- Length:21 pages (5000 words)
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About this document
This fractional ownership agreement covers any situation where parties share ownership and use of a house, flat or other property for holiday occupation.
The agreements are designed to regulate occupation where only one owner occupies the whole of the property at any one time. However, there is nothing to prevent more than one owner occasionally using the property at the same time.
First, you should consider the most suitable structure for your sharing proposal. If you are looking at a commercial arrangement or one for more than ten people, then it would be better to hold the property in a limited company and buy and sell shares in it. Then ownership of the property itself never changes. No stamp duty is paid once it is bought as the right of occupation can be treated as a licence.
However, running a company does cost money, so between 2 and 10 owners it is a matter of preference as to whether you want the formality, expense and greater certainty of a company structure and shareholders agreement or the lower cost and comparative informality of an agreement like one of these.
These Net Lawman agreements specifically record the shares in which land (that is, property) is held. They also record shares which may be owned by someone who is not a registered owner. This is called a beneficial interest.
- Terms of beneficial interest - beneficial trusts provision;
- Price and payment for the Property;
- How many people allowed into occupation at one time and who they may be;
- Who and how will manage payment of expenses;
- Management of the property;
- Detailed management structure ordered by annual meetings of the owners, possibility of proxy voting, and more;
- Undertakings by the parties;
- Alternative exit strategies to allow for a share to be sold to a third party, after offering it to all other owners;
- Effect of termination;
- What if someone wants to sell his share or sell the property;
- Other legal provisions to protect your interest;
- Explanatory notes.