Shared purchase agreement: holiday house between three or more owners
A shared property purchase agreement suitable where
generally only one owner occupies the whole of the
property at any one time. Most suited where the owners use
the property for holidays and weekend breaks
About this document
This fractional ownership agreement covers any situation where three people or sets of people 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.
We offer two versions here. One is for a situation where only two parties share - two individuals or two families, or whatever. The other is designed for more than two parties.
In English (and other UK) law, the registration of ownership does not record the shares in which land (that is, property) is held. So if you own 60% and I own 40% we have to record that in some other document. If we do not do so, Athe Law@ will assume we own in the shares in which we contributed to the purchase price. This may or may not be the same thing. These Net Lawman agreements specifically record the shares. They also record shares which may be owned by someone who is not a registered owner. This is called a beneficial interest.
Application
and features
Suitable for ownership and use of a house, flat or other property for holiday occupation
Not suitable for a business letting, a lease of more than three months or a residential letting
An all in one legal agreement - includes the declaration of trust (trust deed) as well as details about the sharing arrangement
Three or more individuals or three or more sets of people (two couples, two families) purchase together
Comprehensive yet flexible – you edit out what doesn’t apply to you
Complete with notes in plain English.
Contents
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.
Word
Count (approximate):
Document: 3800
words
Explanatory notes:
1800
words
Draftsman
This document is drawn and maintained by Net Lawman. It is real law in plain English.
