Membership agreements aim to position coliving as a service contract rather than a residential tenancy. The intent is usually to (a) avoid statutory tenancy protections (just-cause eviction, rent caps, security-of-tenure) and (b) enable shorter-stay flexibility.
The legal robustness of membership agreements varies dramatically by jurisdiction. UK courts apply Street v Mountford (1985): if substance grants exclusive possession of a specific space, it's a tenancy regardless of label. US courts (Carter v Cohen in CA) apply similar substance-over-form tests. Spain, Portugal, Germany typically don't recognise membership distinct from tenancy at all.
A membership agreement is therefore not a magic eraser of tenancy obligations. It works in jurisdictions where the substance genuinely is service-and-non-exclusive-use; it doesn't work where there's a private bedroom and a fixed monthly rent.
Drafting checklist for jurisdictions where membership agreements can work: (1) Define the service explicitly — what's the operator providing? (e.g., 'access to community programming + shared workspace + concierge'); the price must reasonably correspond to the service, not to the bed. (2) Avoid exclusive-possession language. The member should not have an absolute right to a specific bed — the operator reserves the right to reassign rooms. (3) Termination must be mutual and short-notice (30-60 days). Long fixed terms read as tenancies. (4) No statutory tenant protections language — do not import 'deposit', 'rent', 'eviction' from tenancy law. Use 'fee', 'reservation', 'termination'. The model works in jurisdictions like Texas, North Carolina, Florida (US Sunbelt) and parts of LATAM. It does NOT work in California (AB 1482 still applies), New York (LL18 + rent stabilization), or most European jurisdictions where substance-over-form tests are strict.
In the field
WeLive's failure was partly due to NYC courts re-classifying its membership agreements as tenancies under MDL. The Collective uses membership-agreement-style language but with substance designed to survive UK Street v Mountford analysis. Common uses standard residential furnished tenancies, having concluded the legal risk doesn't justify the structural complexity.
Common pitfalls
- ×Drafting membership agreements that grant exclusive possession of a private bedroom — courts re-classify on first dispute.
- ×Mixing membership and tenancy language in the same contract — creates both reading.
- ×Assuming a US-drafted membership template works in EU jurisdictions — it generally doesn't.
- ×Not having a backup tenancy structure for jurisdictions that won't recognise the membership.