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
  • majority vote proposal
    • 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.
    • In the event of a tie, the proposal fails.
  • consensus decision-making or some sort of variant
    • I'm happy to propose something more concrete but the idea not that everybody needs to agree/support but that we shouldn't move forward if somebody feels strongly enough that they are absolutely opposed. Probably every should read some aobut consensus decision-making in order to make this work. We could do some modified systems like consensus-minus-one or a situation where a person can block, but only once ever (I think this is my actual proposal) or perhaps one every ten years. Basically, if somebody was seriously against something to the point that they would want to move out, I don't want to move forward with it as part of a majority vote. —mako๛ 20:05, 18 February 2024 (CET)
• 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.
    • SGTM —mako๛ 20:28, 18 February 2024 (CET)
• Additional members
  • In general, addition of a new member to the LLC requires unanimous membership approval.
    • SGTM —mako๛ 20:28, 18 February 2024 (CET)
  • What to do if marriage or divorce?
  • What to do if new residents who are partners?
    • I think they should be added in the same way we make other decisions. —mako๛ 20:05, 18 February 2024 (CET)
  • What to do if one of us has children? Adopts a child?
    • Kids get live in the house but don't become decisions making members except through the normal unanimous thing? —mako๛ 20:05, 18 February 2024 (CET)
  • What if one of us becomes caretaker to an aging parent?
    • Normal process of addition? —mako๛ 20:05, 18 February 2024 (CET)
  • What about pets?
    • Not allowed except with consensus by the group. —mako๛ 20:05, 18 February 2024 (CET)
• 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.
      • I'm not sure if these bits cover it already but Mika thinks its important that if somebody is in a very bad financial situation and needs money within weeks (a week?) there should be some path for this. Even if it's only the money they have already put in, that seems like something we should be able to support. —mako๛ 20:28, 18 February 2024 (CET)
• Limits on use of the property
  • I'm not sure what this should be beyond what the house is zoned. I guess there are lots of ways people might use the house (e.g., running a hotel/Airbnb, etc) that I would want to restrict, but I feel like we could deal with that with the normal decision-making process. No?
• How do rights apply to new construction on property? ADU?
  • Only possible with the normal decision-making process? —mako๛ 20:28, 18 February 2024 (CET)
• 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
  • Maybe bigger changes to common space and such require consensus? I'm not sure how to define bigger changes but presumably new constructions.
• Contingencies for late / failure to pay
  • Folks should try to come up with a plan with the group? If that can happen, what are our options? —mako๛ 20:28, 18 February 2024 (CET)
• Planning for high cost expenditures (renovations, roof, sewer etc)
  • We split equally, no? —mako๛ 20:28, 18 February 2024 (CET)
• Do major repairs/replacements need member approval? How many? Costs?
  • Sure, why not? —mako๛ 20:28, 18 February 2024 (CET)
• Contingencies for major unplanned costs not covered by insurance (asbestos, flooding etc)
  • Split, no? —mako๛ 20:28, 18 February 2024 (CET)
• 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
    • What are the options/suggestions here? —mako๛ 20:28, 18 February 2024 (CET)
  • Harassment/Protection orders/Restraining orders between members
    • A member may request the removal of another member through standard governance process.
      • If we use a consensus problem, the person who is being decided against (obviously?) shouldn't get a vote. —mako๛ 20:28, 18 February 2024 (CET)
  • 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?