Buying a lake house, ski cabin, or other vacation home with good friends could ease the financial burden for all parties involved. However, without clear-cut rules, thorny situations likely will arise.
James Grossman, a Rochester, NY, lawyer and former chair of the real estate section of the New York State Bar Association, offers these tips for what to consider before buying a vacation home with other people:
- Decide upfront what will happen if someone decides to sell or dies. One good approach is to provide remaining owners with right of first refusal.
- Spell out financial arrangements. Require an owner who stops making payments to sell his share back to the other partners.
- Decide how and when the property will be used. Create a schedule of when each party will be allowed to use the property. If you feel strongly about not having a schedule, then put in writing that it will be open-ended.
- Set rules for when problems arise. What are your guidelines for parties, pets, broken furniture, and maintenance needs? Will you allow family members to visit by themselves?
- What happens when you don't agree? Especially when there are more than two owners, it's important to include a procedure for handling disputes, for example, a majority vote rules.
Source: The New York Times, Jay Romano (10/21/2007)
NOTE: Hide-A-Way Hills will charge an extra 2/3 of the regular assessment for any deeds containing more than 2 names. An extra 2/3 assessment is also charged for any deed with only 2 parties where either party is married, but not to each other.
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