This asset protection article was inspired by the reader JH who commented on Paranoid Prepper’s article
PrepperNomics 107: A Look At Mutual Assistance Groups (MAG) Contracts. JH was part of a MAG that dissolved as part of an ownership dispute and he lost his preps and his Bug Out Location (BOL). I feel sorry for the reader and wanted to offer some ways preppers can protect themselves as they relate to MAGs.
Salty and Spice have created the term “Inclusive Prepping.” I very much fit into that category as well. In the event something really bad happens, I want to be around other people. I want there to be a doctor, a dentist, a mechanic, a farmer, a rancher, a gardener, an electrician, a plumber, a teacher, a welder, a chef – you get the point. It is my preference to be part of a community. So, how does a community protect itself from real estate disputes? I work for a large homebuilder, and I can tell you the most common ways we do it.
Platting
Let’s consider a group of 10 families who want to purchase a 20 acre tract of land. Each family expects to have their own private one acre site where they will build a cabin or just have a shipping container to store their preps. The remaining 10 acres would be considered “common area” for use by all the members of the group (such as for roads, farming, ponds or pasture). Having a visual record of how the property is to be divided and used is helpful.
Platting is a formal process as it relates to subdivisions, but it doesn’t have to be. Your plat can simply be an exhibit attached to the deed that gets recorded at the courthouse. It can be an aerial photograph with lines drawn on it. Whatever it is, it needs to be clear and obvious so that there is no doubt about who owns what.
Document Recording
If you are going to spend money for the purchase of land, or even just have your preps on a piece of land, you need to record something at the courthouse. Generally, land is conveyed using a deed. You may have a lease, and those can be recorded at the courthouse as well. Recording your conveyance document puts everyone on notice that you have an interest in the property. It would be impossible for someone to deny your interest in or claim to the property.
Community Declarations
Just as good fences make good neighbors, good rules make good communities. You can’t prevent someone from being a jerk, but you can limit the ways in which they can do it.
Almost every subdivision my employer builds is bound by a set of rules that everyone in the community must follow. You can have (and record) a Community Declaration of Covenants, Conditions and Restrictions. This topic can be quite extensive and deserves its own article(s). For the purpose of this example, let’s just say the Community Declaration sets forth that only owners of lots and their immediate family are allowed in the community, and that every member is equally responsible for payment of the taxes for the common areas.
Just like any neighborhood, people in your MAG or prepper community will come and go. Maybe they move. Maybe they die. Maybe they find a better MAG. Whatever the case, each member needs to be able to sell their property. At the same time, the new member will need to agree to the rules that are established. The rules do not have to be complicated, but they need to be documented and recorded. The rules need to have a mechanism for enforcement which would be fining or foreclosure. Also, it should be noted that these rules can be amended, modified or changed should the group choose.
Some readers might be concerned that they don’t want to publicly record the rules that they want such as how many guns, bullets and food each member is required to have and the peculiar obligations of the Association. No problem. The Community Declaration can simply state that there are unrecorded rules that must be followed, whom to contact to get a copy of them, and that an acknowledgment of receipt and acceptance of the rules must be recorded. This way you can keep your prepper related rules hidden from public view, but it also be obvious that any new member will be required to be at least as respectful as your Declaration requires.
Fun Fact: The Woodlands, Texas just north of Houston (population approximately 100,000) was just an extremely sophisticated homeowner association until 2007 when, fearing annexation by the City of Houston, it petitioned the state to become its own city.
Condominium Regimes
In a condominium regime, each member owns their particular unit or lot plus a proportionate percentage of the common elements. Condominium regimes are very common. They are created by recording a Declaration of Condominium Regime. The Declaration will create a homeowner or community association and sets forth the rules of the community and how the ownership is divided. In our example, the condominium regime would have 10 members each with an equal and undivided interest in and responsibility for the common area. Condominiums are not just for buildings. You can have a vacant land condominium.
In case anyone is wondering, I am working with another gentleman on establishing this type of community in the 200 acre size range. The form of ownership is probably going to be a condominium regime. This way people can buy shares. Some may want a one acre tract. Others might want several acres. A condominium regime can allow that flexibility. By definition, a condominium regime would have common areas (which protects the interest of individual owners) and an association (management) of some kind. Also, lenders (and virtually everyone in the real estate industry) are familiar and comfortable with condominiums. Governmental agencies also like condominiums because the infrastructure is maintained by the HOA and any particularly obnoxious behavior is usually addressed by the HOA.
These are four ways preppers can protect themselves as they relate to MAGs and prepper communities. I would submit that a MAG or prepper community that had a properly conceived set of rules would not only protect its members but might even attract members who appreciate the value of a quality organization.
Fascinating, just fascinating information. Thank you. While many people would scoff heavily at a contract or a HOA style preparedness community saying it goes against their freedom, etc in today’s age it really is required because handshakes mean nothing anymore.
Thank you, JH. I have heard some stories with similar outcomes and want to prevent it from ever happening again. You have inspired me.
I understand COMPLETELY the issue people have against HOAs. Most people have a problem with the authority the HOA has related to governing others and what they can do with their property. I am in the process of creating what we call a Declaration of Covenants, Conditions and Restrictions. The one I am creating gives the HOA very little authority, but tremendous responsibility.
The HOA needs to reflect the needs and desires of its members. The rules related to a gated community of $1M+ homes will be vastly different from that of a deer lease (which is more similar to what preppers might want).
This article was just an introduction. There will be much more said on the topic. Salty has plans for it in the future, as do I.