ELS3/OperatingAgreements

Proposed Structure

• *Phase 1* (current): Each of us asynchronously read through suggested resources or equivalent, and add proposed bullets of policies we see as relevant contingencies.
  • will - partial
  • lucy - done w/ first pass
  • bryan - not yet
  • mako - not yet
  • mika - not yet
• Phase 2: Each of us take a pass through the assembled list, and flag any policies we see as needing discussion or which we don't think we want in place.
• Phase 3: We schedule a synchronous session to go through flagged points to reach acceptable compromises.

Proposed Policies

• How decisions are made
  • Any member may propose an action to be taken on behalf of the entity by messaging the action to the full set of members on an approved communication channel.
  • If nobody else contests the action within a week from receiving it, it is considered ratified.
  • If everyone affirms the action, it can be ratified sooner.
  • If anyone else contests the action it will be brought to a vote of the membership.

• Dispute resolution
• Grounds for expulsion
• Governance-related record-keeping
  • All actions taken on behalf of the entity will be kept durably by the designated secretary, and will be made available on request to any member.
• Renters
  • the Entity may offer rooms for rent.
• Subleasing
  • A member may propose to sub-lease their share of the LLC.
  • Such a proposal requires unanimous approval by membership to be valid.
• Additional members
  • In general, addition of a new member to the LLC requires unanimous membership approval.
  • What to do if marriage or divorce?
  • What to do if new residents who are partners?
  • What to do if one of us has children? Adopts a child?
  • What if one of us becomes caretaker to an aging parent?
  • What about pets?
• Limits on sales by a member
  • A member may give notice to the LLC of their intent to withdraw
    • • A member may choose to withdraw their governing shares while maintaining their financial stake, such that they receive that fraction of the ultimate value of the LLC upon dissolution.
    • The LLC may propose a successor to purchase the stake from the member before it is allowed to be put on the public market. The member may choose to pay for an independent valuation of their shares to be determined. This successor may be the LLC itself.
• Limits on use of the property
• How do rights apply to new construction on property? ADU?
• Common areas vs private areas?
  • Residents can make improvements or alterations to their personal living space area that don't affect the rest of the community
  • Two residents may swap personal living spaces without community approval
• Contingencies for late / failure to pay
• Planning for high cost expenditures (renovations, roof, sewer etc)
• Do major repairs/replacements need member approval? How many? Costs?
• Contingencies for major unplanned costs not covered by insurance (asbestos, flooding etc)
• Worst case scenarios
  • Death of member
    • Upon joining, members must designate if they intend for their shares to be willed to the LLC or to another beneficiary.
    • If they choose the LLC, their shares are returned to the LLC
    • If they choose another beneficiary, their shares are put in trust. The LLC must attempt to buy those shares at fair-market value within the following year, and remit the proceeds to the designated beneficiary. If this cannot be done, procedures for liquidation/insolvency should be followed.
  • Incapacitation of member
  • Harassment/Protection orders/Restraining orders between members
    • A member may request the removal of another member through standard governance process.
  • Natural disaster destroys house
    • No special policy needed
  • Zombie apocalypse
    • No special policy needed

Resources

Condo Association handbook https://www.condolaw.net/wp-content/uploads/sites/560/2022/02/2019_Condo_Law_Handbook_for_Community_Associat.pdf

WUCIOA https://app.leg.wa.gov/RCW/default.aspx?cite=64.90&full=true

Sample worker coop bylaws https://institute.coop/sites/default/files/SampleWorkerCooperativeBylaws.pdf https://www.co-oplaw.org/knowledge-base/cooperative-bylaws/#Sample_Bylaws

Sample cohousing operating agreement https://docplayer.net/17757078-River-edge-cohousing-llc-1-operating-agreement.html

Misc / Not fully structured thoughts

• Our friends on the east coast thought of a few unlikely scenarios that we may/may not need to think about. For example, if any of us decides to have kids, what kind of rights would the kids have?