Many of you were extremely interested in my recent post concerning sisters who had reached an impasse regarding a property in Massachusetts which they had purchased together. They were not getting along, and had very different visions about the use of the vacation home they purchased 4 and 1/2 years ago.
It was bad enough the property had lost 25% of its value. Now, they were at odds about how the property should be utilized. My client, a hard-working executive, regarded the property as a family retreat, a place ot spend time with her husband and young child. The other owners wanted to extract as much rental income as possible during the "high-season" and were less concerned about using the property. Their financial situation was not nearly as comfortable as my client.
I told my client that her remedy was to "Partition" the property, sell it under Court supervision, and then split the net proceeds. This did not appeal to her. Selling in today's market made no sense. She has asked me to develop a Tenancy-in-Common Agreement for submission to her sister, as a middle ground. I have just finished same, and I wanted to tell you some of the suggested provisions:
1. No Capital Imporvements Without bother owners agreeing.
2. An Agreed Upon Usage Schedule for 2011, with an agreement to work in good faith to develop same on or before December 1 of each year.
3. A "buy-out" procedure which set up dates, notices and deadlines for one Party to purchase the other's interest.
4. A compulsory arbitration provision which would make the losing party pay ALL costs for arbitration.
I have no idea whether the other Party will accept this type of Agreement. I have tried to make it fair. I believe it is preferable to a Court supervised saled,which is what is currently available. I will let you know if calmer heads have prevailed
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