Legal & Finance: Hands & Land

This page is a working document for group discussion. Nothing here is agreed yet. All members should read and feed back.

Our structure: Community Benefit Society

Hands & Land Centre Limited is registered as a CBS (No. 9505). This is the strongest structure for what we're doing. Here's what it means:

Who owns the property?

The CBS itself. Not any individual. The society is a legal entity that holds the title. Members have a financial stake (via shares or loanstock) but no individual owns a portion of the land or buildings.

Asset lock

The CBS has the strongest statutory asset lock in UK law. If the society ever dissolves, residual assets (after debts and member capital are repaid) must go to another community body. No individual can extract the property's value. This is permanent and cannot be voted away.

Governance

One member, one vote. Regardless of how much you've put in financially. Directors are elected by members. Day-to-day decisions can use consensus or sociocracy, with formal votes as a fallback.

Personal liability

None. The CBS borrows as a legal entity. If the loan can't be repaid, members lose their invested capital but are not personally liable for the debt.

How members buy in

There are two main financial instruments the CBS can use. We need to agree which model (or blend) works for us.

Loanstock model

You are a creditor, not a property owner

Members lend money to the CBS over time via monthly payments
The CBS issues you a loanstock certificate: a fixed-term, fixed-interest loan
Typical terms: 5-25 year term, 0-3% interest
When you leave (or the term ends), you get your money back at face value plus any agreed interest
You do not benefit from property value increases
Used successfully by the Radical Routes network for 30+ years

Example: You put in £500/month for 10 years = £60,000 in loanstock. The property doubles in value. You leave and get back £60,000 (+ interest). Not £120,000.

Community shares model

You are a member-investor, not a property owner

Members buy withdrawable shares at a fixed nominal value (typically £1/share)
Shares can never increase in value. They can be written down if the society loses money.
Interest paid at a rate set by the society (typically 0-5%)
Maximum individual holding: £100,000
Withdrawal: at the board's discretion, subject to the society being able to afford it
Can be offered to the public to raise capital (community share offer)

Example: You buy £20,000 in shares. 10 years later you ask to withdraw. If the society is solvent, you get £20,000 back. Not more, regardless of property value.

Alternative: equity shares (LILAC/MHOS model)

There is a middle path. The Mutual Home Ownership Society model (used by LILAC in Leeds) lets members build equity with capped growth linked to local wage inflation, not property market inflation. Members pay 35% of net household income monthly. After deductions for communal costs, payments buy equity shares. When you leave, you get your accumulated equity back, adjusted for wage growth.

This could be layered into our CBS structure. It gives members something between "money back at face value" and "full market return." Worth discussing.

Exit strategies

What happens when someone wants or needs to leave? This must be agreed before anyone puts money in.

Question	Loanstock model	Community shares model	MHOS equity model
How much do you get back?	Face value + agreed interest	Face value (may be written down)	Accumulated equity, growth capped to wage inflation
When do you get it?	At end of term, or by negotiation	When the board approves withdrawal	After minimum period (typically 3 years)
Can the society refuse?	Early withdrawal: yes. At term end: no.	Yes, if it can't afford it	After minimum period: no
Do you benefit from property growth?	No	No	Partially (capped)
What if the society can't pay?	You're an unsecured creditor	Shares can be written down to zero	Equity can be written down

Key question for the group

Tom & Rosa have ~£125k equity from a house sale. Under a pure loanstock model, that £125k comes back as £125k regardless of what the property does. Is everyone comfortable with that trade-off? If not, which model works better?

Resonance Finance: what we know

What they are

One of the UK's leading social impact investment companies. ~£444m under management across 15 funds, ~70 staff. FCA regulated. Based in Launceston with offices in Bristol.

Their community fund (RCD)

The Resonance Community Developers fund provides development finance for Community Benefit Societies. ~£27m at second close (Jan 2026). Has invested £9.35m into 28+ community groups. Backed by Better Society Capital, Access Foundation, and MHCLG.

Updated April 2026: Resonance is community-side only

Following a further conversation between Kezia, Laura and Oli, our earlier understanding — that Resonance could fund 100% of the property value — has been narrowed:

Resonance lends only against the community / shared-use portion of the site (events barn, shared workshop, meeting spaces, growing infrastructure) — not the residential dwellings.
The residential portion must be funded by member capital, a commercial residential loan, community-share capital, or a blend.
Resonance's line is short-dated: 2-year repayment window. The pledge model on the Properties page is specifically designed to surface whether the group's monthly income can service that obligation.

What counts as community vs residential: for Resonance purposes we're assuming shared buildings (workshop, events barn, meeting space, shared kitchen, community-serving infrastructure) are community; anything that's a private dwelling — the main farmhouse, cottages, annexes, tiny homes — is residential. This is our working definition; needs written confirmation from Resonance.

Finance terms (updated)

Rate on the community slice still depends on location:

0% if the property is in England
8% per year if the property is in Wales

Because Resonance now funds only a fraction of the overall purchase rather than all of it, the England/Wales split matters less than we previously thought — the rate only applies to the community-slice loan, not the whole price. This reopens Welsh candidates we'd been deprioritising (Cilhowey, Ty Du, Steppes, Lower Chapel) and keeps English candidates competitive.

The strategic arc Kezia described remains: pick a property, build a business plan that satisfies Resonance, then sell membership slices / part-deed splits to incoming members. A core team still needs to service the 2-year payback quickly.

See Scenarios for worked examples of how community-only Resonance interacts with member capital and residential finance across different property shapes and sizes.

Still to verify in writing: exactly what Resonance classifies as "community" vs "residential", whether the 0% England rate is for RCD specifically or a different Resonance fund, and the full covenant set (term, pre-conditions, reporting).

What Resonance needs from us

Experienced project team with a strong lead
Robust business plan with income projections showing the loan can be serviced
Evidence of community engagement and support
Good governance structure
A specific site to lend against
Social impact statement

Why CBS and not something else?

We considered these alternatives. CBS wins for our use case.

Structure	Asset lock	Community shares	Why not for us
CBS (ours)	Strongest (statutory)	Yes	This is what we're using
CIC	Yes (with dividend cap)	No	Can't issue community shares. Less democratic governance.
CLT	Yes (usually a CBS anyway)	Yes	A model, not a legal form. Could layer CLT approach onto our CBS.
Co-op Society	No (voluntary only)	Yes	No mandatory asset lock. Members could vote to dissolve and extract value.
Ltd Company	No	No	No asset lock, no community shares. Relies on goodwill.
Split deed (tenants in common)	None	N/A	Any owner can force a sale (TOLATA). Max 4 on title. No protection. Do not use.

Landscape: seven financial models UK projects have used

Beyond our current Resonance-backed CLT-ish setup, here's what other community-led projects across the UK have actually built. Each model has its own sweet spot. We can adopt one, blend two, or ignore them — worth knowing what's out there before we commit.

Structure	Land owner	Home owner	Equity for members?
Fully Mutual Housing Co-op	The co-op	The co-op	No — tenants only
Mutual Home Ownership Society (MHOS)	The co-op (often on CLT land)	The co-op	Yes — equity shares
Community Land Trust (CLT)	The CLT (perpetual)	Usually separate (leasehold to residents or to a co-op)	Depends on home tenure
Community Benefit Society (BenCom)	The society	The society	Withdrawable community shares
Cohousing (leasehold/freehold)	CLT or private freehold	Individual residents	Yes — individual ownership
Shared ownership (with HA)	Housing Association	Split	Part-equity
Commonhold	Residents + commonhold assoc.	Individual residents	Yes (rarely used — mortgage-unfriendly)

1. Mutual Home Ownership Society (MHOS) — LILAC, Leeds

All homes + land owned by the co-op. A single mortgage covers the whole site.
Each household holds equity shares whose number depends on income and home size.
Monthly payment = 35% of net household income, paid into the co-op.
Share value can range 90–110% of the cost of a member's home — cross-subsidises affordability.
On exit, members take an equity pot indexed to wages, not house prices. Land never gets sold off.

Pros: permanent affordability; single-mortgage accessibility; pools income risk.
Cons: complex; has struggled to attract both affordable-housing grants and mainstream mortgage finance.

2. Fully Mutual Housing Co-op + loanstock — Radical Routes / Project Home

Co-op owns everything. Tenant-members pay rent. No equity attached to membership.
Capital raised via loanstock: supporters lend at 0–5% over 5–25 years.
Radical Routes runs Rootstock Ltd as a secondary co-op aggregating investor money and lending on — £1.5m+ currently deployed across 28 member co-ops.
Project Home Co-operative (Wye Valley, moved in Feb 2025) uses this model with Ecology Building Society finance.

Pros: simple, tested, non-extractive; works with modest funding; good for groups who don't want equity complications.
Cons: members build no wealth; exit = just leave, no pot to take.

3. Community Land Trust (CLT) + lease to residents — Resonance-backed (closest to what we're doing)

CLT holds freehold forever; an asset lock prevents resale at market value.
Homes sold at discount to local-area affordability (often pegged to local incomes); resale price capped at same discount of future market value.
Resonance's Affordable Homes Rental Fund can lend up to 100% of development capital to CLTs (mainstream lenders cap at 60–80%). Recently backed by £20m from MHCLG.

Pros: mature sector; government-friendly; keeps affordability locked in perpetuity.
Cons: usually community-facing (open membership) rather than specific-group-facing.

4. Debt-free Commons — Stroud Housing Commons

No mortgage. Investors buy “rent vouchers” representing 25 years of future rent at a discount. Cash from voucher sales funds the purchase outright.
Four-class governance: tenants (majority vote), investors, stewards (paid staff), custodians (veto-only).
Returns ~5% to investors over the period; rents fall to maintenance-only once investors are paid out.
Max 100 properties per group; vouchers tradable on a secondary market.

Pros: no bank exposure; inflation-proof for investors; rents structurally decline over time.
Cons: needs a large investor community willing to take long-horizon returns; newer model with less track record.

5. Community Shares (BenCom) — Ecological Land Co-op, Bridport Cohousing

ELC raised capital via community share offers to buy rural land; holds freehold; leases smallholdings on 150-year leases or rents them — retaining control so land stays in ecological use forever.
Bridport Cohousing ran a £732k share offer on Ethex for common-house capital. Shares are withdrawable (at director discretion), non-transferable.
Of 53 Bridport homes: 27 leasehold-for-sale; 13 sold at 80% of market value with affordability locked on resale.

Pros: ethical retail investment is a proven source of capital; tax-advantageous (SITR/EIS where eligible).
Cons: lots of admin; typically funds only part of the project — still needs debt or grants alongside.

6. Cohousing with private ownership + shared commons — Lancaster, Springhill, Threshold

Residents own homes individually (freehold or leasehold); a management co-op or company owns the common house, land, and amenities.
Lancaster Cohousing, Springhill, and Threshold Centre use variants — Threshold includes shared-ownership with a housing association for affordable units.

Pros: easiest to mortgage individually; familiar to banks and solicitors.
Cons: weaker asset lock — homes can drift to market value over time; harder to keep affordability in perpetuity.

7. Hybrid: CLT-land + MHOS-homes

CLT owns the freehold with a perpetual asset lock; an MHOS sits on top holding the buildings and members' equity shares.
Academic literature flags this as the “best of both” — permanent land affordability plus member equity — but it's rare due to complexity.

How this maps to where we are now

We're registered as a CBS (No. 9505) and working with Resonance — effectively already on the CLT + Resonance-backed rental track. The practical question for the group is:

What we're doing now: CBS + Resonance finance + loanstock/community shares for member capital.
Variants we could adopt: add an MHOS layer for member equity (LILAC-style), or structure member capital as loanstock via Rootstock, or run a community share offer alongside.
Radically different alternatives: Stroud-style debt-free commons (no bank, investor vouchers), or ELC-style smallholding leases (freehold CBS, 150-year leases to members).

Sources

Available funding for development phase

We don't need to wait for a property to start applying for some of these.

Resonance CLF pre-development grant

Apply now

Feasibility, business plan, site assessment. We're already in conversation.

National Lottery Awards for All

Apply now

£300-10,000. Fund pre-purchase community events, skill-shares, feasibility work. Simple application.

Plunkett Foundation membership

Join now

Free for community start-ups. Grants database, business advisors, rural community business expertise.

Community Shares Booster Fund

Check for next round

£2k-15k development grants to prepare a community share offer. March 2026 deadline may have passed.

Welsh Community Facilities Programme

Once site identified

£5k-300k capital grants. Rolling applications. If we buy in Wales, this is a game-changer.

Power to Change: Match Trading Grants

Once trading

Grants that match your trading income. Relevant once enterprises are operating on site.

What we need to do next

Clarify Resonance terms

Get specific: what rate, what terms, does it cover Wales? The "100% at 0%" assumption needs testing.

Formalise membership

All active households should formally join the CBS as members now. This gives voting rights and demonstrates commitment to funders.

Draft members' agreement

Cover: monthly contributions, labour expectations, decision-making process, conflict resolution, and exit terms. This is the hard conversation: it needs to happen before money goes in.

Everyone completes the questionnaire

Tom has done his. Rosa has shared hers. Every household needs to do the same so we understand each other's needs, finances, and red lines.

State sq-ft needs per household

Prompted by Kezia (18 Apr): each household to state roughly how many square feet they need to enable their projects, so properties can be assessed against combined practical requirements.

Kezia & Gaz: ~1,500 sq ft workable, with ~1,000 sq ft for storage + metalwork and a teaching space for metal/stone/fine arts (fine-arts space shareable). Plus shepherd huts for workshop attendees staying on-site. Target borrowing ~£250,000 for workshop needs.
Other households: TBC.

Agree monthly development contributions

Even £50-100/household/month into a CBS account. Builds a working fund and creates a track record of collective financial management.

Collective business plan v1

Combine individual enterprise plans with a collective financial model. Show Resonance that income can service the loan. Stress-test against worst-case scenarios.

Start collaborative activities

Shared meals, skill-share workshops, group visit to Rockaway Park (30 mins from Bristol). Build the community before buying the land.

Apply for Awards for All

£5-10k for a programme of community workshops and skill-shares. Funds activities we want to do anyway and builds evidence for future funders.

Reference models

Rockaway Park, Temple Cloud (30 mins from Bristol)

~5 acres, ~30 artist studios, vegan cafe, two stages, recording studio, accommodation, community garden, forest school. Self-funded, no grants. Built from a former scrapyard using reclaimed materials. Grew organically over 20 years. Proof that a self-sustaining creative community is viable.

Key lesson: Start with what you have. Diverse tenants create resilience. The cafe is the social heart. We should visit together.

101 Outdoor Arts, Newbury

20,000 sq ft warehouse, fabrication workshops, rehearsal spaces, accommodation for 15. ~50 artist residencies/year. Funded by Greenham Trust + Arts Council. 10 years running.

Key lesson: Shared fabrication workshop is the backbone. Residencies generate income and profile from day one. Communal dining space matters.

LILAC, Leeds (Mutual Home Ownership)

20 eco-built households. Members pay 35% of income, building equity shares over time. Capped growth linked to wages. No one needs a personal mortgage or large deposit. Genuinely affordable, permanently affordable.

Key lesson: The MHOS equity model may solve our "loanstock doesn't build equity" problem.

Radical Routes network

26 housing co-ops funded by loanstock from supporters. No commercial mortgages. 30+ year track record. Proof the loanstock model works at scale.

Key lesson: Loanstock can fund property purchases, but co-ops must be financially disciplined.

Project Home Co-operative, Wye Valley

Fully mutual co-op that moved onto its land in February 2025. Uses Ecology Building Society mortgage plus Rootstock loanstock. Rural, relatively recent, and geographically close to us — directly relevant.

Key lesson: A small co-op can buy rural land with ethical finance + supporter loanstock, without community shares or an MHOS layer. Probably the most comparable precedent to what we're doing.

Stroud Housing Commons

Debt-free commons model — no mortgage, funded entirely by investors buying 25-year “rent vouchers.” Four-class governance with tenants holding the majority vote. Still young but structurally distinct.

Key lesson: It's possible to sidestep banks entirely if you can mobilise a long-horizon investor base. Rents structurally decline over time as investors are paid out.

Ecological Land Co-op

Buys rural land via community share offers, holds the freehold in trust, and leases smallholdings on 150-year leases. Run as a CBS, like us.

Key lesson: Community shares work well when the ask aligns with a clear ethical purpose (ecological use in perpetuity). Very long leases can give residents security without the CBS losing control of the land.

Bridport Cohousing

53-home cohousing scheme raised £732k via community share offer on Ethex for common-house capital. 27 units leasehold-for-sale; 13 sold at 80% of market value with affordability locked on resale.

Key lesson: Retail ethical investment platforms (Ethex, Triodos) are a proven route to raise member and public capital alongside a mortgage. Useful template if we want to open the capital-raise beyond the core group.

Legal & Finance