Cohousing-L Mailing List: Re: ownership

[Tom Lent (tlent]

TO: glenn sharron
>     How is the land owned in the community?  i.e. communally,
>individually, in trust, etc.
>              ....the community buildings?
>        .......the individual/family "homes" or "units"?
We bought our prpoerty as a joint tenancy (each household owns an undivided
equal value share of the whole property) and are in the process of conveting
it to a air space condominium (same except each household "owns" everything
"from the paint in" inside of their unit).

>     How was the financing obtained for the initial purchase of land [or
>land and existing building(s)?

50% financed by a LOCAL COMMUNITY bank (the big banks don't care), 50% by us
cash from members and a bunch of loans from members, family, friends, and
the local war tax resistance fund.

>     How was financing obtained for development of the common buildings of
>the community?
>        ......the household units?

More of the same as purchase funding.

>      What is the membership fee and how is it determined?
>      Does every member pay the same amount for membership fees?
>
>        ....for their share of ownership in the common facilities?
>        .....for their household unit?

MEMBERSHIP FEES (& INVESTMENT): HERE COMES THE LONG ANSWER

Members invest in the project in three ways:
1) Monthly Development Fee
2) One time Member Capital Payment 
3) Loans

Members pay a series of fixed fees to cover the ongoing cost of owning the
property and operating the cohousing association:
4) Monthly Carrying Charge (MCC)
5) Monthly Common Operations Fee
6) Monthly Water Fee

Members also pay a series of variable fees that are based upon actual usage:
7) Meal Fee
8) Laundry Fee
9) Guest Room Fee

1) The monthly Development Fee covers certain development costs that we pay
out of pocket rather than through financing (which would add to the final
cost of units) such as the costs of rehabing units for move in, interest on
development loans, and child care for extra development meetings,. The
development fee was $210 per household per month starting in March of 1994
to cover move in costs. It was lowered to $110 for per household per month
effective in February of 1995. 

Catch up development fees will be due upon acceptance as a new members to
bring you to an equal investment with current members. For example, if you
join in July of 1996, your back fees would total $4290. This equals 11
months (March 94 through January 95) @ $210/month ($2310) + 18 months
(February 95 through July 96) @ $110/month ($1980). 

The development fees (including back fees) are credited toward your down
payment when we obtain permanent financing.

2) The Member Capital Payment is $25,000 per household and was invested by
each of the original ten member households before we purchased the property
in February of 1994. This initial investment was part of our down payment on
the initial purchase of the property. New member capital payments help fund
the development process. The Member Capital Payment is credited in full
toward your final down payment when we obtain permanent financing. We
request that you invest the $25,000 as quickly as possible after acceptance
as a member with a minimum first installment of $2500 to become a member and
the remaining $22,500 to be due within one month, unless you work out an
alternate payment schedule with the Finance Committee.

3) Households are encouraged to make Loans to the group to help cover the
development costs of the project. It is now required that all members invest
at least up to the remainder of their expected down payment. Those who
cannot do so immediately must work out an investment plan with the Finance
Committee. This is a win-win proposition for you and the group. You get a 9%
return - a reasonable rate that is better than many other short term places
where you could put your down payment savings. The group gets a cheaper rate
than we would pay for commercial loans and gets the assurance that your down
payment money will be available when closing time comes. Loans may be
directly converted to cover your down payment to whatever extent you desire. 
 
4) The Monthly Carrying Charge (MCC) pays the cost of owning the property,
such as purchase loan interest, taxes, maintenance and insurance. Off site
member households currently pay a Common MCC of $85 per household per month
for their share of common house and land expenses. New members will pay this
fee starting in the first complete month after they become members. Members
living on site pay twice that amount ($170 per month) toward the common
costs plus an additional Household MCC for their individual unit ranging
from $590 to $970 depending upon the size of the unit.

5) The monthly Common Operations Fee pays the ongoing costs of running the
cohousing organization and operating the property, such as bookkeeping,
accounting, common house utilities, supplies, and meeting child care. It is
currently set at $40 per household per month for both on and off site
members. New members will pay this fee starting in the first complete month
after they join.

6) The Water Fee covers the cost of water and sewer service to the living
units (not the common house which is covered in the Common Operations Fee)
on the site. It is currently set at $5 per person per month. Off site
households do not pay a water fee.

7) The Meal Fee covers stock staples and ingredients purchased by the cooks
for common meals, plus cleaning supplies. It is currently set at $3 per
adult per meal, $1 per child per meal, and a self assessed amount for any
leftovers consumed (suggested amount is half price for a complete meal).

8) The Laundry Fees cover all the costs of owning and operating the washer
and dryer - everything from soap and electricity to maintenance eventual
replacement of the equipment. Fees currently are set at $1.00 per laundry
load and $.50 per dryer load. Line drying is free!( You will be assessed a
monthly fixed household fee which is an estimate of your average laundry and
meal fees based upon your past history. Quarterly, your actual usage will be
reconciled with your estimated payments.

9) The Guest Room Fee contributes to the costs of operating the common
house. It is currently set at $5 per night (regardless of number of occupants).

GRACE PERIODS & LATE FEES
All fees are due by the first of the month. The grace period ends on the
fifth day. After the fifth day you will owe a $10 late fee. The late fee
increases at $5 per week starting on the twelfth day.  

RESPONSIBILITY FOR FEES UPON WITHDRAWAL:
Should you decide to withdraw from the group, you are responsible for paying
all fees in full for one year from your written announcement to the group of
your intention or until the condition listed below for the particular fee is
met, whichever happens first:

- The Household MCC payment due will be reduced by the amount the group gets
for a sublet for space you occupied or will be eliminated if a new member
household moves in to that space.

- The Common Operations Fee and the Common MCC will be eliminated when one
new member household joins the group to replace you.

- The Water Fee will be eliminated when you move out.

- The Development Fee will be eliminated when membership is full.

- If you do not pay the monthly fees that are due, your capital account will
be debited. In other words, the amount you owe to the group will be
subtracted from the amount of your Capital Payment that otherwise would have
been refunded to you in full when the group reaches full paid membership.
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Tom Lent * 2220 Sacramento St * Berkeley, CA 94702-1907
           email: tlent [at] igc.org * phone: 510/845-5243
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