel Liang (mabel]

I'll have to ask...

-- Mabel :-)

Mabel Liang
mabel [at] twomeeps.com
Software Engineer turned Gardener

---------------------------- Original Message ----------------------------
Subject: Re: [C-L]_ right of first refusal
From:    "Diana Carroll" <dianaecarroll [at] gmail.com>
Date:    Thu, August 5, 2010 12:31 pm
To:      mabel [at] twomeeps.com
         "Cohousing-L" <cohousing-l [at] cohousing.org>
--------------------------------------------------------------------------

> If you happen to know, who did your folks refinance with?
>
> Our experience has been that individual banks who handle their own
> loans ("portfolio loans") rather than resell them to Fannie Mae are
> more flexible.  Unfortunately their rates are also not usually as
> good.
>
> - Diana
>
> On Wed, Aug 4, 2010 at 11:38 PM, Mabel Liang <mabel [at] twomeeps.com> wrote:
>>
>> Here at Cornerstone Village Cohousing, Cambridge, MA
>> http://www.cscoho.org
>> , some folks have recently refinanced without any trouble.  And we do
>> have
>> a right of first refusal in our documents.
>>
>> Our Master Deed includes language (see below) which means that the right
>> of first refusal does not apply in the case of a foreclosure, etc.  I
>> don't know if that makes banks more comfortable.  The entire Master Deed
>> is at our web site, for anyone who wants to peruse it.
>>
>> In addition, we have language which says "1.    the right to purchase is
>> exercisable only as a means of insuring owner-occupancy of the Unit that
>> is being sold, or for some other valid purpose that serves the best
>> interest of the Association and its members;" plus "Moreover, such right
>> shall not be exercised so as to restrict alienation, conveyance, sale,
>> leasing, purchase, ownership or occupancy of units because of race,
>> creed,
>> color, national origin, sex, age or sexual preference."
>>
>> Also, we have the right to assign our right to purchase, so in practice
>> we
>> would most likely have someone on our waiting list purchase the unit as
>> opposed to the Association doing so.
>>
>> My interpretation of our current policy does not allow a bidding war
>> once
>> the owner has agreed on a price and conditions.  There are those who
>> either disagree or think it should be changed, saying that that's not
>> how
>> real estate deals work.  I include our current policy below, as well.
>>
>>
>> ---------------
>> >From the Master Deed:
>>
>> The Association will not have this right of first refusal with respect
>> to
>> any lease, sale or transfer of a Unit in connection with a mortgage
>> foreclosure (or the acceptance of a deed in lieu of the foreclosure) or
>> with respect to any sale or transfer by the mortgage holder or other
>> party
>> who acquired the Unit in connection with the foreclosure or
>> deed-in-lieu.
>> Such right of first refusal shall not impair the rights of a First
>> Mortgagee to:
>>
>>                        (i)     foreclose or take title to a Unit
>> pursuant to the remedies provided
>> in its mortgage; or
>>
>>                        (ii)    accept a deed (or assignment) in lieu of
>> fore­closure in the event
>> of default by a mortgagor; or
>>
>>                        (iii)   sell or lease a Unit so acquired by the
>> First Mortgagee;
>>
>> ----------------
>>
>>> Cornerstone Cohousing
>>> Unit Sale and Waiting List
>>> Presented to General Meeting on March 20, 2004 by the Membership
>>> Committee CONSENSED
>>>
>>> Rationale:
>>> 1.  To outline the procedure to be followed when a unit becomes
>>> available for sale and the guidelines for the Waiting List.
>>> 2.  To support the seller in having her/his terms for the sale met.
>>> 3.  To facilitate the identification of interested buyers/
>>> prospective Cornerstoners who appear to be committed to the
>>> Cornerstone vision.
>>> 4.  To follow the precepts we placed in the Master Deed.
>>>
>>> Guidelines:
>>> 1.  The seller or the seller's agent is to hand deliver a written
>>> notice (not via e-mail) of intent to sell to the Chair, or Chair
>>> designee, of the Cornerstone Managing Board and provide copies to
>>> the board members (this can
>>> be via e-mail).   This notice is to include the price and terms and
>>> any
>>> other special
>>> circumstances, in keeping with Cornerstone's bylaws.
>>> 2.  Within twenty-four hours the Chair of the Managing Board
>>> acknowledges receipt of this notice of intent to sell and states the
>>> time of receipt, which is the start of the 30-day review.
>>> 3.  Also within twenty-four hours the notice of intent to sell is
>>> sent out by the Membership Committee to the Cornerstone community
>>> and the Wait List.
>>> This will include (a) contact person; (b) the respond-by date; (c)
>>> that a prospective buyer must include evidence of ability to finance
>>> (e.g., a pre-approval).
>>> 4.  Responses will be accepted through day 15 by the Membership
>>> Committee.
>>> 5.  Days 16 to 18 will be used to prioritize the responses.
>>> 6.  Day 19 - 20 the first priority will be notified by the
>>> Membership Committee.
>>> 7.  The first priority person has from Day 21 - 25 to sign a
>>> purchase and sale agreement.
>>> 8.  The Membership Committee will work together with seller to
>>> ensure that Waiting List members get to view the unit.
>>> 9.  If there are no viable responses to this outreach by Day 15,
>>> later responses will be considered until Day 30 but will not delay
>>> seller from selling unit on open market after day 30. (1)
>>>
>>> Notes:
>>> 1.  It is recommended that the seller (for her/his own benefit) not
>>> sign an agreement with a realtor until the 30 days have transpired.
>>> 2.  The Master Deed states that units are not to be purchased solely
>>> for investment purposes.
>>>
>>> Priorities for Use of Cornerstone's Right of First Refusal (2) 1.
>>> The first priority would be a current owner of Cornerstone if one
>>> wishes to purchase the unit for sale on the seller's terms and thus
>>> vacate her/his own unit 2.  The second priority would be Waitlist
>>> Members who are current as of the start of the 30-day period, by
>>> number.
>>> 3.  Interested parties not on the Wait List.
>>>
>>> Waiting List:
>>> A person may be on the Cornerstone Waiting List by meeting the
>>> following
>>> requirements:
>>> a.  Expresses interest in Cornerstone and its Vision.
>>> b.  Attends a general meeting or a Community meal and other
>>> functions as possible.
>>> c.  Pays $10.00 each year (after confirmation of continued interest)
>>> to the Cornerstone Membership Committee.
>>> d.  As of the date of the establishment of this Waiting List, any
>>> people known to have previously expressed interested in Cornerstone
>>> up to this date, will be notified to determine their current
>>> interest in being on the Waiting List.  Those who respond back
>>> within 30 days communicating their interest will be assigned a
>>> Waiting List number by lottery.
>>> e.  Subsequent interested parties will be listed according to when
>>> their Waiting List fee is received.
>>> f.  All resident non-owners interested in purchasing a unit should
>>> be on the Waiting List.
>>>
>>> Footnotes:
>>> (1)   If the transfer does not occur for any reason and the Unit
>>> Owner shall
>>> desire to sell the Unit at a lower price or on more favorable terms,
>>> he shall notify the Board as set forth above; in which case the
>>> Board shall have five (5) business days to notify the Unit Owner of
>>> its decision.  This paragraph s shortened notice provisions shall
>>> only apply within six (6) months of the original notice of intent to
>>> sell.  (Cornerstone Master Deed)
>>>
>>> (2)  Section 17 of the Master Deed describes exemptions from the
>>> Right of First Refusal as: excepted from the right of first refusal
>>> shall be a conveyance or transfer to the Unit Owner s parent, child,
>>> sibling, spouse or to a domestic partner as defined in City of
>>> Cambridge Ordinance Chapter
>>> 2.119 as existing on the date hereof; and Units restricted under
>>> Section 11(b).  Moreover, such right shall not be exercised so as to
>>> restrict alienation, conveyance, sale, leasing, purchase, ownership
>>> or occupancy of units because of race, creed, color, national
>>> origin, sex, age or sexual preference.  A transfer by will or
>>> intestate succession shall not be covered by this Section.  (3)
>>>
>>> (3) Please note that the transfer itself by will or intestate is not
>>> subject to Cornerstone s right of first refusal.  However, if
>>> inheritors sell the unit, they are subject to Cornerstone s right of
>>> first refusal.
>>
>> -- Mabel :-)
>>
>> Mabel Liang
>> mabel [at] twomeeps.com
>> Software Engineer turned Gardener
>> _________________________________________________________________
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>>
>>
>>
>
>