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In a friends/family compound that is subdivided, you need a covenant on the original deeds that controls what happens when a member wants to sell their lot, e.g
by crmd 2y ago
In a friends/family compound that is subdivided, you need a covenant on the original deeds that controls what happens when a member wants to sell their lot, e.g. the existing members collectively have to approve the buyer, or have right of first refusal to buy back the property, etc
Otherwise what starts as a family compound will eventually just become a “normal” neighborhood of strangers.
Subdivided family compounds are one of the extremely rare cases where you actually want a deeded homeowners association.
- daft_pink 2y agoAs someone that’s dealt with families trying to sell real estate owned jointly by several different families, owning real estate that requires all your friends and/or family to approve your sale sounds like a recipe for disaster.
- KerrAvon 2y agoYes. Even when all parties are directionally aligned and fundamentally agree on everything it can be a nightmare simply to get all the ducks in a row. But if I understand this correctly, this is just a way to allow for high density housing; there's nothing specific to friends / family here? A developer can buy a large lot and subdivide it to tiny, tiny houses. Doesn't sound pleasant to me, tbh, but high-density advocates gonna high-dense, I guess.
- amanaplanacanal 2y agoI think it's more about making housing cheaper than being pleasant. Plenty of people live in apartments or condos, so I suspect there is a market for it.
- toomuchtodo 2y agoNot much different than private equity that requires board approval to transfer. As long as the terms are in the operating agreement (or other ownership structure agreement), caveat emptor. (am member/owner in family friend's family farm)
- m463 2y agoAll the stories I've heard about families not getting along pale in comparison to stories of when the parents die. Game of Thrones come to life. I would love to know how people have successfully resolved this for their families. I wonder if this compound stuff might work better for 6 secondary homes, like in the woods for summer. Everyone pitches in to build them.
- potato3732842 2y ago>I would love to know how people have successfully resolved this for their families. Have kids so rich what you leave doesn't really matter, or so poor they can't afford to bicker over it.
- bawolff 2y agoI imagine most of the time its not really about the money but grief and bottled up disagreements coming out in weird ways.
- the_sleaze_ 2y ago> so rich what you leave doesn't really matter Please see recent Murdoch family succession news. The world is not enough. > so poor they can't afford to bicker over it We will never stop bickering, it is only our implements that become more cost efficient.
- sorcerer-mar 2y agoThat's actually how many of the most famous compounds emerged (like the "gingerbread houses" on Martha's Vineyard). Lots of summer camps that became permanent over decades.
- nradov 2y agoThe best resolution is for the parents to sell all of their real estate (and other illiquid assets) before they die and move into an assisted living facility or something. Maybe it's sad to lose the family home but it's sure a lot easier and less emotionally fraught to divide up cash and stocks among the heirs.
- achierius 2y agoOn the other hand, right of first purchase seems fine: "I'm going to sell this to <X>, and if you want it you have to pay the same amount".
- woleium 2y agoSure, just give me 3 weeks to raise the cash…. Actually i don't have the money. in the meantime the actual buyer leaves
- throw2938374 2y agoNah, right of first purchase also has a time limit.
- woleium 2y agobut what happens if i run out the limit? will the original buyer be there still?
- chipsa 2y agoI think it mostly goes “I’m going to sell, it goes up to market on day <X>, unless you meet my ask.”
- moralestapia 2y agoThe problem with that is that, in practice, people barely have money to buy the house they live in and basically no one: 1) Has 500k just laying around ready buy a house out of the blue ... 2) ... that also happens to be an almost identical house next to yours. So, 99.9999% of times it goes into the market, and the other parties feel betrayed, but the seller wants (or needs!) to sell, and things get ugly, brothers stop being brothers, etc ... I wouldn't do it. I also don't like the idea of having friends/family right next to me. Same neighborhood is really really nice, but same lot? Nah!
- kelnos 2y ago> I also don't like the idea of having friends/family right next to me. Same neighborhood is really really nice, but same lot? Nah! There was a time in my 30s when I was a part of a very close-knit group of friends. We actually talked about the idea of building a friend compound, perhaps much later in life during our retirement years, and we were enthusiastic about it. These days (mid-40s now), I'm still friends with all those people, but I agree that I don't need them to be on the same lot with me. I would love it if we all lived in the same neighborhood, though. Fortunately we're almost all still in the same city, at least.
- amy214 2y agoI agree, I don't think HOA is good idea here, at least not, "the right to veto the buyer" part. This creates a whole litany of potential moral hazards "okay, I'll approve them BUT you do XYZ or pay me ABC" or simply someone with a chip on their shoulder or feeling slighted might jam it up out of spite. It's not uncommon to see low key frustration between neighbors. It's also worth mentioning that in California urban regions, where such a law is most applicable here, the townships are fairly highly regulated to the point of being a quasi-HOA. Specifically, various housing developments may have bylaws and rules - no HOA - but bylaws and rules enforced by the local city and burned onto the property deed. A true to life HOA in Idaho or Wyoming, for example, may offer more freedom and flexibility than a HOA-free property subject to local government in California.
- xrd 2y agoMy mom has owned a timeshare (which is a freestanding house) for almost 40 years at the Oregon coast with 5 other families. The families have all changed over the years and there have been small conflicts around what color the couch should be reupholstered but never any large conflicts when someone left the arrangement. It has been a source of pride that these families have shared something in this way, and a bunch of the kids like me have really benefitted in a way that we could not if we always went to a different rental.
- crooked-v 2y ago> Otherwise what starts as a family compound will eventually just become a “normal” neighborhood of strangers. That's explicitly noted as an advantage of the arrangement in the article.
- anjel 2y agoSounds like more fun than selling a co-op, even!
- nicoburns 2y agoThe real benefit here is the increased density of the neighbourhood. That's conducive to community even if it's strangers that move in. Combine this with mixed zoning that allows for commercial property (things like cafes and grocery stores) and suddenly you have a pathway for gradually turning faceless modern suburbs into walkable neighbourhoods with amenities.
- renewiltord 2y agoThat’s fine. My home will be for my children to grow up in, but the world is big. I would never constrain them to this place. Once we pass it’s okay if other families make this their home. What sin is it that’s others enjoy it after I am gone.
- randunel 2y agoIt's called preemption, and it's a thing where I live. A compound's members can have preemption to acquire a property when an outside buyer puts their money in an escrow for a contract that's already been signed. The preemptees have 30d-1y to come up with the same amount to purchase the property themselves or accept the new owner. This way, property law isn't violated, because the seller still gets to sell their property for the agreed price no matter what others decide.
- Pet_Ant 2y agoThis does not prevent gentrification or changing the vibe of the neighbourhood. One can see that as a positive or a negative, just wanted to call that out.
- walrus01 2y ago> In a friends/family compound that is subdivided, you need a covenant on the original deeds that controls what happens when a member wants to sell their lot, e.g. the existing members collectively have to approve the buyer, or have right of first refusal to buy back the property, etc This sounds like reinventing the the often extremely long, complicated and onerous process of getting approved to buy into a coop in NYC. I would hope that any real estate is subject to such covenants will be appropriately valued much less than traditional freehold / fee simple land.