20. How Do We End the Sharing Arrangement?
Many good things come to an end, and the same is true of sharing groups. Your group might dissolve when you no longer need to share (your children are old enough to take care of themselves, for example) or members simply decide that the arrangement isn't working well enough to continue. Here are a few decisions to make in advance to ensure a smooth transition if and when your sharing arrangement ends.
- When will the sharing arrangement end? What is the duration of the sharing arrangement? Will the group reassess after a certain amount of time or continue indefinitely until everyone or a majority decides to dissolve it? What if some want to end it and others want to keep going?
- Are there conditions that will terminate the sharing arrangement? For example, if you and your neighbor are sharing a yard, your agreement will likely terminate when one of you moves out. In this scenario, you might want a written agreement to rebuild the fence when that day comes.
- What is required to dissolve the group? Who will prepare any necessary paperwork? Will you create a termination agreement? How will assets be distributed and debts be paid?
- Who gets the group's assets? The answer to this question may be determined, in part, by the legal form you chose. For example, by law, nonprofit organizations that are tax-exempt under 501(c)3 must give assets to another nonprofit when they dissolve. LLCs must distribute all assets to members.
- What if you can't divide the property? If the shared property cannot be easily divided, who has the first option to buy out other members and at what price? There are many ways to determine this, and deciding in advance can alleviate any worries or conflict that could develop later. For example, in a three-person carshare, members might agree in advance that Alva has first choice to buy out the other members' shares at bluebook value. If Alva doesn't want to buy, then Bobbie may buy. If Bobbie doesn't want to buy, then Carolina may buy. If no one wants to buy the car, they agree to sell the car and divide the money. Another way to do this would be to draw straws; whoever draws the short straw will pay the other members $500 each and keep the car.