Homes for the Upwardly Mobile

(c) Prospective Homeowners Association Membership Agreement
and Multi-party Performance Contract

Cover Page & Table of Contents

(Word) or (Adobe/PDF) formatted

 

 

 

Membership Agreement Purpose

 

The purpose of this Performance Contract is to outline specifically what each party to the contract proposes to do for the Home Buyers Club. Activities documented herein may include any of the following: Land donation, Land sale, Land trade, Membership purchase and Organizational development. (Skills of Member/Development Sponsor)

 

Group’s Purpose

Homes for the Upwardly Mobile is a Home Buyers Club, but as such it is only a preparation-to-buy organization, and actual purchasing of homes is not performed by this organization. To accomplish the group’s goals of seeing that homes are built that members/would-be buyers can afford, and actually transitioning members from renters to owners, this group works in conjunction with other business entities to realize the goals, as outlined herein.

 

This group’s purpose and “reason for being” is to identify landowners, contractors, builders and land to work with as a group, to build within the community a political will, structure a potential deal, negotiate contracts, request zoning and density changes, identify financial organizations to work with, determine the size and dollar amount the group would be able to pay together for and properly develop an appropriate piece of land, Network with other groups & individuals in the county that are of a similar orientation, Discuss our goals with governing authorities and seek changes to policies, Make presentations to larger groups and boards where we could find support, and create proposals and agreements with partners and affiliates. (See Development Sponsor’s Responsibilities³)

 

Difference between Companies

Prospective Homeowners Association (A mutual benefit organization) does the actual purchasing of homes for the members, from the development companies that are being created, CPR (Competitively Priced Residences) & HRU (Homes for the Rest of Us), and their land development-builder partners. Once purchased by the Mutual Benefit Association, the homes are then “turned over” to the ownership of our Common Interest Developments, either the Market Equity Co-op or Limited Equity Co-op, for lifetime management by each co-op’s shareholders, and the land itself is “turned over” to a Community Land Trust for holding in an affordable state into the future.

 

The Parts of the Contract

1. Become a member of Homes for the Upwardly Mobile, home buyers club
2. Sign letter of moral support, with or without agreement to allow for public recognition of signature
3. Financially contribute

 

The Parties (This performance contract is designed to be between):

1. Homes for the Upwardly Mobile, and
2. Prospective Homeowners Association, and
3. The Development Sponsor, and
4. The Prospective Homebuyer, and
5. The Prospective Homebuyers' employer

 

Real Estate Acknowledgement

Any agreement as to the transfer (current or eventual) of property is subject to the consent of all other owners of the property, a title search for liens, the escrow process & a legal review of existing ownership agreements by the attorneys representing all parties to this consideration.

 

Member’s Understanding: Member understands & hereby agrees to perform

 

I ______________________________ (printed name) have heard and/or read the details of the business plan and feel comfortable that I understand it to the degree necessary for my consideration in support for the organization, and I elect to offer:

 

(Please enter an ‘X’ at beginning of each line relevant to you & initial at the end of each line)

 

Financial Support       

I am signing this agreement to financially support this group, when a certain number of other supporters #_______ (total commitments from other members, supporters or donors) have reached the following dollar amount:
$ ______.00 (Signed): ____________________________________________

 

Number of specific dollars in support (I do not expect to gain from tax implications of your organization’s 501(c)(3) status, which is not currently applied for) that I will provide, in the nature of:

 

·         I would like to make a Donation in the amount of $____________. (This donation may be used as needed, for purposes determined by the organization’s directors; or this donation must be used only for the purpose outlined (Circle or write):

·         We are considering a Grant of $______________, on the date: __________ (By foundations)

·         Investment (Only if I am a Qualified & Experienced investor), in the amount of $ _____________, on
the date of: ______________, after the CPR is incorporated. (Homebuyer may not invest²).

·         Offer of a Loan in the amount of $ ______________ to be paid back by date: _______________, (with/without) interest _______% APR (Signed): ________________________________________

 

Assign or Bequeath Life Insurance Benefits or Other Assets, or Create a Charitable Remainder Trust

 

There are several ways you can use life insurance as the basis for a charitable gift. For example:
Donors can give a gift of property or securities to a charity and replace that donation, which might have otherwise gone to a beneficiary who is related, with a like donation of insurance for the benefit of that same relative.

 

Making the charity a beneficiary of your Life Insurance Policy
You may wish to make the charity the beneficiary (or a contingent beneficiary) of a life insurance policy as a way to make a sizeable future gift. You retain lifetime ownership of the policy, keeping the right to cash it in, borrow against it, and change the beneficiary. A gift of this nature is treated much like a bequest made through your will. Because you retain the ownership of your asset (the policy), you will not receive an income tax charitable deduction for this future gift or for your premium payments during your lifetime. The policy's proceeds will be included in your gross estate, and your estate can take an estate tax charitable deduction.

 

The Annuity Trust: A Gift Opportunity That Helps Secure Your Future
An annuity trust can provide you the security you seek from your investments while eventually providing our organization with a much-needed gift. If you are uncomfortable with other types of investment strategies, discover how this plan could be a secure, perfect fit with your unique financial and personal situations.

 

Note: Because none of our organizations have yet incorporated or applied to the IRS for non-profit status, IE: 501(c)(3), there is no tax advantage available for a gift to any of our organizations, and we cannot officially be considered a charity, although the nature of our work is on behalf of the community.

 

_______ (Check here) I am interested in sitting down to discuss this opportunity. Initials: ___________

 

 

Membership

I agree to become a member of Homes for the Upwardly Mobile, a home buyers club, to include an initiation fee, and monthly stipend, according to my income level, at the monthly membership rate of: $ ____________ (designation): ________________ (Class): _______________ or a lump sum of: $ ____________________, for a total of $________.00 per annum; to be / was paid on: ___/___/2006.

 

·         I understand that the funds provided to financially support the organization will reside in the organization’s trust fund and will be additionally co-managed and over-seen by an attorney and a CPA, and I wish funds to:

o        ____ Be released upon reaching levels of performance outcomes, and/or

o        ____ Be released upon certain milestones being reached, and/or

o        ____ Be released upon specific date(s): ___/___/_____, and ___/___/_____, and /or

o        ____ Be released for the general needs of the HUM organization, such as:

§         Running the organization (maximum of 10%), and/or

§         Working with consultants to organization, as in the business plan (maximum of 90%)

§         I do (circle) or do not (circle) wish to purchase a home, and I hereby state that I realize that joining HUM (Homes for the Upwardly Mobile) and neither the funds nor skill support I provide to the organization will provide a home for me, from HUM, or PHA. (Initial: ___)

o        ____ Be released for the specific purpose(s) of:

o        I fully realize that it will take time to do the work of HUM or PHA and therefore the kind of support I anticipate giving, will be available from me for a period of ______ months / _____ years.

 

Classes of Membership (People become members, based on their level of commitment to this cause):

·         Class A Member: They become a paying member, and the organization raises immediate funds of any level, including Bronze thru Platinum.

·         Class B Member: They will, and we receive a written commitment to pay fundraising membership fee, when we reach a certain benchmark, where assuredness rises.

·         Class C Member: They have signed a petition to support* PHA's goals and public interest platform, and once they have mailed us a letter of support; we will mail them a membership card. *They have skills they can add to the development, and will also volunteer time. 

Membership Rates

Working: $20/monthly, after $125 Initiation Fee. ($240 annually) Benefits: Get newsletter, password to website, may attend meetings and vote. Low-low income.

Bronze: $50/monthly, after $125 Initiation Fee. ($600 annually) Benefits: Get newsletter, password to website, may attend meetings and vote. Offers peer support in mechanics of buying. Low-Moderate Income. 

Silver: "Contributor" $75/monthly, after $125 Initiation Fee. ($900 annually) Benefits: as above, plus may attend special events, with officials and other prime movers in our effort. Moderate income.

Gold: "Activist" $150/monthly, after $125 Initiation Fee. ($1,500 annually) Benefits: as above, plus agrees to write and telephone on behalf the organization to help it develop. Middle income.

Platinum: $250/monthly, after $125 Initiation Fee. ($3,000 annually) Benefits: as above, but receives extra attention by leadership/serves as mentors and helps to make connections throughout the community at a higher level. Upper Income. (Based upon ability to donate, and the fact it qualifies them to buy the highest-priced home).

"Donor/Benefactor": $375/monthly, after $125 initiation fee. ($4,500 annually) plus any additional gift to the organization. Benefits: as above.

Corporate: $325.00 per month (plus employee housing outlay) after $125 initiation fee. ($3,900 per annum) Benefits: none of the above, but qualifies their employees to move to the top of the list as potential homebuyers, behind other corporate sponsors' employees who did first.

Board members are expected, (as in any non-profit) to give at the highest contribution level and spend a time fundraising with others. $425 month, or ($5,100 per annum), plus any additional gift to the organization. Benefits include: Helps make board decisions and serves as mentors to help to make connections throughout the community at a higher level.

Obligations of Membership:

Members agree to work on the organization’s behalf, by: Attending public meetings & forums, to learn, participate, add value to or listen & advocate on the organization's behalf. Writing, calling or meeting elected officials to establish our interests in their minds and agenda's, and advocating for attainable housing. Attend membership meetings & perform functions on work committees. Sit on this organization's board of directors, raise funds and otherwise network in the community on the organization's behalf. Register to qualify for homeownership through our processes. Enlist new members & receive reduction in membership fees, through the membership referral program. Pay dues and contribute generally to the organization's growth. Have opportunity to invest in real estate at different commitment levels.

 

Membership Platform: Our association stands for -

·         The constructive and productive use of land.

·         Communities and neighborhoods cannot thrive without variety; Traffic jams and pollution are caused from the lack of good planning and it's LACK of Mixed Use neighborhoods (Easy zoning for multi-use properties: commercial and residential in the same developed area).

·         The equitable production and management of homes for all income levels.

·         We call on the County Boards of Supervisors to attach a Windfall Profit Tax to all sales of new or used homes that were raised-up in price due to the In-lieu fee tax, which the fee doesn't already apply to.

·         Habitat enhancement & species maintenance, as well as saving water from excess use.

·         Universities need to be allowed and asked to develop their own housing for students and teachers on its campus grounds.

·         We call on the Cities, County, State, and Federal government to put land back into the private sector for redevelopment into homes for the Middle Class, which the government has not used for 10 years or has no current plan to use within the next 10 years.

·         We support the availability of county & city land maps, zoning and land ownership information be made available at little cost via the Internet, and the creation of a housing development ombudsman position for the county, to facilitate development by small developers that provide housing for the middle and lower classes.

·         We support the development of a method by which people can lease new homes with the option to buy, and that their money is put to use in the local economy, through an economic development fund paid for by a tax on their leases.

·         We call on the County and Cities' Planning Departments to Fast Track any low cost and under-market rate housing developments.

·        We call on the County to create an Affordable Housing Task Force which would interact with the Cities to oversee, create opportunities and implement plans for Affordable Housing developments for all levels of income, subsidized or not. 

 

Member may resign at anytime

Organization Agrees and Member understands that member may resign at anytime, if for any reason member does not see the goals of the organization being realized, or if for any personal reason member needs to resign (IE: Transferred out of town, needs to use their funds previously budgeted for purchasing a home for other purposes). Member should note that there is a 10% fee taken out of all membership monies on a monthly basis, so that if membership is paid in advance, the only charge is taken from the paid-to-date amounts at the rate of 10%. However, membership fees given to the organization may otherwise be allocated based upon contracts signed with various consultants due to the stage of the project at hand. If no contract has caused the allocation of member’s fees then the balance of the members fees not so allocated, minus the 10% administrative fee for contracted amounts paid-to-date will be reimbursed to the member, because it is an unutilized fee.

 

Disposition of Fund Remains
If the organization should “close its doors” because it cannot meet its performance goals, including obtaining new members, finding properties and negotiating opportunities with landowners, within the time lines set forth herein, (remainder) of funds upon dissolution of the organization (re-distributed to original owners of funds, in the same percentage of the total, as they gave). Per the wishes of the original donor: (1) If land is donated to HRU, it will be returned to the original owner, or passed to a similar non-profit. (2) If land is sold to CPR, it will be sold back to the original owner, or sold and the ROI (return on the investment) donated to a similar non-profit. 

Commitments HUM is seeking

We are basically looking for people who will: Become a Home Buyers Club member, and who know of landowner and can help introduce or co-present to potentially negotiate a deal with the landowner; Join our working committees and/or board of directors and/or become and advisor or mentor; Know of potential board member; Know of a potential member; Can provide additional resources of any kind; Can provide major donation; Will endorse these ideas; Have responded to our Home Buyers survey; Know of a consultant that may be able to advise; Will donate supplies, equipment/tools, software; computers, Will network in community and have technical skills. The following questions are here to determine the kind of commitment a new member will make:

 

I, _________________________________________, as a member or landowner or investor, offer to:

 

_____ I/We will Donate Land, (with/without a tax write-off, as indicated below by my ‘X’ and initials)

(See Page X to give our organizations a description of the land)

 

_____  After the non-profit public benefit association HRU (Homes for the Rest of Us) is organized and legally incorporated, and after 501(c)(3) status, if any, is granted by IRS, so I can look forward to a tax write-off of one amount or another. (Initialed): _______________________, or

 

_____  Before incorporation, and in lieu of availability of tax write-off, (Initialed): _______________________, or

 

Sell land, Trade for Value, Partner with CPR (Competitively Priced Residences) to build-develop my land:

 

_____  I/We offer to Sell Land to Competitively Priced Residences (a for-profit organization), for the sum of
$ __________.00. (It’s current appraised value: $________________.00). (Initialed): _____________________, or 

 

_____         I/We agree to Trade Land for a paid-up Life Insurance Policy with a face value equal to the Current or Future¹ (circle one) value of my land. I understand that such a policy will be arranged for my ownership by HUM, and may or may not be based upon my life/health. ¹ Future value upon sale after the land’s development. (Initialed): _______________________, or

 

_____  I/We offer to Partner with Competitively Priced Residences to jointly build on-develop the land, for an additional negotiated return on investment in my land, over and above the value of the land and any existing improvements, based upon the final disposition of the property, after CPR improves upon it and sells it. (I understand that if my land has not already been approved by the government for higher density or mixed use development, and CPR has to apply for such approval, that said approval may never be granted by the zoning and planning authorities and therefore having a desire to participate in this way is no guarantee of success in the matter, and may not be forthcoming, and may cost me monies to participate in such a venture, to at least pay for a portion of the cost of approval for such plans, as charged by planning review authorities. That without a specific contract for such a venture, this contract only indicates my interest & willingness. (Initialed): _______________________.

 

Description of Land & Legal Address, Current Zoning

 

Description of Land Offered: __________________________________________________________________
___________________________________________________________________________________________
Legal Address of Property:  ______________________________________________________________
Current Zoning: _________________ Conditional Changes Applied for: Yes / No: ____/____/200__ (As of date) Please Indicate Further Communications and status of pending approval: ________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
Geo-technical Surveys completed? ________________________________ (As of Date) ___________________
Results: ____________________________________________________________________________________

Property and/or Improvements Owned by: (Please Circle): An Individual(s), a Corporation, or Partnership?
Name(s): ___________________________________________________________________________________

Contact Information: __________________________________________________________________________

Mechanics Liens, Mortgage, Separate Debts or Tax Liens on the Property? Yes / No  - Amount: $__________
For What Reason? ____________________________________________________________________________

Have any or all of the liens been cleared off the title? Yes / No (Circle) Explain: ________________________

___________________________________________________________________________________________

Has the land ever been donated, offered for sale or trade, or been a part of a bequest before? Yes / No

What happened to the offer? ___________________________________________________________________

Current condition of the land:  ________________________________________________________________
__________________________________________________________________________________________

My understanding of the organizations – For New Member

 

³ Development Sponsor’s Responsibilities

 

These are the responsibilities of Gary R. Cook as the Development Sponsor.  The administrative cost of performing these responsibilities is paid for out of the overhead costs allocated by 10% of donations & fees.

• Build relationships & partnerships with builders/developers & general contractors
• Create speeches and presentations, including materials for website and literature hand outs
• Make presentations to larger groups and boards where we could find support
• Identify Land we could buy, and Landowners who would trade, sell or partner with us
• Negotiate land purchase/lease opportunities with land owners
• Identify financial organizations we can work with
• Discuss our goals with governing authorities and bureaucracies
• Work with potential investors to negotiate returns on their investments
• Sell insurance policies to those whose health qualifies them, or others who will pay for the policies based on others’ good health status, in order for payer to donate their policy to our organization.
• This out of the donor’s good will to these organizations.
• Otherwise, trade landowners who would be interested the value of a life insurance policy in return for the land they give to these ventures.

Development Aspects of Responsibilities 

Fund-raising

• Sell memberships
• Create fund-raising goals
• Solicit donations
• Investigate & write for potential grants, for this and an affiliated organization (HRU)

Communications

• Advocate for members' interests and on their on behalf
• Network with other groups & individuals in the county that are of a similar orientation
• Discuss our goals with governing authorities and seek changes to policies
• Make presentations to larger groups and boards where we could find support
• Creating proposals and agreements with partners and affiliates
• Create speeches and presentations, including materials for website and literature hand outs

Negotiations 

• Identifying Land we could buy
• Negotiate land purchase/lease opportunities with land owners
• Identify financial organizations we can work with
• Build relationships & partnerships with builders/developers & general contractors

Planning & Management

• Communicating & Planning with CPAs and Attorneys
• Filling in incorporation papers & creating by-laws
• Facilitating while attending board and management meetings
• Develop and re-develop ongoing plans and goals

Guarantees and Obligations

Members of PHA become eligible to purchase homes from either of two housing development companies, depending upon members' income level, either: Competitively Priced Residences (CPR), or Homes for the Rest of Us (HRU). 

 

CPR builds housing for middle to upper middle-income persons and HRU builds (privately subsidized) housing for lower income persons. (Membership in PHA doesn't equate automatically to receiving services or benefits of our affiliate organizations: Homes for the Rest of Us, or Competitively Priced Residences). However, in order to apply to own a home developed by either CPR or HRU, one must be a member of PHA.

 

²Because a homebuyer by law may not also “invest” in the development the homebuyer buys into we cannot guarantee that you may utilize any part of your membership fees to defray the eventual cost of purchasing the land, as a direct credit.

 

Nor can we accept any funds over and above your membership fees as an investment, where you would also expect to earn interest or profit on a successful investment. However, upon the successful purchase by the MEC or LEC Co-operative of any development, we believe we may be able to transfer a credit of a like amount of funds you pay into this membership organization later into the co-operative, as they may be considered Home Owners Association, or co-op fees.

 

While our organization is not “associated” with other organizations officially or legally, it is affiliated. These affiliations are structured so that the output or results of the efforts of one organization necessarily benefit the “next” organization in the flow of materials, volunteers, and the like.

 

The difference in the mobilization of funds throughout this effort is that our future owners co-operatives are not investment units, nor are they the “next step or two” away from the initial membership-based homebuyers club.

 

While members are also expected to give “sweat equity” towards the construction of their new home, this sweat equity will be worth much more than the value of their membership fees overall. The membership fees, in contrast to the value of their sweat equity, are negligible.

 

What we can be sure of is that the co-operative that the member buys into will be able to allow a “discount” on the purchase price of the home, both for the value of the member’s sweat equity and the membership fees already paid (although the fees will have been paid to a separate organization).

 

Skills of Members

We would like to find a certain set of skills in the 
Middle Class people we sell homes to (initially)

(This would enable these individuals to provide "sweat equity" to build the next development(s),
to "pay" for the benefit of purchasing a home at perhaps 50% of market value; not a discount)
It would also ensure they can afford to service the mortgage expense
(Mortgage expense is determined by income level)

Note: These aren't positions of employment. All who work on the project do so either as a member of the Home Buyers' Club, or a co-op member, and therefore a part-owner of the co-op producing this work for self-benefit. We're giving nothing away - people will earn what they get.

The skills of these persons may include any of the following (by job title or defined skills):