Cohousing-L Mailing List: RE: Forms of ownership: how it can work out selecting members selling condos

[Rob Sandelin (floriferous]

How a cohousing community overcame a foreclosure by a loan shark

Once upon a time, in a community far in the NW, a couple of people joined a
community and built their dream home. Well actually they got it mostly
built. They were not very honest, either with the community nor with
themselves, and had several other problems besides this. Eventually, in
order to finish out their home, they took a high interest loan from a "loan
shark", because they could get no other financing. They then spent the money
on other things besides their house and did not make the loan payments. They
were foreclosed upon by the loan shark and evicted. Not one word of any of
this was said to the community in which they lived. One Sunday, two large
moving vans pulled up, loaded up, and left. The couple owed some of the
community members several  thousands of dollars which remains uncollected to
this day.

The loan shark hired a crew to bring the house, which was by legal
definition a condo unit, up to final inspection and then hired a realtor who
had no idea what was happening. Again, no communication with the community
was done, and a very misleading ad was placed in the Sunday real estate
section. The first the community heard about it was when cars started
driving up asking about the real estate.

Oh my! The community members rallied, and created an emergency task force
which met and talked with every single person who showed up that day and
beyond. They made a large sign, and also a brochure handout was placed
directly in front of the house, on community property which explained the
community. The Realtor was not happy, and after a couple of unpleasant
exchanges with community members, the realtor called the loan shark and
dropped their contract selling the house.

The emergency task force met with the loan shark, explaining that this home
which he had acquired was not a normal real estate deal, in fact was part of
a community, etc. etc. To his credit, he hired a much more savvy and smart
realtor to sell the house. She contacted the task force, got all the details
about the community, created a handout and description which included this
and tried to market it. With no success. Traditional Real estate means did
not work. After 3 months, the realtor offered to split the commission if the
community marketed the house and found a buyer. The price of the house
dropped to make it a non-profit deal for the loan shark, he  just wanted his
money back at this point.

The community agreed, and moved from a place of trying to block the deal to
one of trying to make the deal and started doing a bit of call down to their
guest lists and visitor logs. There was a quick response and five days later
a buyer signed the purchase  contract. The buyer was completely excited
about the community, lukewarm about the house, but bought the house in order
to have the community.

So what you are and what you do as a community will filter out people who
are disinterested if you approach it the right way, e.g. give them full
information about the community, its work together, the expectations for
involvement, its mission, etc.  None of these things are "Legally" binding,
but they are a powerful filter which guides the right people to buy your
homes. Even if the seller does not want to disclose this info, the community
can. In fact, most condo laws in most states require the condo association
to provide the buyer with the house agreements and other pertinent
documents. So you do select your members, even if you don't have the legal
right  to, just by being a community and doing the things that you do.

The biggest filter factor this community discovered was community dinner.
Mere mention of that sent people away quickly, or intrigued them to the
point of actually coming and hanging out. I guess something over 100 people
came to see the house, maybe two had  enough interest in community to even
consider it briefly. So the marketplace for community homes a very different
from that of non-intentional neighborhoods.

A technical aside, actually most cohousing homes are owned by banks, not the
members anyway, and these absentee owners are usually very clueless about
cohousing. Its usually just another condo development to them.

(As another aside, I personally have never like the term "unit". So I use
the term Home to describe cohousing dwellings)

Rob Sandelin
Community Works! Consensus and community building workshops for social
change non-profit groups
Sharingwood resident