Cohousing-L Mailing List: Re: How do you deal with resale of units?

[apguirard (apguirard]

Please adjust the subjects of your messages to reflect their contents!

Dan writes:
> ... the community may give
> itself a first option to buy a member out when he or she wants to
> leave; but unless that option is exercised, the member can sell...
> to anyone they want, who is
> AUTOMATICALLY a member of the community!
>
> Does anyone out there have experience with this situation?

I don't have experience, but I do have ideas.  Certain communities have
done away with zoning laws in favor of land use restrictions in sales
contracts -- in other words, the real estate contract says, you agree
that you will not do such and such on this property without going through
the following approval process involving consent of other local residents
and furthermore, that if you sell the property the sales contract will
have this same use restriction clause.  This is legal and it works.
If there's a forfeiture and a bank takes over the property they are still
required to follow the terms of the sales contract.

What I'm thinking is that a condo style cohousing venture could be set
up in much the same way.  The sales contract could contain conditions
decided upon at the time the community is founded, that might for
instance specify that the condominium association has the right to
buy out the new resident for the price they paid plus some set
percentage anytime within a year of their purchase, based on a vote
of __% of the households in the association.  That way, if someone
really disastrous should purchase a unit the community could, with
some considerable difficulty, oust them and resell to someone more
to their liking.  I don't think it should be an easy thing to do.

There might be other measures one could take that could be a little
more preventative and less drastic; for instance, the sales contract
might require the organization's approval of a potential purchaser if
the property is resold.

I'm not sure how much of this is actually legal to put into the contract;
you'd have to consult a lawyer.  I'm just throwing out ideas.
====================================================================
     ____ ____   ___     Andre Guirard
      /   /__/  / __     2188 Fremont St.       apguirard [at] mmm.com
     /   /  \  /__/      St. Paul, MN 55119