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EXPANSION MANUAL - SAMPLE ASSOCIATION - CHAPTER/COLONY OPERATING AGREEMENT Every Association acting as a house corporation should have an operating agreement with the chapter. This agreement should describe as thoroughly as possible the duties and responsibilities of each party regarding the housing operations. This agreement should be in writing, and renewed each year. It should be reviewed immediately after the election of new officers for both the chapter and the Association. Following is a sample operating agreement. Sample Operating Agreement Between ___________________ FARMHOUSE ASSOCIATION AND _______________ COLONY/CHAPTER OF FARMHOUSE FRATERNITY The Directors of ____________________________ FarmHouse Association, a (state of incorporation) non-profit corporation, designated here as the ASSOCIATION, as Landlord, have this day rented to the _______________ Colony/Chapter of FarmHouse Fraternity, designated here as the COLONY/CHAPTER, as Tenant, the following real estate in the city of ________, County of __________________, State of _________________ (Province of ____________________): [Legal Description of Property] From the _________________ day of _________________, 20____ to the ________________ day of __________________, 20____, and from year to year thereafter unless notice of amendment or termination is given by the parties as hereinafter provided, at a rental of ______________ due on the _____________ day of each _________________. To be paid to the _________________________ of the ASSOCIATION on the ________________ day of each _____________________ during the term of this Agreement. The Conditions of this Agreement are: 1. That the COLONY/CHAPTER pay the rent promptly as it becomes due; 2. That the COLONY/CHAPTER members treat the premises as their home,and that they keep them in good condition and repair at all times, reasonable wear and tear and damage by fire or other unavoidable casualty only excepted; 3. That the COLONY/CHAPTER be responsible for the collection of rental revenue from its members and occupants, and make any necessary arrangements for the collection of such revenue; 4. That the COLONY/CHAPTER, at its own expense, keep the lawns, trees, vines, bushes, and hedges of the premises cut, watered, and trimmed during the term of this lease; 5. That the COLONY/CHAPTER not injure, overload or deface, or allow to be injured, overloaded or defaced, the premises or any part of them; 6. That the COLONY/CHAPTER be physically and financially responsible for routine maintenance and minor repairs necessary to the preservation and ordinary operation of the building, such as leaky faucets, faulty electrical switches, routine heating and air-conditioning repairs, and similar developments and malfunctions; 7. That the COLONY/CHAPTER make no alterations, additions or improvements without consent of the ASSOCIATION, but after consent has been given, unless otherwise agreed upon in writing, all alterations, additions and improvements made by the COLONY/CHAPTER upon said premises shall be at the COLONY'S/CHAPTER'S own expense, and, at the option of the ASSOCIATION, shall remain upon the premises at the expiration of this agreement and become the property of the ASSOCIATION as a further consideration of this lease; 8. That the COLONY/CHAPTER furnish heat and all utilities for the premises, and promptly pay all gas, oil, electricity, water, heating or air-conditioning service, and telephone rates and charges, and any other bills or charges incurred in connection with the operation or maintenance of the real property which may become due and payable during the term of this agreement; 9. That the COLONY/CHAPTER use the premises only as a fraternity house and in accordance with the laws, regulations and ordinances of the United States of America, (Commonwealth of Canada), State of _________________________ (Province of _______________________, the City of _____________, _________________ University, FarmHouse International Fraternity, and the duly authorized governing bodies of the fraternity system. 10. That the ASSOCIATION place the building in reasonable good condition considering the age and present condition and the use to which it is to be put, namely a fraternity house, during occupancy. 11. That the ASSOCIATION be financially responsible for the maintenance and preservation of the exterior of the building, namely the weather-boarding, gutters, downspouts, roof, fire escapes, masonry, and the replacement of them if needed; 12. That the ASSOCIATION provide adequate insurance against loss by fire, any extended hazard perils for the real property and adequate liability insurance, and that the COLONY/CHAPTER be responsible for all other insurance. 13. That the ASSOCIATION pay governmental assessments and real property taxes, if any, levied against the premises. 14. That the ASSOCIATION retire, according to schedule, any indebtedness which may encumber the leased premises, except any liens created or permitted by the COLONY/CHAPTER. 15. That the COLONY/CHAPTER not assign, sublet or part with the possession of the whole or any part of the rented premises without first obtaining the written consent of the ASSOCIATION. 16. That the duly authorized agents and representatives of the ASSOCIATION and/or University have the right at any time to enter upon and in the premises for the purpose of inspecting them; 17. That at the expiration of the term of this agreement the COLONY/CHAPTER shall deliver up the premises to the ASSOCIATION; neither the terms of this agreement nor possession of the premises shall in any way serve as an option for renewal. It is further agreed between the ASSOCIATION and the COLONY/ CHAPTER that for violation of any of the terms and conditions of this agreement by the COLONY/CHAPTER, or upon the COLONY'S/CHAPTER'S failure to perform any of the terms and conditions, then and in either of these events and without previous notice or demand, this agreement shall be forfeited and the COLONY/CHAPTER shall, upon violation or failure forfeit and lose all right, title and interest in and to this agreement and the real estate, and the right to possess, use and occupy the premises shall be terminated and lost to the COLONY/ CHAPTER. This COLONY'S/CHAPTER'S possession of the real estate after any such violation or failure shall be unlawful and without right, and the COLONY/CHAPTER may be required to give immediate possession at any time after forfeiture of this agreement. The failure of the ASSOCIATION to exercise any right reserved to it by this agreement shall not stop the ASSOCIATION from asserting such right at any time. 18. That both parties to this agreement will submit, one to the other, a financial report reflecting the budget and economic status of each annually during the term of this agreement. The terms, conditions and covenants of this agreement extend and are binding on both parties unless and until revised and upon the heirs, executors, administrators and personal representatives of the COLONY/CHAPTER and the agents, representatives and successors of the ASSOCIATION. In Witness Whereof, the said parties have set their hands and seals this ______________ day of _______________, 20_____ COLONY/CHAPTER (Tenant) ASSOCIATION (Landlord) _______________COLONY/CHAPTER ____________FARMHOUSE ASSOCIATION Of FarmHouse Fraternity By ___________________________ By ___________________________ (President) (President) By ___________________________ By _____________________________ Treasurer or Business Manager (Treasurer) |
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