An Alliance is a relationship among people, groups, or states that have joined together for mutual benefit or to achieve a common purpose. A Fleq Alliance is a partnership between Fleq and one or more Member(s) to purchase a home of the Member(s) choosing.
There are no specific limitations when choosing your home other than it must be in Move-In Condition. Homes with unique features or marketability issues may not qualify or require a larger initial equity contribution.
At any time before the partnership purchases your home, you can back out of an Alliance. There are no penalties, but a prospective Member will have been required to pay for certain costs associated with creating an Alliance. Depending on when a prospective Member backs out, some or all of these costs may not be refundable.
Initial Equity Contributions are determined after review of a potential Member's application. They are not negotiable and must be paid into escrow for the partnership to purchase the Member's desired home. The size of the property and a potential Member's credit history are two of the biggest drivers of the required initial equity contribution.
There is no minimum credit score and credit score is only one of a number of factors (including but not limited to prior rental history, criminal background check, rent to monthly income ratio, etc) that Fleq reviews before forming an Alliance with a potential Member.
An Alliance has no set time frames. Although the lease will have finite duration, it contains automatic renewal provisions, which could extend for as long as the Member wishes it to do so. So as long as the Member has not sold the home, provided notice to Fleq that they wish to terminate the lease, or are in default under the lease or the operating agreement, an Alliance can last indefinitely.
Each month you will make an Alliance payment that consists of two parts. One part is rent paid to Fleq for the portion of the home you don't own and the other part is a monthly capital call for projected ownership expenses for the portion that you do own.
Each year the partnership's home will be valued by Fleq. The value of the home divided by the number of partnership equity units will create the purchase price for the units. This price is then locked in for the next year.
In addition to having the option to sell the home, if the Member wants to start a new Alliance on a new home, you can transfer the equity in your current home to your new home. Fleq will take back your current property eliminating the pain and hassle of needing to sell a home.
You do not have to consult with Fleq before selling the property. However, Fleq has a right of first refusal on any agreed upon sales price. If a Member consults with Fleq prior to the sale, Fleq may waive its right of first refusal as long as the sale price is above an agreed upon floor value.
If a Member in their role as tenant, cannot make the required rent payments under the terms of the lease, the Member will be subject to eviction proceedings. If a Member fails to make a capital call as required by the Operating Agreement, Fleq may make that payment on their behalf and seek the remedies available to it under the Operating Agreement.
Fleq is the managing member of the Alliance. As such, Fleq is in charge of various administrative affairs of the Alliance as well as setting the value of the equity and setting market rents for future leases. As long as a Member is current under the lease, Fleq can never sell the property or cancel the lease.
The Inhabiting Member pays for the cost of home improvements. However, for any approved home improvements, Fleq will either reimburse you for its pro-rata share of the costs or issue you new equity in the partnership equivalent to the increase in the value of the home.