Dear neighbours, it's time to wind up the UCOL company.
This email is about bringing the development to a finish and
repaying the surplus funds to the shareholders as we previously
agreed. Including money that is due to be paid to me as a
shareholder, which I could do with sooner rather than later.
I and 8 others started the company in 2013 to buy the land, and develop a cohousing development on the land. That has now been done successfully, albeit it took a little longer than we initially planned. We signed the UCOL agreement on the 3rd of July 2018, and the task was complete once we received our code compliance certificate, which happened (IIRC) on 31st May, 2021.
The only task remaining for the company is to settle any outstanding bills and any unfinished work in relation to the construction of the units. The bulk of the outstanding work was minuted on the 3rd of June (https://minutes.king.net.nz/2021/ucol-minutes-2021-06-03/):
Minute: This meeting asks the Directors to write to all purchasers to state that UCOL undertakes to finish the site works, which remain unfinished on settlement day, at the earliest opportunity and in any case within 6 months of settlement. Specifically, we agree to finish
The fences between units in the back yards and on the boundary between private and shared areas around the common green as shown on the plans.
Pergolas in the back yards of A and H units as shown on the plans.
The earthworks outside M3 as that was priced by Halls recently.
A pergola in similar construction and size as the A and H unit ones outside M1 and M3
The boundary fence between M3 and Montpellier Street.
The High Street steps outside C1/C2
(I note we settled in June, so 6 months from settlement will be in December.)
The work on the houses and most of the common house were done by the contractor, which is why the bulk of the outstanding work was landscaping. The three items not mentioned in the minute were the commonhouse kitchen, bike shed and the heritage fence.
Of the outstanding work:
There are costs to keeping the company running. We just paid a a
$3000+GST bill for company insurance, for example. We pay $750
per month in accounting fees. Winding up the company will allow
us to stop incurring these costs. But the main reason I want to
do this is to bring this initial development phase to a timely
close.
I propose we set November 30th as the last day for completion of
remaining work. We can then settle final bills in December, and
wind up the company by the end of the year.
Once the company is would up, the bulk of our profit of about $200,000 would be distributed as we agreed in sections 20 and 22 of the UCOL agreement. In short, it will be paid to shareholders pro-rata as interest payments on the loans to the company. We agreed repayment would be on the basis of lending to the company rather than shareholdings because loans by shareholders was the principal source of funding and risk aside from the development loan.
As we have talked about, this doesn't include any payments to
outside lenders who lent us money but aren't shareholders. I'm
happy personally if these external lenders are paid out interest
on the same basis as shareholders. Which would require the
agreement of everyone.
When I committed to this cohousing project in 2013, I invested
all my assets in the project at no interest. I'm really happy
with the resulting development which we are all enjoying. I'm
happy that we agreed in 2018 that any surplus funds would be
repaid to shareholders in recognition of the loans shareholders
made. However I draw the line at continuing to fund further
developments at Toiora out of that money. That money does not
belong to Toiora.
It's time now to close the company and repay the shareholders.
Once the shareholders have been repaid, I'm sure the body corporate would welcome shareholders to re-donate those back to the development fund, if they choose to.
Thanks,
Alex