HOUSING
COMMUNE AGREEMENT
|
|
1998 |
2000 |
2002 |
|
Terri Compost |
_____________ | _____________ |
|
Nishanga Bliss |
_____________ | _____________ |
|
Susan McCallister |
_____________ | _____________ |
|
Todd Jailer |
_____________ | _____________ |
|
Donna McCabe |
_____________ | _____________ |
|
Peter Forni |
_____________ | _____________ |
|
Lisa Sanderson-Fox |
_____________ | _____________ |
|
Suzanne Pegas |
_____________ | _____________ |
Following selection of the 3 names to make up the Council, any Communist may object to any one person selected to sit on the Council by demonstrating one or more of the follow grounds: (a) the selected member has a personal financial interest in the result of the decision; (b) the selected member is currently the lover and/or spouse of any current Communist; (c) the selected member is currently a Communist. If the remaining two persons selected to sit on the Council determine that the objection is valid, the person subject to objection shall not serve on the Council.
If any of the members of the Council chosen at random decline to serve on the Council or are rejected as stated above, a new member shall be selected at random until the Council consists of three members. Any Communist may then again object as stated in the paragraph above. This process shall continue until 3 members remain. If fewer than 3 members of the list are willing to accept service on the Council or are not subject to objection, the Commune shall immediately approve additional members of the list for a further random drawing until at least 3 Council members can be located to conduct arbitration to resolve the decision. The Council, once impaneled, shall only sit to make one decision.
On January 1 of every even numbered year, the above list of potential Council members shall be reviewed by the Commune and amended as necessary so that the list consists of at least 8 respected persons present in the Bay Area who agree to serve on the Council. No family members or lovers of the Communists shall be included in the list. Members selected to serve on a Council shall not be entitled to any compensation, however the Commune may decide to compensate the members of the Council at the Commune's discretion. Any Communist may nominate a new member of the list and following nomination, the Communists must agree to put said person on the list. If the Commune has sent a decision to be arbitrated by the Council at the date on which the list of potential council members shall be reviewed and amended, the review and amendment process shall be postponed until after the resolution of the arbitration.
New
Members. It is the intent of the Communists that as soon as
practicable, the Property shall be equitably owned by 5 Communists,
who shall all be responsible for all duties under this Agreement
and who will all be entitled to all rights under this Agreement.
As of the date of this Agreement, there are three Communists. This
section shall govern the addition of new Communists to the Commune.
(i) If there are any spaces available in the house, i.e. there are
fewer than 5 Communists, any existing Communist may at any time
nominate a new potential member. If all the Communists, after discussion,
agree to accept the new potential member as a Communist, the new
Communist shall become a Communist as soon as they (a) pay the entire
Buy-in amount as stated in this section; and (b) agree to the terms
of this Agreement.
(ii) The Buy-in amount shall be calculated as stated in section
2 and shall be equal to a 1/5 share of the downpayment plus 1/5
of all other initial amounts reflected in the house records. The
amounts entered in the house records shall be binding on calculating
of the Buy-in amount.
(iii) The Buy-in amount shall either (I) be paid in equal shares
to the Initial-communists who advanced the 1/5 share at the time
of the purchase of the Property, or (II) to the separating Communist
who separated at the earliest date and who has yet to be reimbursed
for their Buy-in amount.
(iv) As soon as a new Communist has met the terms of this section,
said new Communist will be responsible for paying all amounts stated
herein and said new Communist shall have all rights under this Agreement.
(v) The existing Communists, upon admitting a new member, may agree
that the new Member be permitted to pay the Buy-in amount in installments
over a period of up to two years from the date the new Communist
joins the Commune. If payments are to be made to a separating Communist,
the separating Communist shall receive payments over time.
Separation
of A Communist. Any member may at any time decide that they
no longer wish to be a member of the Commune. Upon the giving of
60 days written notice, the Communist shall no longer be responsible
for paying any amount required by this agreement. The "Date
of Separation" shall be 60 days after receipt of the 60 day
notice. The separating Communist shall be entitled to receive back
money they put into the Commune while a Communist only as follows:
(i) If the Commune is full at the time of the separation (has 5
Communists) then the separating Communist shall be entitled to receive
back their Buy-in Amount as soon as the Commune accepts a new Communist
to fill the separating Communist's spot, provided, however, that
the Commune shall be under no obligation to rush out to find a new
Communist just to pay back the separating Communist and provided,
however, that the Commune may permit a new Communist to pay the
Buy-in Amount in installments as permitted above. It is not, however,
the intent of this Agreement to permit the Commune to permanently
reduce the number of Communists after a separation merely in order
to permanently screw the separating Communist out of their Buy-in
Amount. Any Communist, or all the Communists, may at any time after
the separation but before the admission of a new Communist pay the
separating Communist the Buy-in Amount in order to reduce the total
number of Communists or in order to reimburse the separating Communist
while waiting to find a new Communist. If the Commune was full at
the time of the separation, and if the Commune fails to pay the
separating member the Buy-In Amount within three (3) years of the
Date of the Separation, the Commune will be deemed to have chosen
to reduce the number of Communists, and the Commune shall thereupon
become obligated to pay the separating Communist the Buy-in Amount.
If more than one Communist has separated and meets the terms of
the above sentence, the Commune shall pay the Buy-in Amounts to
the separated Communist with the earliest Date of Separation first.
If two or more Communists separated at substantially the same time
(within 1 year) then they shall equally divide available Buy-in
reimbursements until each of them is entirely paid.
(ii) If the Commune has never been full at the time of the separation
(has fewer than 5 Communists) and the initial Communists have not
been entirely reimbursed for their initial contributions over and
above their equal 1/5 share, the terms of paragraph (i) shall still
apply except that the separating Communist shall not be entitled
to receive the Buy-In Amount refund until all of the initial Communists
(including the separating Communist if said Communist is a member
of the Vanguard) have been reimbursed for any amounts they contributed
in excess of their share at the time of the purchase of the property.
Further, the 3 year period stated above shall run from the earlier
of (I) the date that the Commune became full (had 5 Communists)
or (II) two (2) years after the Date of the Separation (i.e. a total
of five (5) years until the Commune is deemed to have chosen to
reduce the number of Communists).
(iii) The separating Communist shall be entitled to be reimbursed
for all money they paid as mortgage payments for the Property, without
interest, as follows: At such time as the Commune selects a new
Communist to replace the separating Communist, the new Communist
shall begin making mortgage payments under this Agreement. The separating
Communist shall be entitled to receive the proceeds of any said
mortgage payments, including the Mortgage Surcharge under Table
1, at all times after the initial 30 year mortgage of the Property
is paid off until the new Communist has made mortgage payments for
a total of 30 years, up to the total amount the separating Communist
paid, plus the applicable Mortgage Surcharge for the number of months
of the reimbursement. In the case of multiple separating Communists,
the earlier separating Communists shall be entitled to reimbursement
first. It is the separating Communist's obligation to keep in touch
with the Commune in order to ever collect these payments. If the
separating Communist dies without a will as specified under Section
9 or disappears before these payments become due, the payments shall
be donated to radical causes or distributed as the Commune sees
fit. The separating Communist shall not be entitled to receive back
any payments they made for insurance, taxes, regular upkeep and
maintenance, utilities, etc. If the Commune reduces or is deemed
to have reduced the number of Communists under (ii) above, then
the Commune shall be liable for payment to the separating Communist
as stated herein as if the Commune became a new Communist.
This is complex, so here's an example. The Commune starts in 1998.
A is an initial communist who separates in 2008 after making mortgage
payments for 10 years totaling $36,000 ($300 per month). In 2028
the mortgage is paid off and X, who replaced A in 2010, keeps paying
$300 a month, plus the Mortgage Surcharge discussed in Table 1,
until 2040. From 2028 to 2038, A receives $300 a month, plus the
Mortgage Surcharge amount. (About enough to buy a sandwich due to
inflation after the Nuclear War.) From 2039 to 2040 when X's mortgage
payment obligation is finished, X's mortgage payments go proportionally
to earlier joining Communists who paid high costs from 2008 to 2010
when the Commune rented the extra room to misc. folks. By 2040,
they need the money as David is 74, Jesse is 72 and Elena is 68!
(iv) In getting money back from the Commune, the separating Communist
is limited to the terms stated in this Section. Under no circumstance
shall the separating Communist have the right to force the sale
of the Property in order to be reimbursed for the amounts discussed
in this Section. Although each Communist is considered to own an
equitable share of the Property (and the Initial Communists may
own legal shares as evidenced by their presence on the deed to the
property) this Agreement shall be construed to strictly limit each
Communist's recourse in getting money back from the Commune arising
from their interest in the property.
If an Initial Communist separates from the Commune under this Section
and wishes to remove their name from the title to the Property,
they will have an absolute right to have their name removed, provided,
however, that if they exercise this right, they shall be responsible
for paying the entire cost (100 %) of the consequences
of said removal, including, but not limited to, any increase in
interest or payments due to refinancing, any increase in tax obligations
due to refinancing, any costs of the transaction including legal
or other costs or commissions. The Commune shall be permitted, but
is not required, to waive or modify the terms of this section to
permit the Initial Communist to pay less than 100 % of said costs.
Death
of a Member. The Communists agree that should any of them die,
the remaining Communists shall continue to live in the Property
and under no circumstances shall the Property be sold or divided
due solely to said death. A Communist, if they choose, may elect
to be treated as a separating Communist under Section 8 of this
Agreement upon their death. Any Communist who so elects should execute
a written Will stating their election and stating the persons and/or
entities to which any proceeds payable under Section 8 should be
paid. Section 8 only permits specified payment under limited circumstances
(Buy-in Amount and reimbursement of mortgage payments) so any Will
stating an election to be treated as a separating Communist under
Section 8 shall be subject to the terms and limitations of Section
8 and under no circumstances, except as stated in Section 8, shall
the Commune be obligated to pay a dead Communist any money as a
result of said dead Communist's legal or equitable interest in the
property. If a Communist dies and has not elected to be treated
as a separating Communist, the Commune, in its sole discretion,
shall either contribute any amounts that would be payable to the
Communist as a separating Communist to radical organizations or
distribute said funds to the surviving Communists or to the Commune
as an entity.
Each Communist who is a legal (on the title) owner of the Property
shall draft and properly execute a will providing that if all other
joint owners of the property simultaneously die, or pre-decease
them, the Property shall pass to a then living Communist who is
not on the title to the Property. Said will shall be amended if
the Communists listed on the title to the Property changes or if
the members of the Commune change. If all Communists simultaneously
die, then all assets of the Commune shall be distributed as if the
Communists decided to dissolve the Commune under Section 12. In
such a case, it is likely a very confusing situation in terms of
Court defined legal ownership of the Commune will exist. Therefore,
if the aforementioned terms are not legally enforceable, the Communists
request that the legally determined owners carry out the basic goals
stated above regardless of the legal state of ownership.
If the Commune dissolves under Section 12 of this Agreement, then
the estate of said any Communist shall be entitled to all shares
of the dissolved Commune described in Section 12 as if said Communist
was still alive, except that said dead Communist shall not be entitled
to receive any amounts twice if the dead communist included an election
to receive payments as a separating Communist under this Section.
Pursuant to this Agreement, the initial Communists agree to hold
the title to the property as joint tenants, which means that if
any initial, on title Communist dies, the title to the property
shall pass as a matter of law to the surviving Communists. Said
passage by law shall not affect the terms of this Section, which
may provide reimbursement as dictated by said dead Communists under
said initial Communist's equitable, rather than legal, interest
in the Property.
If any initial Communist severs the joint tenancy and holds title
to the Property as a tenant in common at the time of said initial-Communist's
death, the provisions of this Section shall nonetheless apply as
written. Said dead initial-Communist, or their estate, shall not
be entitled to force a sale of the Property, but instead shall be
limited to the terms of this Section in obtaining payment for said
person's interest in the Property.
Children.
The Communists agree that the Property will be used for raising
kids as necessary. Regardless of the legal parents, all Communists
shall act as joint parents and friends for any kids ("members
of the Communist Youth Brigade"). Communists shall be entitled
to find room in the Commune for any children to live as necessary.
At such time as a child is born, and until said child leaves the
Commune to make their own Commune out in the world, the legal parents
shall be responsible for paying the costs for said kid, as defined
in this section.
The parents of each kid added to the commune shall pay an equal
share of all house expenses (taxes, insurance, repairs, etc.) excluding
mortgage payments for each said kid, in addition to their own share.
The number of Members of the Commune shall be deemed adjusted upward
to take into account the number of children for the purpose of payment
of these expenses. Children shall be considered full members of
the Commune but shall not be deemed Communists for the purposes
of decision making, repayment upon Separation, Ownership, or the
other terms of this Agreement. Children do no inherit their legal
parent's monetary interest in the Commune, except as may be provided
by the parents will, etc.
For example, if the Commune had 5 members, and expenses of $500,
plus a $1500 mortgage, each member would pay $100 per month expenses
plus $300 per month for mortgage ($400). If member A had a child,
and member C and D had 2 children, the Commune would be considered
to have 8 members. Each Communist would pay $72.50 per month expenses,
and keep paying $300 per month mortgage (single member = $372.50).
However, A would actually pay $445 ($300 mortgage plus 2 shares
of expenses) and C and D would collectively pay ($890) 4 shares.
If A's kid moved away, the bills would then be divided among only
7 shares.
A. First, all Communists or separated Communists shall receive any Buy-in Amounts paid to the Commune and owing, up to the entire amount, or if insufficient funds exist to pay the entire amount, then in equal proportion to all Communists owed amounts.
B. Second, all Communists or separated Communists shall receive reimbursement for any mortgage amounts or Mortgage Surcharge amounts actually paid by the Communists, up to the entire amount, or if insufficient funds exist to pay the entire amount, then in equal proportion to all Communists owed amounts. (For example, A-E are Communists and F is a separated Communist. If A had paid $10,000, B had paid $10,000, C had paid $10,000, D had paid $5,000, E had paid $5,000 and F had paid $5,000, and $45,000 was available, everyone would be paid all the money owed. If only $22,500 was available, everyone would get 50 cents on the dollar.)
C. Finally, all Communists or separated Communists shall receive a percentage of any proceeds from the sale remaining after the First and Second payments are made in proportion to the total number of months they paid mortgage payments to the Commune. (If $45,000 was left after everyone was reimbursed for Buy-in Amounts and mortgage payments (First and Second, above) and A-F had lived at the Property for a total of 45 years (A=10 years, B=10 years, C=10 years, D=5 years, E=5 years, F=5 years), then A gets $10,000, B gets $10,000, C gets $10,000 and D through F get $5,000 each.)
If the proceeds of any sale following dissolution are insufficient to pay all brokers' commissions, taxes, debts, outstanding mortgage balances, amounts owed to Communists for separate written loans, and any other expenses of any kind whatsoever, then the existing Communists as of the date that the Communists decide to sell the Property shall be responsible in equal parts for paying said unpaid expenses, provided, however, that any separating Communists whose Date of Separation is 60 or less days prior to the date of the decision to dissolve shall also be responsible as stated in this section.
In any sale of the Property, each Communist shall have a right to purchase the property before the Property is sold to third parties. If more than one Communist or more than one group of Communists wishes to purchase the Property, the Property shall be sold to the Communist or group of communists who have the highest total number of months of making mortgage payments on the Property. Upon sale, the price shall be Fair Market Value. If the Communists are not able to agree on fair market value, the Communists shall agree on one of the two following methods for determining fair market value:
(i) The Commune and each respective Communist or group of Communists shall pick one real estate appraiser familiar with the local market. Within 30 days of the selection of said appraisers, said appraisers shall meet and determine the Fair Market Value of the Property, which shall be binding on the parties. If the appraisers selected are unable to agree on a Fair Market Value, then each appraiser so selected shall submit his or her appraisal and the Fair Market Value shall be deemed to be the average of all appraised values submitted. Each party above (the Commune and each respective Communist or group of Communists) shall bear the cost of their selected appraiser.
(ii) Alternatively, the Property shall be placed on the market and listed with the Multiple Listing Service. Said listing shall be "as is" with no allowance for upgrades. An open house shall be conducted and following said open house, offers accepted. At the opening of offers, the Fair Market Value of the Property shall be deemed to be the highest offer received which does not contain contingencies that carry a substantial likelihood that the actual selling price shall be below the price offered. Thereafter, the Communist or group of Communists specified above shall have the right, but not the obligation, to purchase the Property for one dollar more than the highest offer received.
(i) The Purged Communist shall have a right to convene the Community Council under Section 6 of this Agreement to review the decision of the Communists to force the Purged Communist to leave the Commune. If the Community Council finds that the Purged Communist should not have to leave the Commune, the Communists may renew their attempt to remove the Purged Communist after 90 days. If the Community Council decides that the Purged Communist should have to leave, or if the Purged Communist agrees to leave without convening the Community Council, the Purged Communist shall have 60 days within which to physically move from the Commune.
(ii) The Purged Communist shall be entitled to receive back money they put into the Commune while a Communist only as follows:
A. The Purged Communist shall be entitled to receive back their full Buy-in Amount in cash or check on the day they physically move from the Commune, or 30 days after the Commune decides to purge the Purged Communist, whichever shall occur later. The Commune is required to borrow or take whatever action is necessary in order to make this payment.
B. The Purged Communist shall be entitled to be reimbursed for all money they paid as mortgage payments for the Property, without interest, as follows: If the Purged Communist has lived at the Commune for less than 3 years, the Purged Communist shall be entitled to receive reimbursement, without interest, of all money paid as mortgage payments for the Property on the day they physically move from the Commune, or 30 days after the Commune decides to purge the Purged Communist, whichever shall occur later.
If the Purged Communist has lived at the Commune for more than 3 years, the Purged Communist shall be entitled to receive reimbursement, without interest, of all money paid as mortgage payments for the Property for three years on the day they physically move from the Commune, or 30 days after the Commune decides to purge the Purged Communist, whichever shall occur later. The remaining amounts owed for reimbursement of money paid as mortgage payments for the Property shall be paid as stated in Section 8 of this Agreement dealing with Separating Communists. The Commune, in its sole discretion, may decide to reimburse the Purged Communist more quickly than stated in Section 8. At such time as the Commune selects a new Communist to replace the Purged Communist, the new Communist shall begin making mortgage payments under this Agreement. The purged Communist shall be entitled to receive the proceeds of any said mortgage payments, including the Mortgage Surcharge under Table 1, at all times after the initial 30 year mortgage of the Property is paid off until the new Communist has made mortgage payments for a total of 30 years, up to the total amount the purged Communist paid, plus the applicable Mortgage Surcharge for the number of months of the reimbursement, less any amounts paid to the purged Communist at the time that the purged communist physically moved out, and less any other amount paid early. The purged Communist shall not be entitled to receive back any payments they made for insurance, taxes, regular upkeep and maintenance, utilities, etc. If the Commune reduces or is deemed to have reduced the number of Communists under Section 8, then the Commune shall be liable for payment to the purged Communist as stated herein as if the Commune became a new Communist.
If the Commune is dissolved under Section 12 after a Communist is purged, the purged Communist shall be entitled to receive amounts under paragraphs "A" (Buy-in) and "B" (mortgage reimbursement), if not already received, but shall not be entitled to receive any amounts under paragraph "C" (division of profits).
(iii) In getting money back from the Commune, the purged Communist is limited to the terms stated in this Section. Under no circumstance shall the purged Communist have the right to force the sale of the Property in order to be reimbursed for the amounts discussed in this Section. Although each Communist is considered to own an equitable share of the Property (and the Initial Communists may own legal shares as evidenced by their presence on the deed to the property) this Agreement shall be construed to strictly limit each Communist's recourse in getting money back from the Commune arising from their interest in the property.
If the purged Communist is an Initial Communist and is on the title to the property, the purged Communist's name shall be remove from the title at no expense to the purged Communist. The purged Communist must cooperate and sign all documents necessary to have their name removed from the title to the Property. If they refuse to cooperate, the Commune shall be entitled to obtain an order of the Court for said removal, following binding arbitration before the Community Council.
Wherefore, the Communists set their hands to this Agreement on the date set forth above.
| _______________________ | _____________ |
|
David Modersbach |
Date |
| _______________________ | _____________ |
|
Elena Metcalf |
Date |
| _______________________ | _____________ |
|
Jesse D. Palmer |
Date |
Table
A
Mortgage Surcharge
Issue to be resolved: This proposed agreement may be inherently unfair to early housemates and too generous to later joining housemates. For example, by 2020, the $300/month rent may well be peanuts. What happens when an initial or early member dies/leaves in 2020 and a new person moves in and pays expenses for the equivalent of pocket change? Should an early member who pays a relatively larger amount from 1998 to 2008 get peanuts back when they are in their 60s, while a new member at that time pays virtually nothing? How do we make an "adjustment", recognizing that inflation is going to happen, without it seeming like an investment or interest return?
This
table provides for a Mortgage Surcharge charged to any member of the
Commune who joins after December 31, 2000. This extra payment will benefit
separated members and initial/older members who paid a relatively larger
share in the beginning. The original/early members would keep paying
the same low mortgage rate, and eventually get paid back for their early-on
larger contribution.
A Mortgage Surcharge shall be calculated and paid monthly for every member who joins the Commune after December 31, 2000. The Mortgage Surcharge amount shall be calculated and recorded in the House Records annually. Any Communist who joins in any year after December 31, 2000 shall pay their actual mortgage share, plus the Mortgage Surcharge in effect for the year they join. Once a new Communist joins the Commune, the Mortgage Surcharge they pay will be frozen based on the year they joined. Under no circumstances shall the Mortgage Surcharge be negative (a credit), despite a negative value obtained from the following formula.
Forumula:
-
As of the date of the purchase of the Property, the average cost of a shared housing room in the East Bay is deemed to be $_____________.
-
As of the date of the purchase of the Property, the average cost of a room at the Property (mortgage only--excludes taxes, insurance, water, garbage, utilities, tax rebate) is deemed to be $270.00.
The Mortgage Surcharge shall be an amount such that the proportion between 1 and 2 above, which is deemed to be ___________, shall be maintained in each year after 2000, as the average cost of a shared housing room in the East Bay increases.
For example, if in 2010, the average cost of a shared housing room in the East Bay is $1,000, and the cost of a room at the Property should be 67.5% of that amount, then the target payment amount would be $675. Assuming the actual cost of a room at the Property is $270, then the Mortgage Surcharge payment would be $405 per month, or a percentage over the actual mortgage payment if said payment is for some reason adjusted under the Agreement.