Phew, a lot of confusion… reminds me of a shared apartment, whether old, young, or otherwise alternative to the conventional residential unit of a couple or family. I find such a housing project fundamentally very interesting and also very future-oriented.
The house belongs to the family of 2 siblings in the group (Person G1 & Person G2)
So it doesn’t belong to G1 and G2? …but only to the family?! Then all thoughts are already lost if you want to give G1 and G2 money… You renovate, give money, and then the real owners come and say “thank you” –
Group
The group will probably not last as planned during the renovation with so much potential for conflict. It starts where someone thinks they can work more or faster than another, another (or others, personally I’m not in favor of gendering) can’t work as often as the next, C again has done something wrong or not properly, which D then has to fix, E has a much longer commute and eventually gets grumpy and G2 thinks he has more rights because it’s family property and wants to pull out of the renovation. This delays the whole project and sooner or later everyone is somehow pissed off or the cause of disharmony.
I don’t know any partnership that exists as financier and craftsman where the craftsman later doesn’t believe he has exclusive rights because only he works… forgetting that without money he wouldn’t have any work.
And conversely, with property it’s similar when “his own property” is eventually mentioned to non-owners to claim more rights.
All of this doesn’t exactly sound encouraging or optimistic – and it isn’t.
rent-free
Rental income
Here is, for example, another stumbling block: supposedly rent-free and then not. Suddenly the financier is supposed to pay rent. Yes, the money is a loan and should also be treated as such. However, the loan should come from party X, so as not to offer emotionally confused grounds for attack.
To cover material costs, Person A + Person B give private loans to the people with ownership claims (Person G1 + Person G2). (20,000 € + 30,000 €). With this money, Person G1 + Person G2 then pay for materials and construction costs for the renovation of the house and in return receive a habitable house.
Person G1 and Person G2 rent this out to the group of 7 people (theoretically also to themselves). With the rental income, Person G1 and Person G2 can then repay the private loans to Person A and B.
May I ask what you want to achieve with €50,000? What is that about? Flooring and a nice communal kitchen?
Or even renovation work?
Important: If Person A or Person B moves out before the investments for material costs have been amortized, they still have a legally effective claim to their investments based on the previously concluded private loans.
But that is a private loan?! You don’t have to “amortize” it with rent… and honestly: how many months of “investment” are we talking about? With a €20,000 loan, that’s 20 months at €500 cold rent… that should be foreseeable.
As for the private loan (by the way, I am often in favor of it when something needs to be arranged): what use is it if the other party can’t pay out?!
That only pays off for the 5 people WITHOUT ownership claims on the house IF they live in this project long enough.
First rule: all tenants rent for at least 5 years and commit. Anything else leaves you vulnerable and unplannable. Whoever drops out is out of luck.
Second first rule: one person in the group is the owner and offers residential rights. Otherwise, you depend on every whim of the owner. This person is also the administrator and has a house account. Ultimately, they have responsibility.
I consider an anti-authoritarian or alternative management unfeasible.
(I must say here: I am neither in such a field nor do I have any knowledge except life experience and common sense.)
But I see the fundamental problem with ownership structures and probably everywhere a lack of liquid funds or ignorance about financing etc.
The easiest way is for owner X as administrator to simply take out a loan of, for example, €100,000, have it renovated, and let the seven needy people live there for rent. Further matters are then clarified in the rental agreement, and everyone can be happy.