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  • Cohousing Toolkit 2.0

    Загружено:

    Robert Moses Lim
    583 просмотров102 страницы
    This document provides a questionnaire to help co-owners of a shared property discuss important details of their co-ownership arrangement. It includes questions about contributing to the purchase price and costs, ownership of individual units, rules around tenants and renting units, designation of exclusive and common areas, financial responsibilities, and dispute resolution. The 20 questions address issues like financing the down payment, valuing labor contributions, approving housemates and tenants, pet policies, maintenance responsibilities, and procedures for making decisions. Co-owners are advised to seek legal counsel, as their specific situation will require customized agreements and consideration of additional tax, liability, and regulatory issues.

    Исходное описание:

    How to start a communal home.

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    This document provides a questionnaire to help co-owners of a shared property discuss important details of their co-ownership arrangement. It includes questions about contributing to the purchase price and costs, ownership of individual units, rules around tenants and renting units, designation of exclusive and common areas, financial responsibilities, and dispute resolution. The 20 questions address issues like financing the down payment, valuing labor contributions, approving housemates and tenants, pet policies, maintenance responsibilities, and procedures for making decisions. Co-owners are advised to seek legal counsel, as their specific situation will require customized agreements and consideration of additional tax, liability, and regulatory issues.

    Авторское право:

    © All Rights Reserved
    Скачайте в формате PDF, TXT или читайте онлайн в Scribd
    Отметить как неприемлемый контент
    583 просмотров102 страницы

    Cohousing Toolkit 2.0

    Загружено:

    Robert Moses Lim
    This document provides a questionnaire to help co-owners of a shared property discuss important details of their co-ownership arrangement. It includes questions about contributing to the purchase price and costs, ownership of individual units, rules around tenants and renting units, designation of exclusive and common areas, financial responsibilities, and dispute resolution. The 20 questions address issues like financing the down payment, valuing labor contributions, approving housemates and tenants, pet policies, maintenance responsibilities, and procedures for making decisions. Co-owners are advised to seek legal counsel, as their specific situation will require customized agreements and consideration of additional tax, liability, and regulatory issues.

    Авторское право:

    © All Rights Reserved
    Скачайте в формате PDF, TXT или читайте онлайн в Scribd
    Отметить как неприемлемый контент
    из 102

    Cohousing

    LegalToolkit2.0
    ComplimentsofCohousingAttorneys:
    JanelleOrsi(www.JanelleOrsi.com)and
    CynthiaHawley(www.CynthiaHawley.com)

    TABLEOFCONTENTS
    ACK!SampleDocuments!.....................................................................................................................1
    CoOwnershipQuestionnaire................................................................................................................2
    20BasicQuestionstoDiscussWhenYouShare....................................................................................9
    ArrangementsforHoldingTitletoLand..............................................................................................11
    FormingandStructuringOrganizationsforCohousing.......................................................................13
    SampleCoOwnershipAgreement......................................................................................................22
    CommonIngredientsofCC&Rs............................................................................................................37
    SampleBylawsForaCohousingOwnersAssociation..........................................................................38
    SampleConsensusProcessPolicy........................................................................................................49
    SampleLLCOperatingAgreementForCohousing...............................................................................54
    GettingLoansorInvestmentsfromFriendsandFamily......................................................................69
    ASampleFriendsandFamilyPromissoryNote...................................................................................70
    TaxStuffandCohousing......................................................................................................................72
    ZoningandCohousing..........................................................................................................................74
    CommonInterestDevelopmentComparisonTable............................................................................76
    LawsThatDictateCommunityAssociationGovernance.....................................................................78
    TheDavisStirlingAct...........................................................................................................................79
    GettingApprovaltoSellCohousingUnits............................................................................................81
    Landlord/TenantLawsandSharedHousing........................................................................................82
    BuildingandFireCodesandCohousing...............................................................................................84
    FairHousingLawsandCohousing........................................................................................................85
    SampleCarSharingAgreement...........................................................................................................86
    TipsforEffectiveMeetings..................................................................................................................88
    RestrictionsonRentalsofUnits...........................................................................................................89
    ExpellingMembers..............................................................................................................................91
    EnforcementofRulesinCohousingCommunities..............................................................................92
    BlockingControlinaConsensusProcess.............................................................................................93
    LandUse,Zoning,&EnvironmentalLaws............................................................................................94
    ProtectingPlacewithConservationEasements..................................................................................96
    AdditionalResourcesforSharingandCohousing................................................................................99
    ListofResourcesforLessExpensiveHouses.....................................................................................100

    ACK!SAMPLEDOCUMENTS!
    Thesesampledocumentsandlegaltoolsare
    foryoutoread,enjoy,study,share,andmaybeevenuse
    .butonlyatyourownrisk!

    WhyItsSafertoReadThisOntheBeach.andTalktoaLawyer
    Wehaveincludedsomesampledocumentsinthistoolkitbecausewebelieveinsharing.We
    believethateveryoneshouldsharedocumentsandinformationto
    facilitatethegrowthofcohousingandintentionalcommunities.
    Thesampledocumentsinthishandbookareeducational
    toolstogiveyouanideaofwhatsuchdocumentslooklike.However,
    usingthesesampledocumentscouldberiskyifyouassumetheywill
    meetyourneeds.CoOwnershipAgreements,Bylaws,andLLC
    OperatingAgreementsvaryinlengthfrom10to50pages,andmustbe
    customizedtothefinancialarrangementanduniqueattributesofthe
    community.Thatswhyitssafertoreadtheseresourcesforfunand
    learning,ratherthanadopttheagreementsasyourown.
    Plus,realestatelawiscomplicatedstuff.Cohousing
    arrangementsbringupallkindsofotherlegalquestionsrelatedto:
    Incometax
    Fairhousinglaws
    Propertytax
    Staterealestateregulations
    Zoninglaws
    Rentcontrollaws
    Liabilityandinsurance
    Yourmortgageloan
    Estateplanningquestions
    Localhousingregulations
    Andthelistevengoeson...
    Homeownersassociationrules

    Thatswhyyoushouldalwaysconsultwithalawyerifyouplantocoownproperty.Alawyerwillhelp
    youunderstandyourrights,risks,andpitfallsinacohousingarrangement,andcanadviseyouonthe
    otherlegalissuesthatarise.
    Thatsaid,kickupyourfeetandenjoythesedocumentswithanicecoldglassoflemonade!

    Page2of101

    COOWNERSHIPQUESTIONNAIRE

    UseofthisQuestionnaire:ThisQuestionnaireisatooltohelpcoownerstalkthroughthedetailsof
    theirsharedpropertyownership.Theanswerstothesequestionscouldhelplaythegroundworkfora
    moredetailedTenancyinCommonorLLCOperatingAgreement.NotethatthisQuestionnaireassumes
    thatthepropertyinquestioncontainsmultipleunits,butmanyofthequestionswouldalsopertainto
    thecoownershipofasingleunitproperty.Pleasedonotrelyonthisasathoroughlistofquestionsyou
    shouldaskinconnectionwithcoownership,sincetheremaybemanyotherdetailstoresolveorlegal
    matterstosortthrough.Werecommendthatcoownersseektheadviceofanattorneyregardingthe
    detailsoftheircoownershipagreement.

    BuyingtheProperty
    1. ContributiontoPurchasePriceandCosts:Willeachownerscontributiontothe
    purchasepricebebasedonfinancialability,thevalueoftheshareofspacetheywill
    receive,orsomebalancingofthetwoconsiderations?Aretheunitsand/orprivate
    spacessubstantiallythesameordotheydifferinvalue?Iftheunitsandprivatespaces
    differinvalue,howwillyoudeterminetheshareofthetotalcosttobepaidbythe
    occupantsofeachunit?Forexample,woulditmakemoresensetoallocatethecostby
    squarefootageortohaveeachunitanditsexclusiveusecommonareasappraised?If
    theunitsaresubstantiallysimilar,willyoubeabletocometoanagreementaftertaking
    intoconsiderationanyuniqueattributessuchasparking,decks,views,etc?
    2. ContributionTowardDownPayment,MonthlyPayments,andOverallDebt:Whatwill
    bethepercentoftotalpaidbyeachcoownerfor:
    a. Downpayment
    b. Monthlypayments
    c. Overallshareofdebt
    3. ContributionofLabororProperty:Willanyonebecontributinggoodsorservicesinlieu
    ofmoneypaymentsforthepurchasepriceorothercosts?Ifso,whatwillthose
    contributionsbeandhowwillyouvaluethem?Whatisthetimeframeforcompleting
    thiswork?Howwillyoumanagetheincometaxconsequencesofsweatequity?
    4. GroupOwnershipofUnits:Willmorethanonepersonsharethecostofoneunit;that
    is,canagroupofpeoplebuyintothepropertycollectivelyasonecoownertoshareone
    livingspaceorunit?

    Page2of101

    WhoLivesattheProperty?
    5. NumberofResidents:Doyouwanttolimitthenumberofpeoplewhomayliveineach
    unitorlivingarea?
    6. Housemates:Ifacoownerwantstohaveahousemateorroommates,shouldtheyget
    approvalfromtheothercoowners?
    7. RentingUnits:Ifacoownermovesoutandwantstorentouthisorherunitorliving
    space,shouldtheyhavetogettheothercoownersapprovaloftheprospectivetenant?
    Typically,itsreasonableforthecoowneroftheotherunittohavetherighttoreviewa
    prospectiverentersfinancialstatusandreferencesandrejectarenteronreasonable
    grounds.
    8. RulesforTenants:Doyouwantpotentialtenantstosignawrittenagreementthat
    includesalloftherulesanduserestrictionsinthecoownersagreement?
    9. EvictionofTenants:Doyouwanttorestricthowacoownermayevictatenantinorder
    toprotectothercoownersfromlegalretaliation?
    10. Pets:DoyouwantapetpolicyinyourTICagreement?Youmightwanttoconsiderhow
    manypetsperunitorlivingareamightbeallowed,whatkindsofpetsmightbeallowed
    andspecificallyexcluded,wherepetsaretobekept,whatkindofpetbehavioris
    unacceptable,andwhetheracoownerhastogetapprovalofothercoownerstohavea
    newpet.

    DesignationofUnits,ExclusiveAreas,andCommonAreas
    11. AssignmentofUnitsandLivingAreas:Whichunitorlivingareawilleachcoownerget
    tooccupy?
    12. CommonAreas:Whatcommonareasofthepropertywillbesharedbyallowners?
    13. ExclusiveUseCommonAreas:Whatcommonareasoftheproperty(outsideoftheunits
    orlivingareas)willbereservedfortheexclusiveuseofeachowner,suchasparking
    spaces,garages,yardandgardenspaces,storagespaces,decks?Theseareasareoften
    referredtoasexclusiveusecommonareas.

    WhatMayorMayNotBeDoneToorOntheProperty?
    14. AlterationstoUnits:Whatkindsofalterationsmayacoownermaketoherorhisunit
    orlivingareaandwhich,ifany,alterationswouldrequiretheothercoowners
    approval?
    15. HomeBusinessUse:Maythepropertybeusedforahomebusiness?Ifso,whatkindof
    business?Youmaywanttodistinguishbetweenbusinessesthatinvolvevisitingclients
    orcustomersversusahomeofficeorstudiowithnovisitors.
    Page3of101

    16. UseofChemicals:Doyouwanttolimitthekindsofpaints,pesticides,herbicides,
    cleaningchemicals,etc.thatmaybeusedontheproperty?
    17. HazardousActivities:Doyouwanttolimitorprohibitanyhazardousactivities
    particularlythingsthatcouldaffectyourabilitytogetproperinsurancefortheproperty.
    18. RiskstoThirdParties:Doyouwanttolimitorprohibitanyactivitiesthatcreateariskto
    thirdpartiesandsubjectcoownerstoliabilitysuchas,forexample,teachinggymnastics
    onthepropertyorbuildingatreehouse,etc.
    19. Storage:Doyouwanttolimitwhatmayormaynotbestoredonthepropertysuchas,
    forexample,accumulatedtrashorclutter,discardedfurnitureorotherpersonalitems,
    seldomusedorunusedvehicles,etc?Doyouwanttolimitstorageofanythingto
    certainareasoftheproperty?

    PropertyRelatedCostsandAccounting
    20. Budgeting:Willyouholdanannualmeetingtoadoptanannualbudget?
    21. BankAccount:Willyouopenajointbankaccounttomanagecollectionofmoneyand
    paymentofbills?
    22. Utilities:Areanyutilitiesseparatelymetered?Ifso,whichones?Howwillownersbe
    reimbursedfortheuseoftheirseparateutilities,suchaswaterorlighting,incommon
    areas.Ifanyutilityisnotseparatelymetered,onwhatbasiswillyousharethecost?An
    equalshareperunitorlivingspace?Thenumberofpeoplelivingineachunitorliving
    spaceasapercentageoftotalresidents?
    23. OtherCosts:Whatotherregularcostsdoyouexpectandonwhatbasiswillyouallocate
    eachcoownersshareofthem?
    24. ProcessforCollectingandMakingPayments:Howwillyoucollectmoneytopayforall
    sharedmonthlycosts?Willeachcoownerpayafixedmonthlyamountintoajointor
    associationbankaccount?Inthiscase,anannualreckoningoftheaccountwould
    reimburseorchargecoownersasneeded.Orwillyougettogethereverymonthto
    divideupexpenses?
    25. Bookkeeper/Treasurer:Willonepersonbeaskedtomanageaccounting?Ifso,how
    longwillthatpersonbeexpectedtoprovidetheservice?Ifnot,willyouhirean
    accountantorbookkeepertomanageaccounting?
    26. LargeExpenses:Arethereforeseeablelargeexpensesinthenext510yearssuchas,for
    example,roofreplacement,painting,plumbingorsewerrepairsorreplacements,
    foundationwork,renovation,etc?

    Page4of101

    27. ReserveAccount:Willyoubuildareserveaccountforforeseeablerepairsand
    unanticipatedexpenses?Ifso,howmuch?Howwillyoubuildthefund?Willeach
    ownercontributeasetmonthlyamounttotheaccountuntilthegoalisreached?
    28. Repairs:Ifarepairisneeded,howmuchmayacoownerspendbeforetheyneedtoget
    theothercoownersapproval?
    29. Insurance:Whatminimumlevelofpropertyandliabilityinsurancewillyoumaintain?
    30. Indemnification:Doyouwanttoagreetocompensateanddefendeachotherin
    situationsinwhichonecoownermaycauseliabilitythatwouldextendtootherco
    owners?
    31. RecordKeeping:Whatrecordswillyoukeepaboutthepropertyandwherewilltheybe
    kept?Whatmethodwillyouusetoaccountforcoownercontributions,expensesand
    paymentsmade?

    TakingCareofandDevelopingtheProperty
    32. MaintenanceStandardsforStructures:Doyouwanttohavestandardsfortheupkeep
    andmaintenanceofallstructuresontheproperty?Ifso,whatarethosestandards?
    Thesestandardsareimportanttomakesurethepropertyissaleable,easiertoinsure,
    andmorelikelytogetfavorablefinancing.
    33. MaintenanceStandardsforYards:Doyouwanttohavestandardsfortheupkeepand
    maintenanceoftheyardandothercommonareas?Ifso,whatarethosestandards?
    34. ArchitecturalStyle:Arethereparticulardesignorarchitecturalfeaturesyouwouldlike
    topreserve,stylesyouwanttofollow,ormaterialsyouwanttouseornotuseonthe
    property?
    35. MaintenanceResponsibilities:Whatpartsofthepropertywilleachownerbe
    responsibleformaintaining?
    36. SharedMaintenance:Forwhatareaswillyousharemaintenanceresponsibilities?
    Typically,whereatenancyincommonisallinonebuilding,theownerswillbejointly
    responsibleformaintainingtheentirestructureofthebuilding.Wheretheunitsarein
    separatebuildings,eachownermaytakefullresponsibilityformaintenanceofhisorher
    wholebuildingormayberesponsibleonlyfortheinteriorofthebuilding.Inthiscase
    coownersshareresponsibilityformaintenanceoftheexteriorofbuildingsaspartof
    thecommonarea.
    37. Alterations:Shouldyouneedtogeteachothersconsenttoaltertheinteriorofunitsor
    livingspacesifitdoesnotaffectthestructureofthebuilding?

    Page5of101

    38. MaintenanceCosts:Doyouwanttohaveamonthlycontributionfromeachcoownerto
    payforupkeepandmaintenanceofcommonareasthatwillbemaintainedbyall
    owners?Ifso,howdoyouwanttoallocatethecosts?
    39. PropertyTaxIncreases:Ifpropertytaxesareincreasedduetoimprovementsmadebya
    coownertohisorherunitorlivingspace,willthatpersonberesponsibleforpayingthe
    addedamount?
    40. PartialDestruction:Ifthepropertyispartiallydestroyed,underwhatcircumstancesdo
    youwanttorebuildisthereamaximumoutofpocketamountabovewhichyouwould
    notrebuild?Ifyoutakeaninsurancepayout,howwillyoudividetheproceeds?
    41. MaintenanceManager:Willonepersonberesponsibleformanagingthemaintenance
    andrepairoftheproperty?Ifso,willtheybeaskedtoserveasmanagerforacertain
    amountoftime?Ifnocoownerwillmanagethemaintenanceandrepair,willyouhire
    someonetodothatjob?
    42. Improvements:Ifacoownermakesasignificantimprovementonthepropertythat
    raisesthevalueofthecommonarea(suchasinstallingahottub),howwillcoowners
    compensatetheownerthatmadetheimprovement?Willtheimprovementbe
    appraisedatthetimethepropertyissold?Willtheownerhavearightto
    reimbursementfromthesaleproceeds?Howwilldepreciationbetakenintoaccount?

    RefinancingtheProperty
    43. Refinancing:Underwhatcircumstancesmaythecoownersrefinancetheproperty?
    44. RefinanceCosts:Whowillpaytherefinancingcosts?
    45. BorrowingAgainsttheProperty:Underwhatcircumstance,ifany,mayacoownertake
    anequitylineofcreditorasecondmortgage?

    IfOneCoOwnerhasFinancialTroubles
    46. FinancialTroubles:Whatshouldhappenifonecoownerrunsintofinancialtroubles
    andcannotmakerequiredpayments?
    47. DefaultFund:Doyouwanttosetupadefaultfundtopaythecostsduebyacoowner
    whorunsintofinancialtrouble?Thiswouldservetoprotecttheassets,equity,and
    creditratingsoftheothercoowners.
    48. AdvancingPayments:Inlieuofadefaultfund,doyouwanttoagreeaheadoftimeto
    thetermsunderwhichcoownerswouldadvancepaymentonbehalfofanotherco
    owner?

    Page6of101

    49. RemediesforDefault:Howfarbehindonpaymentsmustacoownergetbeforethe
    otherownercandemandthatthepropertybesold,ordemandtobuyoutorfindathird
    partypurchaserforthedefaultingownersshare?

    SellingtheWholePropertyAllAtOnce
    50. TimelineforSellingtheProperty:Doyouwanttoagreenowtosetagoalofsellingthe
    wholepropertyinthefuture?Ifso,doyouwanttotargetatimetosell?Willthe
    decisiontosellbebasedon,forexample,anumberofyears,theoccurrenceofacertain
    event,orconditionsofthehousingmarket?
    51. DivisionofSaleProceeds:Howwillyoudividetheproceedsifallcoownersdecideto
    sellatonce?Forexample:
    a. Willyousplititonthebasisofhowmuchyoueachpaidtowardthepurchase
    minuseachownersshareoftheoutstandingdebtonthepropertyandother
    moneyowed?
    b. Willyoubasethesplitontherelativevalueofeachownersinterestinthe
    property?Todothis,youwouldappraiseeachownersinterest(meaningtheir
    unitcombinedwiththeirexclusiveusecommonareas,theirshareofthe
    commonareas,andotherrightswithregardtotheproperty),thenaddthe
    appraisalsofallownersintereststogether,thendividesaleproceedsbasedon
    eachownerspercentageofthetotal.Thismethodallowsacoownertobenefit
    fromtheincreasedvalueofimprovementstohisorherunitandprovidesan
    incentivetomakeimprovements.

    SellingIndividualInterestsintheProperty
    52. TermsforSaleofOneOwnersShare:Doyouwanttoprovidethetermsunderwhicha
    coownermaysellhisorherinterestintheproperty?Forexample:
    a. Doyouwanttomakeasaletoathirdparty(notacoowner)contingentupon
    approvalofthesalebyyourexistingmortgagelender?Ifthesaleisnot
    approvedbythelender,youmayruntheriskofthemortgagelenderdeclaring
    theentireoutstandingbalanceoftheexistingmortgageimmediatelydueand
    payablewithpotentiallyseriousconsequencestoothercoowners.
    b. Doyouwanttoagreethateachcoownerwillnotifyotherownerswhenheor
    sheintendstosellandthatotherownerswillhavethefirstoptionofbuyingthat
    sellersinterest?
    c. Doyouwanttoagreeaheadoftimehowyouwilldeterminethesellingpricefor
    saleofasharetoothercoowners?

    Page7of101

    d. Doyouwanttomakethesalecontingentontheprospectivebuyersigningyour
    tenancyincommonagreementsotheagreementwillbindallfuturecoowners?
    53. ApprovalofProspectiveBuyers:Shouldthenonsellingcoownersbeabletoapprove
    orrejectaprospectivebuyer?Ifso,shouldtheapprovalorrejectionbeonthebasisof
    thefinancialstatusoftheprospectivebuyer?Shouldapprovalorrejectionbeonthe
    basisofpersonalreasons?Whileitisnotclearwhetherpersonalreasonscouldbea
    legallyenforceablebasisonwhichtorejectaprospectivebuyer,itsagoodideatotalk
    aboutandconsiderinadvanceonwhatbasisyoumightnotwanttoshareownership
    andresidencyofahousewithsomeone.

    MakingDecisionsAbouttheProperty
    54. Meetings:Howoftenwillyouhaveregularmeetings?Whatproceduresdoyouwantto
    adoptformeetingagendas,noticeandscheduling,etc?
    55. DecisionMakingProcess:Willyouusemajorityvoting,supermajorityvoting,ora
    consensusprocesstomakedecisionsabouttheproperty?Whatprocesswithyouuseto
    consideranddecideonproposals?
    56. ShareofVotes:Ifeachunitorlivingspacewillgetonevote,arethereanytopicson
    whichonecoownerwillhaveagreaterdecisionmakingpowerorpowertoveto?
    57. DelegatingDecisions:Whatkindsofdecisionsmaycoownersmakeontheirownand
    whatkindsofdecisionsmustbemadebyallcoowners?
    58. ConflictResolution:Willyourelyonmediationtosolvedisputesoranotherprocess?
    Howwillyouchooseamediator?Whopays?Howmanymediationssessionsmustyou
    attendbeforeyouturntoarbitrationorlitigation?

    Page8of101

    20BASICQUESTIONSTODISCUSSWHENYOUSHARE
    Adaptedfrom:
    TheSharingSolution:HowtoSaveMoney,SimplifyYourLife&BuildCommunity,
    byJanelleOrsiandEmilyDoskow(Nolo2009)

    Whenyousitdowntodiscussthedetailsofyoursharingarrangement,heresachecklistto
    guideyourconversation:

    1.Whyarewesharing?
    o Whatareourpersonal,practical,financial,orenvironmentalgoals?
    o Whatdoweeachneedorwanttogetoutofthesharingarrangement?
    2.Whatarewesharing?
    o Andforthatmatter,whatarewenotsharing?
    3.Whomarewesharingwith?
    o Doourcosharersneedtomeetanyparticularqualifications?
    4.Howmanypeoplearewesharingwith?

    o Whataretheprosandconsofhavingalargeorsmallsharinggroup?
    5.Howwillthetimingofourarrangementwork?
    o Whenwillitstopandstart?
    o Willithappeninphases?
    6.Whoownstheshareditem(s)?
    o Willonepersonownitandletothersuseit?
    o Willweeachownspecificitemsorpartsoftheproperty?
    o Willweeachownapercentageshareofthewholeproperty?Ifso,inwhatproportions?
    7.Shouldweformaseparatelegalentity,suchasanonprofitorganization?
    8.Shouldourgrouphaveaname,andwhatshouldwecallourselves?
    9.Whatdowegettodo?
    o Whatbenefitsorservicestowegetfromthissharingarrangement?
    o Howmuchcanweusetheshareditem(s)orservices?
    10.Howwillwemakedecisions?
    o Willwealltakepartindecisionmakingordelegatedecisionstoasmallgroup?
    o Doweallhaveequaldecisionmakingpower?
    o Mustalldecisionsbeunanimousormadebymajorityvote?

    Page9of101


    11.Whatresponsibilitieswilleachofushave?
    o Willweassignrolesandtasks?
    o Willwerotateresponsibilities?
    o Willanyonereceiveextrabenefitsinreturnforextraresponsibilities?
    12.Whataretherulesforusingoursharedpropertyormeetingoursharedresponsibilities?
    13.Howwillwehandleadministrativematterslikescheduling,communication,andrecord
    keeping?
    14.Howwillwedivideexpenses?
    o Willtherebeinitialbuyinorstartupcontributions?Willweneedanyloans?
    o Howwillwedivideoverheadandvariablecosts?
    o Howwillwecollectmoney?Throughregularduesorbyreckoningexpensesinsome
    otherway?Willwestartabankaccount?
    o Whatkindsofunexpectedcostscouldariseandhowwillweprepareforthem?
    o Whowillkeeptrackofourmoney?
    o Whathappensifamembercannotpay?
    15.Howwillwemanageriskandliability?
    o Whatrisksareinvolvedinoursharingarrangementandhowcanwereducethem?
    o Howistheriskdistributed(i.e.,whocouldsufferlossorbeliablefordamages)?
    o Dowewanttoredistributeriskbymakingagreementswitheachotherorpurchasing
    insurance?
    16.Aretherelegalrequirementsweneedtofollow?
    o Arethereanyrequiredlicensesorpermits?
    o Willthisbringupanytaxoremploymentlawquestions?
    o Arethereanylegalroadblocksarisingfromzoninglawsorprivatelandcovenants?
    o Whatstepsmustwetaketobecomealegalentity?
    17.Howwillweresolveconflictsordisputes?
    18.Howwillwebringnewpeopleintothegroup?
    o Whatprocedureswillnewmembersfollow?
    o Howwillnewmembersbeoriented?
    o Whatisourpolicyonguests?
    19.Howcanamemberleavethegroup?
    o Whatstepsmustbetakenwhenamemberleavesvoluntarily?
    o Underwhatcircumstancescanamemberbeaskedtoleavethegroup?
    20.Howdoweendthesharingarrangement?

    Page10of101

    ARRANGEMENTSFORHOLDINGTITLETOLAND
    TenancyinCommon(TIC)
    Whenyouownpropertyastenantsincommon(TIC),youeachownanundividedshare.Forexample,if
    youownaduplexwithanotherpersonastenantsincommon,youeachownaportionofthewhole
    building,eventhougheachofyoumayliveinandmaintainoneoftheunits.TICsarecustomarilyused
    whentwoormoreunrelatedpeopleownahometogether,andarealsofrequentlyusedinmultiunit
    residentialbuildings,suchasaduplex,triplex,orafourplex.Itislesscommonformorethanfour
    ownersorhouseholdstoholdtitleasaTIC.
    IfyoutaketitletopropertyasaTIC,youandyourcoowner(s)willwanttodraftawritten
    agreementcoveringeachownersrightsandresponsibilities.Foramultiunitproperty,theTIC
    agreementgiveseachownerrightstoandresponsibilityforoneunit,whichcreatesafeelingofseparate
    ownership.OwnersofTICsusuallyfinancetheirpropertywithasinglemortgagesecuredbythewhole
    property.Thisarrangementcreatessomehurdles,however:Allownersmustqualifytogetherforthe
    loan,forexample,andallownersareatriskifonegetsbehindonthemortgage.Itisforthisreasonthat
    TICagreementstypicallygointogreatdetailonhowcoownersdivvyupfinancialobligations.Although
    thesinglemortgageapproachisstillusedforsharingasinglefamilyhome,afewlendersnowoffer
    fractionalmortgagesforTICpropertiesthatareeasiertodivideintoseparateunits.Forafractional
    mortgage,eachownersignsaseparatepromissorynoteanddeedoftrust.Eachmustqualifyforthe
    loanseparatelyandcanselectdifferentloanterms.Eachfractionalmortgageissecuredonlybythat
    ownersinterestintheproperty.

    JointTenancy
    Jointtenancyisaformofownershipthatincludesarightofsurvivorship.Whenoneownerdies,that
    personsshareofthepropertypassesautomaticallytotheotherowner(s);incontrast,aTICsharegoes
    totheownersheirsatdeath.Jointtenancyismostoftenusedbycouplesandfamilies,butitcouldalso
    workwellforunrelatedownersinasmallsharedhousingarrangement,iftheownerswantthesecurity
    ofknowingthattheirinterestsinthepropertywillbeprotectedifanotherownerdies.
    Formingajointtenancyusuallyrequiresthatallownershaveequalinterestsintheproperty,
    andthattheyacquiredtitleatthesametime,onthesametitledocument.Mostjointtenanciesare
    financedwithasinglesharedmortgage.

    Condominiums
    Condominiumsarelegallydividedsothatportionsofthepropertycanbeseparatelyowned.
    Condominiumownershiptypicallyinvolvesowningbothanindividualunitandashareofownershipin
    commonareas,oftencalledcommonelements.Multiunitpropertiesthatwerenotbuiltas
    condominiumscanoftenbeconvertedtocondos;thisusuallyrequirestheassistanceofanattorneyand
    professionalsurveyor,andtheprocessdependsgreatlyonlocallawsandregulations.
    Acondominiumformofownershipisoftenusedinhousingwhereresidentsownseparateunits.
    Acondominiumcomplexcanbeassmallasaduplexoraslargeasamultistoryapartmentbuilding.
    Cohousinggroupsfrequentlyusethecondominiumformbecauseitfacilitatesbothindividualautonomy
    andsharing.Withcondominiums,eachunitcanbeseparatelyfinanced.
    Condominiumownershiptypicallyrequiresmembershipinacommunityassociationthat
    governsandmanagesthecommonelementsandenforcesrestrictionsontheuseofunits.These
    associationscollectmonthlydues,oftencalledassessments,fromeachownertopayforthecostsof
    upkeep,taxes,insurances,andotherexpenses.

    Page11of101

    OwnershipbyanEntity
    Insomecohousingcommunities,residentsownsharesoramembershipinacorporationorLLC,which,
    inturn,ownstheentireproperty,includingtheindividualunits.Undermanystateslegaldefinitions,
    thisarrangementforholdingtitlemaybeconsideredahousingcooperativeorstockcooperative.
    Typically,aresidentbuysintoa
    communitybypurchasingsharesandsigninga
    proprietaryleasethatentitlestheresidentto
    occupyaparticularresidentialunit.Unliketypical
    Anoteaboutthewordcooperative
    leases,aproprietaryleasegenerallyhasnofixed
    Theuseofthewordcooperativehere
    term.Itlastsaslongastheresidentisanowner
    doesnotnecessarilyimplyorrequirethat
    intheentityanddoesntviolateimportantlease
    acooperativecorporationbetheentityof
    terms.Theentitytypicallyholdsasingleblanket
    choice,northattheentityoperateona
    mortgageontheproperty,andresident
    cooperativebasisunderSubchapterTof
    shareholderssometimestakeoutloansto
    theInternalRevenueCode,northatthe
    financetheirpurchaseofsharesintheentity.In
    cooperativebemanageddemocratically,
    addition,residentspayregularfeestocover
    northatthecooperativefollowthe
    propertytaxes,managementexpenses,
    RochedalePrinciplesforcooperatives.
    mortgagepaymentsonthebuilding,andsoon.
    Themoraltothestoryis:theword
    Eventhoughresidentsdontownthereal
    cooperativehaswaytoomany
    estatedirectly,theystillmightbeabletoenjoy
    meanings,anditsnowonderthatits
    someofthetaxbenefitsofhomeownership;that
    hardtogetastraightansweraboutwhata
    is,solongasthecooperativemeetstheIRS
    cooperativeis.
    definitionofacooperativehousingcorporation
    (below).Forexample,althoughthecorporation
    makesthemortgageandpropertytaxpayments,
    residentsmaystilldeducttheirportionoftheseexpensesfromtheirincometaxes.Ifresidentstakeout
    aloantopurchaseshares,however,theloanisusuallytreatedasapersonalloan,sotheinterestisnt
    deductible.

    DefinitionofCooperativeHousingCorporationforTaxPurposes
    InternalRevenueCodeSection216(b)
    Theterm''cooperativehousingcorporation''meansacorporation
    (A)havingoneandonlyoneclassofstockoutstanding,
    (B)eachofthestockholdersofwhichisentitled,solelybyreasonofhisownershipofstockinthe
    corporation,tooccupyfordwellingpurposesahouse,oranapartmentinabuilding,ownedor
    leasedbysuchcorporation,
    (C)nostockholderofwhichisentitled(eitherconditionallyorunconditionally)toreceiveany
    distributionnotoutofearningsandprofitsofthecorporationexceptonacompleteorpartial
    liquidationofthecorporation,and
    (D)meeting1ormoreofthefollowingrequirementsforthetaxableyearinwhichthetaxesand
    interestdescribedinsubsection(a)arepaidorincurred:
    (i)80percentormoreofthecorporation'sgrossincomeforsuchtaxableyearisderivedfrom
    tenantstockholders.
    (ii)Atalltimesduringsuchtaxableyear,80percentormoreofthetotalsquarefootageofthe
    corporation'spropertyisusedoravailableforusebythetenantstockholdersforresidential
    purposesorpurposesancillarytosuchresidentialuse.
    (iii)90percentormoreoftheexpendituresofthecorporationpaidorincurredduringsuch
    taxableyeararepaidorincurredfortheacquisition,construction,management,maintenance,
    orcareofthecorporation'spropertyforthebenefitofthetenantstockholders.
    Page12of101

    FORMINGANDSTRUCTURINGORGANIZATIONSFOR
    COHOUSING
    Therearethreeprimarylayersofconsiderationsinthedesignoforganizationsfortheownershipand
    managementofland:

    Whatentitywechoose:Theentitywechooseandformatthestatelevelcomeswithasetof
    builtinparametersforhowtheentitycanoperate,managefunds,makedecisions,andengage
    inactivities.

    Whattaxstatustheentitychooses:Thechoiceoftaxstatusaddsanotherlayerofparameters
    thatguidehowanentitycanoperate,andalsoaffectsthefinancialstatusoftheentityand
    individualsinvolved.

    Howwestructuretheentity:Oncewehavechosenandformedanentity,thenext
    considerationishowtostructureit,includinghowtomanagegovernance,capitalization,
    allocationofprofits/losses,etc.Thisisdonethroughthechoiceswemakeindraftingbylaws,
    operatingagreements,andpolicies.

    Sometimesmultipleentitieswillbeinvolvedinthecreationofahousingarrangement.Forexample,
    theremaybeonefortheownershipofland,oneforthemanagementofadevelopmentproject,and
    oneformanagementofsharedactivities.Sometimes,holdingtitletolandunderaseparateentity
    protectsitfromliabilityincurredbyanentitythatoperatesprogramsonanddevelopstheproperty.In
    addition,eachentitymayhavedifferentpurposesoractivitiesthatmandatedifferentlegalstructures
    andtaxexemptions.
    Theformation,structure,andtaxationofentitiesisthefocusofChapter4ofthisbook,sothis
    sectionfocusesprimarilyontheconsiderationsrelatedtotheformationofentitiestoholdandmanage
    landandhousing.

    1. ChoiceofEntity:

    ConsiderationsinChoosinganEntity:
    Thereareusuallymanyconsiderationstoweighinthechoiceofentity;thesearediscussedgenerallyin
    transactionallawpracticeguides,andalsoinChapter4ofthisbook.Herearesomeconsiderations
    relevanttotheownershipandmanagementofland:

    a) Doesthechoiceofentitylimitliabilityofindividualmembers/shareholders?Ifmanaged
    properly,limitedliabilitycompaniesandcorporationsofallkindsgenerallyshieldindividual
    members/shareholdersfromliabilityfortheentitysdebts,acts,andomissions.Ifmultiple
    peoplecometogethertopurchaseanddeveloplandtogether,particularlyiftheyplanto
    takeoutlargeloans,aentitywithlimitedliabilitywilllikelybeoptimaltoensurethatnoone
    individualisleftholdingthebagifthingsgowrong.Allentitieslistedabove,except
    partnerships,offerlimitedliability.Inmanystates,theprimaryreasonthatsomegroups
    maychoosetoformapartnershiptoownlandistosavemoneyonthecostsotherwise
    requiredinformingandoperatingalimitedliabilityentity.InCalifornia,forexample,
    partnershipsarenotrequiredtopaythe$800annualminimumfranchisetaxrequiredof
    LLCsandcorporations.
    Page13of101


    b) Doesthechoiceofentitylimitindividualsabilitiestoderiveprofitfromtheentity?The
    abilitytoprofitfromtheequityorincomeoflandoffersastrongincentiveforpeopletobuy
    land,butthisincentivealsodrivespeopletoexploitlandandbuy/sell/owninwaysthat
    driveuppricesforothers.Manygroupswillwanttolimitindividualsabilitytoprofitfrom
    land,andwillthuschoosetoformanonprofitpublicbenefitcorporationoranonprofit
    religiouscorporation.Whiletheexactnameofthecorporationtypeandthelegal
    restrictionsvaryfromstatetostate,suchnonprofitsaregenerallyprohibitedfrom
    distributingtheirprofitsandassetstoindividuals,andmayonlydistributeprofitsandassets
    toothernonprofits.
    Thereareatleasttwootherentitytypesthattendtoimposesomerestrictionson
    thedistributionofprofitsandassets.Anonprofitmutualbenefitcorporation,undersome
    statelaws,isprohibitedfromdistributingprofitstomembers,butmaypurchaseorredeem
    membershipsfromthemembers.1Thus,ifamemberbuysamembershipinalandowning
    nonprofitmutualbenefitcorporationfor$10,000,thecorporationcanpaythatamount
    backtothememberwhenheorsheleaves.Mostlikely,however,nodividend,interest,or
    appreciationcouldbepaidalongwiththeredemption.Althoughtheyareprohibitedfrom
    distributingprofits,undersomestatelaws,mutualbenefitnonprofitsmay,upondissolution
    only,distributeassetstomembersortoapersonorentityofitschoosing.2Thismeansthat
    individualmembersmayhavesomeincentivetocashoutbysellingtheentirepropertyand
    dissolvingtheentity.
    Often,cooperativecorporationsarelimitedbystatelawsinthewaysthattheycan
    distributeprofitstoindividuals.Forexample,inCalifornia,acooperativecannotdistribute
    morethana15%returnperyearonindividualscapitalcontributions.3Cooperativesare
    generallyrequiredtodistributeearningsonthebasisofpatronage,ratherthanonthebasis
    ofcapitalcontributed.4Thismeansthatearningsaredistributedtoindividuals,butthatone
    individualcannotmakealargeprofitonhis/hercapitalinvestment.

    c) Doesthechoiceofentitymandatedemocraticoraccountablegovernance?Ifanentity
    mandatesacertaintypeofgovernancestructure,thiscancontributetotheprotectionof
    land,byhelpingtoensurethatprivateinterestscannotcontrolanentityfortheirpersonal
    benefit.Cooperativecorporations,nonprofitmutualbenefitcorporations,andnonprofit
    publicbenefitcorporationswithmembersaretypicallymandated,bylaw,tohaveelections
    andmajordecisionsbemadeonaonemember/onevotebasis.Thishelpstoensurethat
    anorganizationoperateswithitsmembersinterestsortheoriginalpurposeofthe
    organizationinmind.Inaddition,evenwhentheydonotobtaintaxexemptionunder
    501(c)(3),nonprofitpublicbenefitcorporationsareoftensubjecttocertainrulesthathelp
    tomaintaintheintegrityoftheboard.Forexample,statestatutesmaylimitthenumberof
    financiallyinteresteddirectorsthatmayserveonaboard,andrequirethatselfdealing
    transactionsbeapprovedbyadisinterestedpanelofdirectorsorbyagovernmententity,
    suchasthestateAttorneyGeneral.5

    d) Doeschoiceofentitymandateacertaintaxtreatment?Asdescribedbelow,anentitycan
    choosebetweentwoormoretaxstatusesorexemptions,buttheIRSwillalsoimpose

    See,forexample,Cal.Corp.CodeSection7411.
    See,forexample,Cal.Corp.CodeSection8717.
    3
    Cal.Corp.CodeSection12451
    4
    SeeCal.Corp.CodeSection12201,andChapter4ofthisbookforadescriptionofpatronageincooperatives.
    5
    See,forexample,Cal.Corp.CodeSection5233.
    2

    Page14of101

    certainotherrulesonanentitydependingonwhetheritisacorporation,LLC,or
    partnership.Taxlawisvast,anditsimpossibletosummarizeitallhere.However,Ill
    describeonemajorconsiderationbriefly,whichisthatintherealestatecontext,mostof
    thetimeitwillbeoptimaltoownlandasanLLC(orpartnership,ifpartnersarewillingto
    assumepersonalliabilityfordebts).Mostcommonly,groupschoosetoformanLLCovera
    corporation,becauseanLLCmembersadjustedbasisintheLLCisraisedbythemembers
    allocableshareoftheentitysdebt.Becauseeachmembersadjustedbasisismuchhigher
    thantheamountofcashthememberhasactuallycontributedtotheentity,eachmemberis
    abletodeductgreaterlossesinanLLCthantheywouldthroughacorporation(wherethe
    entitysdebtisnotincludedindeterminationofashareholdersbasis).Thelossdeducted
    byanLLCmembermay,therefore,begreaterthantheamountofcashtheindividual
    memberhasactuallycontributedtotheLLC.ManyLLCsformedforthepurposesofholding
    realestatewillbeabletopasssignificantlossesthroughtoindividualmembers,asaresult
    ofpaymentofmortgageinterest,propertytaxes,insuranceandotherexpenses,andby
    allocatingashareofthepropertydepreciationtomembers.6Bypassingthroughdeductible
    lossestomembersinthisway,LLCsareabletosimulatesomeofthetaxadvantagesof
    individualhomeownership(suchastaxdeductionsformortgageinterestandpropertytax
    payments).

    CommonEntityTypes
    Everystateoffersalargehandfulofentitytypestochoosefrom,andeachentitycomeswithasetof
    legalrequirementsandconstraints.Therulesgoverningentitiesvaryfromstatetostate,soits
    importanttoreadthestatutegoverningtheentitytypes.Themostcommonentitytypesavailableat
    thestatelevelandusedfortheownershipoflandare:
    Partnerships(GeneralandLimited)
    LimitedLiabilityCompanies
    LowProfitLimitedLiabilityCompanies7
    GeneralStockCorporations,8whichincludenewcorporationtypes,suchasBenefitCorporations
    andFlexiblePurposeCorporations9
    CooperativeCorporations
    NonprofitPublicBenefitCorporations
    NonprofitMutualBenefitCorporations
    NonprofitReligiousCorporations

    Thefollowingarethethreemostcommonentitytypesusedinintentionalcommunities:

    a) LimitedLiabilityCompanies(LLCs):
    LimitedLiabilityCompanies(LLCs)areincreasinglypopularentitiesthroughwhichintentional
    communitiesholdtitletoland.AnLLCisatypeofentitythatcanbeformedinanyU.S.state.LLCs
    provideagreatdealofflexibilityinthewaysthatmemberscanstructuretheLLCsoperations,
    governance,andfinancialprovisions.Forexample,LLCsdonotseemtobesubjecttotheDavis
    StirlingAct,whichimposesmandatorygovernanceprovisionsoncooperativehousingcommunities
    andcondocommunitiesinCalifornia.AmajorbenefitofanLLC,assuggestedbyitsname,isthatit

    Formoreinformation,seeIRSPublications541and925.
    Theseareonlyavailableinahandfulofstates.
    8
    Iusethephrasegeneralstockcorporationstorefertorunofthemillforprofitcorporations,todifferentiatebetweenthose
    corporationsandcooperativesandnonprofits.
    9
    Theseareonlyavailableinasmallhandfulofstates.
    7

    Page15of101

    providesliabilityprotectiontoitsindividualmembers,intheeventthatsomethinggoeswrongor
    theLLCcannotmeetitsfinancialobligations.
    HoldinglandasanLLCalsohascertaintaxadvantages(alsodescribedabove)overholding
    landthroughanentitysuchasacorporation(unlessthecorporationmeetstheIRSdefinitionof
    cooperativehousingcorporation,above),whichisthatcertaincosts,suchasdepreciationofthe
    buildingandmortgageinterestcanbepassedthroughthemembersasabusinessexpenseandloss.
    However,onetaxdisadvantageisthatLLCmembersthatselltheirsharecantclaimthe$250,000
    capitalgainstaxexclusion,astheywouldwhensellinganormalresidence.
    OneotherdisadvantageofpurchasingpropertyasanLLCisthatthefinancingavailableto
    LLCsismoreakintocommercialloans,ratherthanpersonalhomemortgages.Assuchthedown
    paymentrequiredoftheLLCisoftendoublewhatindividualswouldpayunderaregularhome
    mortgage,andinterestratestendtobehigher.
    ManycohousinggroupsalsousetheLLCformduringtheprocessofdevelopingaproperty
    thatwillultimatelybeconvertedintocondominiums.ByforminganLLC,thegroupbecomesalegal
    entityandcanenterintocontracts,whichallowsittopurchaselandandpartnerwithdevelopers
    andcontractors.TheLLCformofownershipalsoprovidesliabilityprotectiontoindividualgroup
    members,shouldanythinggowrongduringthedevelopmentprocess.

    b) PublicBenefitNonprofits
    Nonprofitpublicbenefitcorporationsaretheentitiesmostoftenusedtoholdresidentialproperties
    whenthegoalistocreatesomeformofaffordablehousing,supportivehousing,religious
    community,orhousingforagroupwithdistincthousingneeds,suchasstudents.Beinganonprofit
    publicbenefitcorporationcomeswithakeyrestraint:theprofitsandtheassetsofthecorporation
    cannotbedistributedtoprivateindividuals.Thisisacriticalcontrolthatremovesindividual
    incentivestobuy,sell,develop,orextractresourcesfromthelandforprofitmakingpurposes.
    Widespreadownershipoflandbypublicbenefitnonprofitcorporationscould,therefore,
    significantlychangethedynamicsofthelandmarketandreduceincentivestoexploitorspeculate
    onland.
    Whenmostpeopleusethephraselandtrust,theyareusuallynotreferringtothetypeof
    trustthathasatrusteeandbeneficiary;thephrasemostoftenreferstoanonprofitpublicbenefit
    corporationthatownslandand/oreasements,usuallyforthepurposeofpreservingecosystems,
    agriculturalland,oraffordablehousinginthelongterm.
    Communitylandtruststypicallyoperateunderthismodel:Thenonprofittrustholdstitleto
    apieceoflandandgrantstwothingstoeachresidenthousehold:1)averylongtermlease(known
    asagroundlease)tooccupytheland,and2)ownershipofcertainimprovementsonthatland
    (usuallyahousingunit).Thismodelgivesresidentsthefeelofownership,whilethelandtrusts
    ownershipoftheunderlyinglandgivesthetrustthepowertosetlimitationsontheuseandtransfer
    oftheproperty.Inparticular,thetermsofthegroundleasegenerallylimittheresidentsabilityto
    selltheirunitatmarketrate,therebypreservingtheaffordabilityoftheunitandcreatingwhatis
    usuallycalledlimitedequityhousing.Limitedequityhousingmodelsuseavarietyofformulasto
    determinewhatkindofreturnaresidentmaygetwhenhe/shesellstheunit.Theformulais
    typicallythepurchasepricemultipliedbythechangeintheconsumerpriceindexorthechangein
    areamedianincome,plusthevalueofanyimprovementsaddedbytheresident.
    Notallnonprofitsthatownlandnecessarilythinkoforrefertothemselvesastrusts.For
    example,manyofthehousingcooperativesoccupiedbyUniversityofCalifornia,Berkeleystudents
    areactuallyownedbytheumbrellanonprofit,theBerkeleyStudentCooperative.
    c) MutualBenefitNonprofits
    Page16of101

    Forhousingthatdoesnotnecessarilyserveaspecialcharitableclassofindividualsorpurpose,a
    mutualbenefitnonprofitformissometimesusedtoholdtitletoproperty.Mutualbenefit
    nonprofitsprovideagood,service,orbenefittoagroupofmembers.Homeownersassociationsin
    condominiumcohousingcommunitiesgenerallyformasmutualbenefitcorporations.The
    ownershipoflandatEarthavenEcovillageinNorthCarolinaisbyamutualbenefittypeofnonprofit.
    Mutualbenefitnonprofitcorporationsaresubjecttoanimportantconstraint,whichisthatthey
    maynotdistributeprofitstoindividualsduringthelifeoftheorganization;thispreventsthe
    corporationslandfrombeingdevelopedorminedtoserveprofitmakinggoalsofindividuals.At
    thesametime,mutualbenefitcorporationsaregenerallyallowedtodistributeassetstoindividuals
    upondissolution,whichmeansthatprofitmakinggoalsarenotcompletelypreventedfromdriving
    thedecisionsofsuchanorganization.

    2. ChoiceofTaxStatus:
    Thequestionofanentitystaxstatusisansweredsomewhatseparatelyfromthechoiceofentity
    formationatthestatelevel.Mostentities,onceformed,willthenbeabletochoosefromtwoormore
    taxstatusesorexemptions.

    a) EntityLevelTaxationversusPassThroughTaxation:Someentities(CCorporationsandLLCsthat
    electtobetaxedlikeCCorporations)aresubjecttodoubletaxationtheentitypaystaxonitsnet
    earnings,andindividualmembers/shareholderspaytaxonthoseearningswhentheyaredistributed
    toindividuals.Bycontrast,passthroughentities(SCorporations,mostLLCs,andPartnerships)are
    nottaxeduntilprofitsaredistributedorallocatedtomembersandshareholders.Passthrough
    statusisespeciallyimportantinhousingownership,because,oftenmoreimportantly,lossescanbe
    passedthroughtoindividualstooffsetothersourcesofindividualincome.

    b) CooperativeTaxation:AsdescribedinChapter4,entitiesthatdistributeincometomembersona
    cooperativebasis(onthebasisofhowmucheachpatronizedthecooperative)canbetaxedunder
    SubchapterToftheInternalRevenueCode,whichprovidesforatypeofpassthroughtaxation.
    UnderSubchapterT,cooperativeearningsthataredistributedaspatronagedividendsaretaxableto
    individual,butnottotheentity.

    c) FormsofTaxExemption:Mostnonprofitcorporationswillseeksomeformoftaxexemptionfrom
    theIRS.ThesectionoftheInternalRevenueCodeunderwhichanentityobtainstaxexemptionmay
    dictatemanythingsabouthowtheentityoperates,forwhatpurposes,howitisgoverned,what
    sourcesofincomeitmayhave,andhowitmayspendordistributeitsfunds.Hereisabrief
    summaryofthecategoriesoftaxexemptionlandowningorganizationsmaycontemplate:

    i. 501(c)(2)TitleHoldingCorporations:Anentityorganizedfortheexclusivepurposeofholding
    titletoproperty,collectingincometherefrom,andturningovertheentireamountthereof,less
    expenses,to[anothertaxexemptnonprofit]mayobtainexemptionundersection501(c)(2)of
    theInternalRevenueCode.10Thereareavarietyreasonsthatanonprofitmightwanttocreatea
    separateentitytoholdtitletoandmanageincomeproducingproperties,someofwhichare
    namedbytheIRSinonepublicationon501(c)(2):

    Thesefactorswouldincludelimitationofliabilityfrompotentialdamagesuits;enhancementof
    abilitytoborrow;limitationsimposedingiftsandbequeststoexemptorganizationsthat

    10

    See1986IRSEOCPEText,C.IRC501(c)(2)TitleHoldingCorporationsavailableathttp://www.irs.gov/pub/irs
    tege/eotopicc86.pdf
    Page17of101

    effectivelyrequiresuchgiftstobekeptinseparateentities;clarityoftitle;accounting
    simplification;andlimitationsimposedbyvariousstatelawsonorganizationsthatwouldbe
    recognizedasexemptunderthefederalrevenuelaws.11

    InadditiontothebenefitslistedbytheIRS,501(c)(2)titleholdingcorporationscreateanavenue
    for501(c)(3)nonprofitstobenefitfromrentalincomefromproperties.Rentalincomeisnot
    consideredtaxableunrelatedbusinessincometoa501(c)(2),butsuchincomemaybesubjectto
    unrelatedbusinessincometaxundera501(c)(3).12Ifa501(c)(3)organizationplanstoholdtitle
    tolandthatservesitstaxexemptpurposes,butwhichwillalsohaveagoodamountofrental
    income,itmaybehelpfultoholdtitletothelandina501(c)(2)toavoidtaxontherental
    income.

    ii. 501(c)(3)Charitable,Religious,Educational,andScientificOrganizations:Unlessitisin
    furtheranceofarecognizedcharitable,educational,religious,orscientificpurpose,developing
    andprovidinghousing,alone,isgenerallynotconsideredapurposethatistaxexemptunder
    501(c)(3).Providinghousingtopeoplethatarepoor,distressed,orunderprivilegedis
    consideredacharitablepurpose.13Throughvariousrulingsandguidancedocuments,theIRS
    hasprovidedguidanceonthecircumstancesunderwhichprovisionofhousingtolowincome
    individuals,14peoplewithdisabilities,15andtheelderly16willbetaxexempt.Providinghousing
    infurtheranceofanothertaxexemptpurposecanalso,itself,beataxexemptactivity.For
    example,providinghousingtostudents(whetherornotstudentsarepartofanunderprivileged
    group)maybetaxexempt,becauseprovisionofhousingadvancestheschoolseducational
    purpose.Housingprovidedinconnectionwithareligiouscenterorothereducationalcenterwill
    alsolikelybefoundtobeataxexemptpurpose,iftheprovisionofsuchhousingisnecessaryto
    achievingthereligiousoreducationalpurposes.Organizationsformedtopreserveecologically
    significantland17or,insomecases,historicallysignificantbuildings18mayalsoobtaintax
    exemptionunder501(c)(3).
    Manygroupsthataredevelopinghousingforthemselveswillbecuriousaboutthe
    possibilityofobtaining501(c)(3)statusandusinggrantmoneyortaxdeductibledonationsin
    thepurchaseordevelopmentoftheirhousing.Unfortunately,manyofthesegroupswouldfail
    tomeettherequirementsnecessaryto501(c)(3)taxexemption,primarilybecausetheir
    organizationisdesignedtomeetthehousingneedsofafixedanddefinedgroupofpeople,and
    notnecessarilyformedforthepurposeofcreatingbroaderpublicbenefit.However,such
    groupsmaybenefitfromcreatingaseparate501(c)(3)corporationfortheoperationofspecific
    activitiesthataretaxexempt,suchaseducationalorcharitableprogramsprovidedonthe
    property.Groupsmayalsosellorgivetitle,aconservationeasement,orotherrightstoa

    11

    Id.
    SeeA.AllenButcher,LegalIncorporationforIntentionalCommunity,publishedbyFourthWorldServices,page9,available
    athttp://www.culturemagic.org/PDF/c1Legal%20Inc.pdf.
    13
    SeeIRSPublication557(October2011),page30.
    14
    SeeIRSExemptOrganizationContinuingProfessionalEducationText,1992,LowIncomeHousingasaCharitableActivity,by
    RobertLouthianandMarvinFriedlander,availableathttp://www.irs.gov/pub/irstege/eotopicd92.pdf.SeealsoRev.Rul.70
    585,19702C.B.115,Rev.Rul.67138,19671C.B.129,IRSLowIncomeHousingGuidelinesRevenueProcedure,Rev.Proc.
    9632,19961C.B.717,199620I.R.B.14,availableathttp://www.irs.gov/pub/irstege/rp_199632.pdf
    15
    SeeRev.Rul.7919,19791C.B.195.
    16
    IRSExemptOrganizationContinuingProfessionalEducationText,1979,RentalHousingfortheElderlyUnderIRC501(c)(3)
    availableathttp://www.irs.gov/pub/irstege/eotopich79.pdf.SeealsoRev.Ruls.72124,19721C.B.145;7918,19791C.B.
    194;and7918,19792C.B.194.
    17
    Rev.Rul.76204,19762C.B.15
    18
    SeethefollowingIRSRevenueRulings:Rev.Rul.75470,19752C.B.207,Rev.Rul.676,19671C.B.135,andRev.Rul.76
    147,19761C.B.151
    12

    Page18of101

    501(c)(3)organizationtoempowerthatorganizationtoenforcethepreservationofecosystems
    onthelandortheaffordabilityofsomeofthehousingontheland.

    iii. 501(c)(4)SocialWelfareOrganizations:501(c)(4)taxexemptionisgenerallyavailableto
    organizationsengaginginactivitiesthatbenefitthepublicorabroadsectorofthecommunity.19
    Manyactivitiescanfallunder501(c)(4)taxexemption,solongastheydontlookagooddeal
    likecommercialactivitiesandsolongastheyarenotdesignedtobenefitonlyafixedgroupof
    people.Agroupthatwantstodevelophousingforitselfwilllikelyfailtomeettherequirements
    of501(c)(4)forsomeofthesamereasonsthatitmightfailunder501(c)(3),sincethegroups
    effortsareoftenaimedprimarilytobenefitthegroup,asopposedtoabroadcommunity.Some
    homeownersassociations,however,obtain501(c)(4)statusiftheyoperateprimarilytoprovide
    facilitiestothepublic20oriftheyoperatetoprovidebenefittoalargecommunity(asopposed
    toasmallgeographicarea).21Iftheorganizationworkstoimproveindividuallyowned
    properties,itwilllikelyfailtoqualifyforexemptionunder501(c)(4).22Donationsto501(c)(4)s
    arenottaxdeductibletodonorsandmostfoundationsdonotmakegrantsto501(c)(4)s;this
    meansthat501(c)(4)statusgenerallydoesnothelpanorganizationtofundraise.

    iv. 501(c)(7)SocialandRecreationalOrganizations:Incontrastto(c)(3)and(c)(4)organizations,
    whicharerequiredtoprovidebenefitstothepublic,501(c)(7)taxexemptionisdesigned
    specificallyforgroupsthatprovideaprivatebenefittothemselves.Inthatrespect,501(c)(7)s
    maybefittingforgroupsseekingtoprovidecertainhousingamenitiestothemselves,likea
    countryclub,swimmingpool,orpossiblyacohousingcommonhouse.501(c)(7)isacategoryof
    exemptiondesignedforsocial,recreational,andothernonprofitablepurposes.23Aquestion
    forfurtherinquiryis:whatkindsofactivitiescanbeincludedunder501(c)(7)sother
    nonprofitablepurposescategory?Itisnotaperfectcatchall,becausetheIRShasalready
    saidthatmaintainingroadsinaneighborhoodisnotaproperactivityfora501(c)(7)becauseis
    notrelatedtosocialorpleasurablepurposes.24ApparentlytheIRShasappointeditselfthe
    arbiterofpleasure,indecidingwhatdoesanddoesnotfurthersocialandpleasurable
    purposes.Maintainingroads,totheIRS,mustsoundlikeallworkandnoplay.501(c)(7)maybe
    afinetaxcategoryforagroupthatwantstoshareaprivatevacationhomeorcampground
    (whichsoundslikefun),butitwillnotlikelyworkforagroupthatsimplywantstoprovideitself
    withprimaryresidences(whichsoundstoonormalandboring).25
    Notethat501(c)(7)smaynotreceivemorethan35%oftheirincomefromnonmember
    sources,andnomorethan15%oftheincomemaycomefromtheuseoftheclubsfacilitiesby
    thegeneralpublic.Thisrulerequiresthattheorganizationprovideonlyforalimitedgroupof
    people.Theincomederivedfrommembersmustalsobeofasorttraditionallyassociated
    withnormalandusualactivitiesofasocialclub(memberfees,entrancefees,andsoon).26
    TheIRSseemstohavealsoappointeditselfarbiteroftradition,indecidingwhatgroupscan
    provideforthemselvesandonwhatterms.Acohousingcommunitycouldlikelyownacommon

    19

    SeeExemptOrganizationsTechnicalInstructionProgramforFY2003,IRC501(c)(4)Organizations,byJohnFrancisReilly,
    CarterC.Hull,andBarbaraA.BraigAllen,availableathttp://www.irs.gov/pub/irstege/eotopici03.pdf
    20
    SeeRev.Rul.8063,19801C.B.116.
    21
    SeeRev.Rul.7499,19741C.B.131.
    22
    SeeRev.Rul.7417,19741C.B.130.
    23
    SeeExemptOrganizationsTechnicalInstructionProgram1996,C.SOCIALCLUBSIRC501(c)(7),byJimLangleyandConrad
    Rosenberg,availableathttp://www.irs.gov/pub/irstege/eotopicc96.pdf
    24
    SeeRev.Rul.75494,19752C.B.214.
    25
    Id.
    26
    SeeExemptOrganizationsTechnicalInstructionProgram1996,C.SOCIALCLUBSIRC501(c)(7),byJimLangleyandConrad
    Rosenberg,availableathttp://www.irs.gov/pub/irstege/eotopicc96.pdf
    Page19of101

    houseasa501(c)(7)andcouldchargemembersduesandfeesforinvolvementincommunity
    mealsandsocialactivities.Butcouldthatentityalsooperateagrocerybuyingclubforthe
    members,anequipmentrentalservice,asharedinternetservice,aguesthouse,orother
    amenitythatthemembersmustpayfor?Thisisanareaforfurtherinquiry,anditmayrequire
    thatweseekguidancefromtheU.S.DepartmentofPleasureandTradition(theIRS).

    v. 501(d)ApostolicAssociations:Agroupofpeoplethatwishestodevelopandownhousing
    communallymaywanttoconsiderseekingtaxexemptionunder501(d)27ifthatgroupisbound
    togetherbyasetofcommonbeliefsandvalues.Toobtainexemptionunderthissection,a
    groupmustmeetrequirementsofthestatute,whicharesummarizedbythe9thCircuitas
    follows:thattherebeacommontreasury,thatthemembersoftheorganizationincludepro
    ratashareswhenreportingtaxableincome,andimplicitly,thattheorganizationhaveareligious
    orapostoliccharacter.28Thephrasecommontreasurygenerallymeansthatmembersshare
    incomeandproperty.
    TwinOaksisanintentionalcommunityinVirginiathathastaxexemptionunder501(d).
    TwinOakswasalsothesubjectofaTaxCourtdecisionthatheldthatmembersofa501(d)
    communityneednotsurrendertheirpersonalpropertyandtakeavowofpovertyupon
    joining.29Indeterminingwhatisaproperreligiousorapostoliccharacter,501(d)
    organizationsappeartobesubjecttofarlessscrutinythanarechurchesthatseektaxexemption
    under501(c)(3).501(d)organizationneednotholdreligiousservicesorengageinactivities
    characteristicoftraditionalreligions,suchassongs,adoptionsymbols,orrituals.The
    communitymaysimplycreateanenvironmentforthedailypracticeofitsbeliefs,astheTax
    CourtobservedintheTwinOakscase.30

    vi. Section528HomeownersAssociations:Ahomeownersassociation(HOA)maysoundlike
    somethingyoudfindmanagingcommonareasandpropertyuseinarunofthemillsubdivision,
    butthetaxcategorythattheIRShascreatedforHOAscouldalsobeusedtopurchase,develop,
    andownentirepropertiesforthecreationofintentionalcommunities.EarthhavenEcovillagein
    NorthCarolina,forexample,ownsa320acrepropertyasahomeownersassociationandfiles
    taxesunderSection528.31Earthhavenleasesplotsoflandtomembers,whoconstruct
    residencesonthoseplots.HomeownersassociationsaredefinedbytheIRStoinclude
    condominiummanagementassociations,residentialrealestatemanagementassociations,and
    timeshareassociations.32Suchorganizationsareusuallyformedunderstatelawasmutual
    benefitnonprofits.ToqualifyfortaxstatusunderSection528,90%oftheentitysexpenditures
    mustbemadetoacquire,construct,manage,andmaintainproperty.33Inaddition,60%ofthe
    organizationsincomemustbederivedfrommemberfees,dues,andassessments.34Income
    fromothersourcesisgenerallytaxable.Anorganizationneednotapplyfortaxexemption
    under528,butneedonlymeettherequirementsofthestatuteandfileitstaxreturnusingform
    1120or1120H.

    27

    SeeInternalRevenueManualSection4.76.29(June4,2010).
    Kleinsasserv.UnitedStates,707F.2d1024(9thCir.1983).
    29
    TwinOaksCommunity,Inc.v.Commissioner,87T.C.1233(1986).
    30
    Id.
    31
    DianaLeafeChristian,CreatingaLifeTogether:PracticalToolstoGrowEcovillagesandIntentionalCommunities(NewSociety
    2003),page179.
    32
    IRCSection528(c)(1).
    33
    IRCSection528(c)(1)(C).
    34
    IRCSection528(c)(1)(B).

    28

    Page20of101

    3. ConsiderationsWhenStructuringtheEntity:
    Choiceofentityandtaxstatusareimportantconsiderationsindesigninganorganizationtoownand
    manageland;however,therealteethofanorganizationcansometimesbefoundinthechoicesthe
    members/ownersmakeindesigningitsstructure,governance,andfinancialterms.Thesetermscan
    greatlyinfluenceanorganizationsaccountabilitytoitsmembersandtothepurposesitwasdesignedto
    serve.

    Someentities,likeLLCs,affordavastamountofflexibilitytomemberstostructureandmanage
    theentityhowevertheywish.Evenincorporations,which,bystatute,requirespecificstructuraland
    proceduralformalities,thereisflexibilitytobuildinthestructuralteethtosustaintheorganizations
    purposesandensureaccountability.Chapter4discussessomeofthesechoices,butherearesomeof
    theimportantconsiderationstobemadeinstructuringanentitytoownland:

    a) Compositionofmembership:Whomayjoinand/orbuyintotheentity?
    b) Votingrights:Domembersreceiveonevoteeach,orarevotingrightsallocatedinproportiontoa
    membersinvestment,shareoflandownership,oronsomeotherbasis?
    c) Governingbody:Willtherebeagoverningboardofdirectorsorwillmembersmanagetheentity
    directly?
    d) Electionandappointmentprocedures:Iftheentityhasagoverningbody,howwillmembersofthe
    governingbodybeelectedorappointed?Howwillofficersbeelectedorappointed?
    e) Compositionofgoverningbody:Willthegoverningbodybecomprisedofpeoplethatliveonthe
    property,peoplethatdonotlivethere,orsomebalance?(Forexample,manycommunityland
    trustsrequirethat1/3oftheboardbecomprisedofresidentsofthetrustshousing,that1/3be
    comprisedofexperts,professionals,andpublicofficialshelpfultothetrust,andthat1/3be
    comprisedofconcernedandcommittedcommunitymembers.)
    f) Spheresofdecisionmaking,management,andoperations:Whatdecisionsmustbeputtoall
    membersoftheentityandwhataredecisionsthatwillbemadebygoverningbodies?Aresome
    decisionsallocatedtocertaincommitteeswithintheorganization?Willcertainofficersofthe
    organizationbeempoweredtomakesomedecisions?Howwilltheactivitiesoftheorganizationbe
    managed?
    g) Proceduresformeetingsanddecisionmaking:Whatprocedureswillbeusedtoholdmeetings?
    Whatproceduresareusedtoconsideranddecideonproposals?
    h) Financialprovisions:Howwillmembersbuyinandsellout?Howwillprofitsandlossesoftheentity
    beallocatedanddistributedtomembers,ifapplicable?Whatfeesmaymembersberequiredtopay
    regularly?
    i) Conflictofinterestpolicies:Howwilltheorganizationpreservetheintegrityofitsgoverningbody
    andensurethatitisnotsteeredtoservetheinterestofcertainindividualsorcertainprofit
    interests?Underwhatcircumstancesmightamemberordirectorbedeemedfinanciallyinterested
    inatransactionorissue,andhowwilltheorganizationhandlethis?
    j) Proceduresforamendinggoverningdocuments:Ifgoverningdocumentscanbeamendedsimply
    (suchasbyamajorityvoteoftheboard),thismeansthatmanyofthesafeguardsbuiltintolegal
    structurecouldbeeasilyundermined.Manyorganizationsmaywanttobuildingreatersafeguards,
    suchasbyrequiringapprovalbyasupermajorityoftheboardormembers,unanimousapproval,or
    approvalbyathirdparty(suchasadesignatednonprofit)tochangecertainkeyprovisionsofthe
    governingdocuments.
    k) Dissolutionoftheentity:Underwhatcircumstancesmighttheentitydissolveandsellitsassets?
    Howwilltheproceedsbedistributed?Toanonprofit,tocurrentmembers,ortobothcurrentand
    pastmembers?

    Page21of101

    SAMPLECOOWNERSHIPAGREEMENT
    AboutCoOwnershipAgreements:
    ThefollowingisabasicTenancyInCommon(TIC)Agreementforcoownershipofatwounitproperty.
    Thisisanexampleofanagreementthatcouldflowfromtheuseofthequestionnaireprovidedabove.
    Coownershipagreementshaveaspectrumofdifferentpersonalities,dependingonthedegree
    ofsharinginvolved.Somecoownershipagreementsseektosimulateseparateownership,bygiving
    eachownerhis/herownexclusiveunitandindependentsetofresponsibilities,andbyrequiringthat
    eachownerobtainseparatefinancing.35Forexample,onatwounitpropertywhereeachunitis
    containedwithinitsownbuilding,suchasahousewithabackcottage,eachownerislikelysolely
    responsibleformaintaininghis/herownbuilding;thisdivisionmaycreatearealfeelingofseparate
    ownership.Incontrast,acoownershipagreementforasinglefamilyhome,forexample,likelyentails
    shareduseofmostspaces,sharedfinancing,sharedresponsibilitiesformostmaintenancetasks,andso
    on.
    Thisagreementsitssomewhereinthemiddleofthespectrumofsharing.Theagreementisfor
    coownershipofaduplexwheretheunitsarehousedunderthesameroof.Whentwounitssharea
    singlestructure,coownersmustusuallybejointlyresponsibleformaintainingtheexterior,plumbing,
    foundation,roof,andweightbearingwallsofthebuilding.Thisparticularagreementisalsowrittenfor
    coownersthatshareasinglemortgage,asopposedtoeachobtainingseparatefractionalfinancing.At
    thesametime,rightsandresponsibilitiesunderthisagreementaredividedtosimulateseparate
    ownershipinotherrespects.Eachownerisallocatedasinglelivingunit,theinteriorofwhicheach
    ownerisresponsibleformaintaining.Eachownermaysellhis/herunittothirdpartiesontheopen
    market,thoughonlyafterprovidingtheotherownertheopportunitytobuytheunit.Iftheentire
    propertyissold,theownersagreetodividetheproceedsbasedontheappraisedrelativevalueofeach
    unit,ratherthanbasedonapredeterminedpercentage.Thismethodofdividingsaleproceedsallows
    ownerstobenefitfinanciallyfromcarefulupkeepandanyimprovementstheymakeontheirownunit,
    andit,thus,simulatesseparateownershipinthatrespect.
    Notethat,althoughitislong,thisTICAgreement,inmanyways,issomewhatbarebones.A
    significantamountofdetailcouldpotentiallybeaddedtonearlyeveryprovision,togivemorethorough
    proceduresforhowtohandlevariousmatters.

    CoOwnershipAgreement
    for
    [ADDRESS]

    BackgroundofthisAgreement:PERSON1andPERSON2shareownershipofandresponsibilityforthe
    duplexatADDRESS.PERSON1andPERSON2havedecidedtocoownthepropertybecausetheyenjoy
    andrespecteachother,andtheytrustoneanothertobereliableandaccountable.PERSON1and
    PERSON2valueclearandopencommunication,andexpecttonavigateanychangesorchallengeswitha
    commitmenttorespectfulcommunication.Toensurethatexpectationsareclearlycommunicatedand
    carriedout,PERSON1andPERSON2wanttoclarifytheirrightsandresponsibilitieswithregardtothe
    sharedpropertyandtheirshareddebt,andalsowanttoensurethatanyfuturecoownersandtenants
    adheretoanytermsandconditionsagreeduponnow.Therefore,PERSON1andPERSON2nowreduce
    theiragreementtowriting,andagreeasfollows:

    35

    FractionalfinancingforTICs,however,canbesomewhatdifficulttocomeby,andthemajorityofTICownersmustshare
    responsibilityforasinglehomeloan.
    Page22of101

    1. TenantsinCommonAgreementinRelationtotheProperty
    ThisisaTenantsinCommon(TIC)Agreement(Agreement)anditgovernstherightsand
    obligationsofanypersonorentitythathasanownershipinterest,underthetermsofthis
    Agreement,intherealpropertylocatedatADDRESS(theProperty).ThePropertyconsistsofone
    duplexbuildingcontainingtwolegalunits.ByowningthePropertyasTenantsinCommon,each
    Owner(definedinParagraph2)ownsanundividedfractionalinterestintheentireProperty.This
    meansthatnoneoftheOwnershasanindividuallydeededrighttoexclusiveoccupancyofany
    portionoftheProperty.However,throughthisAgreement,Ownersintendtodividetheirrightsand
    responsibilitieswithregardtotheProperty.TheOwnersdonotintendtocreateacommoninterest
    development,partnership,orjointventure.

    2. OwnersandPartiestothisAgreement
    PERSON1andPERSON2areeachaPartytothisAgreementandanOwneroftheProperty;
    collectivelytheywillbereferredtoasthePartiesand/orOwners.Anyonewholaterassumesthe
    rightsandobligationsunderthisAgreementshallbecomeaParty.ByenteringintothisAgreement,
    PERSON1assumesallrightsandobligationsofOwnerAandPERSON2assumesallrightsand
    obligationsofOwnerB.AnOwnermayrefertoanindividual,anentity,oragroupofpeople,
    dependingonwhoownstheProperty.Forexample,iftheCotenancyInterestofOwnerAislater
    ownedbytwopeople,thosetwopeoplewillbereferredto,together,asOwnerA.

    3. HowOwnersAllocateRightsandResponsibilities
    AtthetimethisAgreementwasenteredinto,OwnerAandOwnerBhaveeachtakenresponsibility
    fora50%shareoftheProperty.However,this50/50allocationdoesnotnecessarilygoverntheway
    thatdecisionsaremade,thatthePropertyisused,howmucheachownershouldpaytowardthe
    mortgage,orhowproceedswillbedividedonsale,partition,destruction,orcondemnation.The
    allocationsofthoseandotherrightsandresponsibilitiesallocatedassetforthinthisAgreement.

    4. CotenancyInterests
    ThetotalofanOwnersownershipshareandrightsandresponsibilitieswithregardtotheProperty,
    asdefinedbythisAgreement,isreferredtoasherCotenancyInterest.EachOwnersCotenancy
    Interestincludes,butisnotlimitedto,herUnit,ExclusiveUseCommonAreas,andhershareofthe
    CommonAreas.

    5. Units,CommonAreas,andExclusiveUseCommonAreas

    a. Units:

    i. ThePropertyconsistsofaduplexwithtwoUnits.EachUnitconsistsoftheinteriorsurfaces
    ofthejoists,studs,andbeamswithintheperimeterwalls,floors,ceilings,windows,window
    frames,doors,doorframes,andtrimofsuchUnitandtheairspaceboundedbyand
    containedwithinthoseinteriorsurfaces.EachUnitincludes,withoutlimitation,any
    appliances,hotwaterheaters,spaceheaters,airconditioningunits,furnace,cabinetry,and
    lightingfixturesinsideeachunit.AUnitdoesnotincludethoseareasandthosethingsthat
    comprisetheCommonArea.

    ii. OwnerAwillhavetherighttoexclusiveuseandpossessionoftheDownstairsUnit,totaling
    720squarefeet,consistingofallroomsonthefirstfloor,including
    ________________________[moredetaileddescriptionofwhatroomsitincludes],not
    includingthebasement.OwnerBwillhavetherighttoexclusiveuseandpossessionofthe
    Page23of101

    UpstairsUnit,totaling750squarefeet,consistingofallroomsonthetopfloor,including
    __________________________[moredetaileddescriptionofwhatroomsitincludes].

    b. CommonAreas:ThespacesofwhichbothOwnershavepossessionandusearereferredtoas
    CommonAreas.OwnersshallbejointlyresponsibleformaintainingallCommonAreas.Each
    OwnermayusetheseCommonAreasinaccordancewiththepurposesforwhichtheyare
    intendedwithouthinderingtheexerciseoforencroachingupontherightsofanyotherOwners
    tousethespacesforthosepurposes.CommonAreasincludeallyards,driveways,the
    basement,decks,patios,walkways,roof,laundryroom,foundation,allotherexteriorportions
    oftheProperty,andtheentirebuildingstructure,minustheUnits,describedabove.

    c. ExclusiveUseCommonAreas:CertainportionsoftheCommonArea,referredtoasExclusive
    UseCommonArea,aresetasideandallocatedfortheexclusiveuseoftheOwneroftheUnitto
    whichtheyareeitherphysicallyattachedorassignedtoaUnit,asdescribedbelow.The
    ExclusiveUseCommonAreaconsistsof:

    i. Fixtures.Shutters,awnings,windowboxes,exteriorstairways,porches,landings,doorsteps,
    exteriordoors,doorframesandhardwareincidentthereto,screensandwindows,skylights
    andotherfixtures,allofwhicharedesignedtoserveasingleUnit,butlocatedoutsidethe
    boundariesofsuchUnit.

    ii. Pipesandwiring.Theplumbing,pipes,conduits,wires,cablesandallotherelectrical
    equipmentorapparatusthataredesignedtoserveasingleUnitbutlocatedoutsidethe
    boundariesofsuchUnit.

    iii. Yards.Asownerofthedownstairsunit,OwnerAshallhaveexclusiveuseofthetwofoot
    stripofgardenthatboardersthefrontoftheDownstairsUnitandrunsthelengthofUnitA.

    iv. Decks.OwnerAshallhaveexclusiveuseofthedeckoffthebackdoorofUnitAandOwnerB
    shallhaveexclusiveuseofthedeckoffthebackdoorofUnitB.

    v. Parkingspaces.EachOwnershallhavetheexclusiverighttouseandenjoythatparking
    spacedesignatedforthebenefitofherUnit,describedontheattachedmap.

    6. UseofProperty

    a. ResidentialuseofProperty:OwnersagreethattheprimaryuseofthePropertyshallbe
    residential.Ownersmayoperateahomebusiness,solongasitcomplieswithzoningrules
    pertainingtohomebusinesses,andsolongasitdoesnotcreateasoundnuisanceorclutterin
    theCommonAreas.

    b. Pets:UnlessOwnersagreeotherwise,eachOwnermaykeepnomorethantwodogsandtwo
    catsontheProperty.Beforeadoptinganypets,anOwnershouldconsultwiththeotherOwner
    toensurethattheotherOwnerdoesnothaveanyseriousconcerns.ThenonadoptingOwner
    mayblocktheadoptingOwnerfromadoptingapetifthepethasatendencytobiteorattack,if
    thepetisloudandcreatesasoundnuisance,orifitisillegaltokeepsuchananimal.AnOwner
    withadogagreestocleanupafteranymessesleftbythedogintheCommonAreaandwillnot
    leaveanydogsintheCommonAreaunattended,unlessallOwnersagreetoit.

    Page24of101

    c. Creatingacleanandreasonablyquietenvironment:OwnersagreetokeepallCommonAreas
    cleanandclutterfree,andshallrespectoneanothersneedforquiet.

    d. Prohibitedactivities:NopersonlivingonthePropertyshallusehazardouschemicalsincleaning
    orcaringfortheCommonArea.

    7. RentalandOccupancy

    a. Housemates:AnOwnermayallowotherstolivewithheranddoesnotneedtoreceivethe
    permissionoftheotherOwner,solongasthenumberofpeoplelivingineachunitdoesnot
    exceedfour.Asacourtesy,anOwnerbringinginhousematesshallnotifytheotherOwner
    beforetheproposedhousematesmovein.IftheotherOwnerfeelsresistanttoorhasworries
    aboutaproposedhousemate,bothOwnersagreetositdownanddiscussanyworries,withthe
    goalofmakingthearrangementworkableandcomfortableforeveryone.

    b. LeasingtoThirdPartyTenants:EachOwnerisentitledtoleaseherUnittoaThirdPartyTenant,
    andtoallincomederivedfromsuchalease,providedthatthefollowingrequirementsaremet:

    i. ApprovalbynonleasingOwner:AnyprospectiveThirdPartyTenantissubjectto
    approvalbythenonleasingOwner.ThenonleasingOwnermayreviewastandardform
    rentalapplication,creditreport,andotherinformationasthenonleasingOwnermay
    reasonablyrequestfromtheprospectiveTenantorleasingOwner.Thenonleasing
    OwnershallquicklyrespondtorequestsforapprovalofaThirdPartyTenant,andshall
    notunreasonablywithholdapprovalofaprospectivetenant.Afailurebythenonleasing
    OwnertorespondwithinthreedaystoaleasingOwnersrequestforapprovalofaThird
    PartyTenantshallbetreatedasapprovalbythenonleasingOwner.

    ii. Leaseagreement:AnyleaseagreementwithaThirdPartyTenantshallbeinwriting,
    shallincludethisagreementandanywrittenRulesasattachments,andmustincludean
    agreementthattheThirdPartyTenantsshalladheretothetermsofthisTICAgreement
    andtoanywrittenRulesregardingdaytodaymanagement,use,andcareofthe
    Propertyasdescribedbelow.

    iii. Agreementtoavoidevictingatenant:IfleasingaunittoaThirdPartyTenant,the
    leasingOwneragreestonotattempttoaneviction,withoutfirstconsultingwiththe
    otherOwnerandreceivingtheotherOwnerspermission.Thisisbecauseevictinga
    tenantcouldnegativelyaffectthefutureapplicationsforcityapprovals,suchasfor
    condoconversion.

    8. DecisionmakingandHouseRules

    a. Meetings:Ownersagreetomeetatleastonceperyeartoagreeonanannualoperating
    budget.Thereshallbenootherrequirementforregularandformalmeetings.However,a
    meetingoftheOwnersmaybecalledbyanyOwnerprovidedshegivesnoticeandaproposed
    agendatotheotherOwneratleastaweekinadvance.Ownersagreetokeepawrittenrecordof
    issuesdiscussedanddecisionsmaderegardingtheProperty.

    b. Voting:RegardlessofthesizeandvalueofanOwnersCotenancyInterest,andregardlessofthe
    numberofpeoplelivingattheProperty,OwnerAandOwnerBeachhaveonevoteindecisions
    Page25of101

    abouttheProperty.Thus,exceptwherethisAgreementallowsanOwnertotakeunilateral
    action,alldecisionsaboutthePropertymustbeunanimous.IntheeventthatOwnerscannot
    agreeaboutaPropertyrelatedissue,Ownersshalldiscussandadapttheproposalinorderto
    findasolutionthatisagreeabletobothOwners.Iftheissuecannotberesolvedthrough
    discussion,Ownersagreetoattendmediation(describedingreaterdetailbelow).

    c. AdoptingRules:TheOwnersmay,fromtimetotime,adoptandamendwrittenRules
    regardingdaytodaymanagement,use,andcareoftheProperty.SuchRulesmayconcernany
    subjectormatterandshallbebindingonallOwners,theirhouseholdmembers,guests,and
    tenants.

    9. FinancialArrangementforPurchase
    PERSON1andPERSON2purchasedthePropertyinJanuaryof2013for$460,000,ofwhicheach
    agreestopayhalf.Atthetimeofthepurchase,PERSON2paidanadditional$10,000towardthe
    downpayment,andPERSON1andPERSON2intendtotreatthisasaloanfromPERSON2to
    PERSON1.PERSON1agreestorepaythis$10,000toPERSON2withinoneyearoftheexecutionof
    thisAgreement

    10. ResponsibilityforDebtontheProperty
    OwnersshareresponsibilityforthePropertyrelateddebtasfollows:

    a. SharedMortgage:TheprimarymortgageonthepropertyistheLocalCreditUnionmortgage
    (theSharedMortgage),intheamountof$400,000.OwnerAandOwnerBshallshare
    responsibilityfortheSharedMortgageinthefollowingproportions:
    i. OwnerA:50%
    ii. OwnerB:50%
    TheportionofSharedMortgageforwhicheachOwnerisresponsiblewillbereferredtointhis
    AgreementasherShareoftheOutstandingDebt.AnOwnersShareoftheOutstandingDebt
    maybeadjusted,asdescribedbelow.

    b. MonthlypaymentsontheSharedMortgage:EachOwnershallmakeamonthlypayment
    towardtheSharedMortgageonthebasisofherShareoftheOutstandingDebt.Atthetimethat
    thisAgreementisenteredinto,thetotalrequiredmonthlypaymentontheSharedMortgageis
    $2,300.InaccordancewitheachOwnersShareoftheOutstandingDebt,OwnerAandOwnerB
    shallmakemonthlypaymentsasfollows:
    i. OwnerA:$1150
    ii. OwnerB:$1150

    c. AdjustmentsDuetoPrepayment:AnOwnermayprepayalloraportionofherShareof
    OutstandingDebt,solongasthelenderdoesnotpenalizeprepayment.ThatOwnermay
    arrangeareamortization,providedshepaysthereamortizationfee,sothatthetotalmonthly
    paymentisreducedtoreflecttheprepayment.Insuchevent,theOwnersshallrecalculatetheir
    SharesofOutstandingDebtandtheOwnermakingtheprepaymentwillreceivethefullbenefit
    ofthemonthlypaymentreduction.

    Page26of101

    11. SharingCosts

    a. Costssharedonanequalbasis:ExceptasotherwiseprovidedinthisAgreement,regardlessof
    thenumberofpeoplelivingattheProperty,OwnerAandOwnerBshalleachberesponsiblefor
    onehalfofthefollowingcosts:
    i. MaintenanceandrepairsofCommonAreas
    ii. Insurance
    iii. Propertytaxes
    iv. Trash

    b. CostssharedonthebasisofthenumberofpeoplelivinginaUnit:Becausegas,electric,and
    watercostsarenotseparatelymetered,Ownerswilleachpay50%ofthecostssolongaseach
    Unithasanequalnumberofoccupants.IfoneUnithasonemoreoccupantthantheotherUnit,
    theOwneroftheUnitwiththelargernumberofoccupantsshallpayanadditional7%ofeach
    bill,andtheUnitwithfeweroccupantswillpay7%less.Thus,iftheDownstairsUnithastwo
    occupantsandtheUpstairsUnithasoneoccupant,OwnerAshallpay57%ofallutilitiesbillsand
    OwnerBshallpay43%.Foreachadditionaloccupant,thebillsshallbeadjustedbyanadditional
    7%.

    12. Insurance

    a. Insurancecoverage:TheOwnershaveagreedthattheywilljointlymaintainaninsurancepolicy
    thatincludespublicliabilityandreplacementcoveragefordamagetotheProperty.IfanOwner
    wishestodoso,shemayobtainaseparateinsurancepolicycoveringpersonalproperty.

    b. Avoidingriskyactivities:Ownersagreenottoengageinactivitiesthatcouldcreateariskor
    hazardtopropertyorpersonsorthatwouldmakethePropertydifficultorexpensivetoinsure.

    13. CreationofaJointBankAccountandPaymentofExpenses

    a. Ownersagreetoopenajointbankaccount,andeachOwneragreestomakeafixedmonthly
    depositintotheaccount.Ownersshallmeetatleastonceayeartodetermineanoperating
    budgetforPropertyrelatedcosts,takingintoaccountforeseeablemaintenancecosts.Owners
    shallthendeterminehowmucheachOwnershoulddepositintothejointbankaccounteach
    month.ExceptwhenOwnersfrontcosts,allbillsshallbepaidfromthisbankaccount.

    14. CreationofaReserveFund

    a. CreationandpurposeofaReserve:Ownersagreetokeepatleast$10,000inthejointbank
    accounttoserveasaReservefund.ThepurposeofcreatingaReserveisprimarilytoprotectthe
    creditandassetsofOwnersintheeventthatoneOwnercannotmakeanobligatorypayment
    relatedtotheProperty.IntheeventthatoneOwnerdoesnotmakeanobligatorypayment,
    eitherOwnermayusetheReservetomakenecessarymortgage,tax,orinsurancepayments.
    TheReservemayalsobeusedtomakeunforeseenandnecessaryrepairs,solongasallOwners
    agreetosuchrepairs.

    b. ContributionstoandreimbursementoftheReserve:EachOwneragreestocontribute$250per
    monthtotheReserveuntiltheReservehasreached$10,000.Ownerswillkeepanaccountingof
    howmucheachOwnerhascontributedtoordrawnfromtheReserve.WhenanOwnerceases
    Page27of101

    toowntheProperty,sheshallbereimbursedanycontributionsshemadetotheReserve,minus
    hershareofanypaymentsthatweremadefromtheReserve.Ownersshallattemptto
    reimbursetheReservefundassoonaspossibleaftertheReserveisusedtopayforanexpense.
    IftheReservefundisusedtopayforanexpensethatwouldbedividedonsomethingotherthan
    anequalbasis,OwnersshallreimbursetheReservefundaccordingly.

    15. KeepingAccountsandRecords

    a. Maintaininganaccountingspreadsheet:Ownersagreetomaintainanaccountingspreadsheet
    documentingthefollowing:

    i. HowmucheachOwnerhascontributedtothejointbankaccount,

    ii. AllcostspaidfordirectlybyanOwnerandwhetherthatOwnerwasreimbursedbythe
    jointbankaccount,

    iii. Allpaymentsmadefromthejointbankaccount,and

    iv. HoweachpaymentshouldbeallocatedamongtheOwners(forexample,mostcosts
    shallbeallocatedona50/50basis,butothersmaybeunequal).

    b. Householdrecordfolder:EachOwneragreestodepositindependentevidenceofallher
    expendituresfortheProperty,suchascanceledchecksorreceipts,inahouseholdrecordsfolder
    tobejointlymaintainedbytheOwners.Totheextentpossible,allrecordsshallbekeptcurrent
    onamonthlybasis.

    c. Annualreckoningofaccounts:Withinonemonthoftheendofeachaccountingyear(ending
    December31),OwnersshallreckontheaccountsbydeterminingeachOwnerstotal
    contributionstoPropertyrelatedexpensesandthetotalamountofPropertyrelatedexpenses
    thatshouldbeallocatedtoeachOwner.IfanOwnerstotalcontributionsarelessthanthat
    Ownerstotalallocationofexpenses,thatOwnershallreimbursethebankaccountforthe
    difference.IfanOwnerstotalcontributionsaremorethanthatOwnerstotalallocationof
    expenses,thatOwnershallbereimbursedbythebankaccountorbytheotherOwner.

    16. Maintenance,Repair,Alterations,andImprovements

    a. Standardsformaintenance,repair,alterations,andimprovements:BecausetheOwnersdesire
    tomaintainatidyandcomfortablehomeenvironment,Ownersagreethattheywillmaintain
    thePropertyingoodconditionandwillnotallowanysignificantdefectstoremainunrepaired.

    b. Maintenance,repair,andimprovementinUnits:EachOwnershallbesolelyresponsiblefor
    maintainingandrepairingtheinteriorofherUnit,whichincludesensuringthatfloors,walls,
    ceilings,lightfixtures,andsmokedetectorsarekeptingoodcondition.AnOwnermaymake
    alterationstoherUnitwithouttheotherOwnersapproval;however,ifthealterationmight
    affectthestructuraloracousticintegrityofthebuilding,theOwnermustseektheother
    Ownerspermission.

    c. Maintenance,repair,andimprovementstoExclusiveUseCommonAreas:EachOwnermust
    maintainallpartsofherExclusiveUseCommonAreas,includingutilitylines,pipes,andconduits
    Page28of101

    thatserveherUnitexclusively.EachOwnermustobtainpermissionfromtheOwnerpriorto
    makinganysubstantialchangesorimprovementstoherExclusiveUseCommonArea,primarily
    toensurethatanychangesorimprovementsfitinharmonywiththedesignofthebuildingand
    exterior.TheotherOwnershallnotunreasonablywithholdconsenttoanychangesor
    improvementstoanExclusiveUseCommonArea.

    d. MaintenanceandrepairofCommonAreas:Ownersarejointlyresponsibleformaintenanceand
    repairofCommonAreasandagreetosharethecostsofsuchrepairsona50/50basis.Theonly
    exceptiontothisisintheeventthatanegligentactoromissionbyoneOwnerorthatOwners
    guestortenantcausesdamagetotheProperty,andthatdamageisnotcoveredbyinsurance,
    thenthatOwnershallberesponsibleformakingorpayingfortherepairs.

    e. PayingfornecessarymaintenanceandrepairstoCommonAreas:Unlessanemergencyrepair
    isrequired,Ownersagreetoconsultwitheachotherpriortoauthorizinganyrepairstothe
    CommonAreacostingmorethan$200.If,atanytime,theOwnersdeterminethatthereare
    foreseeableandexpensiverepairsthatwillbecomenecessarywithinthreeyearsofsuch
    determination(suchasrooforfoundationreplacement,exteriorpainting,orplumbingorwiring
    replacement),Ownersagreetocomeupwithaplanforpayingforsuchrepairs,andwillbeginto
    makelargermonthlypaymentsintothejointbankaccount,inorderplanforthatexpense.

    f.

    ImprovementstoandalterationsofCommonAreas:Owners,bymutualconsent,maymake
    improvementsandalterationstotheCommonAreas.Priortomakinganimprovementor
    alteration,Ownersshallcometoanagreementabouthowtosharethecostsandlabor.Inthe
    eventthatoneOwnerwishestomakeanimprovement,andtheotherOwneragreestothat
    improvementbutdoesnotwanttocontributetothecost,then,recognizingthattheother
    Ownercouldbenefitfinanciallyfromtheimprovement,Ownerscouldagreeinwritingtohandle
    thesituationinavarietyofways,including,butnotlimitedto:

    i. TheOwnerrequestingtheimprovementcouldbereimbursedbytheotherOwnerin
    monthlypaymentsovertime;
    ii. TheOwnerrequestingtheimprovementcouldbereimbursedbytheotherOwneratthe
    timethePropertyissold,oratthetimetheotherOwnersellsherCotenancyInterest;
    iii. TheOwnerscouldagreethat,atthetimethePropertyissoldinitsentiretyoratthe
    timethenonimprovingOwnersellsherCotenancyInterest,theimprovementsshallbe
    appraisedtodeterminetheamountbywhichtheimprovementhasraisedthefair
    marketvalueofthePropertyoroftheCotenancyInterest.TheOwnerthatpaidforthe
    improvementshallthenbepaidthatamountfromthesaleproceeds.Ownersshall,at
    thetimeofsale,chooseanappraisertogether.ShouldOwnersbeunabletojointly
    agreetoanappraiser,theneachshallhireherownappraiserandthetwoappraisals
    shallbeaveraged.Toassistinfutureappraisals,Ownersshouldcarefullydocumentthe
    conditionofthePropertypriortotheimprovement.

    IntheeventthattheOwnersdonotagree,inwriting,toanyoftheabovemethodsofhandling
    animprovementtotheCommonArea,thenthedefaultrulewillbethattheOwnermaking
    improvementwillbecompensatedaccordingtotheproceduredescribedinParagraphiii.

    InasituationwhereoneOwnermakesanimprovementtoaCommonAreawithoutcontribution
    bytheotherOwner,Ownersshouldalsodiscussandcometoanagreementaboutwhoshould
    payanypropertytaxincreasesorinsurancepolicypremiumincreasesthatcouldresultfromthe
    Page29of101

    improvement.Inabsenceofanagreementotherwise,thedefaultruleshallbethattheOwner
    makingtheimprovementshallberesponsibleforpayinganyincreasestopropertytaxesor
    insurancepremiums.

    g. EffectofUnitimprovementsonpropertytaxesandinsurance:AnyOwnerthataltersherUnit
    agreestobesolelyresponsibleforthepaymentofallpropertytaxincreases,insurancepolicy
    premiumincreases,andallothercostsforanyinsurancepolicyorpoliciesobtainedand
    maintainedbytheOwnersarisingfromsuchalterationorimprovementoftheOwnersUnit.

    h. ContributionsofLabor:TheOwnersintendthattherewillbenomonetaryoradditional
    ownershipcompensationforlaborexpendedbyanOwnerforordinaryrepairandmaintenance
    oftheProperty,unlessOwnersagreetoitinwriting.

    17. FailuretoMakePayments

    a. Takingstepstoavoidmissedpayments:Ownersrecognizethatthereissignificantriskinvolved
    withsharingownershipofaproperty,particularlywhentherearedebtssecuredbytheentire
    property,andwhenfailuretopaybillsandtaxescouldresultinliensagainsttheentireproperty.
    Asaresult,inordertoavoiddefaultonanyloanssecuredbythePropertyandanyProperty
    relatedbillsandtaxes,ifoneOwnerhasfinancialdifficultiesandbecomesawarethatshemay
    notbeabletomakeafullandtimelypayment,sheshallnotifytheotherOwnerassoonasshe
    becomesawareofherfinancialdifficulties.ThiswillallowtheotherOwnertoplanforthe
    possibilityofmakingasubstitutedpayment.

    b. FailureofanOwnertomakepayments:IfanOwnerisunabletomakeanynecessarypayments
    becauseofillness,disability,prolongedunemployment,orotherhardship,andifthereareno
    fundsintheReservetocoversuchpayments,theotherOwnermaymakethosepaymentsinthe
    nonpayingOwnersplace,foraslongasnecessaryorpossible,oraslongasthepayingOwneris
    willing.TheOwnersagreethattheOwnermakingthepaymentsmaychoosethemannerand
    timeframeforreimbursementfromamongthefollowingoptions:

    i. TreattheadditionalpaymentsasaloantothenonpayingOwner,bearinginterestata
    rateofnomorethan10%,andtreatitasalieninfavorofthepayingOwneruponthe
    CotenancyInterestofthenonpayingOwner.ThepayingOwnermaydecidethetime
    frameforrepaymentofthisloan,andpartiesshallputthetermsoftheloanandlien
    intowriting.

    ii. TheOwnersSharesoftheOutstandingDebtmaybeadjustedbasedontheamountof
    paymentsmadebythepayingOwner,therebyreducingthepayingOwnersshareof
    subsequentmonthlymortgagepayments.

    c. Forcingasaleorbuyoutasaremedyfornonpayment:IfapayingOwnerisunableorunwilling
    tocoveranonpayingOwnersshareofnecessarypayments,andthenonpayingOwneris
    unabletoresumeregularpaymentswithinthreemonthsoffirstmissingpayments,thepaying
    OwnermaydemandtobuythenonpayingOwnersCotenancyInterestatapricedeterminedin
    accordancewithParagraph20.b.iiofthisAgreement.Intheeventofthreemonthsofmissed
    paymentsbytheotherOwner,thepayingOwnermayalsodemandthatthePropertybesoldin
    itsentirety.

    Page30of101

    18. Encumbrances
    Partiesagreenottoincuranyobligationsthatwouldplacealienoranykindofencumbranceonthe
    Property,unlessallOwnersagreetotheencumbrance.Intheeventthatalienorencumbranceis
    placedonthePropertyasaresultofonePartysobligations,thatPartyshallbearthecostof
    removingtheencumbranceorshallcompensatetheotherOwnersfortheresultingdecreasein
    propertyvalue.

    19. TransferringanInterestinthePropertyandFirstRightofRefusal

    a. OfferingtoSelltoAnotherOwner:AnOwnermay,atanytime,offertosellherCotenancy
    InteresttotheotherOwner.

    b. TransfertoaThirdParty:TheOwnershaveagreedtocoowntogetherbecauseoftheir
    knowledgeofandconfidenceineachother.Thus,anOwnermaytransferherinterestinthe
    PropertytoaThirdPartyonlyinaccordancewiththeguidelinesprovidedinthissection.

    c. LenderApprovalRequirement:AllPartiesunderstandandacknowledgethatifaCotenancy
    InterestinthePropertyistransferredtoanindividualwhoisnotasignatorytothemortgage,
    andsuchtransferisnotapprovedbythemortgagelender,thelendercoulddeclaretheentire
    outstandingbalanceofthemortgageimmediatelydueandpayable(an"acceleration")and,in
    theeventofnonpayment,initiateforeclosureoftheProperty.Accordingly,notwithstanding
    anythingtothecontraryinthisAgreement,noPartyshalltransferanyinterestinthePropertyto
    anindividualwhoisnotalreadyasignatorytothemortgageunless(i)thelenderapprovesthe
    transferinwriting,or(ii)allPartiesagree,inwriting,toallowthetransferwithoutlender
    approvalandassumetheresultingriskofaccelerationandforeclosure.IntheeventallParties
    donotagreetoallowthetransferwithoutlenderapproval,eachPartyshallcooperateingood
    faithinsecuringsuchapproval.Suchcooperationshallinclude,butnotbelimitedto,submitting
    alldocumentationrequiredbythemortgagelender.Allchargesimposedbythemortgage
    lendershallbepaidbythetransferorand/ortransferee.

    d. UnrestrictedtransfersofCotenancyInterests:Subjecttothelenderapprovalrequirement
    notedabove,anOwnermaytransferaCotenancyInterestwithoutotherrestrictionifthe
    transfereeis(i)apersonwhoisalreadyaPartyor(ii)arevocablelivingtrustofwhichaPartyisa
    beneficiary.

    e. RestrictedtransferofCotenancyInterests:Subjecttothelenderapprovalrequirementnoted
    above,anOwnermaytransferaCotenancyInterestasprovidedinthisSection.

    i. NoticeofIntendedSale.Ifasaleisintended,thetransferringOwnershallprovidetothe
    otherOwnera"NoticeofIntendedPartialSale"stating(i)theexpectedsalesprice,
    terms,andconditions(includingfinancing)and(ii)theamountofsalescommission,if
    any,whichshallbepaidintheeventofsalebyarealestateagent.

    ii. InitialRighttoPurchase.Ifasaleisintended,thenontransferringOwnershallhavethe
    righttopurchasethetransferringOwner'sinterestonthetermsandconditionsstatedin
    theNoticeofIntendedPartialSale,exceptthatthepriceandthecashdownpayment
    requiredshallbereducedbytheamountoftheintendedsalescommission.Thenon
    transferringOwnershallexercisethisright(i)within10calendardaysofreceivingthe
    NoticeofIntendedPartialSale,byprovidingNoticetothetransferringOwnerofher
    Page31of101

    tentativeintenttopurchase(a"NoticeofTentativeIntent")and(ii)within30calendar
    daysoftheEffectiveDateoftheNoticeofTentativeIntent,byprovidingasecondNotice
    tothetransferringOwnerreaffirmingherintenttopurchase(a"NoticeofFinalIntent").
    TheNoticeofFinalIntentshallbebinding.IfanontransferringOwnerfailstoprovide
    eitherNotice,shewaivestheInitialRighttoPurchase.

    iii. AdditionalRighttoPurchase.Beforeacceptinganypurchaseoffer,thetransferring
    OwnershallprovideacopyoftheoffertotheotherOwner.Iftheofferistwopercent
    (2%)ormorelowerthantheoriginalexpectedsalesprice,thenontransferringOwner
    shallhavetherighttopurchasethetransferringOwner'sinterestonthetermsand
    conditionsstatedinthepurchaseoffer(withoutdeductionoftheintendedsales
    commission).AnontransferringOwnershallexercisethisrightbypromptlyproviding
    NoticetothetransferringOwnerofherintenttopurchase.ThisNoticeshallbebinding.
    IfanontransferringOwnerfailstoprovidetheNoticewithin48hoursofreceivinga
    copyoftheoffer,shewaivestheAdditionalRighttoPurchasewithregardtothatoffer.
    Nofurtherpurchaserightsshallbecreatedasaresultofagoodfaithrenegotiationof
    salepriceortermsfollowinginspectionsorotherdisclosuresrelatedtothatparticular
    offer.

    iv. RighttoRejectTransferee.Beforecompletinganysale,gift,orothervoluntarytransfer,
    thetransferringOwnershallprovidetotheotherOwnerastatementofthefinancial
    qualificationsoftheprospectivetransfereeincludingaloanapplication,creditreport,
    and,inthecaseofaselfemployedperson,thetwomostrecentyears'FederalTax
    Returns.ThenontransferringOwnershallhavetencalendardaysfromdeliveryofthis
    informationtoprovidewrittennoticeofdisapprovaltothetransferringOwner.During
    thisperiod,eachPartyshallbeentitledtocontacttheprospectivetransfereetoarrange
    apersonalortelephoneinterview.Tobeconsideredvalid,thewrittennoticeof
    disapprovalmust(i)bedeliveredwithintherequiredtimeframe,and(ii)statea
    reasonablebasisnotprohibitedbylawforthedisapproval.Atransfershallbedeemed
    approvedunlessthetransferringOwnerreceivesavalidnoticeofdisapprovalstating
    thebasisfordisapprovalfromthenontransferringOwner.

    f. NontransferringOwnersRighttoDemandSaleoftheEntireProperty.Intheeventthatone
    OwnerwouldliketosellortransferherCotenancyInterest,andthenontransferringOwner
    wouldrathernotendupcoowningthepropertywithaThirdPartyTransferee,thenon
    transferringOwnermaythendemandthattheentirePropertybesoldandtheproceedsdivided
    inthemannerdescribedbelow.

    g. Allocatingincreasedpropertytaxesafteratransfer.TheOwnersunderstandandacknowledge
    thatatransferofanyinterestinthePropertymaytriggerareassessmentoftheProperty.The
    Ownersagreethatthetransfereeshouldbesolelyliablefortheamountbywhichpropertytaxes
    increaseasaresultofthetransfer.

    20. OtherEventsConstitutingOfferstoSelltotheOtherOwner

    a. Eventstriggeringoffertosell:Upontheoccurrenceofanyoftheeventslistedbelow,such
    eventshallbedeemedtoconstituteanofferbytheaffectedOwner,orherexecutor,trustee,
    personalrepresentative,orsuccessorininterest,asthecasemaybe,tosellherCotenancy
    InteresttotheotherOwnerataspecifiedpurchaseprice,asdescribedbelow:
    Page32of101


    i. Death:ThedeathoftheOwner;

    ii. Bankruptcy:Thevoluntaryorinvoluntaryfilingofapetitioninbankruptcyorforthe
    protectionundersimilarinsolvencylawsoranygeneralassignmentofassetsforthe
    benefitsofcreditors;or

    iii. Courtorderedtransferasaresultofdivorce:Theentryofafinaldecreeofdivorceor
    dissolutionofmarriagethattransfersanOwnersCotenancyInteresttoanypersonnot
    apartytothisAgreement.

    b. Noticeandappraisal

    i. Givingnoticeofaneventtriggeringoffertosell:UponanOwnersdeath,herpersonal
    representativeorsuccessorininterestor,intheeventofanOwnersbankruptcyor
    proposedcourtorderedsaleofhisorherinterestpursuanttoafinaldecreeofmarital
    dissolution,theOwnerhimselforherself,shallgivewrittennoticetotheremaining
    OwnerofsuchOwnersdemise,bankruptcy,orforcedsalepursuanttoafinaldecreeof
    maritaldissolution,asthecasemaybe,andtheremainingOwnershallhavetherightto
    purchasetheCotenancyInterestataspecifiedpurchaseprice,asdefinedbelow,by
    givingwrittennoticetothepersonalrepresentative,successorininterest,Owner,or
    trusteeinbankruptcy,asthecasemaybe,within30daysaftertheirreceiptofthe
    notice.

    ii. Determiningpriceofsale:Thespecifiedpurchasepriceforoccurrencesinthissection
    shallbethethencurrentfairmarketvalueoftheCotenancyInterest,lesstheamountof
    theSellingOwnersordeceasedOwnersShareoftheOutstandingDebtandincreased
    ordecreased,asrequired,bytheamountofanyadvances,credits,orexcess
    contributionsmadeandnotyetreimbursed.Ifthepartiescannotagreeonthefair
    marketvalue,thenpartiesshalleitherjointlyappointanappraiserforthepurposeof
    determiningthefairmarketvalueor,failingajointaction,eachseparatelydesignatean
    appraiser.Inthelattercase,theaverageofthetwoappraisalsshallserveasthe
    specifiedpurchaseprice.

    21. SharingoflossesrelatedtotheProperty:

    a. TheOwnersunderstandandacknowledgethatasaresultoffluctuatingmarketcircumstances,it
    ispossiblethatthetotalindebtednessforthePropertymayexceeditsmarketvalueatsome
    pointintime.IntheeventthattheOwnersarepersonallyliableforanysuchobligationorif
    thereisanylossincurredbytheOwnerswithregardtotheProperty,theOwnersagreethatthat
    obligationshallbebornebyallOwnersonthebasisoftheOwnersthencurrentSharesofthe
    OutstandingDebt,unlessotherwiseagreeduponinwriting.

    22. RefinancingtheProperty

    a. Agreementtorefinance:AllOwnersmustconsenttoanyrefinanceofadebtsecuredbyalien
    againsttheentireProperty.FortheSharedMortgage,refinancingexpensesshallbeallocatedto
    OwnersinproportiontotheirthenexistingSharesofOutstandingDebt.

    Page33of101

    b. Assumableloansandfractionalfinancing:Inconnectionwiththerefinancingofanyloan
    securedbytheentireProperty,theOwnersagreetomakereasonableeffortstosecurealoan
    thatallowsforsubstitutionandmaybeassumablebysubsequentpurchasersofthenexisting
    OwnersCotenancyInterests.Iffractionalfinancing,intheformofTICloans,isavailable,
    Ownersagreetoexploreandweightheprosandconsofobtainingsuchfinancing.Althoughitis
    generallymoreexpensive,fractionalfinancingwillreduceriskexposureforeachOwner,andwill
    makeitmoresimpleforeachOwnertosellherUnitseparately.

    23. EventsTriggeringDistributions

    a. Distributionofproceedsuponsale,partition,destruction,orcondemnation:Proceedsfrom
    saleoftheentireProperty,condemnation,destruction,orpartitionwillbedistributedamong
    theOwnersbasedupontheRelativeValuePercentageofeachCotenancyInterest(the
    calculationprocessforwhichisdescribedbelow).EachOwner'sshareofthedistributionwillbe
    reducedbytheamountofherShareofOutstandingDebt,andincreasedordecreased,as
    required,bytheamountofanyadvances,credits,orexcesscontributionsmadeandnotyet
    reimbursed.

    i. SaleofentireProperty:SaleoftheentirePropertywouldrequiretheapprovalofall
    Owners.OwnersshalldistributesaleproceedsinaccordancewithSubparagraph(a.)of
    thisSection.

    ii. Partition:AnOwnerwishingtopartitionthePropertyshallfirstoffertosellherinterest
    inthePropertytotheotherOwner,accordingtotheprovisionsofthisAgreement,and
    agreestoparticipateinthemediationandarbitrationproceduressetforthinthis
    Agreement.OwnersshalldistributepartitionproceedsinaccordancewithSubparagraph
    (a.)ofthisSection.

    iii. CondemnationandEminentDomain:Theproceedsofanycondemnationoreminent
    domainproceedingshallbedistributedinaccordancewithSubparagraph(a.)ofthis
    Section.

    iv. Destruction:IntheeventthatthehouseisdestroyedandOwnerschoosenottorebuild,
    OwnersshallshareinsuranceproceedsinaccordancewithSubparagraph(a.)ofthis
    Section.Generally,OwnersshallendeavortorepairanydamagetothePropertysolong
    astherepairsdonotincuranymorethan$10,000inoutofpocketexpensestoanyone
    Owner.

    b. CalculatingtheRelativeValuePercentageofeachCotenancyInterest:Forthepurposeof
    distributionslistedabove,PartiesagreetousetheRelativeValuePercentageofeachCotenancy
    Interest;thisisbecausethemarketvalueofeachCotenancyInterestmayfluctuatebasedon
    improvements,maintenance,andotherfactors.TheRelativeValuePercentageswillbe
    determinedbyhavingeachCotenancyInterestappraisedseparately,thendividingeach
    appraisalbytotalofthetwoappraisedvalues.Forexample,ifOwnerAsCotenancyInterestis
    appraisedat$400,000andOwnerBsCotenancyInterestisappraisedat$350,000,thenthe
    RelativeValuePercentageswillbe53.33%and46.66%,respectively.Toensureprecisioninthis
    process,Ownersmay,attherequestofeitherOwner,jointlyhiretwoseparateappraisers,each
    ofwhomwillmakeadeterminationoftheRelativeValuePercentages.Ownerswillthenaverage
    thetwoappraisals.
    Page34of101


    24. ThisAgreementShallBindFutureOwners

    a. UnlessthisAgreementisterminated,thetermsoftheAgreementshallbebindingoneachof
    theOwnersandherheirs,assigns,transferees,andsuccessorsininterestandshallconstitutea
    covenantand/orequitableservituderunningwiththeProperty.WhenaCotenancyInterestin
    thePropertyistransferred,allrightsandobligationsunderthisAgreementmustbeacceptedby
    thetransferees.AnytransferofaCotenancyInterestinthisPropertyshallbevoidifthe
    transfereedoesnotacceptallrightsandobligationsassociatedwiththetransferredshareofthe
    Property.TransfereesmustacceptthisAgreementbysigninganaddendumagreeingtobe
    boundbythetermsofthisAgreement,orbyenteringintoanewagreementwiththenon
    transferringOwner,subjecttoapprovalbythenontransferringOwner.

    25. ResolutionofDisputes

    a. Mediation:AnyunresolvabledisputesbetweentheOwnersregardingtheuse,management,
    ownership,ordispositionofthePropertyshallbesubmittedtomediation.Amediatorshallbe
    chosenbybothOwners,oriftheycannotsoagree,eachOwnershallselectonepersonandthe
    twoselectedpeopleshall,together,selectathirdpersontoactasmediator.Thechosen
    mediatorshallconductatleastonemediationsessionperweekforthreeweeks,withboth
    Ownerspresent,unlessthedisputecanberesolvedsooner.Eachsessionmustlastuptotwo
    hours,unlessthedisputeisresolvedsooner.EachOwneragreestoparticipateinthemediation
    ingoodfaithandmakereasonableeffortstoresolvethedisputequickly.Ifnoagreementis
    reachedafterthreemediationsessions,theOwnersagreetosubmitthedisputetoarbitration
    assetforthinthisAgreement.

    b. Arbitration:IftheOwnersareunabletoresolvetheirdisputesbymediation,theissuesin
    controversyshallbesubmittedtoanarbitratorselectedbytheOwners.IfOwnercannotagree
    onanarbitrator,theyshalleachselectoneperson,andthetwopeopletogethershallchoosean
    arbitrator.Thearbitratorshallbecompetenttoconductarbitrationproceedingsinconformity
    toapplicableprovisionsofCalifornialaw.NoOwnersshallbeawardedattorneys'feesincurred
    duringarbitrationofanydispute.

    26. Indemnity

    a. IfaPartybecomessubjecttoanyclaim,liability,obligation,orlossarisingfromorrelatedtothe
    willfulornegligentactoromissionofanotherParty,suchotherPartyshallfullyindemnifyand
    defendtheliablePartyfromallassociatedcostsandexpensesincludingattorneysfees.

    27. EffectiveDate,Term,andTermination:

    a. ThisAgreementiseffectiveonthedateitissignedandshallcontinuefor90yearsfromthe
    effectivedate,unlesspartiesterminatetheAgreementsoonerbymutualagreement,
    consolidationofthepropertyundersoleownership,saleoftheentireproperty,conversionof
    thepropertytoacondominium,orpartition.

    Page35of101

    28. MiscellaneousProvisions

    a. HeadingsandsubheadingsinthisAgreement:ThisAgreementcontainsmanyheadingsand
    subheadings(inbold),whicharetheretomaketheAgreementeasiertoreadandnavigate.The
    headingsandsubheadingsarenotintendedtohaveanylegaleffectorlimitthescopeor
    meaningoftheprovisionscontainedinthisAgreement.
    b. Pronouns:ForthesakeofbrevityandflowinthisAgreement,thephraseheorshehasbeen
    abbreviatedbythewordshe,andhisorherhasbeenabbreviatedbythewordher.
    c. AgreementgovernedbythelawsofCalifornia:Thevalidityandinterpretationofthis
    AgreementshallbegovernedbythelawsoftheStateofCalifornia.
    d. Severability:ShouldanyprovisionofthisAgreementbedeterminedtobeinvalid,theremaining
    provisionsshallremaininfullforceandeffect.
    e. Consultationwithattorneys:ThisAgreementhasbeendraftedwiththeassistanceofattorney
    ______________,whoisrepresentingPERSON1.EachOwnerhasbeengiventheopportunityto
    consultwithherownseparateattorney,beforeexecutingthisAgreement.
    f.

    AmendingthisAgreement:ThisAgreementmaybealteredoramendedonlybywritten
    agreementsignedbyallOwners.

    g. MultipleoriginalsofthisAgreement:ThisAgreementmaybeexecutedinmultipleoriginals,
    eachofwhichshallbeconsideredanoriginal.
    Inwitnesshereof,theOwnershavesignedthisAgreementonthedateandyearsetforthnexttoeach
    signature.

    Dated:____________________
    _______________________________
    PERSON1

    Dated:____________________
    _______________________________

    PERSON2

    Attachments:

    ExhibitA:AttachedasExhibitAisadrawingofthepropertywithbuildingsandfeaturesasdescribed.

    Page36of101

    COMMONINGREDIENTSOFCC&RS
    Conditions,Covenants,andRestrictions(CC&Rs)isthenameofadetaileddocumentthatistypically
    recordedinthecountypropertyrecords,andwhichdescribesacondominiumcommunitysplansforthe
    managementofpropertyrightsandresponsibilities.Cohousingcommunitiesthatarestructuredas
    condominiumsareusuallysubjecttoasetofrecordedCC&Rs.CC&Rsareusuallyrecordedalongwitha
    CondominiumPlanthatclearmapsouttheboundariesofunitsandcommonareas.

    WehavenotincludedasamplesetofCC&Rsinthishandbook,primarilybecausetheCC&Rsof
    cohousingcommunitiesarenotespeciallyuniqueincomparisontotheCC&Rsoftypicalcondominium
    communities.

    CC&Rstypicallycoverthefollowingmatters:

    1. DescriptionofProperty:Locationanddescriptionofproperty;boundariesoflandandlocation
    ofbuildings.
    2. Units:Descriptionoftheunitsandtheirboundaries.
    3. CommonAreas:Descriptionofcommonlyownedportionsoftheproperty(CommonAreas).
    4. ExclusiveUseAreas:Adescriptionoftheareasthatareownedbythegroup,butreservedfor
    theuseofindividualunitowners(ExclusiveUseAreas).
    5. OwnersAssociation:ProvisionsmandatingthecreationofaCondoOwnersAssociation(COA).
    6. MandatoryMembership:RequirementthatunitownersbemembersintheAssociation.
    7. VotingRights:Allocationofvotingrightsofunitowners.
    8. AllocationofExpenses:Generaldescriptionofthehowtheassociationwillhandlefinancesand
    allocateexpensesbetweenunitowners.
    9. AssessmentsandEnforcement:Descriptionofhowassociationwillenforcerulesandpayments,
    suchastherighttoplacealienonunitsofownerswhofailtopay.
    10. Insurance:Generaldescriptionofplansforinsurance.
    11. Architecture:Aframeworkforregulatinguseandarchitectureoftheproperty.
    12. Maintenance:Designationofresponsibilityformaintenanceofcommonareasversusunits.
    13. UseRestrictions:Restrictionsonhowthepropertymaybeused.
    14. DamageandDestruction:Provisionsrelatedtothedestructionoftheproperty.
    15. RightsofFirstRefusal:Rightsoffirstrefusal,tobeexercisedintheeventthananownerwants
    tosellaunit.
    16. Expansion:Provisionsrelatedtothepotentialtoexpandthecommunity.
    17. DisputeResolution:Provisionsrequiringmediationand/orarbitrationintheresolutionof
    disputes.

    Page37of101

    SAMPLEBYLAWSFORACOHOUSINGOWNERS
    ASSOCIATION

    ABOUTTHESESAMPLEBYLAWS
    ThesesampleBylawsareforacondominiumassociationwhereunitsareownedbythemembersand
    theland(evenunderthecondounits)andallcommonfacilitiesareownedormanagedbythe
    CohousingOwnersAssociationwhichisanonprofitmutualbenefitcorporation.Theprocessfor
    decisionmakingintheseBylawsisconsensus.Themanagementistobedividedintoteamsresponsible
    forspecificspheresofmanagementandauthorizedtomakespecifictypesofdecisions.TheBylaws
    provideforthefacilitateddevelopmentoftheAssociationsconsensusprocessandthedevelopmentof
    themanagementteams.Thistoolkitincludesasampleconsensuspolicy.

    Inaddition,thesebylawsarepreliminary;thatis,theyaredraftedtoaddresstheneedsofan
    organizationinthefirststageofoperation.NotethatthesebylawscallforthedevelopmentofTeams,
    PoliciesandProceduresthatmust,byCalifornialaw,bedevelopedandincludedinthebylaws.Itis
    recommendedthatanorganizationworkwithanattorneytodevelopthesePoliciesandProceduresto
    makesurethattheycomplywithlegalrequirements.Onceadopted,bylawsmustbeamendedto
    includethePoliciesandProcedures.

    TheseBylawsandtheconsensuspolicyaresamplesbasedonspecificcircumstancesandareforyouruse
    onlyasexamples.Yourownbylaws,decisionmakingprocess,andsystemofmanagementmayturnout
    tobeverydifferentfromthesesamples,basedonyourownspecificvaluesandgoals.Weemphasize
    thatyourorganizationwillhaveamuchbetterchanceoflongtermsuccessifyoubeginbyestablishing
    clearvalues,policiesandgoalsthatwilldeterminechoicesoforganizationalstructure,ownership,
    financing,andmanagement.

    BYLAWSOFTHEMOUNTAINTOPCOHOUSINGOWNERSASSOCIATION
    ACaliforniaNonprofitMutualBenefitCorporation

    1.
    NameandLocation

    ThenameofthecorporationistheMountainTopCohousingOwnersAssociation,referredtointhese
    BylawsasAssociation.TheAssociationisincorporatedundertheCaliforniaNonprofitMutualBenefit
    Corporationlaw.TheprincipalofficeoftheAssociationis,andshallbelocatedinSanLuisObispo
    County,StateofCalifornia.

    2.
    PurposeoftheBylaws

    ThepurposeoftheseBylawsistoprovidefortheoperationandmanagementofMountainTop
    Cohousing,acondominiumdevelopmentmadeupofninememberownedresidentialunitsand
    Associationownedcommonfacilities,createdundertheDavisStirlingCommonInterestDevelopment
    Act,CivilCodesections13501378,anddescribedwithintheseBylaws,theMountainTopCohousing
    Covenants,Conditions&Restrictions(Declaration),policies,rules,agreementsandprocedureswhich
    areincorporatedintheseBylawsintheirentiretybyreferenceastheyareadoptedandamendedfrom
    Page38of101

    timetotime.TheBylaws,Declaration,policies,rules,agreements,andproceduresadoptedby
    MountainTopCohousingshallbecollectivelyreferredtoasitsGoverningDocuments.

    3.
    MembershipandVotingRights

    Everyownerofaunitshall,byvirtueofownership,beaMemberoftheAssociation.Forpurposesof
    theseBylawsandallotherGoverningDocuments,thetermMemberappliesonlytoapersonwhoowns
    orsharesownershipofaunitorunitsinMountainTopCohousing.Forpurposesofconsensus,where
    thereismorethanonerecordownerofaunit,eachownerisentitledtoparticipateintheconsensus
    decisionmakingprocessesasdescribedintheseBylawsandotherGoverningDocuments.Ifvotingis
    usedinadecisionmakingprocessatfullMembershipmeetings,eachunitisentitledtoonevote.

    4.
    ThePurposeandValuesofMountainTopCohousing

    ItisthepurposeofMountainTopCohousingtocreateasupportive,peaceful,healthy,sustainable,
    affordable,andfriendlycommunityamongitsmembers.TheAssociationshalldeveloppolicies,rules,
    agreements,andproceduresasappropriatetocarryoutthepurposesandgoalsofMountainTop
    CohousingandshallmanageandoperateMountainTopCohousingaccordingtoitspurposesandgoals.
    Morespecifically,thegoalsofMountainTopCohousingareto:

    a. createaninterconnectedcommunitythatenrichesthedailylivesofitsMembersandthe
    surroundingcommunity;
    b. togovernthecommunitybasedonaprocessthatbuildscommunityandresultsindecisions
    thatcanbeeffectivelyimplemented;
    c. createacommunitycultureandgoverningprocessesthatincludeopportunitiesforpositive
    growthandchangeforMembersandthecommunity;
    d. createacultureofsharingandtosharetheCommonHouse,theCommonHousefacilities,
    commonareas,andcommonlyownedpossessionsaccordingtotheagreementsandrules
    fortheiruse;
    e. supportandrespecttheneedsanddesiresforprivacyofMembers;
    f. provideasecureandsafeenvironmentforresidentsandespeciallyforchildren;
    g. createandmaintainenvironmentalandeconomicsustainabilitytotheextentpossible;
    h. provideandmaintainaffordablehousingformembers;
    i. supportnonviolenceandengageinnonviolentcommunication;
    j. supportandencourageactivitiesthatcreatehealthandhappiness;
    k. encouragepositiveinvolvementinthesurroundingcommunity;and
    l. includeopenspacesandfacilitiesdedicatedtogardening,gathering,personalandcultural
    enrichment,play,andrecreation.

    5.
    ApplicationoftheBylaws

    TheseBylawsandthedocumentsincorporatedintothembyreference,includingtheMountainTop
    CohousingDeclarationandgoverningpolicies,rules,agreements,andproceduresastheyeachare
    adoptedandmaybeamendedfromtimetotimetocarryoutthepoliciesandgoalsoftheAssociation,
    applytotheentirecondominiumdevelopmentasdescribedintheDeclarationincludingallseparately
    ownedunitsandcommonlyownedland,structures,andfacilities.TheseBylawsandotherincorporated
    GoverningDocumentsapplytoallpresentandfutureownersofeachunit,mortgageesandother
    encumbrances,lessees,tenants,licensees,andalloccupantsofunitsforanylengthoftimeandtheir
    Page39of101

    guestsandemployees,andanyotherpersonwhomaybepresentonthepremisesorusetheMountain
    TopCohousingfacilities.

    6.
    AssociationDutiesandResponsibilities

    TheAssociationshall:

    a. maintainallcommonareasandfacilitiesingoodorder;
    b. maintaininsuranceasrequiredbytheDeclaration;
    c. fix,levy,collectandenforceassessmentsassetforthintheDeclarationandasneededto
    payforallbudgetedexpenses;
    d. enforcetheseBylaws,theDeclarationandallotherGoverningDocumentsincluding
    governingpolicies,rules,agreements,andprocedures;
    e. keepadequateandcorrectbooksandrecordsofaccount,minutesofMembersMeetings
    andteamMeetings,andacurrentlistofallnamesandcontactinformationofallMembers;
    f. keepthecompleterecordofalltheAssociationsactionsandaffairs;
    g. contractforgoodsandservicesasprovidedintheDeclaration;and
    h. defendtheAssociationasneededincourt.

    7.
    OrganizationalStructureofOperationsandManagement

    TheoperationsandmanagementofMountainTopCohousingwillbeconductedbasedondecision
    makingspheresasdescribedbythepracticeofsociocracyand/orbytheOccidentalArtsandEcology
    Center/SowingCircleCommunityModel,asapplicable.TheAssociationwillhire,andMemberswill
    workwith,aconsultanttodevelopandmanageappropriatedecisionmakingspheres,TeamProcedures,
    andaclearDecisionMakingChart.Decisionmakingsphereswilloperateasteamstooverseespecific
    areasofoperationandmanagementandwillbemadeupofMembersresponsibleforcarryingoutthe
    daytodaydecisionstheymakeandproposingimportantdecisionstobemadebyallMembers,as
    describedintheTeamProceduresandDecisionMakingChart.TheDecisionMakingChartandTeam
    ProceduresastheymayfromtimetotimebeamendedbytheMembershipareincorporatedinthese
    Bylawsbyreference.

    8.
    Governance

    8.1 ConsensusDecisionMakingProcess.Tocarryoutthegoalofgovernancestatedabovein
    section4.(b),itistheintentoftheAssociationMemberstogoverntheAssociationbased
    onaconsensusdecisionmakingprocesswhichshallbedevelopedandadoptedbythe
    Membershipandwhichmaybeamendedfromtimetotimetofurtherthevaluesand
    goalsofMountainTopCohousingandtheAssociation.Theconsensusprocessthatis
    adoptedshallincludeaneffectivemethodofgoverningtheuseofblockstodecisions
    andthismethodshallprovide,amongotherthings,anexplanationofwhatconstitutes
    inappropriateblocksandthemethodthatwillbeusedtodeterand/orprevent
    inappropriateblocks.

    8.2 CommunicationsandConsensusTraining.ImmediatelyafterestablishingtheAssociation
    andnolaterthantwomonthsafterestablishingtheAssociation,allMembersshall
    participateintrainingincommunicationsandtheconsensusprocessprovidedbya
    professionalconsultanttobehiredbytheAssociation.

    Page40of101

    8.3

    8.4

    9.

    DevelopmentandAdoptionofConsensusProcess.Thetrainingincommunicationsand
    consensusprocessdescribedaboveshallincludeconsultantfacilitationofdevelopmentof
    theMountainTopConsensusPoliciesandProcedurestobeusedbytheAssociationand
    shallculminateintheadoptionoftheConsensusPoliciesandProcedureswhichare
    incorporated,asamendedfromtimetotime,intheseBylawsbyreference.
    Developmentandadoptionofcommunicationspolicy.Thetrainingincommunications
    andconsensusprocessdescribedaboveshallincludeconsultantfacilitationof
    developmentoftheMountainTopCommunicationsPoliciesandProcedurestobeusedby
    theMembersinrelationtoAssociationmattersandshallculminateintheadoptionofthe
    CommunicationsPoliciesandProcedureswhichareincorporatedasamendedfromtime
    totimeintheseBylawsbyreference.

    BoardofDirectors

    9.1 MembersoftheBoardofDirectors.AllMembersoftheMountainTopCohousing
    AssociationshallbeontheAssociationBoardofDirectors.ThenumberofDirectorswill
    bedeterminedbythenumberofMembersintheAssociation.

    9.2 DirectorsReferredtoasMembers.SinceallMembersoftheAssociationareDirectorson
    theAssociationBoardofDirectors,MembersandDirectorsareoneandthesameandwill
    bereferredtointheseBylawsasMembersandtheBoardofDirectorsshallbereferredto
    asMembership.

    9.3 MeetingsoftheBoardofDirectors.SinceallMembersoftheAssociationareDirectorsof
    theAssociationBoardofDirectors,allmeetingsoftheBoardwillbemeetingsofthe
    MembershipandarereferredtointheseBylawsasMembershipMeetings.

    9.4 ResponsibilityoftheMembership.TheactivitiesandaffairsofMountainTopCohousing
    andtheAssociationshallbeconductedandallcorporatepowersshallbeexercisedbythe
    Membership.TheMembershiphastheultimateresponsibilityfordirectingtheaffairsof
    theAssociationandofMountainTopCohousing.

    9.5 PowersandDuties.TheMembershiphastheauthorityanddutytoadoptgoverning
    policies,rules,agreements,andprocedures;overseeandreviewtheadministrationofthe
    Associationsaffairs;enforcetheseBylaws,theDeclarationandalladoptedgoverning
    policies,rules,agreements,andprocedures;levyandcollectassessments;andimpose
    fines.

    9.6 DelegationofAuthorityandDuty.TheMembershipwilldelegatetheresponsibilityfor
    specificelementsofMountainTopCohousingandtheAssociationtoMemberteams
    whichwillhavespecificallydefineddutiesandspheresofdecisionmakingauthorityas
    limitedbyCorporationsCodesection7212andasdescribedintheTeamProceduresand
    DecisionMakingChart,includedintheseBylawsbyreferenceastheymaybeamended
    fromtimetotime.

    9.7 BudgetTeam.TheMembershipshallappointaninitialBudgetTeamwhichshalldevelop
    theBudgetProceduresandpresenttheBudgetProcedurestotheMembershipforreview,
    potentialamendment,andadoption.Onceadopted,theBudgetProceduresasamended
    Page41of101

    fromtimetotimeshallbeincludedintheseBylawsbyreference.Atthebeginningofeach
    fiscalyearataMembershipMeetingtheMembersshallappointabudgetteamwhich
    shalldevelopabudgetforfollowingfiscalyearinaccordancewiththeBudgetProcedures.
    TheproposedbudgetwillbedistributedtoallMembersandpresentedataMembership
    meetingatleast60daysbeforethebeginningofthenextfiscalyear.

    10.

    Chairperson,Secretary,andTreasurer

    10.1 Officers.ThepositionsofSecretary,Treasurer,andChairpersonshallbefilledby
    consensusoftheMembershipandshallbeheldforoneyear.

    10.2 Chairperson.TheChairpersonshallberesponsibleformanagingarotationsystemfor
    meetingfacilitators.TheChairpersonshallalsoberesponsibleforsigningcertain
    documentsandchecksfortheAssociation,asprovidedinParagraph20.Anyother
    responsibilitiesoftheChairpersonshallbedeterminedbytheMembershipbyconsensus.

    10.3 DutiesofSecretary.TheSecretaryshall,amongotherthings,keeptheminutesof
    MembershipmeetingsincludingarecordofdecisionsmadeatMembersmeetings,shall
    servenoticesofSpecialMembermeetings,shallpostnoticesofmeetingsontheCommon
    Housebulletinboard,andshallkeeppastandcurrentrecords,includingbutnotlimitedto
    alistofcurrentMembersbasedonrecordedownershipofunitsandtheircontact
    information.TheSecretaryshallalsoberesponsibleforsigningcertaindocumentsand
    checksfortheAssociation,asprovidedinParagraph20.

    10.4 DutiesofTreasurer.TheTreasurershallreceiveanddepositinappropriatebankaccounts
    allmoniesoftheAssociationanddisbursefundsasdirectedbytheMembers,shallcosign
    allchecksandpromissorynotesoftheAssociation,shallkeepproperbooksofaccountor
    causethemtobekept,andshallassistinorcausethepreparationanddistributionofthe
    financialstatementsoftheAssociation.TheTreasurershallalsoberesponsibleforsigning
    certaindocumentsandchecksfortheAssociation,asprovidedinParagraph20.

    10.5 ResignationandRemoval.TheChairperson,Secretary,andTreasurermayresignatany
    timebywrittennoticeandmayberemovedatanytimewithorwithoutcausebythe
    Membershipbywrittennotice.

    11.
    MembershipMeetings

    11.1 RegularMembershipMeetings.TheMemberswillhaveregularMembershipmeetings
    onceamonthonthethirdWednesdayofeverymonth.

    11.2 NoticeandPlaceofRegularMembershipMeetings.Noticeofthedayofthemonthon
    whichregularmonthlyMembershipmeetingswillbeheldwillbegivenatthebeginningof
    eachfiscalyear.Noticeoftheday,time,andlocationofeachmonthsRegular
    MembershipMeetingwillbepostedatalltimesontheCommonHousebulletinboard.

    11.3 SpecialMembershipMeetings.TheSecretaryshallcallaspecialmeetingofthe
    Membershipifdirectedtodosobyapetitionstatingthepurposeofthemeetingand
    signedbynotlessthanthirtypercent(30%)oftheMembers.Thenoticeofanyspecial
    meetingshallstatethepurpose,date,time,andplaceofthemeeting.Nobusinessshallbe
    Page42of101

    transactedandnodecisionsshallbemadeataspecialmeetingexceptasstatedinthe
    notice.

    11.4 NoticeofSpecialMembershipMeetings.Noticeofthepurpose,date,time,andplaceof
    aspecialmeetingshallbedeliveredbytheSecretaryandshallbedeliveredatleastten
    daysbeforethespecialmeetingtoeachresidencebymailorbyphone,emailorother
    methodthatisagreedtoinwritingbytheMembership.Ifnoticeisbymail,deliveryis
    whenthenoticeismailed.NoticeofanyspecialMembershipMeetingshallbe
    immediatelypostedontheCommonHousebulletinboardandmaintainedthereuntilthe
    meetingisover.NoticeofaspecialMembershipMeetingmaybewaivedinwritingbefore
    orafterthemeeting,byconsenttoholdingthemeeting,orbyapprovalofthemeeting
    minutesandisdeemedtobewaivedbyattendanceatthemeeting.

    11.5 EmergencyMembershipMeetings.AnemergencyMembershipMeetingmaybecalledby
    anyMemberwheretherearecircumstancesthatrequireimmediateattentionand/or
    actiontoprotectthewelfareofaMember,Members,MountainTopCohousing,orthe
    Association,andwhichofnecessitymakeitunreasonableorimpossibletotakethetime
    toprovidethenoticesrequiredforspecialMembershipMeetings.

    11.6 Quorum.Aquorumis50%oftheMembership.IfanyMembershipMeetingdoesnot
    haveaquorumpresentoriftheMemberspresentagreethatadditionalMembersshould
    bepresentforthemeeting,theMemberswhoarepresentmayadjournthemeetingtoa
    timenotlessthanfortyeighthoursfromthetimetheoriginalmeetingwascalled.
    ImmediatenotificationshallbegiventoallMembers.

    12.

    FinancialandReportingRequirements

    TheAssociationshallcarryoutthefinancialandreportingrequirementsinaccordancewith
    CivilCode1365through1365.6.

    13.
    Assessments

    13.1 AnnualMembershipBudgetMeeting.Memberswillattendandparticipateinanannual
    Membershipbudgetmeetingwhichwillbeheldatleast60daysbeforethebeginningof
    thenextfiscalyear,atwhichthebudgetforthenextfiscalyearasproposedbythebudget
    teamwillbediscussed,andatwhichabudgetwillbeapproved.ThisMembershipbudget
    meetingmaybecontinuedasneeded.

    13.2 BasisforRegularAssessment.Regularannualassessmentswillbebasedonthebudget
    approvedbytheMembershipforthatyearandshallbebilledtotheownerorownersof
    eachunitforthenextfiscalyear.

    13.3 NoticeofAssessmentandTimeforPayment.Atthebeginningofeachfiscalyear,the
    TreasurershallnotifyeachMemberoftheamountoftheregularmonthlyassessmentdue
    forthatyear.EachMemberisresponsibleforpaymentofhis/her/theirassessmentonthe
    firstofeverymonthwithoutadditionalnotice.AMembermaypayextrapaymentsorthe
    fullremainingamountdueoftheannualassessmentatanytime.

    Page43of101

    13.4 SpecialAssessments.IftheMembersdecideataMembershipMeetingthattheamount
    tobecollectedfromregularassessmentswillnotbeadequatetopaytheexpensesfor
    thatfiscalyearduetounanticipatedcostsorforanyotherreason,theMembersmay,ata
    noticedMembershipMeeting,setanamountconsistentwiththeneededamountfor
    specialassessment.Thespecialassessmentshallbepaideithermonthlyorinalumpsum,
    thesameastheregularassessment,unlesstheMembershipdecidesthatitisnecessaryto
    payinalumpsumorinanyotherway.

    13.5 InterestonUnpaidAssessments.Interestof10%maybepayableonanyportionofan
    assessmentifunpaidwithin30daysoftheassessmentduedate.

    13.6 EnforcementofAssessmentDue.Enforcementofanassessmentduemaybebycivilsuit
    toobtainapersonaljudgmentand/orbylienonthedebtorsunit.

    14.
    ConflictResolution

    TheMembershipshallappointmembersofaConflictResolutionTeam.TheMembersofthisteammay
    changefromtimetotimeasneeded.ThisTeamshallprovideconflictresolutionamongMembersand
    betweenMembersandtheAssociationand/orMembership,andshallprovideInitialConflictResolution
    MeetingswithMembersrelatedtoenforcementofBylaws,theDeclarationandotherpolicies,rules,
    agreements,andproceduresasdiscussedbelow.AconsultantshallbehiredbytheAssociationas
    neededtotraintheConflictResolutionTeamMembersinconflictresolution.

    15.
    EnforcementofGoverningDocuments

    15.1 EnforcementofGoverningDocuments.TheAssociation,throughitsMembership,shall
    enforcetheseBylawsanditsDeclaration,policies,rules,agreements,andprocedures.Itis
    understoodthattheAssociationhasthedutytoenforceitsGoverningDocumentsand,if
    theAssociationfailstoenforce,aMembermaytakejudicialactiontocompelthe
    AssociationtoenforcetheGoverningDocuments.

    15.2 Remedies.EnforcementofGoverningDocumentsshallincludealawsuitforinjunction,
    fines,andsuspensionofprivilegesincludingsuspensionfromparticipationinteams,
    suspensionfromparticipationinanydecisionmakingprocess,andsuspensionfromthe
    useofcommonareasandfacilitiesasallowedbylaw.Enforcementmaynotinclude
    suspensionfromattendanceofmeetingsorsuspensionfromfreeaccesstoanduseofa
    Membersunitand/orparcelconsistentwithlawandallGoverningDocuments.

    15.3 EnforcementTeam.TheMembershipshallappointanEnforcementTeamnolaterthan
    twomonthsafterincorporationoftheAssociation.TheEnforcementTeamshalldevelop
    EnforcementPoliciesandProcedures.ThePoliciesandProceduresshallincludeliens,
    suspensionofprivileges,fines,moneyjudgments,injunctions,impositionoflatecharges
    fordelinquentassessmentsandfines,paymentplansfordelinquentassessmentsand
    fines,andnoticeofanownersrighttodisputeadelinquency,tointernaldispute
    resolutionandtoalternativedisputeresolution.TheEnforcementTeamshalldevelopa
    specificFinePolicyandFineScheduleasdescribedbelow.AfteradoptionofthePolicyand
    Schedule,theFinePolicyTeamshallberesponsibleformonitoringtheeffectivenessofthe
    adoptedFinePolicyandFineScheduleandshallassesstheneedforandpropose
    appropriateamendmentsasneeded.
    Page44of101


    16.

    ConflictResolutionProcess

    16.1 NoticeofIntenttoEnforceandofInitialConflictResolutionMeeting.Unlessotherwise
    providedinParagraph18orunlesstheviolatingmemberrefusestoparticipateinthe
    conflictresolutionprocess,priortoinitiatingtheuseofanyremediesdescribedin
    Paragraph15.2,includingimpositionoffines,theAssociationmustusetheConflict
    ResolutionProcessdescribedintheseBylaws.Immediatelyafteraviolationoccursoris
    knowntotheMembership,theSecretaryshallprovidea)noticetotheMember,Members
    and,whereapplicable,rentersoftheAssociationsintenttoenforcenotsoonerthan30
    daysofthenotice,andb)noticeofanInitialConflictResolutionMeetingoftheConflict
    ResolutionTeamasdescribedbelow.

    16.2 InitialConflictResolutionMeetingwithConflictResolutionTeam.AnInitialConflict
    ResolutionMeetingofaMemberandtheConflictResolutionTeammayberequestedby
    theMemberornoticedbytheAssociationSecretary.Themeetingmustberequestedin
    writing.Oncerequested,theAssociationmustimmediatelyschedulethemeeting,which
    mustoccuratleastwithin20daysoftherequestandmorepromptlyifthecircumstances
    showanurgentneedforfasterresolution.

    16.3 PurposeoftheInitialConflictResolutionMeeting.ThepurposesoftheInitialConflict
    ResolutionMeetingshallbetounderstandandclarifythecircumstancesandthepositions
    oftheMemberandtheAssociation,resolveanyconflictifpossible,andattempttocorrect
    aviolation,ifpossible,orstopitfromcontinuing.Thismeetingmustbenoticedas
    describedbelow.Theteammustreporttheresultsofthismeetingtothefull
    Membership.

    16.4 RequiredParticipation.IftheInitialConflictResolutionMeetingisrequestedbya
    Member,theConflictResolutionTeamisrequiredtoparticipate.IftheInitialConflict
    ResolutionMeetingisrequestedbytheAssociation,theMemberisnotrequiredto
    participate.

    16.5 NoFeeforInitialConflictResolutionMeeting.AMemberoftheAssociationshallnotbe
    chargedafeetoparticipateinthisprocess.

    16.6 NoticeofInitialConflictResolutionMeeting.Nomatterwhocallsthemeeting,any
    meetingoftheConflictResolutionTeamorthefullMembershiptodiscussenforcementor
    disciplineofanyMembershallbenoticed.TheSecretarymustgivetheMembernotice10
    daysbeforethemeetinginwritingandmusteitherdeliverthenoticepersonallyorbyU.S.
    mailorbyothermethodestablishedbytheMembershipinwriting.Thenoticemust
    includethedate,time,andplaceofthemeeting,mustexplaintheviolationthatis
    claimed,andmustlettheMemberknowthatheorshehastherighttoattendthe
    meetingandtotalkwiththeMembershipabouttheallegation.

    16.7 AdditionalConflictResolutionMeetings.IftheMemberparticipatesinanInitialConflict
    ResolutionMeetingandthedisputeisnotresolvedbyagreementofboththeMember
    andtheConflictResolutionTeam,then,ifappropriateinrelationtotheurgencyfor
    resolution,theConflictResolutionTeamandtheMembermaymeetuptotwomoretimes
    within30daysoftheNoticeofInitialConflictResolutionMeeting.
    Page45of101


    16.8 UnresolvedConflict.Ifthisprocessdoesnotresultinendingtheviolationand/orprovide
    aremedyforharmsdonewithinthe30dayperioddescribedinParagraph16.1,orifthe
    MemberdoesnotparticipateintheConflictResolutionProcess,thentheAssociationmust
    usetheremediesdescribedinParagraph15.2toenforcethetermsoftheseBylawsandits
    Declaration,policies,rules,agreements,andprocedures.Atameetingnoticedas
    describedinParagraph16.8,theMembershipshalldecidetheremedytobeimposed.The
    Membershallnotparticipateinanydecisionmakingprocessesrelatedtoenforcement.

    16.9 ResolvedConflict.IftheMemberparticipatesinthisprocessandaresolutionisreached
    thatisnotinconflictwiththelawortheAssociationsGoverningDocuments,the
    resolutionshallbeputintowritingandsignedbytheparties,andshallbindtheparties
    andbeenforceableincourt.

    17.

    Waivers.

    WaiverofenforcementoftermsoftheGoverningDocumentsmaybegrantedbytheMembership
    withoutbiasandwhereitisdeterminedthatawaiverisinthebestinterestofMountainTopCohousing
    and/ortheAssociation.TheMembershipunderstandsthatfailuretoenforceatermofitsGoverning
    DocumentsortheimpropergrantingofwaiverscouldresultintheAssociationslossofitsrightto
    enforcethatterm.

    18.
    ImmediateEnforcementofGoverningDocuments

    Enforcement,asallowedbylawandtheseBylawsandotherGoverningDocuments,includingimposition
    offines,suitforinjunctionand/orsuspensionsasdescribedintheseBylaws,shallbeimmediatewhere
    anyviolationhascaused,iscausing,orcouldcauseseriousharmorinjurytopeople,property,orthe
    environment,asdeterminedbytheConflictResolutionTeam.Insuchacase,itshallnotbea
    requirementtousetheConflictResolutionsProcesspriortoinitiatingenforcement.

    19.
    EnforcementofGoverningDocuments:Fines

    19.1 FinePolicyTeam.TheMembershipshallappointaFinePolicyTeamwhichwillbe
    responsiblefordeveloping,andamendingasneeded,aproposedFinePolicyanda
    proposedFineSchedule.AfteradoptionofthePolicyandSchedule,theFinePolicyTeam
    shallberesponsibleformonitoringtheeffectivenessoftheadoptedFinePolicyandFine
    Scheduleandshallassesstheneedforandproposeappropriateamendmentsasneeded.

    19.2 FinePolicy.ThefinesintheFinePolicyshallbereasonableandtheamountoffinesshall
    besettodeterviolationofMountainTopCohousingsGoverningDocuments.

    19.3 ReviewandAdoptionofFinePolicyandFineSchedule.BeforetheFinePolicyandFine
    Scheduleareadopted,theAssociationmustsendadraftoftheproposedPolicyand
    ScheduletotheMembershipfor30daysofreview,afterwhichaMembershipMeeting
    willbeheldtodiscuss,amendasnecessary,andadoptaFinePolicyandFineSchedule.

    19.4 NoticeofFinePolicy,FineScheduleandFine.TheFinePolicyandFineScheduleshallbe
    providedtoallMembersatthebeginningofeachyearandshallbepostedatalltimeson
    theCommonHousebulletinboard.Beforefining,theSecretaryshallprovidenoticeof
    Page46of101

    intenttoenforceandnoticeofinitialconflictresolutionmeeting,asdescribedinSection
    16.

    20.

    FiscalYear

    ThefiscalyearfortheMountainTopCohousingAssociationshallbethecalendaryear,beginningon
    January1andendingonDecember31.

    21.
    AvailabilityofDocuments

    AllAssociationandMountainTopCohousingdocumentsshall,asstatedabove,bekeptbythe
    AssociationSecretarywhoshallmakealldocumentsavailableforreviewbyallMembersbyappointment.

    22.
    ExecutionofDocuments.

    Allagreements,contracts,deeds,leases,checks,andotherinstrumentstobeexecutedonbehalfofthe
    Associationshallbesignedbytwoofthefollowingofficers:theChairperson,Secretary,and/or
    Treasurer.Innoeventshallanysuchdocumentbesignedbyonlyonepersonunlessadecisionhasbeen
    adoptedbytheMembershiptoallowthesigningofcertaindocumentsorofchecksunderacertain
    amount.

    23.
    GoodFaithActions

    WhenmakingdecisionsandactingfortheAssociation,Membersunderstandthatitistheir
    dutytoactingoodfaithinthebestinterestofMountainTopCohousingandtheAssociation.

    24.
    ContributionsofTime,Labor,andServices

    24.1 ServicestotheAssociationonVolunteerBasis.Allserviceonteams,service
    asChairperson,Secretary,andTreasurer,andserviceasfacilitatorofany
    processormeeting,andanyotherservicetoMountainTopCohousingshallbe
    onavolunteerbasiswithoutpay,unlessotherwisedecidedbythe
    Membership.

    24.2 ContributionsofTime,Labor,andServices.TheMembersoftheAssociation
    agreetocontributetheirtime,labor,andservicestothebenefitofMountain
    TopCohousingasdescribedintheMountainTopCohousingCommunity
    ServicePolicyandRuleswhichisincludedintheseBylawsasamendedfrom
    timetotime.

    24.3 CommunityServiceandMaintenanceTeam.TheMembershipshallappointa
    CommunityServiceandMaintenanceTeamwhichwilldeveloptheMountain
    TopCohousingCommunityServicePolicyandRulesforreview,amendment,
    andadoptionbytheMembership.

    25.
    Pets

    25.1 PetPolicy.PetsmaybekeptinaccordancewiththeMountainTopCohousing
    PetPolicywhich,whenadopted,willbeincludedbyreferenceintheseBylaws
    Page47of101

    asamendedfromtimetotime.Thepetpolicyshallincludelimitsonthetype,
    size,andnumberofpetsallowedatMountainTopCohousing,andshallset
    rulesabouttheenclosureandbehaviorofanimals.

    25.2 PetPolicyTeam.TheMembershipshallappointaPetPolicyTeamwhichwill
    developtheMountainTopCohousingPetPolicyandRulesforreview,
    amendment,andadoptionbytheMembership.ThePetPolicyTeamshallbe
    responsibleformonitoringtheeffectivenessofthePetPolicy,developing
    appropriateamendmentsforreviewbytheMembership,andformonitoring
    complianceandtheneedforenforcementofthePetPolicyandRules.
    ViolationsofthePetPolicyandRulesmaybereportedtotheMembershipby
    anyMember.

    26.

    Amendments.

    TheseBylawsmaybeamendedataproperlynoticedMembershipmeetingbyaconsensusofthe
    membershipasdescribedintheAssociationsConsensusPolicy.

    27.
    Indemnification

    TheMountainTopCohousingAssociationshallindemnifyallMembersintheirstatusofdirectorsand/or
    officersandanypersonwhoisorwasanemployeeoragentofMountainTopCohousingAssociation
    (CorporationsCodesection7237)tothefullestextentpermittedandsubjecttoanylimitationsimposed
    bytheCaliforniaCorporationsCodesection7237.Inaddition,theMembersoftheAssociationareand
    shallbeentitledtothebenefitsdescribedintheMountainTopCohousingDeclarationofCovenants,
    Conditions&Restrictionsandsection1365.7oftheCaliforniaCivilCodebothofwhichlimittheliability
    ofdirectorsandofficers.

    Page48of101

    SAMPLECONSENSUSPROCESSPOLICY
    byTreeBressen
    (ReprintedfromPracticingLawintheSharingEconomy,byJanelleOrsi,ABABooks2012).

    TreeBressenservesawidevarietyofgroupsonagifteconomybasis,offeringskilledfacilitation,
    dynamicworkshops,andelegantprocessdesign.www.treegroup.info

    Thefollowingisasamplepolicyoutliningaconsensusdecisionmakingprocessthatmaybeusefulto
    drawon.Thislevelofdetailwouldtypicallyappearinapolicydocumentratherthanbylaws,sothatit
    canbemoreeasilymodifiedasagroupevolves.Often,anorganizationsbylawswillmakereferencetoa
    separateconsensuspolicy,andrequirethatdecisionsbemadeinaccordancewiththepolicy.An
    electroniccopyofthispolicyandanaccompanyingarticlebyTreeBressenisavailableat:
    http://treegroup.info/topics/consensusinsharinglaw.pdf

    Introduction
    Consensusisacooperativeprocessinwhichgroupmembersdevelopandagreetosupportadecisionin
    thebestinterestofthewhole.Itembracesindividualperspectives,honoringeachpersonspieceofthe
    truth,whileemphasizingthesenseofthemeetingthroughacreativesearchforunity.Bychoosingto
    useconsensusasourprimarydecisionmakingmethod,werecognizethatwearepledgingtodothe
    hard,patientworkofbringingourbestselvesforwardandlisteningfromtheheart.Weencourage
    participantstoshareideas,feelings,needs,andconcerns,inaspiritofhonesty,kindness,andmutual
    respect,givingallviewpointsafairhearing.Werecognizewearesometimescalledtoacceptwithgood
    graceadecisionofthemeetingwithwhichwearenotentirelyinagreement.Weaffirmourwillingness
    tolistenwithanopenmindtothetruthsofothers,andtoworkingoodfaithtowarddecisionsthat
    reflectthewholegroupintentionandserveitsgreatestgood.

    AgendaPlanning
    Itemstobeconsideredforthemonthlymeetingagendaareexpectedtobereceivedbytheagenda
    planner(s)nolaterthan10daysbeforethemeeting,includinganyassociateddocumentation.Agenda
    plannersaimtopublishtheproposedagenda57daysbeforethemeeting,alongwiththebackground
    materials(reports,research,surveyresults,proposals,etc.).Membersareaskedtopleasereadthisand
    comepreparedtodiscusstheissues.
    Thereareoftenmorepotentialitemsfortheagendathantimeinthemeeting.Wesupportour
    agendaplannersinprioritizing,recognizingthatthegroupusuallyfindsitmoresatisfyingtodoa
    thoroughjobonafewitemsthantotakeaquickpassatmany.Agendaplannersmayalsoassist
    membersinfindingalternatewaystoaddressissueswithouttakingfullgrouptime.Theplannermakes
    suretherearefacilitatorsandminutetakerssignedupforeachmeeting,aswellasthenextagenda
    planner.
    Everyplenaryagendaincludestimeatthebeginningforshortpersonalcheckinsandgroup
    confirmationandapprovaloftheagenda;atleastonebreak;andtimeattheendforevaluationsand
    appreciations.Eachitemontheagendaisassignedatimeallocationandlabeledwithacleargoal,such
    as:Information,Discussion,orDecision.
    Weusethefollowingmatrixindeterminingwhetheranitemcomesfirstasanissuediscussion
    oranofficialproposal:

    Page49of101

    Is the issue . . .

    SIMPLE

    COMPLEX

    Proposal may pass with


    relative ease.

    Likely send to committee for


    main work.

    Might be ok to start with


    proposal, and might take a
    few more meetings, possibly
    with committee work in
    between.

    Start with issue discussion


    not proposal, and expect it to
    take a series of meetings,
    almost always with
    committee or individual work
    in between.

    SMALL

    LARGE

    FacilitatorRoles

    Weaskeveryonepresenttoshareresponsibilityforcreatingaconstructiveconversation.Our
    facilitatorstakespecialresponsibilitytosupportusbymanagingourmeetingprocesssotherestofus
    canfocusonthecontent.Thefacilitatoractsasaservantofthegroup.Inordertodothis,facilitators
    needtoremainasneutralaspossibleinword,deed,andappearanceandavoidstatingorimplying
    youropinionontheagendaitemsinthemeeting.Thisincludesnotbeingtheofficialpresenterofany
    itemsatthemeetingyouarefacilitating,andfindingareplacementfacilitatorifsomethinggetsputonto
    theagendathatyouhaveespeciallystrongfeelingsabout.Ifatanytimeyourneutralitybecomesan
    issue(foryoupersonallyorinsomeoneelsesperception),yourcofacilitatorandtherestoftheteam
    cansupportyoubysteppinginandgivingyouabreak.
    Thefacilitatorjobincludesworkingwiththeagendaplanner(s)beforehand.Eachmeetinghasa
    leadfacilitatorandanassistantfacilitator,whosignupaheadoftimeandtogetherdecidehowto
    handlethejob.Theymayrecruitadditionalassistanceifneededtocoverallthework,whichincludes:

    Contactingpresenterstodiscussformatandhowtheitemmayunfoldatthemeeting
    Gettingtheroomready,includingsettingupchairs,flipchart,markers,andtape
    Postingagendaclearlysoeveryonecanreadit
    Welcomingthegroupandopeningthemeeting
    Makingitclearwhichstepoftheprocessweareonwhen
    Keepingstackanddecidingwhospeaksinwhatorder,includingensuringthatquietervoices
    areheard
    Doingreflectivelisteningtoindividualparticipants,especiallythoseholdingconcerns
    Weavingandsummarizinginputtothemeeting
    Scribingcommentsandlistsontotheflipchart
    Suggestingformats,light&livelyexercises,orbreakstohelpimprovetheenergy
    Takingtemperaturechecksifneededtogetfeedbackfromthegroup
    Vibeswatching,thatis,keepinganeyeoutforemotionaldynamicsandresponding
    appropriately
    Runningthecallforconsensusoneachitemthatreachesthedecisionpoint
    Ensuringthatextraneousissueswhicharisemidmeetingandgetputontothebikerackmake
    itontotheagendalistafterwardtogetconsideredforfuturemeetings
    Timekeeping

    Page50of101

    Wetrytohaveatleastsixfacilitatorsontheteamatanygiventime,servingstaggeredterms,andto
    pairupmoreandlessexperiencedfacilitatorssothatnewcomersgetsupporttostepup.

    StepsoftheConsensusProcess
    Eachitemrequiringadecisiongoesthroughthefollowingsteps.Someitemsmaynotneedadecision,
    inwhichcasetheymightnotgothroughthefullsequence.Weexpectsubstantiveitemstotake
    multiplemeetings,inwhichcasewestarteachtimewithstep#1,andthenpickupwhereitmakessense
    basedonwhathappenedlasttime.Becauseweprefertogivepowertopeoplewhoarepresentina
    meetingmorethanthosewhoareabsent,proposalscanbemodifiedonthefloorandadopted;indeed,
    changingaproposalinresponsetonewwisdomemergingisattheheartoftheconsensusprocess.

    1.Introduction
    Typicallytakeslessthan5minutes,andcoversthefollowing:
    Whyarewetalkingaboutthis,whydoesitmatter?
    Historyoftheissue(includingresultsofanypreviousmeetingsonit).
    Goalforthisitematthisparticularmeeting(report,decision,committeegatherinput,etc.).
    Attheendoftheinitialpresentation,otherswhohavefactualknowledgeoftheissuearesometimes
    invitedtoaddinfurtherbitsaboutthehistoryandsoon,aslongasitdoesntgoonattoomuchlength.

    2.ClarifyingQuestions
    Thesearesimplequestionsjusttomakesureeveryoneintheroomfullyunderstandswhathasbeen
    presentedorproposed.

    3.Discussion
    Thisistheexploratoryphase,wherepeopleareinvitedtoaskfurtherquestions,showthefulldiversity
    ofperspectives,raisechallengesandconcerns,andsoon.Agreementsanddisagreementsongeneral
    directionarenoticed,andthereasonsforthemexaminednotjustwhatthepositionsare,butwhy,
    andanyunderlyingvaluesconflictsbroughtout.

    4.EstablishBasicDirection
    Whatisthesenseofthemeeting,intermsofbasicdirectiononthisissue?Hereweseekgeneralor
    philosophicalagreement,anagreementinprinciple.

    5.SynthesizeorModifyProposal(asneeded)
    Integratewhatsbeensharedsofarandmakeitasspecificasneeded,recognizingthatsomedetailswill
    alwaysbelefttoimplementationandreallifeexperimentation.Again,wenoticeagreementsand
    disagreements(thistimeonthespecificsoftheproposal),andworkwiththeunderlyingreasons,then
    generateideasforaddressingandresolvingconcerns,emergingwithaproposalthathassubstantial
    groupsupport.Periodicallythefacilitatormayask,Arethereanyremainingunresolvedconcerns?

    6.CallforConsensus
    Thefacilitatorclearlyrestatestheproposalandthenaskspeopletoindicatewheretheyare,usingthe
    optionslistedbelow.Rememberourbylawsrequire70%quorumforofficialdecisions.Notethat
    newcomersarerequiredtoattendanorientationfromthefacilitationteambeforetheycanbevested
    asfullyempowereddecisionmakingmembers.

    7.Record
    Thenotetakerreadsbackthedecisiontothegroup.Inaddition,theyrecordanyimplementation
    informationneeded(tasks,whosresponsible,timelines,etc.).
    Page51of101


    8.RevisitingtheDecisions
    Onceadecisionhasbeenreached,itmayberevisitedifanyofthefollowingconditionsapply:
    (a)Somethingrelevantandsignificanthaschangedsincethedecisionwasreached;
    (b)Morethantwoyearshavepassed;
    (c)Fiveormoremembersrequestarevisit.

    DecisionPointOptions
    Atthepointthatthefacilitatorcallsforconsensus(step#6above),participantshavethefollowing
    options:

    1.Agreement:Isupportthisproposal,andamwillingtoabidebyandimplementit.

    2.ConsentwithReservations:Isupportthebasicthrustofthisproposal,andhaveoneormore
    minorunresolvedconcerns.

    3.StandAside:Ihavemajorconcernswiththeproposal,andagreetostandasideandletthe
    groupproceedwithit.Thechoicetostandasidemaybebasedon(butisnotlimitedto)anyof
    thefollowing:
    Disagreementwiththeproposal,ortheprocessusedtoreachthedecision;
    Personalvaluesorprinciples;
    Personalimpactorneed,e.g.IcantaffordthisorIdhavetoleavethegroup.
    Ifsomeonestandsaside,theirnameandreasonisrecordedintheminutes.Thatpersonis
    relievedofanyleadimplementationresponsibilities,yetisstillboundtofollowthedecision.

    4.Blocking:Ibelievethisproposalwouldbemajorlydetrimentaltoourgroup,becauseeitherit
    goesagainstourfundamentalprinciplesoritwouldleadtoadisastrousoutcome.Notethat
    noneofthefollowingareappropriatereasonstoblock:
    Togetyourwayorbecauseyoupreferadifferentproposal,ornoproposal;
    Tofulfillyourpersonalmoralvaluesorhowyouwanttolive;
    Tradition:becausethingshavealwaysbeendonethisway;
    Becausetheproposedactiondoesntfityourpersonalneeds(orfinances);
    Becauseyoudhavetoleavethegroupiftheproposalpassed.
    Inordertoprotectagainstinappropriateuseofblocking,thegrouphastheoptiontoevaluate
    blocks:If90%ofthegrouppresentbelievesthatablockisbeingappliedinappropriately,then
    theblockisinvalidated.Thispowermustbeusedcarefullyinordertoavoidsimplyoverruling
    thosewedisagreewith.

    5.Abstain:Ichoosenottoparticipateinthemakingofthisdecision.Typicallyusedbecausea
    participantfeelsuninformedornotreadytoparticipate.

    Ifwevedoneagoodjobduringthediscussionperiod,thereshouldnotbeanysurprisesatthecallfor
    consensus.Ifanyonehasreservations,standsaside,orblocks,thegroupwillpausetoensurethatthe
    reasonsareclearlyknown,andconsiderwhethertheproposalmightbemodifiedtoaddressthe
    concerns.Ifmorethanthreepeoplehaveminorreservations,ormorethanonepersonstandsaside,we
    willaskwhetherornotthedecisionathandrequireshighersupportinordertofulfillthegoalsofour
    consensusprocess(highqualitydecisions,effectiveimplementation,andconnectionamongthegroup),
    Page52of101

    inwhichcasewemayholdthedecisionovertoafuturemeeting.Mostdecisionsdontneedtobemade
    inarush;atthesametime,werecognizethatthereisacosttoinaction,soweseektomovethings
    alonginordertorespectpeoplestime,energy,andmorale.
    Ifadecisionistimesensitiveduetoexternalfactorsandconsensusisnotreached,thegroup
    mayelecttoinvokeavotingfallback.Inorderforthattohappen,95%ofthosepresentmustagreeitis
    calledfor.Ifavotetakesplace,decisionsmaypassby90%ofthosevoting.Optionsatthatdecision
    pointare:Yes,No,Abstain.(Abstentionsdontcounttowardthetotal.)

    ***

    AdditionalConsensusResources
    TreeBressenswebsite,filledwithfreearticles,handouts,andpointerstoyetmoreresources.
    www.treegroup.info

    GroupWorksdeck,publishedbytheGroupPatternLanguageProject.Distillsthecorewisdomofgood
    meetingsintoanexcellenthandsontool.www.groupworksdeck.org

    SeedsforChange(UK)hasawonderfulwebsiteonconsensusdecisionmaking:theirwritingis
    straightforward,thorough,valuesbased,andincludesahistoricalandmulticulturalperspective.
    www.seedsforchange.org.uk/free/res#grp

    Starhawks'sFiveFoldPathofProductiveMeetings,afreebonuschapterfromherbookThe
    EmpowermentManual:AGuideforCollaborativeGroups.
    www.starhawk.org/Empowerment_FiveFoldPath.pdf

    TrainingforChangehasagreatcollectionoftoolsandexercisesontopicssuchasdiversity,strategy,
    andteambuilding.www.trainingforchange.org

    VernalProject.RandySchutt,longtimeactivist,hasadozenshortpapersoncooperativedecision
    making.See,forexample,GettingUnstuck:CommonProblemsinMeetingsandSomeSolutions.
    www.vernalproject.org/papers/Process.html

    Page53of101

    SAMPLELLCOPERATINGAGREEMENTFORCOHOUSING

    NoteaboutthisLLCOperatingAgreement:OperatingAgreementsforcohousingcommunitiesvary
    widely,basedontheneedsofthecommunity.Notethatthisparticularagreementenvisionsa
    communitythatwillpurchaseanexistingbuildingorbuildings,andwhichwillhavenonresident
    investors.Inthiscase,thememberresidentsenvisionthemselvesastenantsinalandlordtenant
    relationshipwiththeLLC.Noteverymember/owneroftheLLChasarighttoliveattheproperty;thisis
    inpartduetothefactthattherearenonresidentinvestorsthatownashareoftheLLC.Thisgrouphas
    alsostructureditselfinthiswayinordertoclarifythatitisnotacommoninterestdevelopmentsubject
    tomanyburdensomelegalrequirementsunderCaliforniastatelawandlocalcitylaws.
    KeepinmindthatthisOperatingAgreementmaynotmakeagoodtemplateforyourcommunity,since
    thecircumstances,financialconsiderations,andplansforyourcommunitymaybequitedifferent.

    OperatingAgreementfor[Imaginary]CambriaCohousing,LLC

    TheMembersofCambriaCohousing,LLC(theCompany)enterintothisOperatingAgreementtoform
    andprovideforthegovernanceoftheCompanyandtheconductofitsbusiness,andtospecifytheir
    relativerightsandobligations.TheMembersagreeasfollows:

    Section1PurposeofCambriaCohousing
    TheprimarypurposeoftheCompanyistopurchase,develop,own,andmaintainarentalproperty(the
    Property)forthepurposeofcreatingacohousingcommunity.TheCompanyshallberesponsiblefor
    enteringintoleaseswithandcollectingrentfromeveryonelivingattheProperty(theTenants)and
    managingcommunityactivities.TheCompanymay,inaddition,engageinanyandalllawfulbusiness
    activities.

    Section2MembershipandcapitalContributions
    2.1

    ClassesofMembership:ThereshallbetwoclassesofMembershipintheCompany:
    a. RESIDENTMEMBERS:ResidentMembersarethoseMembersthatintendtoliveatthe
    Property.ResidentMembersareentitledtoMemberDistributionsand,undersome
    circumstances,SpecialDistributions,asdescribedinSection6.Aperson,group,orentity
    wishingtobecomeaResidentMembermustbeapprovedby2/3ofcurrentResident
    Members,mustsignthisAgreement,andmakethefollowingcapitalcontributionsand
    agreements:
    i.

    DuringthePlanningPhase:AnyResidentMemberjoiningtheCompanybeforethe
    CompanyhasenteredintoapurchaseandsaleagreementforthePropertyshall
    makea$15,000InitialCapitalContributiontotheCompany.Membersmayagreeto
    raisethisrequiredInitialCapitalContributioninordertomeetanynecessarycosts
    oftheCompany.

    Page54of101

    ii. AftertheCompanyisUnderContracttoPurchaseaProperty:AftertheCompany
    hasenteredintoapurchaseandsaleagreementfortheProperty,eachResident
    MembershallmakeanAdditionalCapitalContributionsoastobringthatMembers
    TotalCapitalContributiontobetween$20,000and$100,000,asdeterminedbythe
    Managersatthetimeofpurchase,dependingonthecostofthePropertybeing
    purchased,andtheUnittobeoccupiedbythatMember.AResidentMembermay
    makeanadditionalCapitalContributionifthatMemberdesires,solongasa
    majorityofResidentMembersapprove.AResidentMemberthatmakesan
    additionalCapitalContributionshallbeentitledtoaSpecialDistribution,as
    describedinSection6.IfaResidentMemberdoesnotmakehisorherTotalCapital
    ContributionwithinoneweekoftheCompanyssigningofapurchaseandsale
    agreement,thatMembersmembershipshallconverttoaNonResident
    Membership.AllResidentMembersjoiningtheCompanyafterthepurchaseofthe
    PropertyshallalsoberequiredtomakeaTotalCapitalContributionasappropriate.
    iii. EnteringIntoanOptiontoLease:AftertheCompanyhasenteredintoapurchase
    andsaleagreementfortheProperty,eachResidentMembershallenterintoan
    OptiontoLeasewiththeCompany,asdescribedinSection5ofthisAgreement.A
    SampleOptiontoLeaseisattachedtothisAgreementasExhibitB.
    b. NONRESIDENTMEMBERS:NonResidentMembersarethoseMembersthatmakean
    investmentintheCompanywithouttheintenttoliveinthecohousing.NonResident
    MembersareentitledtoMemberDistributionsandSpecialPayments,describedinSection
    6.NonResidentMembersmayconverttoResidentMembersbygoingthroughthe
    membershipprocessdescribedinsection2.1(a),whichincludesacceptancebytheMembers
    andenteringintoaLeaseorOptiontoLease.Aperson,group,orentitywishingtobecome
    aNonResidentMembermustbeapprovedbythemajorityofallMembers,signthis
    Agreement,andmakethefollowingcapitalcontributions:
    i.
    WhentheCompanyisUnderContracttoPurchaseaProperty:Whenthe
    CompanyhasenteredintoapurchaseandsaleagreementfortheProperty,theNon
    ResidentMembersshallmaketheirCapitalContributionsasapprovedbyamajorityof
    ResidentMembers.TheminimumCapitalContributionforNonResidentMembersshall
    bedeterminedbytheResidentMembersbasedonthecostofthePropertybeing
    purchased.
    2.2

    Members'PercentageInterests:AMember'sPercentageInterestinthisLLCshallbecomputedas
    afraction,thenumeratorofwhichisthetotalofamember'scapitalaccountandthedenominator
    ofwhichisthetotalofallcapitalaccountsofallmembers.Thisfractionshallbeexpressedinthis
    agreementasapercentage,whichshallbecalledeachmember's"PercentageInterest"inthis
    Company.EachMembersPercentageInterestshallbelistedinExhibitA.Membersunderstand
    thattheadditionofnewMemberstotheCompanywilldilutepreexistingmembershipinterests,
    aswellthecontributionofadditionalcapitalbyanypreviouslyadmittedMembers.The
    PercentageInterestofeachnewMembershalldilutethePercentageInterestsofthepreviously
    admittedMembersinproportiontotheirrespectivePercentageInterestsasineffectimmediately
    priortosuchdilution.AtnopointmayaResidentMembersPercentageInterestfallbelowa
    certainfraction,thenumeratorofwhichis1andthedenominatorofwhichisthetotalnumberof
    UnitsattheProperty.

    Page55of101

    2.3

    ChangingtheRequiredCapitalContributions:Membersmay,bymajorityvote,raiseorlowerthe
    requiredTotalCapitalContributionsofallcurrentandnewMembers.

    2.4

    MemberList:TheMembersnames,contactinformation,classesofmembership,TotalCapital
    Contribution,andPercentageInterestintheCompanyareassetforthinExhibitA.ExhibitAshall
    beupdatedaseachnewMemberjoinstheCompanyandshallimmediatelybecomeapartofthis
    OperatingAgreement.AllMembersagreetopromptlynotifytheCompanyofchangestotheir
    addressandcontactinformation.

    2.5

    MembershipsHeldbyCouples,Households,orGroups:AsingleMembershipmaybeheldbyan
    individualoragroupofindividuals.IntheeventthataMemberconsistsofmorethanoneperson,
    thatMembermustdesignateoneperson(theContact)toserveasthecontactpersonand
    decisionmakerforthatMember.ThisContactpersonshallbelistedonExhibitA.

    Section3ManagementandDecisionMaking
    3.1

    SpheresofDecisionMaking:TheCompanyshallhavethreeprimaryspheresofdecisionmaking:
    a. MEMBERDECISIONS:Exceptasotherwiseprovided,anydecisiondesignatedinthis
    AgreementtobemadebytheMembersshallbemadebyanaffirmativevoteofthe
    MemberswhosecombinedInterestsintheCompanyconstitutethemajorityofthetotal
    InterestsintheCompany.HoweverMajorDecisionspertainingtotheCompanyshallbe
    madebyanaffirmativevoteoftheMemberswhosecombinedInterestsintheCompany
    constitute2/3ormoreofthetotalInterestsintheCompany.MajorDecisionsaredefinedas
    follows:
    i.

    AmendmentofanyOperatingAgreementprovisionthatwouldmateriallyaffect
    thefinancialinterestsordecisionmakingpowerofaNonResidentMember;

    ii.

    ThedecisiontoexpelaMemberfromtheCompany,unlesstheexpulsionisofa
    NonResidentMembermorethan10yearsfromtheeffectivedateofthis
    Agreement;

    iii.

    ThedecisiontoraiseorlowertherequiredCapitalContributionsofMembers;

    iv.

    Thedissolution,merger,orsaleoftheCompany;

    v.

    ThesaleofanyrealpropertyownedbytheCompany;

    vi.

    ThedispositionofallorasubstantialpartoftheCompanysassetsnotinthe
    ordinarycourseofbusiness;

    vii.

    TheincurringofanydebtsecuredbytheProperty;

    viii.

    Anyactthatwouldmakeitimpossibletocarryontheordinarybusinessofthe
    Company;

    ix.

    AnyconfessionofajudgmentagainsttheCompany;

    x.

    Thefilingofapetitioninbankruptcyortheenteringintoofanarrangement
    amongcreditors;and
    Page56of101

    xi.

    Theenteringinto,onbehalfoftheCompany,ofanytransactionconstitutinga
    reorganizationwithinthemeaningoftheBeverlyKilleaLimitedLiability
    CompanyAct.

    b. MANAGEMENTDECISIONS:ThebusinessoftheCompanyshallbemanagedbythe
    Managers,consistingofallResidentMembers.DecisionstobemadebyManagersshallbe
    calledManagementDecisions,andincludealldecisionsthatdonotconstituteMajor
    Decisions,whicharenototherwisedesignatedtobemadebytheMembers,andwhichdo
    notfallwithinthepurviewoftheCommunityProgram.InanyManagementDecisionin
    whichaMemberisentitledtovote,theMembershallhaveonevote,regardlessofthesize
    ofthatMembersPercentageInterestintheCompanyandregardlessofthenumberof
    peoplecomprisingthatMemberorlivinginthatMembershousehold.
    c. COMMUNITYDECISIONS:DecisionsfallingunderthepurviewoftheCommunityProgram
    shallmadebytheCommunityCommittee.ThescopeandmanagementoftheCommunity
    ProgramisfurtherdescribedinSection4ofthisAgreement.
    3.2

    ManagementDecisionMakingProcess:
    a. MANAGEMENTDECISIONMAKINGPROCESS:AsprovidedinthisAgreement,anydecision
    tobemadebyManagers,unlessotherwiseprovidedordelegated,shallbemadeduring
    ManagementMeetings,inthefollowingmanner:AllManagementDecisionsshallbemade
    byanaffirmativevoteofamajorityoftheResidentMembers,meaningavoteofResident
    Memberswhosecombinedvotesequalmorethan50%ofthevotesofallResidentMembers
    inthisCompany.PriortovotingonanyproposalconstitutingaManagementDecision,
    ResidentMembersshallfirstmakeagoodfaithefforttoobtainconsensusofthegroupby
    submittingtheproposalfordiscussionandmodifyingtheproposalbasedonMembers
    reasonableconcerns.PriortopurchasingtheProperty,Managersshalladoptamore
    detailedpolicydescribingthisconsensusprocedure,andattachthatpolicytothis
    AgreementasExhibitH.

    3.3

    Meetings:
    a. TYPESOFMEETINGS
    i.

    AnnualMemberMeeting:TheCompanyshallholdanAnnualMemberMeetingfor
    thetransactionofanybusinessrequiringthevoteofbothResidentMembersand
    NonResidentMembers.TheAnnualMemberMeetingshallbeheldinOctober.The
    SecretaryshallprovideallMemberswithonemonthNoticeofthetime,date,and
    placeofthismeeting.

    ii. SpecialMemberMeetings:AnytwoMembersmaycallaSpecialMemberMeeting
    bygivingNoticetoallMembersofthetimeandplaceoftheMeetingatleastone
    weekpriortothetimeoftheholdingoftheMeeting.TheNoticemustspecifythe
    purposeoftheMeeting.
    iii. ManagementMeetings:MeetingsofManagersforthepurposeManagement
    Decisionsshallbeheldasneededwithnolessthan48hoursNotice.

    Page57of101

    b. PARTICIPATIONINMEETINGS:Membersmayparticipateinmeetingsthroughtheuseofa
    conferencetelephoneorsimilarcommunicationsequipment,providedthatallMembers
    participatingintheMeetingcanhearoneanother.
    c. ACTIONWITHOUTMEETING:Anyactionrequiredorpermittedtobetakenbythe
    MembersoranygroupofMembersunderthisAgreementmaybetakenwithoutaMeeting
    solongasallMembersentitledtovoteonthatdecisionreceiveNoticeoftheproposalanda
    reasonableopportunityobjectorcommunicateconcernstotheMembership,andsolongas
    therequisitenumberofMembersconsentsinwritingtosuchaction.Furthermore,the
    transactionsoftheMembersatanyMeeting,howevercalledornoticed,orwhereverheld,
    shallbeasvalidasthoughtransactedataMeetingdulyheldaftercallandNoticeif,either
    beforeoraftertheMeeting,eachMembernotpresentsignsawrittenwaiverofNotice,a
    consenttotheholdingoftheMeeting,oranapprovaloftheminutesoftheMeetingor
    provideswrittenconsentbyelectronicmail.
    3.4

    Records:TheMembersshallkeepthefollowingrecordsattheprincipalbusinessaddressofthe
    CompanyorinelectronicfilesaccessibletoallMembers:
    a. MINUTES,NOTICES,ANDCONSENTS:FullandaccurateminutesofallMeetings,Notices,
    andwaiversofNoticesofMeetings,andallwrittenconsentsinlieuofMeetings.
    b. BOOKS:BooksofaccountoftheCompanysfinancialtransactions.
    c. ORGANIZINGDOCUMENTSANDMEMBERLIST:CopiesoftheLLC'sArticlesof
    OrganizationandasignedcopyofthisAgreement,includingExhibitAwithupdateMember
    namesandcontactinformation.
    d. TAXRETURNS:TheCompany'staxreturnsfortheprecedingthreetaxyears.

    3.5

    Officers:TheManagersshallberesponsibleforelectingthefollowingOfficersfromamongits
    ResidentMembers.OfficersshallbeelectedbyavoteofManagersattheAnnualMember
    Meetingandshallserveatermofoneyear.Intheeventoftheincapacity,resignation,orrecallof
    oneoftheseOfficers,theManagersshallelectanewpersontofilltheposition.Officersmay
    receivereasonablecompensationfortheirworkasOfficers,andanycompensationmustbe
    approvedbytheManagers.TheOfficersandtheirdutiesareasfollows:
    a. CHAIR:ThedutiesandauthoritiesoftheChairareasfollows:
    i.

    TheChairwillhavenoindependentdecisionmakingauthority.

    ii. TheChairshallsettheagendaforManagementMeetingsandMemberMeetings
    withinputfromotherMembers.
    iii. TheChairshallserveasfacilitatoratmeetingsordesignateanotherpersontoserve
    asfacilitator.
    iv. TheChairwill,alongwiththeTreasurer,signallchecksfortheCompany.
    TheManagerscanopttoelectafacilitationteamtoassumeresponsibilitiesforitemsii&iii.
    b. TREASURER:ThedutiesandauthoritiesoftheTreasurerareasfollows:
    i.

    TheTreasurershallprovidetheCompanywithregularwrittenfinancialreports.
    Page58of101

    ii. TheTreasurershallcoordinatewiththeCompanysaccountantandensurethatthe
    Companyfilesallrequiredtaxreturns.
    iii. TheTreasurershallcollectanddepositrentpayments.
    iv. TheTreasurershall,alongwiththeChair,signallchecksfortheCompany.
    c. SECRETARY:ThedutiesandauthoritiesoftheSecretaryareasfollows:
    i.

    TheSecretaryshallprovideNoticetoMemberswhenNoticeisrequiredfora
    meeting.

    ii. TheSecretaryshallmaintaincontactinformationupdatestoExhibitAofthis
    Agreement.
    iii. TheSecretaryshalltakewrittenminutesordesignatesomeoneelsetotakeminutes
    ofManagementMeetingsandsendminutesbyemailtoallResidentMembers
    within7daysofthemeeting.
    iv. TheSecretaryshalltakewrittenminutesordesignatesomeoneelsetotakeminutes
    ofMemberMeetingsandsendminutesbyemailtoallMemberswithin7daysofthe
    meeting.

    Section4TheCommunity

    4.1 TheCommunityProgram.InadditiontomanagingthePropertyandleasingtheresidentialunits,
    theCompanyshalloperateaspecialprogramcalledtheCommunityProgram(theCommunity).
    TheCommunityshallberesponsiblefororganizingcommunityeventsandmeals,owningand
    maintainingshareditems(suchasrecreationalequipmentandtools),adoptingrulespertainingto
    daytodaylifeinthecohousing,andmanagingcertaincommonareasontheProperty.The
    Managersshalldeterminethetermsonwhichcommonareamanagementanduseisdelegatedto
    theCommunityProgram(suchaswhetherrentwillbepaidandsoon).TheCommunityshallbe
    subjecttotheprovisionsinthisSection4.

    4.2 CommunityParticipants: TobeeligibletoregularlytakepartinCommunityactivities,apersonor


    householdmustbecomeaCommunityParticipant,bysigningaCommunityParticipantAgreement,
    attachedtothisAgreementasExhibitE.Alladults(age18andover)livinginUnitsownedby
    ResidentMembersshallbecomeCommunityParticipants.TheCommunitymayadmitanyother
    personasaCommunityParticipant,withapprovaloftheCommunityCommittee.AllCommunity
    Participantsmustpayregularduesandtakepartincertainactivitiesandchoressetbythe
    CommunityCommittee.

    4.3 CommunityCommittee:DecisionsregardingtheCommunityanditsactivitiesshallbemadebythe
    CommunityCommittee,whichshallbeelectedbytheCommunityParticipants.Theinitialmembers
    oftheCommunityCommitteeshallbetheResidentMembersoftheCompanyatthetimethatthis
    Agreementisfirstexecuted.TheCommunityCommitteeshalladoptseparatepoliciesfordecision
    making,meetings,andfutureCommitteeelections.TheCommunityCommitteemayappointother
    committeesforthedelegationofcertaindutiesandactivities.

    Page59of101

    4.4 AdoptingPoliciesandRules:TheCommunityCommitteemayadoptpoliciesandrulesrelevantto
    Communityactivities,chores,anddaytodaylifeattheProperty.

    4.5 CollectingCommunityDues:TheCommunityshallsetandcollectduesfromallCommunity
    Participants.TheCommunitymaysetarangeofdueslevels,basedonvariousfactors,including
    whethertheCommunityParticipantlivesatthePropertyandhowmanypeopleliveinthe
    CommunityParticipantsUnit.

    4.6 CommunityAccount:TheCommunityshallmaintainaspecialaccountwhereCommunityDuesshall
    bedepositedandfromwhichCommunityexpensesshallbepaid.

    4.7 FailuretoPayDues:ThisAgreementprovidesandtheCommunityParticipantAgreementshall
    providethatifaResidentMemberfailstopayduestotheCommunity,theCompanymaytreatthe
    unpaidduesasalienagaintheMembersMembershipInterestintheCompanyintheamountofall
    unpaidduesplusaninterestrateof3%.TheCommunityCommitteemaysetseparatepoliciesfor
    howtorespondwhenanyotherCommunityParticipantsfailtopaydues.

    4.8 LegalStructureoftheCommunity:TheCommunityProgramshallinitiallybeaprogramoperated
    undertheumbrellaoftheCompany.TheCompanymay,fortax,liability,orgovernancereasons,
    wishtolaterhavetheCommunityoperateunderanotherentity,suchasanonprofitmutualbenefit
    corporationtaxexemptunderInternalRevenueCodeSection528(whichiswhathomeowners
    associationsgenerallyuse)or501(c)(7)(whichiswhatcountryclubsandsocialclubsuse).The
    CommunityProgrammaybeterminatedandreorganizedbyanaffirmativevoteofamajorityof
    ResidentMembers.

    Section5LeasingPolicies
    5.1

    NoResidencyRights:MembersshallnothavetherighttoresideatthePropertysolelybecauseof
    ownershipofanInterestintheCompany.

    5.2

    ProspectiveTenants:ProspectiveTenantsreferstoallpeoplethatarelistedintheOccupancy
    PriorityList,andwithwhomtheCompanyhasenteredintoanOptiontoLeaseagreement.

    5.3

    MemberTenants:MemberTenantsreferstoResidentMembersoftheCompanythathave
    enteredintoacurrentLeasetoliveattheProperty.

    5.4

    PreexistingTenants:PreexistingTenantsreferstoallpeoplelivinginatthePropertyatthe
    timethattheCompanytakestitletotheProperty.AsPreexistingTenantsmoveoutofthe
    Property,theUnitstheyvacatewillbemadeavailabletoProspectiveTenantsintheOccupancy
    PriorityList,orshallbeconvertedtoacommonarea.

    5.5

    TheOccupancyPriorityList:TheOccupancyPriorityListreferstoalistthattheCompanyshall
    keep,indicatingtheorderofpriorityinwhichProspectiveTenantswillbeofferedaLeasefora
    Unit.OnlyResidentMembersmaybeplacedintheOccupancyPriorityList.

    5.6

    OptiontoLease:TheCompanyshallenterintoOptiontoLeaseagreementswithResident
    Members,whichsecuresthoseProspectiveTenantsplaceintheOccupancyPriorityList.The
    followingprovisionsshallbeincludedintheOptiontoLease:

    a. PLACEINTHEOCCUPANCYPRIORITYLIST:TheOptionshalloffertheProspectiveTenant
    anopportunitytoleaseaUnitwhenonebecomesavailable,inorderofthatProspective
    Page60of101

    b.

    c.

    d.

    e.

    5.7

    TenantspriorityintheOccupancyPriorityList.AcopyoftheOccupancyPriorityListshall
    beattachedtotheOptiontoLeaseandanupdatedOccupancyPriorityListshallbeattached
    tothisAgreement.

    ACCEPTINGALEASE:IfaProspectiveTenantdoesnotenterintoaLeasewiththe
    CompanywithintwoweeksofaUnitbeingofferedtothatProspectiveTenant,thatUnit
    shallbeofferedtothenextpersonintheOccupancyPriorityList.TheCompanyshallmake
    reasonableeffortstoensurethatNoticeofsuchofferisreceivedbyaProspectiveTenant
    whenaUnithasbecomeavailableforthatProspectiveTenant.IfaProspectiveTenantis
    nextintheOccupancyPriorityListandistravelingoroutofreach,heorsheshallgivethe
    Companyinformationnecessarytoreachinghimorher,orshalldesignatearepresentative
    toaccepttheLeaseontheProspectiveTenantsbehalf.

    FEEFOROPTION:ToensurethecontractualenforceabilityoftheOptiontoLease,the
    Companyshallchargeafee(evenifnominal)toProspectiveTenantswhenenteringintothe
    OptiontoLease.ThefeeshallberefundableonlyintheeventthattheCompanydoesnot
    succeedintakingtitletothePropertywithinfiveyearsoftheeffectivedateofthis
    Agreement.

    COPYOFTHELEASE:AcopyoftheLeasethatwillbeofferedtotheProspectiveTenant
    shallbeattachedtotheOptiontoLease.ByattachingacopyoftheLease,theProspective
    TenantisabletosecurethetermsonwhichtheywillbeofferedaLease.

    MONTHLYRENT:TheOptiontoLeaseshallstatetheamountofinitialrenttheProspective
    TenantshallpayuponbecomingaMemberTenant;however,therentmaybecontingenton
    thesizeanddesirabilityoftheUnitthatbecomesavailabletothatMember.TheOptionshall
    statethecriteriafordeterminingtherentamount.ThebaserentforeveryUnitshallbeset
    atthetimethatthePropertyispurchased,andascheduleoftherentsforeachUnitshallbe
    attachedtothisAgreementasExhibitF.BeforeaResidentMembermovesintoaUnit,the
    Unitshallbebroughtuptoacommonstandardofrepair,attheexpenseoftheCompany.A
    descriptionofthisstandardofrepairisattachedtothisAgreementasExhibitG.

    LeaseProvisions:TheCompanyshallincludethefollowingprovisionsintheLeaseofferedto
    ProspectiveTenants:
    a. COMMUNITY:TheLeaseshallrequirethataMemberTenantbecomeandremaina
    CommunityParticipantingoodstandingandpayCommunityDues.
    b. REMEDYFORNONPAYMENTOFRENT:IfMemberTenantdoesntpaythefullrent
    amount,theCompany,inadditiontoanyotherlegalremediesavailable,shallhavealienon
    theMembersInterestintheCompany,intheamountoftheunpaidrent,plus7%interest
    accruingannually.AMemberTenantthathasfallenmorethanonemonthbehindonrent
    paymentsmay,attheoptionoftheManagers,havetheirCompanymembershipconverted
    toaNonResidentMembership,andwillthereforebyineligibletotakepartinManagement
    Decisions.TheLeaseshallalsorequirethatMemberTenantspayafeeforlatepaymentof
    rent.Inaccordancewithstateandlocallawsgoverningevictions,theCompanymayevict
    anyTenantinviolationofthetermsoftheLease.
    c. BUYINGOUTTHELEASE:TheLeaseshallprovideawayfortheCompanytobuyouta
    MemberTenantsLease,intheeventthattheMemberTenantleavesvoluntarilyorthe
    Page61of101

    CompanywishesfortheMemberTenanttoleave.TheBuyOutprovisionshallspecifyhow
    theCompanyshallcompensateaMemberTenantfortheterminationorforfeitureoftheir
    Lease,takingintoaccountrentalpricesintheareaandimprovementsthattheTenanthas
    madetotheUnit.Furthermore,theCompanyshalloffertoPurchase(onthetermssetforth
    inSection7)theMembershipInterestofanyMemberTenantthathasbeenevictedorhad
    theirLeaseinvoluntarilyterminated.TheCompanyhastheoption,butnoobligation,tobuy
    outtheLeaseofaMemberTenantthatmovesoutvoluntarily.Unlessthedeparting
    MembersMembershipisterminatedbytheMembers,thedepartingMemberTenanthas
    theoptiontomaintainhisorherMembership,howeveritwillconverttoaNonResident
    MembershipwhentheMemberTenantvacatestheProperty.
    d. ASSIGNINGALEASETOSOMEONEELSE:AMemberTenantmaynotassignhisorher
    LeasetoathirdpartywithoutfirstofferingtheCompanyanopportunitytoBuyOutthe
    Lease.WhenthereareMemberswaitingintheOccupancyPriorityList,theCompanyshall
    BuyOuttheLeaseunlessdoingsowouldmaketheCompanyunabletomeetotherfinancial
    obligations.IfaMemberTenantassignshisorherLeasewithouttransferringhisorher
    MembershipInterestinconjunction,thatMembersmembershipshallbecomeaNon
    ResidentMembership.AMemberTenantmaynotassignhis/herLeasetoathirdparty
    unlessthethirdpartyisapprovedby2/3oftheResidentMembers.AResidentMemberthat
    disapprovesaproposedthirdpartyassigneemuststatereasonablegroundsforthat
    disapproval.
    e. SUBLEASING:IntheeventthataMemberTenantwishestomoveoutandsublethisorher
    Unittoathirdpartysubtenant,anaffirmativevoteof2/3ofResidentMembersisrequired
    toapprovethesubtenant.AResidentMemberthatdisapprovesaproposedsubtenant
    muststatereasonablegroundsforthatdisapproval.IfaMemberissubleasingandhasnot
    livedatthePropertyformorethantwoyears,thatMembersMembershipshallconverttoa
    NonResidentMembership,unlessdeterminedotherwisebytheManagers.
    5.8

    Rents:AllTenantsshallpaymonthlyrenttotheCompany,asprovidedbythatTenantsLease.The
    rentforeachunitshallbesetbytheCompanybasedonthesquarefootageoftheunitandother
    reasonablefactorsrelatedtotheunitsdesirability,etc.TherentsforeachUnitshallbe
    determinedinadvanceandattachedtothisAgreementasExhibitF.TheCompanymayraiseor
    lowerrentasitchoosesandasallowablebylaw,howeverallMemberTenantsrentsshallbe
    raisedorloweredsimultaneouslyandinthesameproportions.

    Section6AccountsandDistributions
    6.1

    6.2

    CapitalAccountforEachMemberandAllocationofProfitsandLosses:Acapitalaccountshallbe
    setupandmaintainedonthebooksoftheCompanyforeachMember.Itshallreflecteach
    Member'sTotalCapitalContributiontotheCompany,increasedbyeachmember'sshareofprofits
    intheCompany,decreasedbyeachmember'sshareoflossesandexpensesoftheCompany,and
    adjustedasrequiredinaccordancewithapplicableprovisionsoftheInternalRevenueCodeand
    correspondingincometaxregulations.AllprofitsandlossesoftheCompanyshallbeallocated
    amongtheMembersCapitalAccountsonthebasisoftheirPercentageInterestintheCompany.

    OperatingBudget:TheManagerswillmeetatleastonceperyeartodetermineanoperating
    budgetfortheCompany,takingintoaccountbothregularexpensesandforeseeableimprovement
    andmaintenancecostsoftheProperty

    Page62of101

    6.3

    6.4

    6.5

    6.6

    6.7

    6.8

    MaintenanceofReserves:TheCompanyshallmaintainaReserveaccountandshallplantobuilda
    MinimumReserveof$300,000withinthreeyearsofpurchasingtheProperty.TheReserveshall
    servetopayforunforeseenexpensesoftheCompanyandinstanceswhentheCompanydesiresto
    BuyOuttheLeaseofaMemberTenant.TheCompanyshallbudgetappropriatelyinorderto
    contributetoandbuildtheReservetotheminimumlevel.

    SpecialPaymentstoNonResidentMembers.Beforetheendofsecondfiscalyearafterthe
    CompanyhastakentitletotheProperty,andbeforetheendofeveryfiscalyearthereafter,the
    CompanyshallmakeaSpecialPaymenttoeachNonResidentMember.TheamountofeachNon
    ResidentMembersSpecialPaymentshallbetheequivalentof3%oftheamountoftheMembers
    TotalCapitalContribution.TheSpecialPaymentshallnotchangetheNonResidentMembers
    proportionateshareoftheallocatedprofitsandlossesoftheCompany.SpecialPaymentsmay,at
    theelectionoftheManagers,bereduced,delayed,orcancelledintheeventthatthe
    ManagementTeambelievestheCompanywillnothavesufficientfundstomeetitsOperating
    BudgetandtobuildandmaintainitsMinimumReserve.

    SpecialPaymentstoResidentMembers.SpecialPaymentstoResidentMembersshallbemadein
    ordertoprovideanincentivetoResidentMemberstocontributemorethantheirrequiredshare
    ofcapital.BeforetheendofsecondfiscalyearaftertheCompanyhastakentitletotheProperty,
    andbeforetheendofeveryfiscalyearthereafter,theCompanyshallmakeaSpecialPaymentto
    eachResidentMemberthathascontributedmorethanthatMembersrequiredCapital
    Contribution.TheamountofeachResidentMembersSpecialPaymentshallbetheequivalentof
    3%oftheamountbywhichtheMembersTotalCapitalContributionexceedsthatMembers
    requiredCapitalContribution.TheSpecialPaymentshallnotchangetheResidentMembers
    proportionateshareoftheallocatedprofitsandlossesoftheCompany.SpecialPaymentsmay,at
    theelectionoftheManagers,bereduced,delayed,orcancelledintheeventthatthe
    ManagementTeambelievestheCompanywillnothavesufficientfundstomeetitsOperating
    BudgetandtobuildandmaintainitsMinimumReserve.

    MemberDistributions.Fromtimetotime,whentheManagershavedeterminedthatthe
    CompanyhassufficientfundstomeetitsOperatingBudgetandtomaintainaMinimumReserve,
    theCompanymaymakedecideonanamountofDistributableCash,whichshallbedividedupand
    paidtoMembersoftheCompanyinproportiontoeachMembersPercentageInterestinthe
    Company.

    ConsenttoCapitalContributionWithdrawalsandDistributions:Exceptasprovidedelsewherein
    thisAgreementandexceptfortheMemberDistributionsandSpecialPaymentsdescribedabove,
    Membersshallnotbeallowedtowithdrawanypartoftheircapitalcontributionsortoreceive
    distributions,whetherinpropertyorcash,unlesssuchdistributionsareapprovedbythe
    Managers.

    TaxandAccountingMatters:
    a. TAXCLASSIFICATION:TheMembersofthisCompanyintendthatthisLLCbeinitially
    classifiedasapartnershipforfederalandstateincometaxpurposes.

    b. FISCALYEAR:ThetaxyearofthisCompanyshallbeJanuary1toDecember31.

    Page63of101

    c. ACCOUNTINGMETHOD:TheCompanyshallusethecashmethodofaccounting.

    d. ANNUALINCOMETAXRETURNSANDREPORTS.Within60daysaftertheendofeach
    taxableyearoftheCompany,theCompanyshallsendtoeachoftheMembersall
    informationnecessaryfortheMemberstocompletetheirfederalandstateincometaxor
    informationreturnsandacopyoftheCompany'sfederal,state,andlocalincometaxor
    informationreturnsforsuchyear.

    e. WITHHOLDINGTAXES.TheCompanymaywithholdfromdistributionsallamountsrequired
    underapplicablelaworregulation.AmountsrequiredtobewithheldpursuanttoCode
    Section1446oranyotherprovisionoffederal,state,orlocaltaxlawshallbetreatedas
    amountsactuallydistributedtotheaffectedMembersforallpurposesunderthis
    Agreement.

    Section7TransfersofInterests
    7.1

    VoluntaryTransferofaMembershipInterest:Duringhis/herlifetimeaMembermaynotsell,
    assign,transfer,pledge,gift,subjecttoavotingtrust,orotherwisedisposeofanInterestorany
    incidentorprivilegeofMembership(referredtoasa"Transfer"),unlesshe/sheobtainstheprior
    writtenconsentof2/3ofResidentMembers,orintheabsenceofsuchconsenthascompliedwith
    thefollowing:
    a. RIGHTOFFIRSTREFUSAL.TheMemberwantingtoTransferanInterest(referredtoasthe
    "OfferingMember")shallfirstoffertheInteresttotheCompany,whichshallhavethe
    option(butnottheobligation)topurchasetheOfferingMember'sInterestforaperiodof
    fifty(50)daysafterthedateofsuchoffer.AnyportionoftheInterestnotpurchasedduring
    thisperiodmaythenbepurchasedbytheotherMembers.TheMembersshallhavethe
    option(butnottheobligation)topurchasetheOfferingMember'sInterestproratabased
    ontherelativepercentages(byratio)oftheirrespectiveInterests,foraperiodofforty(40)
    additionaldaysafterthedateofsuchoffer.AnyportionoftheInterestnotpurchasedduring
    thisperiodmaythenbepurchasedbytheMembersexercisingthepurchaseoption,who
    shallhaveaperiodofthirty(30)additionaldaysinwhichtoproportionatelyincreasetheir
    respectivepurchaseoftheOfferingMember'sInterest.ThenoticebytheotherMembersof
    acceptanceoftheaforesaidoffersshallsetaclosingdateforsuchpurchasebetweenten
    (10)andthirty(30)daysafterthedateofsuchnotice.
    b. PERMITTEDTRANSFER.TheInterestoftheOfferingMemberwithrespecttowhichthe
    CompanyandotherMembersfailtoexercisepurchaseoptions,maythenbesoldbythe
    OfferingMembertoathirdparty.However,aResidentMemberthatcontinuestoliveat
    thePropertymaynotoffertosellhisorherMembershipInteresttoathirdpartyunlessthe
    thirdpartywillbeassignedtheMembersLease.
    i.

    ConditionsofTransfer.NotwithstandinganyprovisionofthisSection8tothe
    contrary,allTransfersshallbesubjecttothefollowing:(i)thetransfereemustagree
    inwritingtobeboundbytheprovisionsofthisAgreementandanyother
    agreementsandpoliciesincorporatedintothisAgreementbyreference,aswellas
    anyamendmentsthereto;(ii)noTransfershallbemadeif,intheopinionofcounsel
    totheCompany,theCompanywouldloseitscharacterization,orbedeemed
    Page64of101

    terminated,asapartnershipfortaxpurposes;(iii)everyTransferincontraventionof
    anyprovisionhereofshallbevoidandineffectual,andshallnotbindorbe
    recognizedbytheCompanyortheMembers;and(iv)allpartiesshalltakesuch
    actionsasarenecessary,includingexecutionofamendmentstothisAgreementor
    theArticles,tocarryouttheintentofthissection.
    c. PURCHASEPRICE.NotwithstandingtheofferreceivedbytheOfferingMember,orany
    otherprovisionhereoftothecontrary,thepurchasepriceforanyMemberInteresttobe
    paidbytheCompanyoranyotherMemberunderthisAgreementshallbeanamountequal
    totheamountoftheMembersCapitalContributionadjustedinaccordancewithany
    changeinthefairmarketvalueoftheProperty,whichshallbedeterminedandadjustedas
    follows:
    i.

    AdjustmentforFairMarketValue:TheCompanyshallrecordthefairmarketvalue
    ofthePropertyatthetimethateachMembereitherjoinedtheCompanyoratthe
    timetheCompanypurchasedtheProperty,whichevercomessecond.A
    determinationoffairmarketvalueshallbemadeagainforthetimeatwhichthe
    MembergivesnoticeofintenttoTransfer.TheamountpayabletotheMember
    shallthenbeadjustedbasedonthechangeinfairmarketvalue.Forexample,ifthe
    valueofthePropertyhasrisenby10%,theMembershallreceiveanadditional10%
    premiumontheamountoftheMembersCapitalContribution.Ifthevalueofthe
    Propertyhasdeclinedby10%,theMemberspaymentshallbetheamountofthe
    CapitalContributionminus10%.

    ii. DeterminingFairMarketValueoftheProperty:Therecordedfairmarketvalue
    shallbedeterminedbyanagreementbetweentheCompanyandtheMemberin
    question.IftheMemberdoesnotagreewiththeCompanysassessmentoffair
    marketvalue,theMembermayhavethePropertyappraisedtodeterminethefair
    marketvalue.IftheCompanydoesnotagreewiththeMembersappraisal,the
    Companymayobtainanindependentappraisalandthetwoappraisalsshallbe
    averaged.
    d. PAYMENTTERMS:IftheMembershipInterestispurchasedbytheCompanyorother
    Members,thePurchasePriceshallbepaidinfullwithinsixmonthsoftheCompanysor
    MembersexerciseoftheoptiontopurchasethedepartingMembersInterest.
    7.2

    InvoluntaryTransferofaMembershipInterest:
    a. WITHDRAWAL.ForpurposesofthisAgreement,anInvoluntaryWithdrawalofaMember
    (theWithdrawingMember)shallbedeemedtooccuriftheMember(i)filesfor
    bankruptcyprotection,isadjudgedinsolventorotherwisebecomessubjecttobankruptcyor
    insolvencyproceedingsthatarenotdismissedwithinthirty(30)days,(ii)dies,or(iii)has
    actedoromittedtoactinamannerinconsistentwiththepurposeoftheCompanyorwhose
    holdinganInterestisotherwisedetrimentaltotheCompanyortheMembers,as
    determinedby2/3oftheMembersingoodfaith.SincethegoaloftheCompanyisto
    achieve100%residentownership,anInvoluntaryWithdrawalofaNonResidentMember
    mayalsobebroughtaboutbyadecisionoftheManagers10yearsormoreafterthe

    Page65of101

    purchaseoftheProperty.IntheeventofanyInvoluntaryWithdrawal,theMembersshare
    shallbepurchasedasprovidedinParagraphbofthisSection.
    b. PURCHASEOFWITHDRAWINGMEMBERSINTEREST:IntheeventofanInvoluntary
    Withdrawal,theCompanyshallpurchasetheWithdrawingMembersInterestattheprice
    andonthetermssetforthinParagraph7.1.cand7.1.d.However,iftheWithdrawing
    Memberhasdied,theWithdrawingMembersheirsorbeneficiariesmayrequesttokeep
    theMembershipInterest.IntheeventthatadeceasedWithdrawingMembersheirsor
    beneficiariesrequesttokeeptheMembershipInterest,sucharequestshallthenbe
    consideredbyManagersandmayonlybedisapprovedifamajorityofManagersrejectthe
    request.

    Section8DissolutiontheofCompany
    8.1
    8.2

    8.3

    DurationoftheCompany:ThedurationofthisCompanyshallbeindefinite.

    EventsThatTriggerDissolutionoftheCompany:Thefollowingeventsshalltriggeradissolutionof
    theLLC,exceptasprovided:

    a. Thewrittenagreementof2/3oftheMemberstodissolvetheCompany;
    b. EntryofadecreeofdissolutionoftheCompanyunderstatelaw.

    DistributionofAssetsUponDissolution:UpondissolutionoftheCompany,allassetsremaining
    afterpaymentofdebtsshallbedistributedtothethencurrentMembersoftheCompanyonthe
    basisoftheirPercentageInterestsintheCompany.

    Section9ConflictResolution
    9.1

    9.2

    MediationastheFirstRecourse:InanydisputeovertheprovisionsofthisAgreementandin
    otherdisputesamongtheMembers,iftheMemberscannotresolvethedisputetotheirmutual
    satisfaction,themattershallbesubmittedtomediation.Thetermsandprocedureformediation
    shallbearrangedbythepartiestothedispute.Thechosenmediatorshallconductatleastone
    mediationsessionperweekforfourweeks,withallpartiestothedisputepresent,unlessthe
    disputecanberesolvedsoonerthanfourweeks.Ifnoagreementisreachedafterfourmediation
    sessions,thepartiesshallsubmitthedisputetoarbitrationassetforthinthefollowingparagraph.

    ArbitrationastheSecondRecourse:

    a. ARBITRATION:Ifgoodfaithmediationofadisputeprovesimpossibleorifanagreedupon
    mediationoutcomecannotbeobtainedbytheMemberswhoarepartiestothedispute,the
    disputemaybesubmittedtoarbitrationinaccordancewiththerulesoftheAmerican
    ArbitrationAssociation.

    b. REQUESTINGARBITRATION:Anypartymaycommencearbitrationofthedisputeby
    sendingawrittenrequestforarbitrationtoallotherpartiestothedispute.Therequestshall
    statethenatureofthedisputetoberesolvedbyarbitration.Arbitrationshallbe
    commencedassoonaspracticalaftersuchpartiesreceiveacopyofthewrittenrequest.

    Page66of101

    c. PAYINGFORARBITRATION:Allpartiesshallinitiallysharethecostofarbitration,butthe
    prevailingpartyorpartiesmaybeawardedattorneyfees,costsandotherexpensesof
    arbitration.

    d. ARBITRATIONSHALLBEBINDING:Allarbitrationdecisionsshallbefinal,bindingand
    conclusiveonallthepartiestoarbitration,andlegaljudgmentmaybeenteredbasedupon
    suchdecisioninaccordancewithapplicablelawinanycourthavingjurisdictiontodoso.

    Section10GeneralProvisions

    10.1 ReplacingPriorAgreements:ThisAgreementamendsandreplacesallpriorOperating
    AgreementsofCambriaCohousing,LLC,formerlyknownasCambriaCohousing,LLC.

    10.2 ModificationofthisAgreement:ThisAgreementrepresentstheentireagreementamongthe
    MembersofthisCompany,anditshallnotbeamended,modifiedorreplacedexceptbyawritten
    instrumentexecutedbyanaffirmativevoteof2/3ofResidentMembers,exceptwhenapprovalof
    NonResidentMembersisalsorequired,asprovideinSection3.

    10.3 Notice:AnytimeNoticeisrequiredtobegivenunderthisAgreement,unlessotherwiseprovided,
    NoticeshallbedeemedtohavebeendeliveredtoaMemberonthedaythatanemailissentto
    theemailaddressprovidedbytheMembertotheCompanyandlistedonExhibitAofthis
    Agreement.IfaMemberwishestoreceiveNoticebymail,thatMembermustrequestthisin
    writingdeliveredtotheSecretaryoftheCompany.

    10.4 RecordDate:ThedateonwhichNoticeofameetingofMembersisdeliveredorthedateon
    whichadistributionismade,asthecasemaybe,shallbetherecorddateforthedeterminationof
    theMembersentitledtonoticeofortovoteatsuchmeeting,includinganyadjournmentthereof,
    ortheMembersentitledtoreceivesuchdistribution.

    10.5 NonliabilityofMembers:NomemberofthisCompanyshallbepersonallyliablefortheexpenses,
    debts,obligationsorliabilitiesoftheCompany,orforclaimsmadeagainstit,exceptasotherwise
    providedbylaw.

    10.6 HeadingsandSubheadingsinthisAgreement:ThisAgreementcontainsmanyheadingsand
    subheadings(inboldoritalics),whicharetheretomaketheAgreementeasiertoreadand
    navigate.Theheadingsandsubheadingsarenotintendedtohaveanylegaleffectorlimitthe
    scopeormeaningoftheprovisionscontainedinthisAgreement.

    10.7 Severability:Ifanyprovisionofthisagreementisdeterminedbyacourtorarbitratortobeinvalid,
    unenforceableorotherwiseineffective,thatprovisionshallbeseveredfromtherestofthis
    agreement,andtheremainingprovisionsshallremainineffectandenforceable.

    10.8 AgreementgovernedbythelawsofCalifornia:ThevalidityandinterpretationofthisAgreement
    shallbegovernedbythelawsoftheStateofCalifornia.

    Page67of101

    10.9 EffectiveDate:ThisOperatingAgreementofCambriaCohousing,LLC,effective
    __________________________,isadoptedbytheMemberswhosesignaturesappearattheend
    ofthisAgreement.

    ExecutionofthisAgreement
    Inwitnesswhereof,theMembersofthisCompanysignandadoptthisAgreementastheOperating
    AgreementofCambriaCohousing,LLC.
    Name:_______________________Signature:_________________________Date:____________
    Name:_______________________Signature:_________________________Date:____________
    Name:_______________________Signature:_________________________Date:____________
    Name:_______________________Signature:_________________________Date:____________
    Name:_______________________Signature:_________________________Date:____________

    ListofExhibits:
    1.
    2.
    3.
    4.
    5.
    6.
    7.

    ExhibitA:Names,ContactInfo,CapitalContributions,andPercentageInterestsofMembers
    ExhibitB:SampleOptiontoLease
    ExhibitC:OccupancyPriorityList
    ExhibitD:SampleResidentialLease
    ExhibitE:BylawsandParticipantAgreementforCommunityProgram
    ExhibitF:ScheduleofRents
    ExhibitG:StandardofRepairforUnits

    Page68of101

    GETTINGLOANSORINVESTMENTSFROMFRIENDSAND
    FAMILY
    WhatisaSecurityandWhyDoesitMatter?
    Youcreateasecuritywhenyouaskpeopletoinvestinorlendmoneytoyourcohousingcommunityor
    otherproject.Itsimportanttoknowwhatisorisntasecurity,becausewheneveryousellorevenoffer
    tosellasecurity,itneedstoeither1)beregisteredwiththefederalSecuritiesExchangeCommission
    andwiththestateagencyineverystatewhereyouwanttoraisemoney,or2)qualifyforanexemption
    fromregistration.

    The25102(f)SecuritiesExemptioninCalifornia36
    CaliforniaCorporationsCodeSection25102(f)offersaspecialsecuritieslawexemptiontocertainkinds
    ofprivatesecuritiesofferings,iftheymeetthefollowingcriteria:

    First,youmustbeexemptfromfederalsecuritiesfilingrequirements:
    YourcompanymustbeformedunderCalifornialaw(i.e.,ifyouareacorporationyoufiledyour
    articlesofincorporationinCalifornia,etc.)
    YourplanonlytooffersecuritiestoCaliforniaresidents
    Yourmustincludeinyourcontractwithyourinvestorsthattheywillnotresellthesecurityto
    anyoneoutsidethestateforninemonths
    YourbusinessisveryCaliforniafocusedhereisatestforthis:
    o Yougetatleast80%ofyourrevenuesfromCalifornia
    o Atleast80%ofyourassetsareinCalifornia
    o Youplantouseatleast80%ofthemoneyyouraisewithinCalifornia

    Then,youmustmeettherequirementsfor25102(f):
    Youcansellyoursecuritiestoupto35investorsaslongastheymeetoneormoreofthe
    followingcriteria:
    o Theinvestorshaveapreexistingpersonalorbusinessrelationshipwithyouconsisting
    ofpersonalorbusinesscontactsofanatureanddurationsuchaswouldenablea
    reasonablyprudentpurchasertobeawareofthecharacter,businessacumen,and
    generalbusinessandfinancialcircumstancesofthepersonwithwhomsuchrelationship
    exists.Theseinvestorscanbefriendsorfamily;
    o Theinvestorshaveenoughfinancialexperiencetoprotecttheirinterests;or
    o Theinvestorshaveexperiencedprofessionalfinancialadvisors.
    Youcansellanunlimitednumberofsecuritiestoofficersanddirectorsofthecompanyand
    accreditedinvestors.Accreditedinvestorsare1)peoplewith$1millioninnetworth(excluding
    theirhome)or$200,000inannualincome,or2)entitieswithmorethan$5millioninassets.
    Yoursecuritiesofferingcannotbeadvertisedtothepublic.
    Theinvestorsmustsignsomethingsayingthattheyarenotinvestingforthepurposeofre
    sellingthesecuritiestosomeoneelse.
    YouhavetofileasimpleNoticeofTransactionformwiththeCaliforniaDepartmentof
    Corporationsandpayasmallfee:http://www.corp.ca.gov/LOEN/pdf/25102f.pdf

    36

    AdaptedfromahandoutcreatedbyJennyKassanoftheSustainableEconomiesLawCenter(www.theSELC.org)
    Page69of101

    ASAMPLEFRIENDSANDFAMILYPROMISSORYNOTE
    PromissoryNote
    for
    CambriaCohousingLender

    BackgroundInformation:CambriaCohousing,LLCiscurrentlyundercontracttopurchasea40
    acrepropertyinCambria,Californiaforthepurposeofbuildingacohousingcommunity.
    _________________________[NameofLender]isnowmakingaloanof$________________
    toCambriaCohousing,LLCtoassistwiththepurchaseofthepropertyanddevelopmentofthe
    project.Now,CambriaCohousing,LLCand_________________________[NameofLender]
    wishtoclarifythetermsofrepaymentofthisloan,asfollows:

    1. PromisetoPay:Thus,forvaluereceived,CambriaCohousing,LLC(Borrower)hereby
    promisestopaytotheorderof_____________________(Lender),atanaddress
    providedtoBorrowerbytheLender,asumof$__________________(thePrincipal),
    togetherwithinterestontheunpaidPrincipalbalanceaccruingatanannualrateof
    ______%,withallPrincipalandinterestdueandpayablebythefollowingdate:
    ______________________________.

    2. PaymentPlan:BorrowershallpayLender______________[monthly/quarterly/annual]
    installmentsofatleast$_______________commencingonorbeforeJanuary1,2013.
    EachpaymentunderthisNoteshallbecreditedfirsttointerestthendueandany
    remaindertoPrincipal.ThisNotemaybeprepaid,atanytime,inwholeorinpart,
    withoutpremiumorpenalty,aslongasanyPrincipalprepaymentisaccompaniedbya
    paymentofinterestaccruedtothedateofprepaymentontheamountprepaid.

    3. Default:IfBorrowerfailstopayanysumdueunderthisNotewithinsixmonthsof
    whenitbecomesdueandpayable,thisshallbeconsideredaDefault.Intheeventofa
    Default,theLendermay,athis/heroption,declarethisNotetobeimmediatelydueand
    payable.

    4. CollectionCosts:BorroweragreestoreimbursetheholderofthisNoteforallcostsof
    collectionorenforcementofthisNote,whetherornotsuitisfiled(including,butnot
    limitedto,reasonableattorneyfeesandexpenses),incurredbytheLender.

    5. NoIntentiontoResellthisNote:Lenderrepresentsandwarrantsthathe/sheis
    purchasingthisNoteforhis/herownaccountandnotforthepurposeofresellingthe
    Notetosomeoneelse.

    6. LenderisaCaliforniaResident:Lenderrepresentsthathe/sheisaresidentofCalifornia.
    Page70of101


    7. RelationshipBetweenBorrowerandLender:Lenderrepresentsthathe/shehasa
    preexistingpersonalorbusinessrelationshipwith__________________________
    [nameornamesofCambriaCohousing,LLCmembersthatlenderhasarelationship
    with],andthisrelationshiphasinvolvedsufficientcontacttoenableLendertobeaware
    ofthecharacter,businessacumen,andgeneralbusinessandfinancialcircumstancesof
    CambriaCohousing,LLCandsomeofitsmanagingmembers.[Forthepurposeof
    demonstratingapreexistingrelationshipundersection25102(f)oftheCalifornia
    CorporationsCode,ithelpstoaddmoredetailaboutthenatureanddurationofthe
    relationship].

    8. AcknowledgmentofInformationProvidedtotheLender:Lenderacknowledgeshe/she
    hasreceivedthefollowinginformationfromCambriaCohousing,LLC,priorto
    purchasingthisNote,andthatthisinformationis:

    a. [ListdocumentsyoullbeprovidingtotheLender]

    9. GoverningLaw:ThisNoteshallbegovernedbyandconstruedinaccordancewiththe
    lawsoftheStateofCalifornia.

    Bysigningbelow,BorrowerandLenderagreetotheabovetermsandconditionsofthisNote.

    Executedat___________________,California:

    Dated:____________________

    CambriaCohousing,LLC,Borrower

    Signature:_______________________________
    By:[NameofmemberwhowillsignonbehalfofLLC]
    Address:[LLCAddress]

    Dated:____________________ Name:
    ___________________________,Lender

    Signature: ________________________________

    Address: ________________________________

    ________________________________

    Page71of101

    TAXSTUFFANDCOHOUSING
    Thissectionhasbeenadaptedfrom
    PracticingLawintheSharingEconomy,byJanelleOrsi(ABABooks2012).

    IndividualIncomeTaxImplications

    Propertyownership,andparticularlyownershipofonesprimaryresidence,generallycomeswithtax
    benefitstotheindividual.Theownershiparrangementinintentionalcommunitiesmayaffectthe
    availabilityofcertaintaxbenefits,whichinclude:

    a. Thecapitalgainsexclusion:TheIRScurrentlyallowshomeownerstoexcludefromtaxationthe
    first$250,000(or$500,000foramarriedcouple)ofcapitalgainsonthesaleofaprimary
    residence.37Unfortunately,individualsthatowntheirpropertythroughanentitythatdoesnot
    meettheIRSdefinitionofacooperativehousingcorporation38orthatisadisregardedentity,
    suchasasinglememberLLC,39willnotbeeligibletousethisexclusioniftheyselltheirshareofa
    landholdingentityandrealizeagain.

    b. Themortgageinteresttaxdeduction:Paymentofinterestonhomemortgagesisgenerallyatax
    deductionforanindividual.40Thisisasubstantialtaxbenefit,sinceasignificantportionof
    mortgagepaymentsconsistofinterestduringthefirstyearsofpayment,andthedeductioncould
    reduceanindividualstaxableincomebytensofthousandsofdollars.Thistaxdeductionis
    availabletotenantshareholdersofhousingthatmeetstheIRSdefinitionofcooperative
    housingcorporation,anditallowsthetenanttodeducthis/hershareoftheinterestonthe
    cooperativeblanketmortgage.
    Theavailabilityofthemortgageinteresttaxdeductionisamajorconsiderationwhenagroup
    ofpeopleiscontemplatingpurchasingamultiunitresidentialpropertytogetherandchoosing
    betweenownershipastenantsincommonoralimitedliabilitycompany.Althoughthemembers
    oftheLLCcannotclaimthedeductioninthesamewaydirecthomeownersmay,anLLCpasses
    themortgageinterestthroughtomembersasabusinessexpense,whichusuallyresultsina
    businesslossshownonthemembersK1(thestatementofamembersshareofprofits,losses,
    deductions,andcreditsintheLLC).

    c. Thepropertytaxdeduction:Homeownerscangenerallydeductfromincomeamountspaid
    towardlocalrealpropertytaxes.Thisbenefitisavailabletodirecthomeownersandtenant
    shareholdersofcooperatives,butmustbepassedthroughtomembersasabusinessexpensein
    thecaseofownershipbyanLLCthatdoesnotmeettheIRSdefinitioncooperativehousing
    corporation.

    37

    SeeIRSPublication523,SellingYourHome.availableathttp://www.irs.gov/pub/irspdf/p523.pdf
    SeeInternalRevenueCodeSection216(b),thetextofwhichisincludedinafootnoteabove.
    39
    SeeIRSPublication3402,TaxationofLimitedLiabilityCompanies,(March2010),page3,forwhenasinglememberLLCmay
    beconsideredadisregardedentity.
    40
    SeeIRSPublication530,TaxInformationforHomeowners,availableathttp://www.irs.gov/pub/irspdf/p530.pdf
    38

    Page72of101


    d. Sweatequity:Anothertaxissuetoconsideristheeffectofanagreementtograntaproperty
    interesttoapersoninexchangeforworktheydoonaproperty.Clientsarefrequentlyshocked
    whenItellthemthatsuchasweatequityarrangementgeneratestaxableincometotheperson
    contributingwork,asmeasuredbythevalueofthelandinterestthattheyaregranted.

    PropertyTaxes
    InCalifornia,wherepropertytaxassessorsgenerallydonotreappraiseapropertyunlesstherehas
    beenachangeofownership,agroupofcoownersmaywanttofindawaytopreventfrequentchanges
    ofownership.Forexample,ifaCaliforniapropertyisownedby8peopleasaTIC,chancesarethatevery
    severalyearsanownermaywishtoleaveandrelocate.Ifthatpersonsellshis/hershare,thiscould
    triggerpartialreappraisalofthepropertyand,ifthepropertyvaluehasrisen,higherpropertytaxes.
    Onewaytoavoidfrequentreappraisalistoownthepropertythroughanentity,suchasapartnership,
    corporation,orLLC.UnderCalifornialaw,achangeofownershipmaynottakeplaceunlessthereisa
    transferofmorethan50%oftheinterestsintheentity.41

    41

    CaliforniaRevenueandTaxationCodeSection64
    Page73of101

    ZONINGANDCOHOUSING
    Thissectionhasbeenadaptedfrom
    PracticingLawintheSharingEconomy,byJanelleOrsi(ABABooks2012).

    LocalZoningandLandUseLaws:
    Residentialzoninglawshavecarvedupcitiesandsuburbsintosinglefamilyhomesandunits,largely
    separatinghouseholdunitsintoisolatedspaces.Asaresult,manycohousingcommunitiesencounter
    zoninglawbarrierstothedevelopmentoftheircommunities.Hereisabriefsummaryofthetypesof
    zoningbarrierssharedhousingandcohousinggroupsmayface:

    1. Restrictionsonthenumberofunitsonaparcel:Mostcitiesrestrictresidentiallandusesby
    cappingorsettingaminimumnumberofunitsthatmustbeputonaparcel.Whilethepurposes
    ofdensitycappingareoftenrootedinmanagementandprotectionoflimitedresourcessuchas
    water,cleanair,healthyecosystems,andthecapacityandupkeepofinfrastructuresuchsewage
    treatmentsystems,transportation,andschools,densitycapscanpresentobstaclestogroups
    wishingtocreatecommunityorientedhousingwithsharedspaces.
    Manypeoplewishingtocreatesemisharedhousingarrangementshaveworkedaround
    suchrestrictionsby,forexample,buildinganadditionontoahouseandincludingashared
    kitcheninbetweentwootherwiseseparatelivingspaces.Thisisbecauseadwellingconstructed
    withoutakitchensometimesdoesnotmeetthelegaldefinitionofadwellingunit.42
    Insomeplaces,stateshavepassedlawsmandatingthatcitiesallowresidentstobuild
    accessorydwellingunits,alsoknownasADUs,grannyflats,inlawunits,secondunits,accessory
    apartments.Forexample,recognizingthatADUsmayprovidethemostimportantmeansby
    whichwewillhouseourgrowingpopulation,theCalifornialegislaturepassedAB1866in
    2003,requiringthatcitiesadoptmorestreamlinedpoliciesforthepermittingofADUs.
    Wherepossible,citiescouldincreaseallowabledensity,eveninsinglefamilyresidential
    areas,ifthelandwillbeusedinawaythatmitigatesthetypicalimpactsofdensity.For
    example,ifacohousingcommunityorecovillageisbuiltwithsystemstocapture,purify,and
    recyclewater,tomanageitsownwasteandwastewater,toproduceitsownenergy,andto
    provideresidentswithacarsharingprogramandeasyaccesstopublictransit,thiswould
    mitigatetheimpactonthesurroundingcommunity,localecosystems,andcityinfrastructure.
    Formbasedzoningcodes,43alreadyimplementedincitiesaroundtheU.S.,mayoffer
    groupsauniqueopportunityforsharedhousing.Suchcodesfocusonurbanplanningbasedon,
    amongotherthings,theform,shape,size,andimpactofbuildingsonparcels.Thismodelmay
    providegroupswiththeopportunitytoparticipateintheplanninganddevelopmentofcompact
    urbanmultiusecommunitiesthataccommodatetheneedsofsharedliving.

    2. Restrictionsontherelationshipsofornumberofoccupantsperunit:Inmanycitiesthroughout
    thecounty,zoninglawsstillrestrictthenumberofunrelatedindividualsthatmaylivetogether
    inaunit.Suchlawshavepresentedbarrierstogroupsthatintentionallyseektoliveinashared

    42

    Forexample,theInternationalResidentialCode(2009)definesDwellingUnitasAsingleunitprovidingcomplete
    independentlivingfacilitiesforoneormorepersons,includingpermanentprovisionsforliving,sleeping,eating,cookingand
    sanitation.
    43
    Formoreinformationonformbasedcodes,seetheFormBasedCodesInstitute:www.formbasedcodes.org
    Page74of101

    and/orsupportivelivingarrangement.MentalHealthAdvocacyServices,Inc.hasissuedasetof
    recommendationsforhowcitiescanredefinehouseholdandoccupancystandards.44
    Otherlawsrequirethatunrelatedindividualsinaunitbepartofahouseholdunitor
    singlehousekeepingunit,meaningthattheysharefinancialresponsibilitiesandchores,and
    act,insomerespects,likeafamily.Suchalawpreventsasingleownerofathreebedroom
    housefromrentingoutherothertwobedroomstostudentsorotherpeoplefoundon
    Craigslist.45

    3. Mandatoryparkingspaces:Mandatoryparkingrequirementscanbeasignificantbarrierto
    sharedhousing.InMountainView,California,thecostofonecohousingdevelopment
    significantlyincreased,duetothecitysinflexiblerequirementthatthedevelopmentprovide2.3
    parkingspacespernewunit.46Thisisunfortunate,becausecitiescouldactuallyincentivize
    sharedhousing,carsharing,ridesharing,andpublictransitusebylooseningrequirementsthat
    eachnewunitbeaccompaniedbyoffstreetparking,andbyfindingotherwaystoensurethat
    streetparkingdoesntbecomescarce.Forexample,acitycouldrequirethatnewunit
    developmentsbeaccompaniedbyacarsharingplanorprogram,transitpassesforresidents,
    bicycleparking,andotherinfrastructurethatenablesresidentstonotownacar.Citiescould
    alsorequireresidentsofnewunitstopayhigherfeesforstreetparkingpermits,sincethose
    residentswouldnormallyhaveincurredtheexpenseofinstallinganewparkingspotonthe
    property.

    InclusionaryZoningLaws:
    Inclusionaryzoningisatoolusedbycitiestoensureasupplyofaffordablehousingunits.Suchlaws
    oftenrequirethatnewdevelopmentscontainacertainnumberofaffordableunitsand/orrentalunits,
    ortheyimposefeeswhenmultiunitbuildingsareconvertedfromrentalpropertiestoresidentowned
    condos.Atthesametime,suchlawssometimespresentbarrierstothecreationofcohousingunits.For
    example,inOakland,California,ifagroupof10peopleweretobuya10unitbuildingforthepurposeof
    creatingcohousingforthemselves,theymightberequiredtocreateacertainnumberofreplacement
    rentalunitsintheirbuildingorelsewhereinthecity.47Suchlawsaddsignificantcoststoaprojectand
    cannegativelyimpactthefeasibilityofresidentdevelopedcohousingprojects.Citiesshouldmake
    specialexemptionsforowneroccupiedunitsthatarecooperativelydevelopedbythepeopleintending
    toliveintheunits.

    Notethatitmaybepossibletostructurethecohousingentityinsuchawaythatitavoids
    meetingthedefinitionofastockcooperativeorcondominium.Forexample,ifagroupformsanentity
    topurchaseamultiunitbuildingtorenttothemselves,andiftherearesomenonresidentownersof
    thatentity,thisbecomes,ineffect,ahybridbetweenarentalpropertyandaresidentownedproperty,
    anditmaynotberestrictedbyinclusionaryzoningrules.

    44

    FairHousingIssuesLandUseandZoning:DefinitionsofFamilyandOccupancyStandardsbyMentalHealthAdvocacy
    Services,Inc.,September1998,Availableathttp://www.housingrights.org/pdfs/def_family.pdf
    45
    See,forexample,aproposedLosAngeleslawcalledtheStateLicensedFacilitiesordinance,CouncilFile110262,which
    definesaboardinghouseas:Aonefamilydwellingwherelodgingisprovidedtoindividualswithorwithoutmeals,for
    monetaryornonmonetaryconsiderationundertwoormoreseparateagreementsorleases,eitherwrittenororal.
    46
    CohousingandCarsharing:AGreatOpportunity,byNealGorenflo,publishedbyShareableonOctober11,2009,available
    athttp://shareable.net/blog/cohousingandcarsharingagreatopportunity
    47
    OaklandMunicipalCodeSection16.36.070.
    Page75of101

    COMMONINTERESTDEVELOPMENTCOMPARISONTABLE
    TYPEOFCID

    DEFINED

    COMMUNITY
    APARTMENT
    PROJECT
    CACiv.Code
    1351(d)

    Undividedinterest
    inlandcoupled
    withrightof
    exclusive
    occupancyofan
    apartment.

    STOCK
    COOPERATIVE
    CACiv.Code
    1351(d)

    Corporationholds
    titletolandand
    improvementsand
    shareholdershave
    rightofexclusive
    occupancyina
    portionofreal
    property(usuallya
    unit).
    Shareholdersmay
    deductshareof
    mortgageinterest
    andpropertytaxes
    ifthecooperative
    meetsIRS
    requirements.

    COMMONAREA OWNERSHIPOF
    DESCRIBED
    COMMON
    AREAS

    Entireproject
    Commonarea
    exceptthe
    ownedby
    apartments
    individual
    occupiedby
    ownersas
    residentsand
    tenantsin
    anyincidental
    common.
    exclusiveuse

    commonareas
    suchasparking
    spacesand
    storageareas.

    Entireproject
    Commonarea
    exceptthe
    ownedby
    apartments
    corporation
    occupiedby
    formedtohold
    residents
    titletotheland
    (shareholders)
    and
    andany
    improvements.
    incidental
    exclusiveuse
    commonareas
    suchasparking
    spacesand
    storageareas.

    Page76of101

    SEPARATE
    INTEREST

    Theexclusive
    righttooccupy
    anapartment.

    Theexclusive
    righttooccupy
    aportionofthe
    developedreal
    property,title
    towhichisheld
    bycorporation.
    Theowners
    interestmaybe
    heldasashare
    ofstock,a
    certificateof
    membership,or
    anotherway
    andisdeemed
    tobean
    interestinthe
    CID.

    TYPEOFCID

    DEFINED

    COMMONAREA OWNERSHIPOF
    DESCRIBED
    COMMON
    AREAS

    Commonarea
    CONDOMINIUM Anestateinreal
    Alllandand
    improvements
    ownedby
    CACiv.Code
    property.
    1351(f),783
    Undividedinterest constitutingthe undivided
    CIDexcept
    interestsof
    incommonin
    individually
    ownersinequal
    portionofreal
    ownedunits.
    shares,oneper
    propertywith
    Interests
    unit,unless
    separatereal
    CC&Rsprovide
    propertyinterest conveyedby
    deedandsetout otherwise.May
    inunitlandor
    infinalmap,
    beheldas
    structure.
    tenantsin
    Boundariesofunit parcelmapor
    commonorby
    mustbedescribed condoplan.
    thehome
    andrecordedina
    owners
    finalmap,parcel
    association.
    map,or
    condominium
    plan.

    PLANNED
    Development
    Commonareais Commonarea
    DEVELOPMENT otherthanthe
    theentire
    ownedbyan
    CACiv.Code
    abovethree
    development
    associationorin
    1351(k)
    havingeitheror
    exceptforlots
    commonby

    bothofthese:
    andresidences
    ownersof
    ownedby
    separate
    Commonarea
    owners.
    interestswith
    ownedas
    Commonarea
    appurtenant
    described;
    rightstouseof
    Associationhas rightsmaybe
    conveyedby
    commonarea.
    powerto
    mutualor
    Maybeowned
    enforce
    inequalshares
    reciprocal
    obligationsof
    astenantsin
    easementrights
    separateowners
    appurtenantto commonbut
    byassessment
    titleby
    theseparate
    thatmay
    association
    interests.
    becomelien
    minimizes
    againstseparate
    liabilityto
    property.
    owners.

    Page77of101

    SEPARATE
    INTEREST

    Separate
    ownershipof
    unitwhichcan
    bedescribedas
    landonamap,
    asphysical
    structures
    plannedorin
    existencelike
    ceilings,floors
    andwalls,an
    entirestructure,
    orany
    combinationof
    these.

    Separate
    ownershipofa
    lot,parcel,area,
    orspace.

    LAWSTHATDICTATECOMMUNITYASSOCIATION
    GOVERNANCE
    Partsofthissectionhavebeenadaptedfrom
    PracticingLawintheSharingEconomy,byJanelleOrsi(ABABooks2012).

    Manystates48havelawsthatgoverntheoperationofassociations,suchashomeownersassociations
    andcondoownersassociation,formedforthemanagementofpropertyrightsandundividedinterestsin
    land.Inacommunitywheretheownershiporleaseofaunitiscoupledwithanundividedinterestin
    property,suchasinacondocommunityorcooperative,and/orwheretheConditions,Covenants,and
    Restrictions(CC&Rs)provideforacommonmanagementschemeforpropertyrightsinaneighborhood,
    itmaybenecessarytoadheretocertainregulationspertainingtothestructureandoperationofthe
    communityassociation.Suchstatutestendtosetminimumstandardsformeetingprocedures,notice
    requirements,quorum,numberofvotesrequiredtopasscertainproposals,electionprocedures,
    requirementsfortheadoptionofincreasedassessmentsorspecialassessments,remediesfor
    nonpayment,useofliensasamechanismforenforcement,andsoon.Suchstatutesmayalsoimpose
    limitsontherightsofassociationstodictatehowapropertymayormaynotbeused.Forexample,
    California49andFlorida50havebothpassedlawsprohibitingacommunityassociationfrommakinggrass
    lawnsmandatory,andallowingresidentstoinstalldroughttolerantlandscapes.Coloradostatelaw
    prohibitshomeownersassociationsfrombanningclotheslinesandsolarpanels.51

    TheUniformCondominiumAct(UCA)52andtheUniformPlannedCommunityAct(UPCA)53are
    examplesofregulationsoncommunityassociations,andtheseactshavebeenadoptedinsomestates.
    InCalifornia,theapplicablelawiscalledtheDavisStirlingAct.Theselawssetmandatoryproceduresor
    mandatoryminimums,whichcanoverriderulesplacedinanassociationsgoverningdocuments.Other
    times,theselawssetdefaultrulesthatwillapplywhenanassociationsgoverningdocumentsaresilent.
    NotethatinCalifornia,theDavisStirlingActwouldapplytoastockcooperativeinwhicha
    corporationholdstitletotheland.However,itappearsthattheDavisStirlingActdoesnotapplytoa
    communityinwhichalimitedliabilitycompany(LLC)holdstitletotheland.Thus,theLLCstructure

    lendsitselfwelltocommunitiesthatwishtomaintainfullflexibilityinthedesignofgovernance.

    48

    CaliforniaandFlorida,forexample,bothimposeextensiveregulationsontheoperationofcommunityassociations.
    CaliforniaAB1061,passedin2009,amendingSection1353.8oftheCivilCode.
    50
    FloridaSB2080,Enrolledin2009
    51
    ColoradoRevisedStatutesSection3830168,Unreasonablerestrictionsonrenewableenergygenerationdevices.
    52
    UniformCondominiumAct,availableathttp://www.law.upenn.edu/bll/archives/ulc/fnact99/1980s/uca80.htm
    53
    UniformPlannedCommunityAct,availableathttp://www.law.upenn.edu/bll/archives/ulc/fnact99/1980s/upca80.pdf
    49

    Page78of101

    THEDAVISSTIRLINGACT

    TheDavisStirlingActisCaliforniaslawthatgovernscommoninterestdevelopments(CIDs).
    OtherstateshavelegalframeworksforgoverningCIDssometimescalledcondominiumactsor
    plannedcommunityacts.

    INCALIFORNIATHEDAVISSTIRLINGACTINVOLVESFOURTYPESOFCOMMUNITY
    DEVELOPMENTS.

    CommoninterestdevelopmentsinCaliforniagovernedbytheDavisStirlingActare:

    Communityapartmentprojects
    Condominiumprojects
    Planneddevelopments
    Stockcooperatives

    Eachofthesetypesofdevelopmentsinvolvesinterestinaseparateresidenceorspaceandan
    interestinacommonarea.PleaseseetheattachedtableforadescriptionofeachtypeofCID.

    Ifyourintentionalcommunityfallswithinthelegaldescriptionofoneofthesedevelopments,it
    issubjecttotheregulationsimposedbytheDavisStirlingAct.

    REQUIREMENTSTHATMAYCONFLICTWITHGOVERNANCEOFINTENTIONALCOMMUNITIES

    TheDavisStirlingActwaswrittentoprotectindividualswhobuyintoacommoninterest
    development.ManyintentionalcommunitiesfindthatsomerequirementsoftheActarenot
    wellsuitedtotheirdesignoftheircommunitygovernanceandoperations.

    Forexample,CIDsmustadheretostrictrulesforelectionsandvoting.UndertheAct,whena
    CIDassociationelectsorremovesofficers,makesadecisionaboutassessments,ordecidesto
    amenditsgoverningdocuments,itisrequiredtouseasecretballot.Theuseofasecretballot
    wouldbecontradictorytothenatureofaconsensusprocesswhichrestsoneveryperson
    expressinghisorherideasandviewsonagivenproposalordecision.Inthiscase,the
    communitycouldstillusetheconsensusprocesstoreachaproposalthatisaccepted,butinthe
    end,toconformtotheAct,memberswouldneedtovotewithasecretballot.

    DEFAULTPROVISIONS

    AnotherimportantissuetospotintheDavisStirlingActandotherstatelawsisthatthereare
    defaultprovisionsthatwillautomaticallyapplyunlesstheyarechangedinthegoverning
    documents.

    Agroupwillneedtodecidewhetheritwantsthedefaultprovisionorwantstomakeupitsown
    rules.Forexample,inCaliforniaifagroupwantstocreateitsown:
    Page79of101

    rulesforconflictresolution,
    latechargesforassessments,
    thetimefornoticingmeetingsandtheplaceformeetings,and
    responsibilityforrepairandmaintenanceofseparatelyownedareasandcommonareasand
    facilities,or
    dutiesofaboardofdirectorsoftheassociation

    itwillneedtowriteitsownprovisionsontheseissuesingoverningdocuments.

    REQUIREMENTSFORENFORCEABLEOPERATINGRULES
    Anotherissueisthatifagroupwantstoenforceitsoperatingruleslike,forexample,what
    managementteamswillbeformedandwhatauthoritiestheywillhavetheruleswillhaveto
    meetcertainstandards.Tobevalidandenforceablerules:

    havetobeinwriting,
    theyhavetobeadoptedbytheassociation,
    theyhavetobeconsistentwiththeprovisionsofthegoverningdocuments,and
    theboardofdirectorshastobeauthorizedbythegoverningdocumentstomaketherule.

    ALLGOVERNINGDOCUMENTSNEEDTOBECONSISTENT
    Thisbringsupanotherissuetobeawareofthatallthedocumentsshouldbeconsistent
    meaningtheyshouldnotcontradicteachother.Thearticlesofincorporation,bylaws,policies,
    agreements,rulesandprocedureshavetobeconsistentandbackeachotherup.

    Forexample,therulesforthegroupsconsensusprocesscouldbebackedupbythe
    foundationalvaluestoreachdecisionsthataresupportedbythewholecommunityandto
    promotetrustamongcommunitymembersandthepolicythatdecisionswillincludetheinput
    andideasofallmembersintoafinaldecisionthatisacceptabletoallwithinaconsensus
    process.

    CHANGESTOUNITSORCOMMONAREAS

    Anotherissuethatisimportanttospotformanycommunitiesishowtomakesurethatthe
    communitygetsfinalapprovalofchangesownerswanttomaketotheirownunitsand
    properties.Thecommunityassociationwillhavetomakesurethattherequirementfor
    approvalofchangesisspelledoutinthegoverningdocumentsandtheprocedureforreviewing
    andapprovingordisapprovingproposedchangeswillhavetoconformtotheActs
    requirements.

    Page80of101

    GETTINGAPPROVALTOSELLCOHOUSINGUNITS
    Thissectionhasbeenadaptedfrom
    PracticingLawintheSharingEconomy,byJanelleOrsi(ABABooks2012).

    Inmanystates,therearelawsthataredesignedtoregulatethesaleofsubdividedlandsbydevelopers
    topurchasers.Inthesamewaythatsecuritieslawsweremeanttoprotectinvestorsfromlosingmoney
    ininvestmentschemes,subdivisionregulationsaremeanttoprotectpurchasersfromlosingmoney
    throughthepurchaseofapropertyinacommoninterestdevelopmentthathasbeenimproperly
    managed,fiscallyorotherwise.

    Lawsdesignedtoprotectthepurchasersofsubdividedpropertiesaresomewhatawkwardto
    applywhenthepurchaserispartofagroupofpeoplethatalsodevelopedandissellingtheland,suchas
    inacohousingcommunity.Thelegalhoopsthatsuchgroupshavetojumpthroughmayfeelincredibly
    high,consideringthatthehoopsweredesignedforarelationshipwherethedevelopermaynoteven
    knowthepurchaser.
    InCalifornia,wheretherearefiveormoreunitsinacondominiumproject,cooperative,planned
    unitdevelopment,communityapartmentproject,ortenancyincommon,theprojectmustundergoa
    longandexpensiveapprovalprocesswiththestateDepartmentofRealEstate(DRE)beforetheunitsin
    theprojectcanbesoldor,inthecaseofcooperativesandcommunityapartmentprojects,leased.In
    approvingaproject,theDREexaminestheplanneddivisionoftheproperty,ensurescleartitletothe
    land,examinesproposedgoverningdocuments,andmustfeelsatisfiedthatallnecessaryservices
    (utilities,roads,etc.)areprovidedforeachunit.TheDREalsolooksatbudgetsandconsiderswhether
    thefinancingstructurefortheprojectwillputbuyersattoomuchrisk,intheeventthatanotherbuyer
    cantmakemortgagepayments.TheDREultimatelyproducessomethingcalledaPublicReportona
    project,whichservesasasetofdisclosuresthatwillbeprovidedtoanyonewhobuysaunit.54

    54

    Cal.Bus.&Prof.Code11018
    Page81of101

    LANDLORD/TENANTLAWSANDSHAREDHOUSING
    Thissectionhasbeenadaptedfrom
    PracticingLawintheSharingEconomy,byJanelleOrsi(ABABooks2012).

    Landlord/tenantlawsaredesignedprimarilytoprotecttenantsinwhatisseenasaneconomically
    dependentrelationship.Landlordscontrolavaluableresource,andlandlord/tenantlawsgenerally
    ensurethatpeoplethatdonotownlandwillbeabletohaveastablerelationshipwiththelandthey
    occupy.Suchlawsmaygivetenantstheassurancesthattheywillnotbearbitrarilyevicted,thattheir
    dwellingwillbehabitable,andthattheirrentwillnotberaisedtounreasonablerates.Landlord/tenant
    lawsareaconstraintonthefreedomtocontract,justifiedbytheunequalbargainingpowerbetween
    landlordsandtenants.
    Atthesametime,landlord/tenantlawsdonotnecessarilyapplyhelpfullyinsituationswhere
    thelandlordisthetenant,wherethetenantispartofacooperativethatservesaslandlord,orwhere
    partiesseektocollaborativelycreateuniqueagreementsforthesharingofland.Manygroupsform
    entitiestopurchaselandandproceedtoleasepartsofthelandtothemselves.Althoughthetenants
    are,indirectly,ownersoftheproperty,thecreationofaleaseholdinterestmaytriggertheapplicationof
    landlord/tenantlaws.Manygroupsfindtheapplicationoflandlord/tenantlawscounterintuitive,since
    theythinkofthemselvesasownersandwanttheflexibilitytosetthetermsoftheiragreementsforthe
    useoftheland.Aquestionremainsforfurtherresearch:Underwhatcircumstances,ifatall,have
    courtsdeclinedtoapplylandlord/tenantlawstoasituationwherethetenantownsasignificantshareof
    theentitythatisthelandlord?

    Inthemeantime,herearesomeoftheprimarywaysthatlandlord/tenantlawsmayrestrictthe
    kindsofagreementsgroupcanformtooccupylandasbothownersandtenants:

    1. Tenantabilitylawsandthewarrantyofhabitability:Ifagroupformsanentitytopurchase
    land,andthengrantleasestothemselvestooccupyselfconstructedunits,thisbringsupthe
    questionofwhethertheentityisresponsibleforensuringthetenantabilityorhabitabilityof
    thespacesoccupiedbythemembertenants.Thisisespeciallyimportanttoconsiderwhen
    groupmembersarelivingoffthegridandusingcompostingtoilets,capturedrainwater,and
    otheralternativestoregularplumbingorothercommonamenities.Manystatelawsprohibita
    propertyownerfromrentingaresidentialunittoatenantiftheunithascertaindefectsthat
    couldaffectthehealthandsafetyofthetenant.Evenifnorequirementsexistinstatutes,
    courtsmayimposecertainrequirementsonlandlordstoprovideaspacethatishabitabletoa
    tenant.Overtime,courtshaveevenadaptedthedefinitionofhabitabletoincludemodern
    amenities,suchasflushtoiletsandrunningwater.55Thefactthatcourtshaveusedtheir
    discretionindeterminingwhatisareasonablewaytolivemeansthatcourtscouldprobablyalso
    recognizethatsomepeopleconsciouslychoosetoliveoffthegrid.Courtswouldhopefully
    allowfortenantstovoluntarilyassumethiswayoflife.Now,however,somecourtshavealso

    55

    AleadingCaliforniaSupremeCourtcaseonthewarrantyofhabitability,Greenv.SuperiorCourt,517P.2d1168(CalSupreme
    Court1974)providesthefollowingsummaryofhabitabilitystandardsinfootnotenumber22:TherecentcaseofAcademy
    Spires,Inc.v.Brown(1970)111N.J.Super.477[268A.2d556]givesagoodindicationofthegeneralscopeofthewarrantyof
    habitability.Inthatcase,atenantinamultistoryapartmentbuildingcomplainedofaseriesofdefects,including(1)the
    periodicfailuretosupplyheatandwater,(2)themalfunctioningofanincinerator,(3)thefailureinhotwatersupply,(4)several
    leaksinthebathroom,(5)defectivevenetianblinds,(6)cracksinplasterwalls,(7)unpaintedconditionofwallsand(8)a
    nonfunctioningelevator.TheAcademySpirescourtheld:"Someoftheseclearlygotobarelivingrequirements.Inamodern
    societyonecannotbeexpectedtoliveinamultistoriedapartmentbuildingwithoutheat,hotwater,garbagedisposalor
    elevatorservice.Failuretosupplysuchthingsisabreachoftheimpliedcovenantofhabitability.
    Page82of101

    heldthatthewarrantyofhabitabilitycannotbewaived.56Othercourtshaveallowedthe
    warrantytobewaivedundercircumstanceswhereitisdemonstratedthatthetenantor
    homebuyerisfullyinformedoftheconditionoftheproperty.57
    Notethatstateshavealsolikelyadoptedstatutesthatdefinewhatisorisnota
    tenantabledwelling,buttheselawsmayallowforalandlordandtenanttowaivethelaws.For
    example,inCaliforniaCivilCodeSection1941providesthatalandlordofabuildingintended
    fortheoccupationofhumanbeingsmust,intheabsenceofanagreementtothecontrary,putit
    intoaconditionfitforsuchoccupation,andrepairallsubsequentdilapidationsthereof,which
    renderituntenantable(emphasisadded).ThedefinitionoftenantableinSection1941.1
    includesrequirementsforrunninghotandcoldwaterandconnectiontoasewagedisposal
    system.
    Insum,ifgroupswishtoliveinsuchmodest,offthegrid,and/orexperimental
    dwellings,andifgroupshaveformedanentityfortheownershipofproperties,itmaybe
    importanttoensurethatthereisanadequatewrittenwaiverofhabitabilityandtenantability
    betweentheindividualoccupantsandtheentity.Attorneysshouldalsoresearchstatestatutes
    ontenantability/habitabilityandcommonlawcasesontheimpliedwarrantyofhabitability,in
    ordertoknowif,when,andhowtherequirementscanbewaived.

    2. Justcauseevictionlaws:Whengroupsformintentionalcommunities,theymayenvisionthat
    communitymemberswillcooperateinvariousactivitiesandmakeagreementstoengageinor
    withholdfromengagingincertainactivities.However,injurisdictionswithjustcauseeviction
    ordinances,itmaybedifficulttouseevictionasameansofupholdingsuchagreements.Thisis
    becausethelawleansheavilyinfavorofprotectingthetenureofrenters.Forexample,a
    communitymay,forhealthreasons,wishtoadheretosomeof25PrinciplesforBuilding
    Biology,58andagreetocreateacommunityfreeofcertainchemicals,noises,vibrations,
    radiation,syntheticmaterials,andsoon.Ifacommunitymemberrepeatedlyviolateslease
    provisionsrelatedtochemicaluse,thecommunitymaynotbeabletoevictthetenantonthe
    groundsthatthetenantisindefaultunderthelease.Thisisbecauseacourtmayconsidersuch
    provisionsunreasonableasgroundsforeviction.Thecommunitymustinsteadseekotherlegal
    remedies,suchasobtaininganinjunctionmandatingthatthetenantcomplywiththeno
    chemicalrule.

    3. Rightsoftenantsincondoconversion:Whenapropertyisconvertedintoresidentowned
    housing,suchasastockcooperativeorcondominium,locallawssometimesrequirethattenants
    presentatthetimeofconversionbegivenadditionalrights,suchasthefirstrighttopurchase
    thecondounit,ortherighttoleasethepropertyandnotbeevicted,butforjustcause.

    4. Rentcontrollaws:Rentcontrollawscaptheratesatwhichlandlordsmayraiserents,thereby
    ensuringthatatenantcancontinuetoaffordlivinginaunit.Inthecaseofresidentowned
    housing,residentsmaywanttovotetoraiserentsinordertocoveroperationcosts.Ifrent
    controllawspreventthis,however,itmaybepossibleforthetenantstodemandthateveryone
    makeadditionalpaymentsasownersofabusinessentity,ratherthanastheentitysrenters.

    56

    See,forexample,CentexHomesv.Buecher,95SW3d266(TexasSupremeCourt2002),holdingthattheimpliedwarrantyof
    habitabilitycannotbewaivedexceptunderveryspecificcircumstances,andalsoexaminingtheapproachtakenbyotherstate
    courts.
    57
    SeeCrowderv.Vandendeale,564S.W.2d879,881(Mo.1978)
    58
    SeethePrinciplesofBuildingBiologyathttp://www.baubiologie.de/site/english/principles.php
    Page83of101

    BUILDINGANDFIRECODESANDCOHOUSING
    Thissectionhasbeenadaptedfrom
    PracticingLawintheSharingEconomy,byJanelleOrsi(ABABooks2012).

    Buildingcodescansometimespresentabarriertotheoutsideoftheboxwaysthatpeoplewishto
    housethemselves,orinsidetheboxways,forthatmatter,inthecaseofpeoplelivinginverytiny
    dwellings.ThedocumentaryfilmGarbageWarrior,59forexample,documentedtheplightofNew
    MexicoecoarchitectMichaelReynoldsinhisattemptstobuildexperimentalhousing(earthships)out
    ofrecycledmaterials.Hewasrepeatedlycitedforbuildingcodeviolationsuntilhe,atlast,successfully
    lobbiedtheNewMexicolegislaturetopassabillcreatinglimitedcircumstancesunderwhichpeoplemay
    constructandliveinexperimentalbuildings.
    Theclusteringoftinyhousesincombinationwithsharedspacesmayofferanaffordableand
    sustainablehousingoption,yetbuildingcodesmayactasabarrier.Ownersofsuchunitsmay
    encounterdifficultyingettinglegalclearancefortheoccupancyofsuchtinyhomes,sincemanycities
    haveadoptedInternationalResidentialCoderequirementsthatadwellingunitincludeaminimumof
    oneroomthatisatleast120squarefeetinarea,60andotherminimumareaandheightrequirementsfor
    roomswithinadwellingunit.
    Firecodessometimesapplymorestrictrequirementsinmultiunitbuildingsorothershared
    housingarrangements.Forexample,inColorado,somecohousingcommunitieshavebeenrequiredto
    includeexpensivefireprotectionsintheircommonhousekitchens,includinga$10,000exhaustsystem
    installedoverthestove.61

    59

    http://www.garbagewarrior.com/
    SeeCaliforniaResidentialCodeSectionR304.1:MinimumRoomAreas,providingthatEverydwellingunitshallhaveat
    2
    leastonehabitableroomthatshallhavenotlessthan120squarefeet(11m )ofgrossfloorarea.
    61
    EmailconversationwithKathrynMcCamant.
    60

    Page84of101

    FAIRHOUSINGLAWSANDCOHOUSING
    Thissectionhasbeenadaptedfrom
    PracticingLawintheSharingEconomy,byJanelleOrsi(ABABooks2012).

    Somegroupsmaywishtoformresidentialcommunitiesofacertaincompositionallseniorcitizens,all
    women,orallBuddhists,forexample.TitleVIIIoftheCivilRightsAct,alsoknownastheFairHousing
    Act,prohibitsdiscriminationonthebasisofrace,color,religion,sex,nationalorigin,disability,orfamilial
    statusinthesaleorrentalofrealestate.Statesthathaveadoptedsimilarlawsmayhaveaddedtolist
    ofprohibitedbasesofdiscrimination.Forexample,CaliforniasFairEmploymentandHousingActalso
    prohibitsdiscriminationonthebasisofsexualorientation,sourceofincome,ancestry,mentaldisability,
    andHIVstatus.62
    Certainexemptionshavebeenmadetothelawtoallow,forexample,thecreationofsenior
    housing.The1988AmendmentsandtheadoptionoftheHousingforOlderPersonsAct(HOPA)of1995
    allowfortheexclusionoffamilieswithchildrenincommunitiesdesignedforseniors,solongasthose
    communitiesmeetcertainrequirements.63
    TheFairHousingActalsoexemptssomesmallowneroccupiedcommunities,rentingofsingle
    familyhomes,andhousingoperatedbyorganizationsandprivateclubsthatlimitoccupancyto
    members,64whichiswhatallows,undercertaincircumstances,fraternityhousestoprovidehousing
    onlytomenorsororityhousestoprovidehousingonlytowomen.
    However,theActsadvertisingrestrictionsmayapplyeventotheadvertisingofaroomrentalin
    asinglefamilyhomeorthesaleofaunitinasmallowneroccupiedcommunity.Inthosecases,itisstill
    likelyillegaltoadvertiseormakeanystatementthatindicatesalimitationorpreferencebasedonrace,
    color,nationalorigin,religion,sex,familialstatus,orhandicap.65Agroupthatwantstocreatea
    communityofacertaincharactermaystillcommunicatesuchavisioninadvertisingwithoutexpressing
    apreferenceforacertainprotectedclassofpeople.Forexample,thecommunitymaystatethatpartof
    itsmissionistocreateasafeandwelcomingplaceforlesbianandgayparentsandtheirchildren,butthe
    communityshouldnotexpressapreferencethatprospectiverenterorpurchaserbelesbianandgay
    parents.

    62

    Cal.Gov.Code1290012996
    FairHousingItsYourRightU.S.DepartmentofHousingandUrbanDevelopment,availableat
    http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws/yourrights
    64
    Id.
    65
    Id.
    63

    Page85of101

    SAMPLECARSHARINGAGREEMENT
    Adaptedfrom
    TheSharingSolution:HowtoSaveMoney,SimplifyYourLife&BuildCommunity,
    byJanelleOrsiandEmilyDoskow(Nolo2009)

    ThisagreementisbetweenCatherineLoveandTheoDancer,whoagreeasfollows:
    1. AGREEMENTTOSHAREACAR:Weagreetoshareownershipanduseofa2008Toyota
    Camry,VIN#:9723ks65,(thecar).
    2. TRANSFERINGTITLE:Withinoneweekofsigningthisagreement,Catherinewilltransfer
    titleofthecarfromhernametobothofournames,CatherineLoveandTheoDancer,as
    tenantsincommon.Theowillpayalltaxesandtitlefeesrelatedtothetransfer.
    3. OWNERSHIPOFTHECAR:Inconsiderationfor50%ownershipofthecar,Theowillpay
    Catherine$4,150,whichweagreeishalfofthecurrentBlueBookvalueofthecar.
    4. ACCESSORIES:WeagreethatthefollowingaccessoriesinthecarwillremainCatherines
    separateproperty:theroadsideemergencykitandthesteeringwheellockingdevice.
    5. PARKING:WewillkeepthecaratTheosapartmentonParkerStreet.
    6. USEOFTHECAR:CatherinecanusethecaronSundays,Mondays,andTuesdays,andTheo
    canusethecaronWednesdays,Thursdays,andFridays.Wewilltaketurnsusingthecar
    everyotherSaturday.Wemayfromtimetotimenegotiateanewschedule.Ifeitherofus
    needstousethecaronadaywhentheotherpersonisdesignatedtousethecar,that
    personmayasktheotherforpermissiontousethecar.Thepersontowhomthecaris
    designatedmayrefusewithoutgivingareason.
    7. LONGTRIPS:Unlessweagreeotherwise,ifoneofusewantstousethecarforatriplonger
    thanthreedays,thatpersonwillrentacarfortheothertouseonthedaystheother
    normallywouldhavehadthecar.
    8. DECISIONS:Wewillbothtakepartequallyindecisionsrelatedtothecar.Neitherofuswill
    agreetosell,encumber,ormakeexpensiverepairsorimprovementstothecarwithoutthe
    otherspermission.
    9. RESPONSIBILITIES:Wewilleachbeequallyresponsibleforfillingthegastankandkeeping
    thecarclean.Catherineagreestotakethecarforregularmaintenance.
    10. RULES:Eachofusagreesnottolendthecartoanyonewithoutfirstdiscussingitwithand
    gettingpermissionfromtheother.Wewillneverlendthecartoanunlicenseddriver.
    Smokingisnotallowedinthecar.

    Page86of101

    11. COSTS:Wewilldivideallinsurance,registration,maintenance,andrepaircostsequally.We
    willeachkeepourreceiptsinseparateenvelopesintheglovecompartment.Everysix
    months,wewilladdupourcostsandreimburseeachanotherforanydifferencesin
    expenses.Eachofuswillpayforthegasweuse.Ratherthankeepstrictrecordsofour
    mileageandgasexpenses,wewilltrytobuygasinroughproportiontothenumberofmiles
    wedrive.Thecargetsabout30milespergallon.
    12. INSURANCE:Wewillcarryanautoinsurancepolicythatwillcoverupto$500,000per
    victim,$1,000,000peraccident,and$50,000forpropertydamage.Catherinewillbelisted
    astheprimarydriverandTheoasasecondarydriver.Wewilleachpayhalfoftheinsurance
    premiums.Ifoneofusreceivesaspeedingticketordoesanythingtomarhisorherdriving
    record,thatpersonwillberesponsibleforanyincreaseininsurancepremiumsthatresult.If
    theinsurancecompanydeemsthatthecaristotaledandpaysustoreplaceit,wewill
    splitthoseproceeds.
    13. INDEMINFICATION:Ifoneownerisinvolvedinanaccidentforwhichthatownerispartially
    orcompletelyatfault,thatownerwillpayanyinsurancedeductibles,andwillindemnify
    andcompensatetheotherownerforanyexpensesrelatedtotheaccidentthatarenot
    coveredbyinsurance.Thatownerwillalsopayforanyincreasesintheinsurancepremium
    rates.

    Ifoneownerisinvolvedinanaccidentforwhichthatownerisnotatfault,ownerswilleach
    payhalfoftheinsurancedeductible(ifapplicable),anycostsrelatedtofixingthecar,and
    anyincreaseininsurancepremiums.Anyothercostsrelatedtotheaccident,suchas
    medicalbills,willbepaidbytheownerinvolvedintheaccident.

    14. DISPUTERESOLUTION:Ifaconflictordisputearisesthatweareunabletosolvethrough
    discussion,weagreetoattempttoresolvethedisputethroughmediation.Wewillseekto
    mediatethroughSEEDSCommunityResolutionCenter
    15. TERMINATION:Ifoneofuswantstostopsharingthecar,wewillconsidertheseoptionsin
    thefollowingorder:1)theotherownerwillkeepthecarandpaythedepartingownerhalf
    oftheBlueBookvalueofthecaratthattime;2)thedepartingownerwillkeepthecarand
    paytheremainingownerhalfoftheBlueBookvalueofthecaratthattime;or3)wewill
    sellthecarandsplittheproceeds.
    Date:_______________________Signature:_______________________________

    CatherineLove

    Date:_______________________Signature:_______________________________

    TheoDancer

    Page87of101

    TIPSFOREFFECTIVEMEETINGS
    Meetingsareimportantforsharinggroups:Theycreateatimeandstructureformakingdecisions,
    talkingaboutconcernsanddevelopments,andcheckinginwithoneanotherabouthowthingsare
    going.Evenifyourgroupisjustyouandyourneighbor,youshouldstillsetasidetimespecificallyfor
    discussinghowyoursharingarrangementisworkingout.Althoughmeetingsplayanimportantrolein
    keepingasharinggroupfunctioningwell,youmaybehesitanttoschedulethem.Perhapsameeting
    seemstooformal,oryourenotsureyouhaveanythingtodiscuss.Maybeyouvesatthroughtoomany
    dullmeetingsatworkorforcharitablecauses,andyouarenteagertohavemoreofthemwithyour
    friendsandneighbors.Butmeetingsdonthavetobestiltedorboring:Youcanhaveproductive,
    interesting,andevenfunmeetings.Herearesomeguidelines:

    Keepmeetingsasshortaspossibleandkeeptrackoftime.Thesedays,freetimeseemstobemany
    folksmostvaluablecommodity,andfewofuslookforwardtospendinganyofourfreetimeina
    meeting.Onewaytokeepthingsshortistohaveatightagendaandsetatimelimitforeachagenda
    item.Also,ithelpstoreservemeetingsforimportantdeliberationordecisionsonly.Lessimportant
    decisionscantakeplaceoutsideofmeetingsorbyemail.Forexample,ifpossible,dontputReporton
    lastweeksgardeningclassontheagendaifthereisnothingthatneedstobediscussedordecided
    aboutthatevent;writeupyournotesandcirculatethembyemailinstead.

    Dosomethingfun.Meetingtimeisvaluable,butyoushouldspendabitofitlighteningupalittle.
    Startingwithafunactivitycanbreaktheice,perkpeopleup,gettheirattention,lightenthemood,and
    helppeoplefeelmoreconnected.Forideas,seeTheBigBookofMeetingGames,byMarleneCaroselli.

    Designateameetingfacilitator.Thepurposeofhavingameetingfacilitatoristoensurethatthegroup
    movesthroughtheagenda,tokeepthediscussionontrack,toensurethateveryonesinputistakeninto
    account,andtoguidethegrouptoavotewhenappropriate.(SeeTipsforFacilitators,below.)Take
    turnsfacilitatingthemeetings,togiveeachmemberaturnatbeingtheleaderandguidingthegroup.

    Designatesomeoneotherthanthefacilitatortotakenotesorwriteonaflipchart.Afacilitatorjuggles
    manytasks:callingonpeople,followingtheagenda,restatingpartsofthediscussion,moderatingvotes,
    andmostimportantly,listeningtowhatisbeingsaidandhow.Takingnotesmightaddonetoomany
    ballstojuggle.Letaseparatenotetakerberesponsibleforwritingontheflipchartandfiguringouthow
    tospellcooperatively.Anotetakercanalsoserveasanextraearandhelporganizeinformation.

    Ifadecisioncanbedelegated,delegateit!Ifthegroupdecidestoholdapotluckonacertaindate,it
    canappointapersonorcommitteetotakecareoftherestofthedetails.Thereisnopointinwasting
    meetingtimesortingoutthedetailsifpeoplearehappytodelegate.

    SendoutmeetingnotesASAP.Meetingscanbuildalotofmomentuminagroup.Decisionsaremade
    andpeoplecommittotakingoncertaintasks...whichtheymaypromptlyforgetassoonastheyleave
    theroom.Tokeepthegroupfromlosingmomentum,havesomeonetakenotesonthediscussionsand
    decisions.Whensomeonecommitstodoingsomething,underlineandboldthatpersonsnameinthe
    notessotheycaneasilyseewhattheycommittedto.Sendoutthosenotesrightaway.

    Serveamealorsnacks.Often,thebiggestchallengeisgettingpeopletofitameetingintotheirbusy
    schedule.Butthepromiseofcoffee,bagels,andfruitsaladcanimproveattendancedramatically.

    Arrangeseatsinacirclewhenpractical.Thisallowseveryonetomakeeyecontactwitheachotherand
    preventsafeelingofhierarchyinthemeeting.

    Page88of101

    RESTRICTIONSONRENTALSOFUNITS

    Acommonissueincohousingcommunitiesariseswhenoriginalownerswanttorentoutspacein
    theirhomeortheymoveawayandwanttorentthehouse.Canthemembersofacohousingor
    otherintentionalcommunityrequireowneroccupancyofunits?Cantheyrestricthowandtowhom
    anownerrents?Cantheylimitthepercentofunitsrentedoutatanyonetime?Cantheyrestrictthe
    rightsofrenters?

    INGENERALthelawdisfavorsanyrestrictiononapropertyownersrighttorenthisorherproperty.

    RIGHTSAREBALANCEDWITHRESPONSIBILITIES.

    However,therightsandconveniencesoflivinginacommunitythatsharescommonareasand
    facilitiesarebalancedtheresponsibilitiesofgoverningthoserights.Incommoninterest
    communities,thelawaccommodatesthelimitedlossofrightsincludinganownersrighttorentthe
    propertywithoutrestriction.So,inCaliforniaandinsomeotherstates,commoninterest
    developmentscan,undercertainconditions,imposereasonablerestrictionsonrentals.

    SUPPORTANYRESTRICTIONSWITHPURPOSESLISTEDINGOVERNINGDOCUMENTS

    InCalifornia,66ifyouwanttoputrestrictionsonrentalunitsinacohousingorintentionalcommunity,
    youshouldsupporttherestrictionwithreasonablepurposesthatarespelledoutinyourgoverning
    documentsanddesignedtoprotecttheinterestsofthecommunity,suchas:
    Preservationofpropertyvalues
    Protectionofasafecommunityforchildren
    Protectionofstablecommunity
    Costsofmaintenance
    Needforenforcementofrules
    Needtopreservetheabilityofhomeownerstoobtainfinancing

    PUTRENTALRESTRICTIONSINTHEORIGINALCC&Rs.

    InCalifornia,restrictionsonrentalofunitsaremorelikelytobeupheldincourtiftherestrictionsare
    intheoriginalCC&Rs.Why?BecauseifarestrictiononuseofpropertyisintheCC&Rsandis
    recordedwiththecountyrecorder,thebuyerispresumedtohaveknownoftherestrictionbefore
    buyinginandtherestrictionispresumedtobereasonable.Thepersonchallengingtherental
    restrictionswouldhavetheuphillbattleofshowingthattherestrictionisnotreasonableandwhy
    theyshouldnotbesubjecttoaruletheyknewaboutbeforebuyingin.

    AnotherimportantreasontoputrestrictionsonrentalsintheoriginalrecordedCC&Rsisthat,in
    California,ownersareexemptfromrentrestrictionsiftheyboughtinbeforetherestrictionscame

    66Ifyouarefromanotherstate,youneedtocheckthelawthere.

    Page89of101

    intoeffect.And,ifthecityorcountythatapprovedthedevelopmentrequiredlanduseconditionsto
    berecordedintheCC&Rs,lateramendmentoftheCC&Rsmayrequireapprovalofthatcityor
    county.

    Ifyoudidntputrentalrestrictionsintoyouroriginaldocumentsandyouhaveownerswhoboughtin
    beforenewrestrictionsgointoeffect,youcanaskthoseownerstosignanagreementtoabidebythe
    newlyadoptedrestrictions,whichwouldbebinding.

    DISCRIMINATIONISPROHIBITED

    Norentalrestrictioncanbebasedonexcludingpeopleorfamiliesbasedonrace,gender,nationality,
    religion,sexualorientation,disability,etc.

    FAIRHOUSINGLAWS

    Ingeneral,communitymembersneedtobeawarethatprocessesforselectingrentersmaybe
    challengedincourtforviolationsoffederalandstatefairhousinglaws.

    THEREASONABLENESSTEST

    InCaliforniathetermsofgoverningdocumentswillbeenforcedonlyiftheyarereasonable.
    Reasonablenessisdeterminednotonlybycommonsensebutisconsideredwithinthecontextofthe
    purposesofthecommunity.Ananalysisofwhetheraparticularrentrestrictionmightbeconsidered
    tobereasonablewouldinvolvethespecificcircumstancesandareviewofrelatedcasestoseehow
    thecourtsdealtwiththosecircumstancesinthepast.

    Page90of101

    EXPELLINGMEMBERS

    Manyintentionalcommunitieswanttoknowifmemberscanbeexpelledandifso,how.

    Typically,lawsthatallowenforcementincommoninterestdevelopments(CIDs)makeitclear,asthe
    DavisStirlingActdoesforCaliforniaCIDs,thatenforcementofthetermsofthegoverningdocuments
    maynotprohibitanownerfromaccessovercommonareastohisorherpropertyandcannot
    prohibitfulluseoftheirproperty.However,amemberofthecommunitymaybeexpelled,andthe
    methodofexpulsionvariesdependingonthetypeofcommunity.

    Condominiums:
    Theonlywayincivillawyoucanexpelapersonfrompropertythattheyownasinacondominium
    istoforecloseon,andforceasaleoftheirresidenceduetononpaymentofassessments.Thiscanbe
    donebyajudicialforeclosurewherethecommunitysuestosellthepropertyandtocollectamoney
    judgmentoranonjudicialforeclosurewherethecommunityplacesalienonthepropertyandforces
    asale.(Pastdueassessmentsmayalsobecollectedbyasmallclaimssuitforthemoneyowed.)

    Cooperatives:
    ThesituationisdifferentforstockcooperativeswhicharedeemedinCaliforniaandotherstatesto
    formalandlord/tenantrelationshipbetweenthecorporationandtheshareholdingoccupants.Inthis
    case,landlord/tenantlawwouldapplyandresidentscouldbeevictedfromthedevelopmentfornot
    payingrentorassessmentsunderalltherulesoflandlord/tenantlaw.Notethatthecooperative
    wouldlikelyalsoneedtoadheretorulesintheCorporationsCodegoverningtheterminationofa
    membershipinacorporation.

    Page91of101

    ENFORCEMENTOFRULESINCOHOUSINGCOMMUNITIES

    Whileotherstatesmayhavesimilarrules,commoninterestdevelopmentsinCalifornia,including
    thosethatareownedascondominiums,aresubjecttotheDavisStirlingActwhichprovidestermsfor
    enforcementofgoverningdocuments.

    REMEDIESALLOWEDBYLAW

    Fines.Typically,communitiescanenforcerules,includingfailureorrefusaltopayassessments,with
    fines.Iffinesareused,thecommunityisrequiredtostateaheadoftimewhatthefinewillbefor
    eachkindofviolationandproduceascheduleoffinesthatisdistributedtoallmembers.

    Suspensionofrights.Enforcementcanincludesuspensionofrights,liketherighttoparticipatein
    decisionmakingandtherighttousecommonareasandfacilities.Amembercannotbeprohibited
    fromenteringandusingtheirownpropertyandtheycannotbesuspendedfromusingcommon
    accesstoreachtheirpropertyorunit.

    Legalremediesforcollectingassessments.Whenanownerinacohousingcondominiumfailsor
    refusestopayassessments,therearethreeoptions:
    1) ajudicialforeclosurewherethecommunitysuestosellthepropertyandtocollectamoney
    judgment;
    2)anonjudicialforeclosurewherethecommunityplacesalienonthepropertyandforcesa
    sale;and
    3) alawsuitinsuperiorcourtwhichcanbeasmallclaimssuitdependingontheamountfor
    themoneyowed.

    STANDINGTOSUE

    Violationsofgoverningdocuments.ACIDhomeownersassociationhasstandingtosueamember
    forviolationsoftheassociationsCC&Rs(Covenants,Conditions&Restrictions).Theassociationis
    requiredbylawtoenforcetheCC&Rsandiftheydont,membershavetherighttosuethe
    associationforacourtordercompellingtheboardofdirectorstoenforce.Boththeassociationand
    individualmembershavetherighttosueincourtforenforcementofthetermsofothergoverning
    documentssuchasbylaws.Iftheassociationsuesithastobeinthenameoftheassociationandnot
    ofitsboardofdirectors.

    Harmstopropertyandpeople.Wheremembersortheirguestscauseharmtopropertyorto
    people,theassociationand/oramemberhavestandingtosueincourtforinjunctiontostopthe
    harmandformoneydamages.

    Page92of101

    BLOCKINGCONTROLINACONSENSUSPROCESS
    WHYISCONTROLOFBLOCKINGINACONSENSUSPROCESSSOIMPORTANT?
    Somecohousinggroupsthatuseaconsensusprocessrequireaunanimousapprovalofaproposalandallow
    oneormorememberstoblockadecision.Thisisacriticalmatterbecauseacommunitysprogresstoward
    projects,decisions,orproposalsthatallbutonememberwanttocarryoutcanbeblockedbythatone
    memberifnoblockingcontrolproceduresareadoptedinthecommunitysgoverningdocuments.For
    example,acommunitythatwantstoamenditsgoverningdocumentstoincludeablockingprocessmaybe
    continuallystoppedfromdoingsobyasinglepersonwhoblockstheamendment.
    ThereisanexcellentseriesofarticlesaboutthistopicintheJune2012issueofCommunitiesMagazine.
    Aformingcommunitythatwantstouseaconsensusprocessandwantstoincludeaprocedureforcontrolling
    blocksshouldincludeprovisionsinitsoriginalrecordedDeclarationofCovenants,Conditions,andRestrictions
    (CC&R)that1)consensusprocesswillbeusedandthat2)theconsensusprocesswillincludeclearprocesses
    forblockingandforgroupdeterminationofwhetherablockisappropriate.Theadoptedbylawsshouldthen
    includeaconsensuspolicyanddetailedproceduresforconsensusandforblocking.InCalifornia,recording
    CC&Rswiththesecovenantsmeansthatprospectivebuyershavenoticeoftheprovisionsandtheyare,if
    challenged,presumedtobereasonable.
    WHATIFYOURGOVERNINGDOCUMENTSDONTHAVEAPROVISIONFORCONTROLLINGBLOCKS?
    Somecommunitiesestablishedtheirgoverningdocumentstoincludeaconsensusprocesswithoutprovisions
    forcontrollingblockingbyoneperson.Thiscanfreezeacommunityinturmoilandconflict.

    InCaliforniathereisaremedy.UndertheDavisStirlingAct,anindividualownerortheassociationmayfilea
    lawsuitaskingthecourttostepinandreducethenumberofaffirmativevotesneededtoamendthe
    associationsCC&Rs.Inthiscaseitwouldbetoreducethenumberofaffirmativevotesfromunanimity.For
    example,anownerortheassociationcouldaskthecourttoorderthattheCC&Rscanbeamendedtoallow
    decisionstobeapprovedbyunanimityminus,forexample,1or2,orby75%vote,orwhateverisreasonable
    fortheassociation.OnceacourtorderallowsthemembershiptoamendtheCC&Rswithlessthana
    unanimousagreement,themembershipcanamendtheCC&Rstoincluderulesforblockingincluding
    qualificationsforeffectiveblocks.

    Cohousingcommunitymembersinotherstatesmaywanttoresearchthepossibilityofthesametypeof
    provisionintheirstatelaw.Ifnospecificprovisionexists,alegalremedymaybeacourtactionfordeclaratory
    relief,thatis,arequestforajudicialdeclarationthattherequirementforunanimityisnotreasonable,andfor
    acourtorderrequiringhowtheprovisionforunanimityinthegoverningdocumentsshallbechanged.

    Page93of101

    LANDUSE,ZONING,&ENVIRONMENTALLAWS

    STARTWITHARESPECTFULANDFRIENDLYRELATIONSHIPWITHPLANNINGSTAFF

    Whenyouknowthecountyorcitywhereyourcohousingprojectwillbe,thefirststepistodesignateacouple
    offriendlyandpatientgroupmembersasrepresentativestovisitthelocalplanningdepartment.Make
    contactwithstaffmembersandstartlearningaboutthelanduselawsandtheprocessesyouwillneedtogo
    throughtogetpermitsforwhatyouwanttodo.Whenyoudescribeyourprojecttoplanningstaff,describeit
    inplanningtermsnotasanintentionalcommunityorcohousingbutinlanduseplanningtermsas,for
    example,acondominiumorplanneddevelopment.

    KNOWWHATYOUWANT

    Beforeyouevengototheplanningdepartment,youandyourgroupneedtoknowwhatyouwanttodo.If
    youwanttodivideupspacesinanexistingstructureandraisechickensontheland,youwillneedtofindareas
    wherechickenfarmsareallowedalongwithmultiresidentialdevelopmentandyouwillneedtoknowallthe
    lawsthatregulatetheretrofitofexistingbuildingsandthedevelopmentandoperationofchickenfarms.
    Manyifnotmostcountyandcitygovernmentshavedigitalaccesstolanduseareasorzones.Youcanalsogo
    intoyourcityorcountyplanningdepartmentsandasktoseethezoningmaps.

    SUBDIVISIONS

    Ifyourprojectincludesdevelopmentoffiveormoreunitsorresidencesyouwillneedtomakesuretheproject
    complieswiththeSubdivisionMapActandDepartmentofRealEstaterulesforsubdivisiondisclosuresinthe
    SubdividedLandsAct.

    LONGRANGEGENERALPLANSANDPOLICIES

    Inadditiontoknowingwhatlandusezoneyourprojectwillhavetofitinto,somestatessuchasCalifornia
    requireallcitiesandcountiestodeveloplongrangepoliciesandplansthatalldevelopmentandchangesin
    landusemustfitinto.InCaliforniathisistheGeneralPlan.Youmayfindpolicies,plansandordinancesfor
    thingslikedensityrestrictions,resourcemanagement,affordablehousingprograms,andinfrastructure
    requirements.Themessageistoshapeyourprojecttofitwiththeselongrangeplanninggoalssoyoucan
    avoidtimeconsumingredesignsandotherroadblocks.

    VARIANCES

    Ifyourprojectjustcantfitexactlyintowhatsrequired,itsimportanttoknowthelocalrulesforgettinga
    variancewhichistypicallyaprocessthatrequiresaseparateapplication.

    CALIFORNIACOASTALACT

    IfyouwanttodevelopacohousingorintentionalcommunitynearthecoastinCaliforniayouwillneedto
    checktoseeifyourchosensiteisinthecoastalzone.Ifitisinthecoastalzone,youwillberequiredto
    conformtoanotherlayeroflawsthatprotectpublicresourceslikebeachaccess,andnaturalresourceslike
    plantsandanimalsandtheirhabitatsinthecoastalareas.Thecoastalzonerangesfromseveralhundredfeet
    toseveralmilesinland.

    Page94of101

    NATIONALENVIRONMENTALPOLICYACT/CALIFORNIAENVIRONMENTALQUALITYACT

    NEPAisanenvironmentalreviewprocessthatappliestoallfederalprojectsanddevelopmentthatisfederally
    funded.SoifyourprojectwillbeusingHUDfundsdepartmentofhousingandurbandevelopmentorother
    federalfundsyouwillneedtomakesurethattheprojectcomplies.

    TheCaliforniaEnvironmentalQualityAct(CEQA)appliestoallprojectsinCaliforniathatmaycauseaphysical
    changeintheenvironmentbothhumanmadeandnatural.

    BothNEPAandCEQArequireadevelopertoprovideinformationaboutandanalysesofthepossibleimpactsa
    projectmayhaveontheenvironment.Thepurposeistocreateaninformedpublicdecisionmakingprocess
    basedonpublicallyavailableinformationabouttheproposedproject,theenvironmentthatmaybeaffected
    bytheproject,andthepossibleenvironmentaleffectstheprojectmayhave.

    Ifthesiteyouvechoseninvolves,forexample,theretrofitofanhistoricalbuilding,hasastream,lakeor
    wetland,orincludeshabitatsforprotectedplantsoranimalsyouwillneedtoallocateadditionalfundsfor
    analysesandreportsonyourprojectsimpactsonthesepublicresources.

    ApprovalsofpermitsanddocumentsrelatedtoNEPAandCEQAwillrequirepublicadministrativereviewand
    approvalprocesses.Unlesssomeoneinyourgroupknows,orcanlearnabouttheseprocessesandguideyour
    communitythroughthem,youmaywanttoconsiderworkingwithaplanningconsultantorlawyer.

    Page95of101

    PROTECTINGPLACEWITHCONSERVATIONEASEMENTS

    WHATISACONSERVATIONEASEMENT?
    Aconservationeasementisalegallimitationontheuseoflandinawrittendocumentthatis
    executedbythepropertyownerandbindingonsuccessiveownersforthepurposeofretainingthe
    landinitsnatural,scenic,historic,agricultural,forested,oropenspacecondition.Whilea
    conservationeasementisanagreementbetweentwopartiesthepropertyownerandthe
    easementholderitisfarmorethanjustacontract.Theconservationeasementdeedisanestatein
    realpropertythatisrecorded,canbesold,andisperpetualinduration,thatis,futureownersbuythe
    landwiththeeasementrestrictions.Thespecificinterestinthelandthatistransferredtothe
    easementholderisdescribedintherecordedconservationeasementdeedandincludes,among
    otherthings,theareaoflandtobeprotected,thespecificvaluestobeprotected,theusesand
    activitiestobeallowedontheland,andtheusesandactivitiestobeprohibited.Thefederaland
    stategovernmentsallowcharitabletaxdeductionsforthedonationofconservationeasementsthat
    conformtospecificstatutoryrequirements.Insomestates,propertytaxreductionsarealso
    available.
    ISSUESRELATEDTOCONSERVATIONEASEMENTS
    Conservationeasementholders.Toqualifyforfederaltaxdeductions,theeasementholdermustbe
    astateorlocalgovernmententity,a501(c)(3)nonprofitcorporation,afederallyrecognizedNative
    AmericanTribe,or,inlimitedcircumstances,anonfederallyrecognizedNativeAmericanTribe.To
    beaneasementholder,a501(c)(3)nonprofitcorporationmustbeorganizedfortheprimarypurpose
    ofpreservationofeasementvaluesnatural,scenic,historic,agricultural,forested,oropenspace
    resources.Thebestsourceofinformationaboutlandtruststhatholdconservationeasementsisthe
    LandTrustAllianceatwww.landtrustalliance.org.
    Perpetuityandtheterminationofconservationeasements.Eventhoughaconservationeasement
    maystatethattheeasementisinperpetuityandbindingonsuccessiveowners,therearediffering
    legalopinionsastowhetherconservationeasementscanbeterminated.Ingeneral,thebasisfor
    terminationisthedoctrineofchangedcircumstances.Thisdoctrineallowsoneoftheparties(usually
    thepropertyowner)topetitionacourttoterminateaneasementbecausetheconditionsthatcalled
    foritsexistencehavechanged.Forexample,ifaconservationeasementprotectsaforest,anda
    droughtorfirecausesamajordieoffoftheforeststrees,wouldthedoctrineofchanged
    circumstancesapplytoallowterminationoftheconservationeasementanddevelopmentofthe
    land?Orifthesurroundinglanduseschangedsuchthattheprohibitedusesbecamemorevaluable
    economicallythanthepermitteduses,wouldthepropertyownerbeallowedtoterminatethe
    easement?
    Toprotectthenaturalresourcesinperpetuity,aconservationeasementshouldincludea
    statementofagreementbythelandownerandtheeasementholderthatspecifiedconditionsarenot
    groundsforterminationbasedonimpossibilityorimpracticability.Intheabovecases,easement
    Page96of101

    termscouldincludeastatement,forexample,thatweatherandothereventsthateliminatespecies
    orharmecosystemsshallnotbegroundsforterminatingtheeasementorthatchangesinthe
    surroundinglandusesthatcausetheeasementtobeeconomicallyimpracticalshallnotbeaground
    forterminatingtheeasement.
    Whatyouwanttoprotectandhowyoudecidetoprotectitinlightofforeseeableoranticipated
    economicandclimaterelatedchangesshouldbewellthoughtthroughinordertocraftaneasement
    thatwillprotectland,environment,andcommunityovertime.
    Taxdeductionsfordonationofconservationeasements.Thedonationofaconservationeasement
    isagiftofaninterestinrealproperty.Tobeeligibleforfederalincometaxdeductionsasacharitable
    donation,aconservationeasementmustrestricttheuseoftheland,theuserestrictionmust
    promotespecificconservationpurposes,theeasementmustbeperpetual,andtheeasementholder
    mustbeaqualifiedorganizationasdescribedabove.Statesalsoprovidetaxincentivesfor
    conservationeasements.Forexample,inCalifornia,countytaxassessorsarerequiredtoconsiderthe
    effectofenforceablelanduserestrictionsonpropertyvalue.Thefederalgovernmentalsoallows
    estatetaxdeductionstoreflectthevalueofthepropertywiththeeasementrestrictions.
    Conservationpurposes.Theconservationpurposesrequiredforfederaltaxdeductionsare
    preservationoflandforpublicrecreationoreducation,protectionofnaturalhabitatforfishand
    otherwildlife,plantsorecosystems,preservationofopenspaceincludingfarmlandandforestedland
    forpublicscenicenjoyment,orpreservationofanhistoricallyimportantareaorstructure.
    Baselinedocumentationreport.Abaselinedocumentationreportisawrittendescriptionwithmaps
    andphotographsoftheconservationvaluesandpublicbenefitsthatexistontheland.Thereport
    recordsboththeexistenceandconditionoftheresourcesatthetimetheconservationeasementis
    created.Thereportsupportsqualificationfortaxbenefitsandprovidesthebaselinedatafor
    monitoringandenforcementoftheeasementsterms.
    Mineralrights.Therighttoextractminerals,gas,andoilmaybeownedbysomeoneotherthanthe
    ownerofthesurfaceofland.Anyoneinterestedinbuyinglandforpreservationinaconservation
    easementshouldcarefullysearchthetitlerecordstodetermineiftheunderlyingmineralrightsare
    separatelyowned.Theholderofmineralrightshasthelegalrighttoaccesstheminerals,gas,oroil
    toberemovedandtodisturbthelandssurfacetoremovethem.Oncetheyareremovedtheyare
    thepersonalpropertyofthemineralrightholder.Forthepurposeoffederaltaxbenefits,the
    requirementforprotectionoftheconservationpurposesinperpetuitymaynotbemetifthereare
    underlyingseparatelyownedmineralrightsonthelandthatmayberemovedinthefuture.
    Ifyouhavepurchasedthesurfacerightstolandwithouttheunderlyingmineralrightsandyouwant
    toprotectthelandanditsresourcesfromdisruptioncausedbymininganddrillingactivities,aquiet
    titleactionmaybeanavailableoptiontoreattachthemineralrightstothesurfaceoftheland.
    Recordationoftheeasement.Aconservationeasementshouldberecordedimmediately.
    Recordationisessentialtoprovidelegalnoticeoftheeasementbecauseanunrecordedeasement
    maybechallengedorterminatedifthelandissoldtoabuyerwithoutnoticeoftheeasement.A
    prospectivebuyerisconsideredtohavebeennotifiedwhenaneasementisrecorded.
    Page97of101

    Amendmentofeasements.WhileCaliforniaandseveralotherstatesdonotprovideforlegal
    amendmentsofconservationeasements,manystatesdo.Thefederalrequirementforperpetuity,
    however,mayconflictwithaneasementthatallowsamendmentstothetermsrelatedtoprotection
    andpreservationoftheconservationvalues.
    Marketablerecordtitleactsanotherpossiblethreattoperpetuity.Oneoftheoverarchingland
    usepoliciesinthisnationispromotionandencouragementofthesalabilityofland.Tosupportthe
    policy,manystateshavestatutesthatcauseantiquatedliens,easements,andoptionsthatmay
    hamperthesaleofpropertytobeextinguishedafteraspecifiedtime.Whilesomestates,including
    California,excludeconservationeasementsfromexpirationundertheact,amarketablerecordtitle
    actwithoutthatexclusioncouldbedetrimentaltotheperpetuityofaconservationeasement.
    Coownedproperty.Oneownerofanundividedinterestinland,suchasanowneroflandasa
    tenantincommon,cannotcreateaneasementthatbindsthesharesofothercoowners.Allowners
    mustparticipateinexecutionofaconservationeasement.

    Page98of101

    ADDITIONALRESOURCES FORSHARINGANDCOHOUSING

    FellowshipforIntentionalCommunitywww.ic.org(Hasadirectoryofecovillages,cohousingandother
    intentionalcommunitiesthroughouttheU.S.andtheworld).
    CohousingAssociationwww.cohousing.org(Anationaldirectoryofcohousing,withdetailedinformation
    andstatisticsabouteachcommunity,andlotsofgreatarticles).
    GlobalEcovillageNetwork,www.ecovillage.org(includesaglobaldirectoryofecovillages)
    CoopDirectoryServicewww.coopdirectory.org
    EastBayCohousing:www.ebcoho.org
    SharingSolutionWebsiteandBlog:www.sharingsolution.com
    Shareable:www.shareable.net
    Websitesdesignedtofacilitateneighborhoodsharing:
    www.nextdoor.com
    www.ohsowe.com
    www.rblock.com
    www.rentalic.com
    www.neighborrow.com
    www.neighborgoods.com

    Books:

    TheSharingSolution:HowtoSaveMoney,SimplifyYourLife&BuildCommunity,byJanelleOrsiand
    EmilyDoskow(Nolo2009)

    SharingHousing:AGuideForFindingandKeepingGoodHousemates,byAnnamariePluhar(Bauhan
    Publishing)

    Superbia:31WaystoCreateSustainableNeighborhoods,byDanChirasandDaveWann(NewSociety
    Publishers)

    Cohousing:AContemporaryApproachtoHousingOurselves,byKathrynMcCamant,CharlesR.Durrett,
    andEllenHertzman(TenSpeedPress)

    CreatingCohousing:BuildingSustainableCommunities,byKathrynMcCamantandCharlesR.Durrett
    (NewSocietyPublishers)

    TheCohousingHandbook:BuildingaPlaceforCommunity,byChrisScottHansenandKellyScottHansen
    NewSocietyPublishers)

    SeniorCohousing:ACommunityApproachtoIndependentLiving,byCharlesDurrett(TenSpeedPress)

    CollaborativeCommunities:Cohousing,CentralLiving,andOtherNewFormsofHousingWithShared
    Facilities,byDoritFromm(VanNostrandReinhold)

    TheGreatNeighborhoodBook:ADoitYourselfGuidetoPlacemaking,byJayWalljasperandProjectfor
    PublicSpaces(NewSocietyPublishers)

    CreatingaLifeTogether:PracticalToolstoGrowEcovillagesandIntentionalCommunities,byDiana
    LeafeChristian,(NewSocietyPublishers)

    ToolboxforSustainableCityLiving:ADoitOurselvesGuide,byScottKellogg,et.al.(SouthEndPress)

    TheConservationEasementHandbook,byElizabethByersandKarinMarchettiPonte(TheTrustforPublic
    LandandTheLandTrustAlliance)

    Page99of101

    LISTOFRESOURCESFORLESSEXPENSIVEHOUSES

    www.oasisdesign.net

    Earthplasterbuilding

    www.grisb.org/plans

    GeigerResearchInstituteSustainableBuildinglowcosthouseplans

    www.tumbleweedhouses.com

    TumbleweedTinyHouseCompany

    www.tinyhousedesign.com

    TinyHouseDesignMoreAttainableandSustainable

    www.thistinyhouse.com

    Thistinyhousebewell,travellight,andgiveitallaway

    www.tinyhouseblog.com

    LivingSimplyinSmallSpacesincludingshippingcontainerhomes

    www.tinyfreehouse.com

    Forcreativeuseofusedpallets

    www.tinypallethouse.com

    Pallethouses

    www.designboom.com

    Tinyhousessmalldwellingsofeveryshapeandsize

    www.smallhousestyle.com

    Plans,photos,andbuildersofsmallhouses

    www.dornob.com

    Shippingcontainerhomeplans

    www.designcrave.com

    Photosandinformationaboutshippingcontainerhomes

    www.newavenuehomes.com

    Designsandbuildssmallhomes

    www.yesmagazine.org

    SeetheirOctober2008postingLivingLargeinaTinyHouse.

    www.yesmagazine.org

    YesMagazine,Spring2012onMakingitHome

    www.instructables.com/id/HowtoBuildDirtCheapHouses

    AdditionalResource:
    ExcellentArticleSeriesonMakingCohousingAffordable:WitharticlesbyBetsyMorris,BradGunkeland
    ReneeHart:http://www.cohousing.org/cm/article/affordable_1

    Page100of101

    Legal Services for


    Cohousing, Nonprofits, and Cooperatives
    Servicesinclude:LegalEntityFormationAgreementsRealEstateLaw
    JanelleOrsiisanattorneyandmediatorinOakland,andadvisesindividualsand
    groupsthroughoutCalifornia.Sheworkswithcohousingcommunities,ecovillages,
    socialenterprises,nonprofits,cooperatives,communitygardens,localcurrencies,
    andothersdoinginnovativeworktocreatemoresustainableandsharingcommuni
    ties.JanelleisalsotheDirectoroftheSustainableEconomiesLawCenterinOak
    land.SheattendedUCBerkeleysBoaltHallSchoolofLaw.
    JanelleiscoauthorofTheSharingSolution:HowtoSaveMoney,Simplify
    YourLife&BuildCommunity(NoloPress2009),apracticalandlegalguideto
    cooperatingandsharingresourcesofallkinds,andauthorofPracticingLawin
    theSharingEconomy(ABABooks2012).

    Law Office of Janelle Orsi


    3871 Piedmont Ave. #55, Oakland, CA 94611
    510-649-9956, Janelle.Orsi@gmail.com

    www.JanelleOrsi.com

    Legal Services for

    Cohousing and Intentional Communities


    Environmental Protection
    Government Accountability
    CynthiaHawleyslawpracticeincludeslegalservicesforthedevelopment,
    organization,andongoingsupportofsustainablecohousingandintentional
    communities,andcivillitigationforenvironmentalprotectionandgovern
    mentaccountability.Cynthiarepresentsindividuals,nonprofitcorporations,
    andassociations.SheservedasanelectedmemberoftheCambriaCom
    munityServicesDistrictBoardofDirectors,cofoundedtheCoalitionto
    SaveCambriaandSanSimeon,andcurrentlyservesasdirectoronthe
    boardsofLandWatchSanLuisObispoCountyandtheWomenLawyersAsso
    ciationofSanLuisObispoCounty.CynthialivesinCambriaontheNorth
    CoastofSanLuisObispoCounty.

    The Law Office of Cynthia Hawley


    1306 Tamson Drive, P.O. Box 29, Cambria, CA 93428
    Phone: 805-927-5102, Fax: 805-927-5220
    cynthiahawley@att.net

    www.CynthiaHawley.com

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