Sigma Alpha Epsilon - Auburn University

Common Questions from Alumni WHAT IS THE ALABAMA ALPHA MU FRATERNAL ASSOCIATION? This is the legal entity for the house corporation. The house corporation is made up of 12 alumni serving four- year terms. Every August, three board members rotate off and three new members come on. Board members have zero ownership in the assets of the house corporation and serve strictly in a volunteer role. WHAT IS THE RELATIONSHIP BETWEEN THE HOUSE CORPORATION AND THE CHAPTER? The house corporation owns the property at 550 West Magnolia. The chapter occupies the house and pays the house corporation a monthly rent. This rental income is the major source of revenue for the house corporation, with other revenue coming from annual alumni contributions. There is also an advisor relationship between the chapter and the house corporation. Working with the current chapter advisor, the house corporation meets bi-annually with the chapter to ensure they are meeting their obligations with Nationals, Auburn University, and the house corporation. WHAT IS THE SCOPE OF THE PROJECT AND WHY IS IT BEING CONSIDERED? The project plans are to tear down the old dorms and rebuild. We will go from two floors and 24 rooms to three floors and 47 rooms. The dorms are in terrible shape and need to be rebuilt to provide a safe and reasonable place for brothers to live. Also, the rental market is Auburn is very competitive with new apartments going up every year. These new dorms will put us on a level playing field with what's currently being offered in the rental market in Auburn. HOW WILL THE ALUMNI LEADERSHIP ENSURE THE STABILITY OF OUR INVESTMENT? The house corporation owns the land. If for any reason the chapter no longer occupies the property, we still have an asset that can be managed and/or sold to recoup our investment. To prevent this from happening, we will continue to work with the chapter and chapter advisors to make sure the chapter is fulfilling their duties to Nationals, Auburn University, and the house corporation. We will also control the rental agreement between brothers and the dorms. We will have each brother living in the house sign a lease agreement with house corporation that will stipulate such things as security deposits, how to handle property damage, etc. We will also collect all rent and pay related expenses to the dorms. This will allow us to control any net income the dorms produce and use these funds to pay down debt, fund ongoing maintenance, etc. HOW ARE WE GOING TO HOLD THE ACTIVE CHAPTER ACCOUNTABLE FOR THE NEW PROPERTY? Every brother living in the house will sign a lease agreement with the house corporation. This lease agreement will be drawn up by attorneys that are serving on the house corporation and will address such topics as security deposits, property damage, etc. This will allow us to pursue any recourse that would be provided to us much the same as any rental company would have against their tenants. WE ARE NEARLY DOUBLING THE NUMBER OF ROOMS. WHAT HAPPENS IF WE CANNOT FILL THE HOUSE? Our breakeven point is 60% occupancy. We believe with our location, quality of the new rooms, and cost vs. other rental options, we will be able to exceed our breakeven level each year. If for some reason we cannot, we do have precedent of pro-rating unused dorm rooms across all brothers' bills. This would provide an incentive for the current brothers to fill the house and provide us with secondary options if our breakeven level isn't met. Founded in Tradition, Continuing the Legacy The Campaign for alabama alpha mu

• Cover