Legal at Last
By Diana Leafe Christian
If you see us smiling broadly these days, it’s because in January 2019 we finally finished our legal restructuring process, underway since we learned the severity of our financial/legal structure issues in 2010. Now every Earthaven member and our entire 329-acre mountain property are safer and more secure legally than when the first site lease was issued in 1999.
Since we couldn’t accept new Earthaven members until we fixed the problem, there has been a membership moratorium since 2012. Fortunately, many people waited until they could join us officially, and in the last six months seven wonderful young people became full members. More reason for our broad smiles.
Here’s what happened, and here’s how we resolved it.
Earthaven has been “building the road as we travel” – with our physical, social, and legal infrastructure. Our founders started out with a legal structure that was intended for us to own the land together, lease homesites from the community, and own our own homes. This approach was based on unregistered 99-year leases. In 2010, a critical mass of people became aware of potential issues with this approach, which could leave the community and members legally vulnerable. After our initial shock and dismay, and dawning understanding that we had a serious situation, we got down to work. We spent years of intense researching and learning, negotiating, and deciding. Little by little we agreed on what we needed to do, with the hard work and leadership of the late Kimchi Rylander, Geoffrey Stone, Martha Harris, Debbie Lienhart, and many others.
Over 2018 and early 2019 we created 12 different 10+ acre neighborhood parcels. Ten parcels are owned by associations of Earthaven members, either through a housing cooperative or an LLC (Limited Liability Company), one is owned by an individual member, and one is owned as a 501©3 nonprofit. These are:
- Gateway Neighborhood and Farm LLC
- Persimmon Grove Neighborhood Housing Co-op (formerly Forest Garden neighborhood)
- Hut Hamlet Housing Co-op
- Hickory Knob (owned by an individual)
- Village Terraces Housing Co-op
- Bellavia Gardens Housing Co-op
- Medicine Wheel Collective, a 501©3 nonprofit
- Hawk Holler Housing Co-op
- Feathervev LLC (Lower Rosy Branch neighborhood)
- Dancing Shiva LLC (formerly Loving Acres neighborhood)
- Chestnut Housing Co-op (comprised of two adjacent neighborhoods, Upper Rosy Branch and Piney Knob)
Each neighborhood is a member of the Earthaven Homeowners Association (HOA), which owns the approximately 200 acres of common land. The HOA builds and maintains the roads and bridges on our shared common land.
Owning our property this way means that our residential areas are not subject to our county subdivision regulations and, as individuals and as a community, we have far less legal liability than we did before. Another feature of our new way of co-owning Earthaven property is that it may be more applicable and helpful to other intentional communities than the legal structure we used before. Also, using three different kinds of legal entities to own neighborhood parcels — housing co-ops, LLCs, and a 501©3 nonprofit — can help us learn how each legal entity works best for Earthaven and other intentional communities.
Most Earthaven neighborhood members are also members of the Earthaven Community Association (ECA), a newly created legal entity (a “nonexempt nonprofit”) that doesn’t own any property but manages some of our physical infrastructure and all other aspects of community life — our website, visitor program, tours, alternative currency, membership process, non-member residents, work exchangers, rituals, celebrations, social and cultural events, and so on.
“Most legal entities,” observes Debbie Lienhart, who managed our legal restructuring for the last several years, “have tax-related restrictions on how they get money, what they spend it on, and/or whether they need to make a profit. The cool thing about the new ECA legal structure is that we can earn and spend its money on anything we want within its very broad mission, as long as we pay taxes.” We still have an associated 501(c)3 non-profit — Culture’s Edge — for accepting tax-deductible contributions that can be used for Earthaven’s charitable and educational activities.
The young people who recently “jumped” into full Earthaven membership are Sara Carter, Liz Diaz, NikiAnne Feinberg, Zev Friedman, Carmen Lescher, Dimitri Magiasis, and Travis Robb. The Provisional Members we anticipate “jumping” soon are Sam Del Veccio, Rachel Fee, Julia Taylor, and Gabriel Vieira. Many of these new members have taken on leadership roles to manage our new legal entities — another reason for our smiles.
Diana Leafe Christian has been an Earthaven member since 2002 and is a member of Persimmon Grove Neighborhood. Author of Creating a Life Together, she leads workshops and webinars and speaks at conferences on community topics worldwide. Connect with Diana directly via her website.