Cohousing-L Mailing List: Re: getting money up front

[Raines Cohen (rc3-coho-L]

Van -

Lancaster Cohousing is in the UK, so it's an entirely different
regulatory and housing-finance framework over there. Just imagine any
urban US zoning/planning commission/council/neighbors' reaction to the
concept of a group "living in a caravan on the site" pre-development.

That said, lots of US cohousing groups have created
pre-development/site acquisition/group operation investment LLCs that
have successfully structured themselves to fit within the "investment
club" safe harbor, with up to 30 people actively involved in the
management in addition to any that qualify as high-net-worth
("sophisticated" and therefore able to watch out for their own
interest) investors.

Has your group retained legal representation knowledgeable about
Florida regulation of investment solicitation? That seems like one
next step.

However, to me the key point that you mentioned is that you don't yet
know each other well enough to trust each other with shared control of
large amounts of each others' money without extensive legal protection
from one another... which you will pay for creating. Training together
on group process, going through simulations like the Timeline Game,
and other small steps together will build confidence in the goal, the
process, and each other at the same time, may well be the best
long-term investment you can make to simplify the process and increase
your probability of sucess.

With attorneys, accountants, and even regulatory agencies like the
IRS, the quality of the answers you get depends a lot on the degree of
internal processing you've done, the degree of internal
cohesion/shared experience, and the nature of the questions you ask.

Raines Cohen, Cohousing Coach http://www.CohousingCoach.com/
Planning for Sustainable Communities (at the David Brower Center in
Berkeley, CA)
a proud sponsor of The 2010 National Cohousing Conference in Boulder, CO

Wrapping up a two-day worksession with facilitator/trainer Tree
Bressen from Eugene, Oregon, and a dozen local facilitators, working
toward a "Pattern Language of Group Process"
http://grouppatternlanguage.org/

On Mon, Feb 8, 2010 at 12:45 PM,  <vandeist [at] msn.com> wrote:
>
> By pulling your money, have you violated any Security & Exchange Commission
> (SEC) regulations?  If people without a history together pool their funds,
> the SEC interprets that as a security.  Did your group members have an
> extensive personal/business history with one another?  Are you an LLC or
> incorporated?  Did you create a security?  Please tell.  We have avoided
> pulling our funds, because we're new to one another as a group and didn't
> want to run afoul of the SEC.  Now we're considering creating a security.
> Van Deist    Venice, FL