Casual Co-Housing

Learn more informal arrangements for sharing housing space and costs.

Casual cohousing (sometimes called "cohousing light," "cohousing cousins," or "cohousing-inspired") is sort of a scaled-down version of cohousing. A casual cohousing community might have two to five households, each with its own separate dwelling unit, plus shared common spaces. Casual cohousing residents may also share meals, childcare, purchasing goods and services, and so on. Casual cohousing might be set up in a duplex or multiplex, accessory units (such as in-law apartments), or a small condominium project. Housing that isn't officially joined can also be turned into cohousing. For example, neighbors might decide to take down the fence between their houses and share their outdoor space and other common facilities.

Forming Casual Cohousing

If casual cohousing sounds right for you, there are two main ways to make it happen:

  • Buy into pre-existing casual cohousing.
  • Form a group of people you would like to share housing with and buy property together. Before getting started, we recommend that you enter into a written agreement, detailing your plans, initial investments, how you collect funds, borrow money, and so on. Having an agreement enables the group to move forward by guaranteeing everyone's commitment and giving individual members the security that their rights and investment will be protected.

Ownership Structure for Casual Cohousing

The most common ownership structures used in casual cohousing are tenancy in common (TIC) or condominium. Both of these forms are described in more detail in the article “Legal and Financial Issues to Consider When Co-Owning a Home” in this section. Often, multiunit properties are initially purchased by a group as a TIC, because that's the automatic form of ownership created when a group buys property together. The owners can later convert their property into condominiums (which typically requires the help of a lawyer and surveyor). Cohousing owners often prefer condominiums because they are easier to finance and resell than TICs, and may provide a greater feeling of autonomy to residents.

At the same time, the TIC form of ownership can be crafted to feel much like a condominium in a multiunit context. To achieve this, TIC units should be appraised, ownership percentages divided carefully, and a TIC agreement should make clear everyone's respective ownership and use rights to the property. In this way, everyone's ownership interests are delineated and protected, banks are more likely to provide fractional financing, and owners can more easily resell their units. In sum, it will feel like condo ownership.

Sharing Expenses in Casual Cohousing

No matter how you own the units, your group will share ownership of and responsibility for common areas and property. It's important to come up with agreements about some of the following money issues:

  • How will you divide expenses such as property taxes? Will you split the property taxes or divide them based on ownership percentages?
  • How will you share insurance costs? In a TIC, each unit owner has separate personal property and liability insurance policies, and the group collectively purchases a policy to insure the building(s) and protect against liability in common areas. You'll have to decide how to divide the common insurance expenses. Insurance is handled somewhat differently with condos, depending on whether each owner owns the structure of their unit or just the air space within it.
  • How will your group manage finances? It's often good to have a group account into which each member makes a monthly payment, and from which you pay all common bills. And how will you create a budget and determine how much each member must pay each month?
  • Will your cohousing group have a reserve fund to pay major unforeseen expenses or cover a member who fails to pay monthly expenses?
  • How will you share utilities? If utilities are metered separately for each unit, there will not be much to talk about. But if there's one meter, how will you divide costs? Will you charge more for households with larger spaces and more family members?
  • How will you share any increases in property taxes that result from reassessment, or a rise in mortgage payments as a result of refinancing? If, for example, one owner makes an improvement on his or her portion of the property that triggers a tax reassessment, should that owner bear the cost of the raised taxes? If so, for how long?

Your Casual Cohousing Documents

Depending on your ownership arrangement, your casual cohousing will likely be governed by multiple tiers of documents. If you own the property together as tenants in common (TIC), your primary governing document will be a TIC agreement, (and possibly a "cohousing agreement," described below).

If you have formed a four-unit condominium, your first tier of documents will be the deeds, which declare ownership of certain units as well as partial ownership of common areas. Your second tier document will be the CC&Rs, which include many of the basic agreements about how your property is divided and shared, such as:

  • the location and description of the property
  • descriptions of the units and their boundaries
  • a description of commonly owned portions of the property, also known as "common elements"
  • a description of the areas that are owned by the group, but reserved for the use of individual unit owners, also known as "limited common elements"
  • details on the creation of a condo owners association or other organizational entity to govern the shared property, including a provision requiring that unit owners be members in the association
  • allocation of voting rights of unit owners
  • how the association will handle finances and allocate expenses between unit owners
  • how the association will enforce rules and payments
  • a framework for regulating use and architectural design of the property
  • who is responsible for maintaining common areas, and
  • attached maps and floorplans.

Your third tier of documents may govern the specifics of how your cohousing is managed and how your group makes decisions. This is often included in a document called the bylaws. If your community association is formed as a nonprofit corporation (which provides the benefit of liability protection), you will also have articles of incorporation, a short document you file with the state to create your nonprofit.

All of the documents in the first three tiers should be drafted by a lawyer who is familiar with state and local real estate law.

Finally, you will likely have a fourth tier of documents, which you can draft yourself and change as often as necessary. The primary document, often called a "community agreement," "community rules," or a "cohousing agreement," lists many of the day-to-day details of how your cohousing group operates, including:

  • how residents may use shared areas of the property
  • what kinds of alterations residents can make to their units or the landscaping
  • policies on guests and subletting
  • rules about pets, smoking, noise, parties, and so on
  • parking arrangements
  • decisions about common expenses and how they will be shared
  • what household goods are owned by the cohousing community and how residents may use them, and
  • residents' responsibilities with regard to the yard, garbage, recycling, composting, newspaper, mail, and so on.

Check out the Cohousing Association of the United States for detailed information on various communities and lots of great articles and links on cohousing. Also, a useful book on the subject is Creating Cohousing: Building Sustainable Communities, by Kathryn McCamant and Charles Durrett (New Society Publishers).

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