Cohousing-L Mailing List: Seeking advice about forming community

[Ed Self (selfe]

Hello,

I'm involved with a small group of people who are attempting to 
form an intentional community in Boulder County, Colorado.  Our group is 
not strictly a "Co-Housing" group according to the Danish model, but 
there are many similarities.  I hope this list is an appropriate place 
to post this inquiry.  Please forward this message to anyone who might be 
able to help us...
 
Our group has recognized the complexities of formulating a comprehensive 
legal agreement that will meet our current needs and, as much as 
possible, anticipate future circumstances and complications which 
could arise.  We have also recognized that there is a 
relationship between our choice of legal structure and how that 
could affect our efforts to obtain financing. 

We are seeking any advice or suggested resources (persons to 
contact or publications) which could help us as we formulate a 
legal agreement and pursue financing.  We are also potentially 
interested in hiring a consultant(s) to help us hash out the 
legal and financial aspects of forming community.

For anyone interested, I'll summarize our current situation.  If 
you see any contradictions or potential "red flags" or obvious 
directions to head in, we'd love suggestions.

There are 10 of us, including 6 adults and 4 children in 4 family 
units.  We are attempting to purchase a agricultural property of 
about 10 acres which some of the members of our group have been 
leasing for 4 years.  It currently has 1 house, a cottage and 
several out buildings.  We would construct another small house.  
As far as we can tell, local zoning regulations will let us build 
a second home, but we cannot subdivide the property.  Therefore, 
we must own the property in common.  We have fairly good water 
rights and intend to purchase more.

In total, we have about 30% of the cost of the property to put as 
a down payment.  Due to our individual financial situations, our 
down payments would range from $5,000 to $100,000.  However, our 
monthly mortgage payments would be in a narrower percentage 
range, from around $250 to $500 each, depending on space used and 
children.

We currently run a CSA (Community Supported Agriculture, ie. 
subscription farm) from the property, do educational/therapy 
programs with children and run a dried flower business.  We would 
like all of these to continue and have some additional ideas 
"cooking".  We envision some commonly held businesses supporting 
the community as a whole; while other businesses would be solely 
owned and run by specific members with some sort of lease 
agreement with the community for the space they use.  In 
addition, some members would work entirely outside the community.

We want a legal structure which will provide, or allow for:

  * community choice of prospective new future members

  * a "simple" legal mechanism for allowing members to leave or 
    enter the community

  * common ownership of the property and structures with equity 
    percentages based on initial and on-going contributions of 
    money and labor 

  * "sweat equity" for those who contribute extra labor rather 
    than, or in addition to, money

  * possibly, a core non-profit (501-C3) with a few satelite 
    for-profit businesses (this subject is very unclear to us at 
    this point)

  * some degree of liability separation so that if, for 
    instance, one of us were personally sued, the whole 
    community wouldn't be jeopardized.

  * clear contingencies for people getting married, having 
    children, renting their personal space to "outsiders", 
    defaulting on their portion of the payments, dying, etc.
 
  * possibly, the future establishment of a Community Land Trust 
    or the selling of the development rights to the county with 
    a guarantee that it will never be developed.

  * probably, many other things which we haven't thought of yet!

Our preliminary investigations have suggested that a membership 
or stock cooperative would satisfy many of our requirements, but 
not all.  The financing could be tricky.  Most banks apparently 
don't like to touch membership cooperatives, but the National 
Coop Bank in Washington, D.C. might work with us.  Several banks 
have said they would finance the purchase at a very good interest 
rate, but probably only if we have a standard fee-simple title 
with up to 5 names on it.  We believe that type of legal 
structure would be problematic for our situation.  As anyone who 
has tried to do this knows, it's all very confusing.  Current 
legal and corporate models don't readily support what we want to 
do.  If you're still reading this long winded message, you must 
be fairly curious about our project.  Please gives us feedback 
and suggestions.

Thanks!

Ed Self
1496 Alpine Avenue
Boulder, Colorado  80304
(303)449-8639