Some families are able to hand over a cabin to the next generation with a cash fund to cover the cost of maintaining the property, and some homeowners are not tied up for extra money. Families and friends who need to plan and save for money available need to make sure the deal answers the question of how expenses are paid. For example, all homeowners can contribute monthly, or a planned collection can be done when money is needed. The agreement should also address whether owners who contribute to “sweat fairness” receive recognition for their work and the thorny issue of the co-owner who is unable or unwilling to contribute as required by the agreement. There are a number of options that need to be considered, including the gentle approach of having a co-owner cover the costs and it is a loan to the non-contributing party that is repaid to the paying owner when the property is sold or if money is available. Another option is to require the non-contributing co-owner to sell his share to the other owners. • Foundation contribution (funds held in an account for the purposes of the cottage) An agreement for a cottage or cottage should also include a property transfer plan. There are many situations in which a homeowner needs or wants to sell their share of the property. An agreement should look at how landlords treat the share of a person who no longer wants to use the property. An agreement between co-owners should also cover other events that would trigger a transfer of an owner`s interests, including incapacity, divorce or even failure to contribute to expenses. It must be determined whether the share of a deceased co-owner is transferred to his heirs or whether the share of a deceased owner would be sold to the co-owners or to an external party.
Depending on the individual situation of the co-owners, the agreement could oblige the remaining co-owners to buy the share of a departing member or give them the opportunity to do so. The agreement may also specify how the purchase price is determined either by an agreed formula or for the estimated market value of the property. Arrangements may also be made for the financing of the acquisition of a share of a retiring owner. Some parties will choose to require cash at closing, others will use a promissory note to cover all or part of the purchase price for a fixed term. In some cases, parties choose to purchase life insurance to provide money to buy a deceased owner`s share of their estate. Finally, the agreement can set the terms for the sale of the property to the public if the owners are forced to sell or if they agree that they no longer want to own the property. Some cottage arrangements include a regular meeting, usually once a year in the low season, to discuss important issues and plans for the following year. Can you budget for planned operating costs, repairs and improvements, and assign responsibilities – the same as last year, or is it someone else`s turn to pay the bills, plan the work weekend, or attend the Lake Association meeting? Ask someone to take notes on what is decided, and remember, meetings always go more easily when someone brings snacks! The family home on the lake or hunting lodge is reminiscent of a pleasant and carefree getaway for friends and family, where summer days are devoted to relaxation, fishing, swimming and boating, and evenings are enjoyed around the campfire to listen to the call of the loons. Most people who grow up with a place by the lake have a warehouse with happy and cherished memories. Roofs and renovation are simple. It leaves perishable goods in the refrigerator, does not fill gas tanks or puts garbage in recycling, which can be the real sand in gears. At first, create a set of cottage rules and include them in the sharing agreement.
This can clarify expectations and avoid unnecessary headaches later. A simple majority vote can resolve many decisions, e.B how long weekends need to be redecorated or divided. Important and complicated issues – renovations, inviting new owners, selling the cottage – should require a higher level of approval, perhaps unanimous approval. A cottage sharing agreement should clearly define which issues require a majority and which require unanimity. It may also provide for mediation or arbitration in the event of disagreement. For example, if one homeowner thinks a new roof is needed and the other does not, a competent and independent third party could give an unbiased opinion to guide the decision. In a two-owner situation where a majority is impossible, the agreement may provide for arbitration when an independent third party that the owners agree to actually make the decision. Here are some typical types of “manager” cottage operations: Who has the deed to transfer the cottage to the LLC? _______ Lender consent required? _____ Value of the cabin for donation tax purposes? _______ Opinions in progress? Who contacts the evaluator? _______ • How money is collected each year to maintain the cottage – to pay for utilities, property taxes, fire insurance, repairs and maintenance, association fees, permit fees, etc. to pay? • Guidelines for voting by members to approve a sale or redevelopment of the cottage At first, co-owners must ask important questions.
For example, can all owners use the cottage all the time? If there are periods for exclusive use, how are they allocated? Can the owners bring guests in turn or even rent or borrow the holiday home? Who will open and close the cabin each year? Who ensures that electricity bills, municipal taxes and insurance premiums are paid on time? And how are collective decisions made for changes, improvements or additions? In order to avoid misunderstandings that could lead to fights, it is often appropriate for co-owners to establish ground rules for the use of the cottage or holiday home. The agreement should allow co-owners to adopt rules that may be revised from time to time. Rules can determine whether guests are allowed, how many and who they can be, or they can require the group`s permission to allow external guests. It may be necessary to establish rules to ensure safety, especially if the apartment is located on a lake or used for hunting. If there are boats, ATVs, jet skis, canoes or docks, the rules of their use should be considered in advance, especially if the recreational equipment is used by people other than their owner. An agreement should be reached on the distribution of the workforce. For example, the task of mooring the dock and boat in the spring and closing the hut at the end of the season. If children are in the group, a rule may cover supervision requirements and determine whether older children and college-aged children should be supervised. It may be necessary to establish rules to handle even small, seemingly small details such as laundry and dishes, filling the fridge and pantry, and mowing the lawn. Preparing a simple set of rules in advance is one of the most effective ways for co-owners to set expectations and ensure those expectations are met. • In addition, the use of the cottage within the family will not be the same – some family members will use it more than others.
How to take into account this difference in use and pay? It is always possible that a dispute may arise that the parties cannot resolve after prior agreement. Most people intend to be able to settle things through a simple discussion, but if the owners reach an impasse, the agreement may include provisions on dispute resolution if there is an impasse between the co-owners. .