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.

Finance terms (per Kezia, 9 April 2026)

Kezia confirmed from her conversations with Resonance that the group can access 100% of the property value from Resonance Social Impact Investors, with interest rate depending on location:

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

This materially changes the economics of our target areas: Welsh sites (e.g. Cilhowey Farm, Brecon) now carry a real cost of capital, while English sites (e.g. Kentchurch, Hereford) do not. Rosa has already flagged this as "importantly England side of the border for Resonance funding" when assessing Kentchurch.

The route Kezia described: pick a property, build a business plan to pass Resonance's scrutiny, then sell membership slices / part-deed splits to incoming members at their own pace. A core team is needed to service payments back to Resonance quickly.

Illustrative sizing: 8 people × £150,000 = £1.2m, with additional allowance needed for development costs, legal fees and stamp duty.

Still to verify in writing: exact terms (term length, covenants, pre-conditions), whether the 0% England rate is for RCD or a different Resonance fund, and whether Welsh sites qualify even at 8%.

Geography: England vs Wales for our target sites

With the Wales/England rate split above, the border now matters a lot. Several live candidates straddle it:

Cilhowey Farm (Brecon, Wales) — top pick but 8% finance rate applies.
Kentchurch barns (Hereford, England) — 0% rate applies; actively being explored.
Ty Du Farm / Steppes Farm (Monmouthshire, Wales) — 8% rate.

We still need written confirmation from Resonance that Welsh sites are eligible even at 8%, and whether the 0% rate in England is time-limited or conditional on particular impact criteria.

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.

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.

Legal & Finance