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If a member of a non-profit which owns a large parcel of…

If a member of...

If a member of a non-profit which owns a large parcel of land, builds a home on that land, who owns the structure that was built on the land?

Lawyer's Assistant: What steps have been taken so far? Has any paperwork been prepared or filed?

None, it is a decision question, not an existing case.

Lawyer's Assistant: Where is the land located?

In New Mexico

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Not specifically. Just general rules. Tried to find the answer in the New Mexico state statutes and got lost.

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Answered in 4 minutes by:
3/19/2018
Legal Eagle
Legal Eagle, Lawyer
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Hello I am an attorney here to help. The answer to your question is that the member owner the land and any improvements unless they sell or lease the improvements to another party. In your case, if the landowner/member has given or sold the rights to the structure, the member is the owner
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Did you have any other questions for me about this today?
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Customer reply replied 1 month ago
What happens if 50 members come together, form a non-profit in the state of New Mexico, buy a large parcel of land in the name of the non-profit, then several members build homes on that land? Who owns the structures (homes)? The non-profit (as an additional asset of the corp) or the members who put the money into building the structures (homes)?
Customer reply replied 1 month ago
I have heard there are New Mexico state statutes for non-profit organizations that govern this, but cannot find them.
I see. Thanks fir clarifying. If the members buy the land and then the members build on that land, the NONPROFIT will be the owner of that improvement. If the members put in money to the non profit to get the home built, they don't have any personal ownership of the improvement unless they had a separate agreement with the non profit to give them an interest in the improvement. But bear with me a moment while I review NMs statues to verify...
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Customer reply replied 1 month ago
I hope you have better luck trolling through the statutes than I did!
Ok based on what I could see in the statues, I don't see anything that specifically gives members ownership of that property. The reason is because nonprofit corporations are treated similar to for-profit corporations when it comes to property ownership of its members. Is there something else that you have seen that suggest otherwise?
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Yeah I had trouble funding something to the contrary of my understanding. Is there something else to that you find otherwise?
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Customer reply replied 1 month ago
Not that I have seen, only heard. The non-profit would own the land, but the members would own the structures they build there with the right to pass it to their heirs or sell it to another member if the purchaser was a member. Do the statutes indicate any kind of restriction by the state, or could an agreement be made by the members within the non-profit that the structures could be owned.
Otherwise queried as: Are there any NM laws that would PREVENT the non-profit membership from agreeing in membership agreements that members who build the houses are allowed to own the structures but not the land under them? We don't want to design something that is illegal.
I see what you mean. For me to confirm with 100 percent certainty, I would have to do a lot of legal research that could take hours and would cost far too much. However, I don't believe I am wrong here. The non profit is the owner of the land and its improvements.
With that said, the board of the non profit could agree to provide an interest in the land and its improvements equally among the members. The non profit could also sell it to the members as well.
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Customer reply replied 1 month ago
Would you mind telling me which NM statute covers this issue? I would like to do further research myself as well.
You just need to ensure that the non profit has a board meeting that makes this possible and be sure to have a quit claim deed signed over to the members and have that recorded in the county where the property is. One thing to keep in mind is that the home itself can't be given away in shares because the home is just an improvement. This means that the nonprofit's will have give portions of the entire land itself.
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I really wish that I could, but finding something like that would take hours. If you have not already, my recommendation would be to speak to a New Mexico real estate attorney. You can even talk to a real estate agent who is likely to talk to you for free. You can take what I said and measure it against what the lawyer or real estate agent says and I think you'll find them I'm accurate. Part of the reason you may not be able to find it in the New Mexico statutes is because splitting the improvement is not recognized.
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Customer reply replied 1 month ago
Great, that is also helpful information.
You bet. The first thing that you should do is just contact a local real estate attorney or a real estate agent and just verify what I have told you after that, I believe it at the simplest thing to do would be to have a board meeting where the members of the nonprofit are gifted the property.
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Once the vote has been taken, then the nonprofit should get a quit claim deed and include all of the members on the quit claim deed and then file that quit claim deed with the county.
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Customer reply replied 1 month ago
Ok, one last question about this....if the people who build the structures use their own money to build, and they pay the property taxes on the structures (check payable to the corp, which writes the bulk check to the state), does this change the nature of the ownership of the structures?

Very good question. The answer to your question is no; it won't change it. A court would likely view this as the members paying on behalf of the non-profit. Since the non-profit is not a human entity, someone has to pay the taxes and if it's the members, it'll likely be considered on behalf of the non-profit and won't automatically change ownership. If you find something different after speaking with a local pro, come back to the site and talk to me about this so we can help each other get to the bottom of this definitively.

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Customer reply replied 1 month ago
Will do. It is such an interesting situation to figure out!

I concur. Thank you!!

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