Holding onto houses when chapter is dormant

Rudey · #1 04-04-2005, 02:58 PM

I'm really interested in reading about this since it happens often.

Do fraternities and sororities make good money by renting to the university or other GLOs?

Who takes care of the upkeep and does it make for any tangly risk management issues ever?

-Rudey

sageofages · #2 04-04-2005, 03:26 PM

Quote:

Originally posted by Rudey
I'm really interested in reading about this since it happens often.

Do fraternities and sororities make good money by renting to the university or other GLOs?

Who takes care of the upkeep and does it make for any tangly risk management issues ever?

-Rudey

Phi Mu chapter houses are owned by individual house corporations. They choose to keep or sell the house when a chapter ceases operation. For example, we still have a house at UCLA and the house corporation rents it out. They make a profit enough that the house now has no mortgage. They maintain the property and have the necessary insurances.

Rudey · #3 04-04-2005, 03:29 PM

Quote:

Originally posted by sageofages
Phi Mu chapter houses are owned by individual house corporations. They choose to keep or sell the house when a chapter ceases operation. For example, we still have a house at UCLA and the house corporation rents it out. They make a profit enough that the house now has no mortgage. They maintain the property and have the necessary insurances.

Does the international office get to say anything in regards to selling it or whatnot?

-Rudey

SmartBlondeGPhB · #4 04-04-2005, 04:28 PM

Quote:

Originally posted by sageofages
Phi Mu chapter houses are owned by individual house corporations. They choose to keep or sell the house when a chapter ceases operation. For example, we still have a house at UCLA and the house corporation rents it out. They make a profit enough that the house now has no mortgage. They maintain the property and have the necessary insurances.

They rent out their house at the UW as well.

Kevin · #5 04-04-2005, 04:35 PM

Our houses are owned by house corporations. If a chapter closes, the final say is with them. I'd assume that if they think there's a good chance that recolonization could take place within the next few years, they'd keep the house. Otherwise, they might want to get out from under it.

AGDee · #6 04-04-2005, 05:11 PM

I agree that this will vary greatly depending on the situation, size of the house, whether a mortgage is paid off, etc. Our Chi chapter house at Michigan State was purchased by our IHQ from the House Association and we will hang on to it until we can recolonize. Our Alpha chapter house (Syracuse) is still owned by an AGD group. I know that Chi is being rented out to another sorority but I don't know about Alpha. I think it is decided on a case by case basis.

Dee

Tom Earp · #7 04-04-2005, 06:05 PM

Most LXA Chapter Houses are owned by Housing Corporations.

In some cases, LXA has a Group that is called LCAP where Houses were purchased on owned by LCAP.

Some may be sold such as Un. Oo. or kept in trust and rented out such as Un. Ark.

There is financing through LCAP that is worked out via Financial Instituions to keep them intact.

A lot would depend on the viability of the Structure of the building and rentability as it were or the possibility of the Chapter to be re colonized.

sageofages · #8 04-04-2005, 06:09 PM

Quote:

Originally posted by Rudey
Does the international office get to say anything in regards to selling it or whatnot?

-Rudey

The National Housing Committee makes recommendations to the National Council which has considerable influence...but the final say really rests with the owners of the property - the House Corporation.

Coramoor · #9 04-04-2005, 06:13 PM

A lot of HQ's do not hang onto houses.

Owning houses can get extremely expensive. If a chapter is having trouble and folds and they still owe money on their house-then the HQ would have to pay it.

Simply, say the payment is an avg. of 3k a month (and that is extremely low for some multi-million dollar homes), in a year that is 36,000. What if there are 10 houses vacant?

That's 360,000 a year just on paying for the house. No upkeep, no bills, etc.

That is one hell of a commitment and could easily make a HQ go bankrupt in only a few bad years.

STL Kappa · #10 04-04-2005, 06:24 PM

Quote:

I'd assume that if they think there's a good chance that recolonization could take place within the next few years, they'd keep the house. Otherwise, they might want to get out from under it.

This is happening right now at Missouri... the Sig Kap (before that AGD) house is currently vacant, and I suppose their house association is hanging onto it in case of recolonization. (Because the chapter closed so recently, it's still being worked out how often they will be reviewed for recolonization, votes are still being made, etc.)

I know there's a lot of groups interested in trying to get the house though... but I guess that's as not much of an incentive as getting your chapter back.

DeltAlum · #11 04-04-2005, 06:27 PM

Quote:

Originally posted by Coramoor
Owning houses can get extremely expensive. If a chapter is having trouble and folds and they still owe money on their house-then the HQ would have to pay it.

But if the House Corp owns the house, Nationals is not liable for payment of the mortgage.

I believe that the decision of whether to keep an aging house is becomming more difficult to decide as universities upgrade dorms, etc.

Rudey · #12 04-04-2005, 06:33 PM

I'm assuming when the corporation is formed, there is language about what should happen with the money if a house is sold right?

This is just interesting for me to read about.

-Rudey

winnieb · #13 04-04-2005, 06:39 PM

Yes, if the House Assoc is incorporated there should be language as to what to do with profits realized from the sale of the property outlined in the documents of incorporation, or the bylaws of the corp.

madmax · #14 04-04-2005, 08:30 PM

Quote:

Originally posted by Coramoor
A lot of HQ's do not hang onto houses.

Owning houses can get extremely expensive. If a chapter is having trouble and folds and they still owe money on their house-then the HQ would have to pay it.

Simply, say the payment is an avg. of 3k a month (and that is extremely low for some multi-million dollar homes), in a year that is 36,000. What if there are 10 houses vacant?

That's 360,000 a year just on paying for the house. No upkeep, no bills, etc.

That is one hell of a commitment and could easily make a HQ go bankrupt in only a few bad years.

Quote:

Originally posted by DeltAlum
But if the House Corp owns the house, Nationals is not liable for payment of the mortgage.

I believe that the decision of whether to keep an aging house is becomming more difficult to decide as universities upgrade dorms, etc.

Plus the house isn't always vacant. The corp could rent the house out to a sorority or anyone that has the cash. The cost to maintain the house might even drop.

efcheerBB · #15 04-04-2005, 11:50 PM

Quote:

Originally posted by AGDee
I agree that this will vary greatly depending on the situation, size of the house, whether a mortgage is paid off, etc. Our Chi chapter house at Michigan State was purchased by our IHQ from the House Association and we will hang on to it until we can recolonize. Our Alpha chapter house (Syracuse) is still owned by an AGD group. I know that Chi is being rented out to another sorority but I don't know about Alpha. I think it is decided on a case by case basis.

Dee

Where is/was the AGD house at MSU located? Because if I am thinking right, your house used to be on Ann Street, right? And if that is the house I am thinking of, I think Alpha Omicron Pi bought that house. They now live there. This is their first year in that house. But I could be greatly mistaken.

Elena