19. How Can a Member Leave the Group?

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When you are forming a plan to share with friends, it might be hard to imagine anyone wanting to leave or worse, getting kicked out. But the fact is, we live in a society where people move around quite a bit. One member of your group might decide to go back to school or take a job in another state. A member might become too busy to participate or might decide that his or her growing family needs its own car. Things come up. Things also go sour, unfortunately. Because change is inevitable, it's a good idea to plan ahead.

Voluntary Departures

There are a handful of decisions to make pertaining to how members can leave your group: Can someone leave at any time, or will members make some sort of contractual commitment (such as signing a lease agreement)? Does a member who wants to leave have to give notice, so other members can figure out ways to take up the slack? Can members give or sell their share to someone else without the group's permission? Are there responsibilities members must fulfill before they leave?

The answers to these questions will depend on what you're sharing. If you have a shared childcare arrangement, for example, you might want to require enough notice to allow the rest of the group to make sure their childcare needs are covered (and you'll certainly want the remaining group members to be able to choose the person who will take the departing member's place). If you're a member of a large group sharing gardening tools, on the other hand, you might decide that members are free to leave at any time.

Continuing the Group After Someone Leaves

In some situations, if one person leaves, the sharing group will have to disband. This is most obviously the case when one person leaves and only one is left. This can also be the case when the person who leaves has assets or skills the group can't do without.

However, the group can also make provisions that will allow it to continue even after an important member leaves. For example, you could decide to give the remaining members a right of first refusal or a discount on purchasing the departing member's share. Giving sufficient advance notice is also important to allow the remaining members time to find a new member who will work well with the group.

Compensating Departing Members

What a member gets upon leaving the group depends on what you are sharing. For example, if you are sharing responsibilities for elder care and members pay dues annually to cover administrative costs, the departing member could simply stop making contributions for expenses. If the departing member made an initial contribution, you'll need to decide whether to refund the payment, in whole or in part. Some groups decide that the amount of any refund should depend partly on why the member is leaving: Members who leave the group for reasons beyond their control (sickness or disability, for example) receive more compensation than members who leave of their own accord.

If you are sharing property ownership, you should come up with a plan to allow members to buy the departing member's share. The price can be set in advance, determined based on market rates at the time of departure, or expressed as a right of first refusal when the departing member receives an offer from someone outside of the group. If the remaining members aren't able to come up with the money in a lump sum, you can have a provision for monthly payments.

EXAMPLE: Betsy, Fred, John, and Robin are freelance carpenters who own equal shares of a set of expensive and specialized power tools, worth about $8,000. Knowing that the value of the tools will depreciate over time and that they may acquire additional tools, they meet each year and agree upon an estimate of the tools' worth. By agreeing on the value of the tools in advance, the group hopes to avoid any disputes when someone leaves. That way, when one member leaves the group, that member will receive a quarter share of the agreed-upon value of the tools.

Involuntary Departures

It's no fun to imagine removing or expelling members from your group, but it might be necessary. For instance, you might ask carsharers to leave the group if they routinely fail to pay their portion of the costs. Or you might ask a family to leave a childcare co-op if their parenting style clashes with the rest of the group. It's a good idea to talk in advance about what constitutes a reason to expel a member; that way, no one can claim to be caught off guard.

You should come up with procedures for removing members, including a policy about providing the member with notice and an opportunity to correct the problem. Also decide on how many votes are required to remove a member. If conflict or disagreement develops over the removal, your dispute resolution procedures should apply.

Expelled members should be compensated for their interest in the group, through the refund of contributions, membership dues, or shares. We recommend erring on the side of extra generosity when it comes to compensating the expelled member, mainly to minimize hard feelings and bitterness.

Keep in mind that removing a member could trigger some legal issues. If the member is a renter in group housing, for example, expelling the member constitutes an eviction, and specific rules and procedures will apply.

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