Legal Structures for Intentional Communities

These are structures that some have used to form intentional communities. Our listed legal consultants may be able to determine which forms could be workable for your location and goals. Founders are often primarily concerned to ensure that future generations would hold the original intentions and values. Please contact us if you have information that would improve this resource page. We are especially interested in linking to or providing legal contracts that founding groups could use as template instead of starting from scratch.

Fixed Equity Co-op

+ Can prevent gentrification of your building or cooperative neighborhood

–  Prevents the buy-in from being an investment that allows you to reap high profit when you sell

Land Trust

+ potential to protect natural resources in perpetuity as you continue to live and work on the land

+ reduce or eliminate land tax

–  expensive to legally establish

–  descendants may have access to but not ownership of property

A contractual trust (also called a pure trust or constitutional trusts) involves three parties: the creator of the trust, the trustee, and the beneficiary. A legal document is used to create a contractual trust wherein an individual transfers ownership to a non-profit group, the land trust. It is different from a statutory trust in which the trust owner has power to sell.

Alliance of Canadian Land Trusts https://ltacanada.ca/alliances/

U.S. land trusts http://www.landscope.org/connect/find/landTrusts/

Tenancy in Common

+ an avenue for buying real estate that is out of the price range of many individuals

+ there are online platforms that can help you connect with potential residents or co-investors who may or may not want to also reside at the property: Pacaso and Kocomo help you connect for fractional ownership in luxury vacation homes, while Sharetini focuses on metropolitan areas (this is not an endorsement)

–  others may be tempted to buy out when land value rises, and existing owners may not want to sell but must because they can’t pay the higher price; your contract needs to stipulate buy-out terms and who you can sell to

–  when an existing co-owner wants to sell (or dies and the inheritors want to sell), you may end up with unsuitable neighbors; your contract needs to stipulate fair terms for approving buyers that don’t completely block a sale at a fair market value

– banks and insurance companies only want to deal with 6 or fewer people on a mortgage

Non-profit

+ can receive donations up to $500,000 for land purchase

–  unclear how to structure membership buy-in that ensures investors a lasting co-ownership

Corporation

Often used for strata or condominiums.

+ easy to form, easier for people to join and exit financially

+ banks understand and will more easily support this structure, so easier to secure loans

–  potentials for a future board to change the bylaws even if the founders’ intentions are carefully crafted

– more tax obligation

Natural Asset Company

Designed to hold the rights to the productivity and health of natural assets 

+ potential to protect natural resources

–  potential to exploit natural resources

Private Membership Association

http://pmapower.org/the-private-domain-is-a-protected-domain/

First Nations (Native American) Land Partnership

One IC founder purchased First Nations land for a tiny home village. Her husband was First Nations tho she was not.

+ bypass zoning and other restrictions

–  you could create a 100-year lease as a non-native, but not ownership; there’s no guarantee that a future chief would honor the original contract, and you can’t take them to court because they are independent of the typical jurisdictions