5. Operating and living at your property

Operating and living at your property

Photo © Andy Izenson

Sharing expenses

Even after you buy the place, homeownership can be expensive. The goal is to agree on how to share expenses up front so that each gutter cleaning, boiler replacement, and new washing machine doesn’t become a mini financial referendum.

Your operating agreement can outline:

how to decide whether and when to fix items that break, and when to upgrade (see decisionmaking resources)

who is responsible for getting them fixed

how to decide which contractor or specialist to use, if prices differ

how payment will be divided

logistics: whether you have a monthly fee that everyone pays into a common maintenance fund or each expense will be requested separately

if someone breaks something, do they pay or does the group pay?

how to pay for ongoing expenses, like utilities

what if someone can’t afford the upgrade?

Enforceability of group agreements

People often ask whether operating agreements are “enforceable.” “Enforceability” should be thought of as the absolute last resort, something you only consider once all your dispute resolution procedures have failed. If you get to that point, you’d take your dispute to small claims court, and whoever the judge is that day will decide whether they think your agreement is reasonable enough to enforce - and that’s usually not who you want to be making decisions about your life. Even if you do take it to court, because it takes so long and so much money to fully go through a trial, most lawsuits end in settlement.

You can short circuit this process yourself by going to a mediator and come out with a similar result in 3 or 4 sessions. A court will give you the same settlement after 3 years and many dollars. It’s in your best interest to have a robust set of dispute resolution systems before anyone resorts to the law. Mediation can be a good option if your intragroup processes are not producing adequate restitution for the harmed party.

Mediation is different from arbitration. An arbitrator is essentially a mini judge, who makes a decision that’s binding on the parties, but without following all the rules that regular judges do. Mediators, on the other hand, help you come to your own decision. They can’t make you do anything.

It’s often a good idea to form a relationship with a mediator at the beginning of your project, before a dispute arises. You want everyone in the group to know and trust them – because they can’t make you agree on anything, they can just help facilitate your own decision.

See Resources for information on how to find a good mediator.

_{PHOTO BY ERIKA KAPIN FOR THE OPEN PHOTO PROJECT}

Court enforceability

If you do get to a point where someone is acting out of alignment with the separation agreement you’ve set forth, and you’ve exhausted the mediation options outlined above, you might want to know whether a civil court could enforce your agreement. Perhaps you have a post-separation support clause, and someone is refusing to pay.

Contracts are usually governed by state law, so you’d take that to state civil court or small claims court, depending on the amount of money involved. Whether your agreement will be enforced might depend on judges in your state or even in your county. For example, New York courts have generally been willing to enforce contracts even if they’re “weird” or out of the ordinary, with the rationale that if the contract was “validly executed” (everyone knew what was in it, meant to sign it and did sign it) then they agreed to it and should be held to their word. But not every place is guaranteed to be like that, especially if judges find your particular living agreements distasteful.

Talk with a lawyer to figure out how to create the most enforceable agreement. They can help you figure out whether it’s likely enforceable in your state/county, but there’s always some element of risk. See the Mediation Resources section . The most reliable way to enforce your group agreement is by holding people accountable, without involvement from the law.

Dispute Resolution

What happens if something comes up that you didn’t agree on up front, and now people disagree as to how to resolve it?

It’s important to note that while you may have an operating agreement or triple net lease specifying what everyone’s recurring obligations are, it’s very likely that the agreement doesn’t specify what happens if someone has their sibling moves in without telling anyone, or paints their room a truly heinous shade of puce, or has an art project spontaneously combust.

See the Appendix: Internal work on Joint Agreements for more on handling smaller issues that weren’t included in the operating agreement.

For an example of a real-world operating arrangement, see:

Walnut Street Cooperative's Culture and Governance Document

_{PHOTO BY ERIKA KAPIN FOR THE OPEN PHOTO PROJECT}