Capital Guidelines - Part One March 2005

[Applicable to tenant members and ex-members]

INTRODUCTION

Corani has been established as a radical housing co-operative to provide
HOUSING
ACCESS TO LAND
GUIDELINES FOR HANDLING WEALTH
to people with at least some commitments in common:

• collective stewardship of resources;
• a balance between personal wealth and social wealth;
• maintaining equity in the co-operative housing movement.

A basic assumption of these capital guidelines is that within the context of present society [England in the 2000s] each person needs enough capital to modestly house themselves; that those with less capital than this are relatively underprivileged; those with more are relatively over-privileged.

It is accepted that such a simple measure of wealth can take no account of skill levels, employability, handicaps, age, etc., nor of how that capital was acquired. Corani members have the power to agree exceptions in real situations, but one should not expect a mere housing co-operative to address all social ills.

We define modest housing as one personal room plus common facilities in economical but adequate housing, roughly equivalent to a family of three in a downmarket 3-bed semi.

Definitions

CORANI	Corani Housing and Land Co-operative Limited.
TENANT MEMBER	A person accepted into membership of Corani who also occupies Corani housing and who has signed an occupancy agreement.
COST SHARE	One person's share of the total [averaged] weekly cost of providing, maintaining and using the housing and land, due by virtue of the personal room and shared facilities which they occupy/use.
COST SHARE SPACE	The space available to one person as above.
BASIC HOUSING CAPITAL	The calculated capital cost, at current values, of providing one cost share space.
NET WORTH PER COST SHARE SPACE	The value of properties less all liabilities divided by the number of cost share spaces
ON DEMAND	Repayment of capital within one calendar month, normally within a few days of the request.

Loanstock Classes
Class 'A'	Accessible
Class 'C'	Held in trust for the Corani Commonwealth
Class 'S'	Social Purposes
Class 'T'	Term
Class ‘X’	Transferable Trustee

Guidelines

1.1

No minimum capital requirement for occupation of Corani housing; also see 1.8 below.

1.2

Open books policy. All known capital information to be declared when applying for membership and changes in a member's capital situation to be explained to other members. Corani books to be open to tenant members at all times.

1.3

Tenant members'/ ex-members' capital in Corani to be honoured with non-transferable Loanstock Bonds issued in multiples of £50. Each bond to specify the terms and conditions of the loan. [Note: Bond certificates will not be physically issued to tenant members. Records will be kept on Bond History Cards.] Bonds may be of different Classes, and further Bonds may be issued or Bonds cancelled to take account of investments, withdrawals, conversion options, quota requirements, as below. Bonds will not be issued for fractions of capital less than £50, nor will such fractions be included in increment or interest calculations.

1.4

Any Loanstock held in Corani by tenant members shall bear no interest, but shall have annual increments added to it to compensate for any increase in the cost of living. These increments are tax exempt. [In practice, an increment of one fourth of the published cost of living index averaged over the preceding three months will be added every quarter day: 1 January, 1 April, 1 July, 1 October - e.g. 2% added when inflation stands at 8%.]

1.5

Any Loanstock held in Corani by ex-members shall bear interest. The interest is payable quarterly, or as agreed. Except for Class X Loanstock [see 1.16 below], the interest will be at the standard rate as fixed by Corani from time to time, unless the Loanstock holder has opted to receive a lower or zero interest in support of Corani intentions, or unless the Loanstock has been 'frozen' by agreement. Interest will be paid without deduction of tax. For more details about interest, see sections 2.4 to 2.11 of the CAPITAL GUIDELINES, PART TWO.

1.6

As a condition of being housed, tenant members participate in the Snowball Income Sharing Scheme, or similar. The income sharing scheme must include provisions to address both the distribution and the social accountability of capital as follows:
[i] All capital held by the member beneficially, whether as Corani Class ‘A’ or Class ‘T’ Loanstock or elsewhere, shall be 'frozen', i.e. not converted into income or otherwise spent. This rule does not itself preclude the movement of capital from one investment to another, or to a capital project, e.g. a house or business.

1.7

Basic housing capital [see Definitions] is deemed to be £30,000 at 1 October 2004.

1.8

Notwithstanding 1.1, it is intended that each tenant member provide if possible some capital to house themselves as per 1.7 above.

1.9

Any personal capital in Corani shall be covered by Class 'A', Accessible Loanstock, withdrawable as follows: £2,000 on demand, £6,000 on three months notice, balance on six months notice. Corani may refuse this investment if it deems that the liquidity to provide such repayments is insufficient.

1.10

Class 'S', Social Purposes Loanstock [held in trust for social, charitable or political purposes, but not for personal advantage], shall have the same repayment terms as tenant member's Class 'A' Loanstock.

1.11

Class 'T', Term Loanstock, is not normally an option for tenant members.

1.12

Class 'X', Transferable Trustee Loanstock [held for possible transfer in the event of the member leaving Corani housing to join a fully-mutual non-equity-sharing housing co-operative having a net worth per cost share space less than Corani Housing and Land Co-operative Limited], shall be repayable on one year's notice plus advice of the bona fide co-operative project to which the capital is to be applied.

1.13

Class ‘X’ Loanstock shall remain valid for up to 5 years from the date the trustee ceases to be a member. In the event that the Loanstock has not been applied for in the 5 year period, the certificates shall be surrendered for cancellation and the loanstock value shall be transferred to Class ‘C’ Loanstock.

1.14

The value of Class ‘X’, Transferable Trustee Loanstock, issued on 1 April 2005 to all Corani members and to ex-members who ceased to be members after 1 April 2000, shall be £2,000

1.15

Class ‘X’ Loanstock for tenant members shall be index-linked to the cost of living as prescribed by the financial regulation of Industrial and Provident Societies

1.16

Class X Loanstock held by ex-members will receive interest at a rate similar to the cost of living index. However this will not be tax exempt.

1.17

Future issues of Class ‘X’ Loanstock to new members shall have the same value as that held by other members on the quarter day [as defined in 1.4] following their admission as members

1.18

Any capital gifted to Corani shall be added to the Corani Commonwealth as Class ‘C’ Loanstock.

1.19

Tenant members to undertake on acceptance that any windfalls of capital will be invested in the spirit of these guidelines

1.20

Any anomalies or situations not fully covered by specific rules above are also to be dealt with in the broad spirit of these guidelines.

Capital Guidelines - Part two March 2005

[[Applicable to non-members]]

DEFINITIONS

CORANI	Corani Housing and Land Co-operative Limited.
ON DEMAND	Repayment of capital within one calendar month, normally within a few days of the request.

CORANI	Corani Housing and Land Co-operative Limited.
TENANT MEMBER	A person accepted into membership of Corani who also occupies Corani housing and who has signed an occupancy agreement.
COST SHARE	One person's share of the total [averaged] weekly cost of providing, maintaining and using the housing and land, due by virtue of the personal room and shared facilities which they occupy/use.
COST SHARE SPACE	The space available to one person as above.
BASIC HOUSING CAPITAL	The calculated capital cost, at current values, of providing one cost share space.
NET WORTH PER COST SHARE SPACE	The value of properties less all liabilities divided by the number of cost share spaces
ON DEMAND	Repayment of capital within one calendar month, normally within a few days of the request.

Guidelines

2.1

All capital invested or held in Corani will be pledged with Loanstock Bonds issued in multiples of £50.00 [Fractions - see 2.16]. Each Bond will specify the terms and conditions of the loan. When Bonds are issued a corresponding entry will be made on the subscriber's Bond History Card held at the Corani office, so their physical loss or destruction will not invalidate the holder's claim.

2.2

Bonds are non-transferable to third parties.

2.3

Bonds may be of different Classes [see 2.14] and further Bonds may be issued or Bonds cancelled to take account of investments, withdrawals, new agreements, conversion options and donations. The Class of Bond is donated by the code letter on the Bond certificate.

2.4

Corani is offering on its Loanstock four interest rate options:
Needy Rate [currently 5% p.a.]
Standard Rate [currently 4% p.a.]
Supporter Rate [currently 2% p.a.]
Benefactor Rate [currently 0% p.a.]
New subscribers decide which option to take up and may alter their decision with effect from 1 April or 1 October each year by prior notice. Exceptions are:
[i] If lower/zero interest rates have been linked to favourable terms [see 2.14];
[ii] If the interest rate forms part of a Term Loanstock agreement.

2.5

Corani interest rates will be adjusted from time to time to take account of wider influences, Corani borrowing needs and other factors. The Corani top rate of interest is related by law to the Bank Base Lending Rate.

2.6

Subscribers investing in Fixed Term Loanstock may opt for the rates in force at the commencement of the term to apply to its full duration. This must be requested in writing at the time of the application.

2.7

Interest will be due for full calendar months for which Loanstock Bonds are issued. New investments of capital as Loanstock accepted on or before the 15th day of the month will count as interest bearing for that month. Loanstock cancelled due to withdrawals on or after the 16th day of the month will bear interest for that month.

2.8

The bondholder may request that the interest is paid to them at regular intervals, or left to accrue as additional capital in their name. A fresh decision on this option may be made every quarter - immediately prior to the Corani quarter days [see 2.9].

2.9

Interest due to be paid to the bondholder will normally be paid out quarterly, becoming due on each Corani quarter day: 1 January, 1 April, 1 July, 1 October. Half-yearly or yearly payments can be made on request. All interest will be calculated on a simple basis. Amounts paid out will be rounded to the nearest 50p.

2.10

Where interest is left to accrue as additional capital, further Loanstock Bonds will be issued to the bondholder each quarter day for every complete £50 so accrued on that day and such Bonds will henceforth themselves bear interest. [To avoid small denominations, actual Bond certificates may not be given every quarter, unless requested.]

2.11

Interest will be paid without deduction of tax. It is the responsibility of the bondholder to declare interest received as income for tax purposes. Corani may be liable to declare annual interest payments above a value specified by government.

2.12

Investors intending to withdraw capital should give notice in writing to the Secretary of Corani. Exception: capital invested for a fixed term, where no notice is required.

2.13

The notice period in calendar months required for encashment of Bonds is indicated on the Bond certificate by the number following the Class code letter. Exception: Term Loanstock, where the number after the letter 'T' denotes the fixed investment term in years.

2.14

Classes of Corani Loanstock currently on issue to non-members:
Class 'A' [accessible] Loanstock
Class 'T' [fixed term] Loanstock
Corani's preference is for fixed term investments. Where investors require their Loanstock to be accessible, larger amounts will be divided between Classes 'A1', 'A3' and 'A6' [see 2.13 above]. Each subscriber will normally be limited to £1,000 of Class 'A1' Loanstock [withdrawable on demand], but up to £2,000 or £3,000 may be held where the subscriber elects to receive interest at the Supporter or Benefactor rates respectively. A further £2,000 may be held as Class 'A3' Loanstock. Any further investment accepted by Corani will be as Class 'A6' Loanstock.

2.15

On expiry of the term for Class ‘T’ Loanstock, investors not requiring immediate repayment may opt to convert their loanstock to Class ‘A’ [accessible] Loanstock. The interest paid will become variable as explained in 2.5 above.

2.16

Corani is empowered to receive donations to further its objects. Where bondholders elect to donate some Loanstock to Corani, their Loanstock Bonds [or part thereof] will be deemed to be cancelled

2.17

No Loanstock Bonds will be issued for amounts of capital less than £50. Such fractions will be non-withdrawable and will bear no interest. A £50 Bond will be accredited in the event of such fractions of accrued interest reaching £50 in total. Persons whose active relationship with Corani has ceased will be invited to donate them.