Can anyone help me find a form of fractional ownership agreement for vacation rental property? Perhaps there is a sample agreement available or a list of questions to address in the agreement.
Property is in Colorado. Owners are family members with unequal percentage of ownership.
Fractional ownership agreement
Hal,
When we started we owned a fraction with a partner; we formed an LLC partnership, which automatically took care of some of the details.
I don't know if that would work in your case, but you need to get some sort of agreement down on paper right away. If it's a very complicated situation, consider consulting a lawyer. Maybe a property lawyer?
Cheers!
When we started we owned a fraction with a partner; we formed an LLC partnership, which automatically took care of some of the details.
I don't know if that would work in your case, but you need to get some sort of agreement down on paper right away. If it's a very complicated situation, consider consulting a lawyer. Maybe a property lawyer?
Cheers!
Brooke
Hi Hal,
The form by which property is owned in the US is important and quite complex. Colorado may well differ from New York, (where I am located), so you will need to seek proper professional legal advice from a Real Estate Attorney licensed in that State.
To give you an example of how complex it is when dealing with fractional ownership, here in New York, there are various options depending on the relationship of the parties involved. The word tenant is used in various forms of ownership, but it does not refer to someone who is renting the property, it means the owner. New York recognizes Tenancy in Common, Joint Tenancy and Tenancy by the Entirety.
Tenancy in Common means that on the death of one of the owners, their interest would pass to heir(s) named in their will. There is no right of survivorship by the other owners, meaning other owners cannot claim the share of the deceased owner. As well, each owner may sell, convey, mortgage or transfer their interest without the consent of the other co-owners.
Joint Tenancy means that if one of the owners dies, there is simply one less in the group, and the remaining tenants receive the share, regardless of the person's will. Only the last owner may dispose of the property by right of survivorship. To create a Joint Tenancy, co-owners hold equal ownership which is acquired at the same time and they hold undivided interest.
Tenancy in the Entirety is specifically for properties owned by husband and wife.
You would also want to discuss with your legal counsel the various options of business ownership, including Partnerships, Corporations, Limited Liability Company (LLC) and Syndicates, which would be a joint venture arrangement.
I will PM you with details of another forum which has a Q&A section for questions like this, and someone from CO may well be more helpful, but you really do need to take proper legal advice before purchasing the property or transferring title.
Hope this helps.
The form by which property is owned in the US is important and quite complex. Colorado may well differ from New York, (where I am located), so you will need to seek proper professional legal advice from a Real Estate Attorney licensed in that State.
To give you an example of how complex it is when dealing with fractional ownership, here in New York, there are various options depending on the relationship of the parties involved. The word tenant is used in various forms of ownership, but it does not refer to someone who is renting the property, it means the owner. New York recognizes Tenancy in Common, Joint Tenancy and Tenancy by the Entirety.
Tenancy in Common means that on the death of one of the owners, their interest would pass to heir(s) named in their will. There is no right of survivorship by the other owners, meaning other owners cannot claim the share of the deceased owner. As well, each owner may sell, convey, mortgage or transfer their interest without the consent of the other co-owners.
Joint Tenancy means that if one of the owners dies, there is simply one less in the group, and the remaining tenants receive the share, regardless of the person's will. Only the last owner may dispose of the property by right of survivorship. To create a Joint Tenancy, co-owners hold equal ownership which is acquired at the same time and they hold undivided interest.
Tenancy in the Entirety is specifically for properties owned by husband and wife.
You would also want to discuss with your legal counsel the various options of business ownership, including Partnerships, Corporations, Limited Liability Company (LLC) and Syndicates, which would be a joint venture arrangement.
I will PM you with details of another forum which has a Q&A section for questions like this, and someone from CO may well be more helpful, but you really do need to take proper legal advice before purchasing the property or transferring title.
Hope this helps.