“We all get along great” isn’t much help if there’s a disagreement about guests, repairs or maintenance. A lawyer can pre-solve problems before issues arise.
NEW YORK – Homebuyers purchasing vacation homes with family or friends face unknown risks, such as disputes about guests, repairs and maintenance. It can unravel the arrangement and even lead to court battles.
Booming home prices compound the situation. Attorneys and financial advisers say clear communication and a plan created before potential problems emerge can prevent ruptures with family or friends.
Planners, in fact, often discourage sharing ownership of a vacation home with extended family or friends, since it’s not assured that even small disagreements will find swift resolution.
UBS Financial Services adviser Michele McCallion says more frequent natural disasters have also escalated conflicts, often over who will cover improvements, renovations and maintenance on the property, and an upfront plan for how bills will be paid will minimize this discord.
Another recommendation is to formulate an exit plan. It can prevent future disputes, even if the solution is for one party to leave the agreement.
A co-worker of St. Petersburg, Florida-based financial planner Brent Weiss inherited a vacation home with his three siblings, for example. After the first year of co-ownership, two siblings wanted to sell the property, and the other two wanted to keep it and rent it out part time, which led to a legal fight.
“If clear expectations aren’t set early on, pressure can build and eventually blow the top off the partnership,” Weiss says.
Source: Wall Street Journal (07/24/23) Dagher, Veronica
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