Have you longed for that vacation home on the beach or in the mountains? Because of the slow real estate market in Florida and many other areas of the country, there are bargains available.
Despite this condition, many people cannot afford their dream vacation home. Others are reluctant to buy because they can't use it enough to justify the expense.
This has led many to an alternative that makes vacation home ownership affordable - Shared Use Ownership. Shared Use Ownership is an arrangement where several individuals or families own a property together and share the use and expenses.
Most people who own vacation homes spend an average of only two weeks to two months each year at the property. However, they pay expenses such as taxes, insurance and maintenance fees year round. To meet these expenses, some property owners have to rent out the property. Shared Ownership provides an arrangement where you own only the share of the vacation home that you will use.
You, along with the other owners would share the cost of acquisition, the expenses and the maintenance of the vacation home. You would also share the occupancy and use of the home, setting a schedule under which each owner is allocated certain weeks or months.
Shared ownership is not a time share or fractional ownership project. Those arrangements are usually set up by a developer and you would buy an interval or pre-arranged week of usage.
The Shared Use Ownership arrangement is flexible. The method of structuring the ownership, allocating the use, and sharing the expenses can be set up differently and uniquely for each property. There is no developer and these arrangements are usually limited to a maximum of six owners or families. This arrangement works with houses as well as condominium units.
With Shared Use Ownership you would be an actual owner of the property. Unlike a timeshare, you would directly share in any appreciation in the value of the property.
You can choose your partners in the vacation home. You and your partners can then decide on the appropriate legal structure of the ownership. It may be a limited liability company, corporation or tenants-in-common.
You and your co-owners would then, with the help of an attorney, prepare the user agreement, which is the centerpiece of the Shared Use Ownership arrangement. The user agreement sets forth how you will allocate the occupancy, share the expenses, manage the property and settle disputes. It will also address when a co-owner can sell his interest and under what circumstances the owners would sell the property.
The user agreement will also govern such issues as whether the property can be rented to third persons and how the home will be decorated. It provides the method for setting a budget so that all expenses are paid and a reserve maintained to pay for repairs and maintenance. Under the agreement each co-owner is required to contribute his share of the expenses on a regular basis and procedures are included to address an owner who is delinquent in payments. This ensures that the owners can meet the expenses of the property as they come due.
A properly structured Shared Use Ownership arrangement can be a practical and affordable way to own your dream vacation home.
Author Resource:-
Dean Hanewinckel is a real estate attorney practicing in Englewood, Florida. For further information you may contact him at dean@dean-law.com. Visit his website at http://dean-law.com for additional information.
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