Summer weather finally arrived in Rochester at the end of June. As the temperatures warm up, many of us in western New York are escaping to the lake to cool off and to enjoy the warmer weather. If you are among the lucky few to own a second home or a cottage, you may be looking forward to enjoying the hot weather by the lake with your family. However, if you share the property with siblings, cousins, and/or other relatives, the family vacation may instead become a source of tension and disharmony.
Many lake houses have been in families for generations. As the initial owners age and pass the property to the next generation, a myriad of legal problems may arise with the next generation taking ownership of the property. For example, if the family matriarch passes away and leaves the summer cottage to her four children, who then become responsible for paying the property taxes, mowing the grass, winterizing, renting out the property when the family isn’t using the property, etc. When one person or a couple owns the property, all of those obligations (and rights) fall to one person or couple. When four children (and their spouses) own the property, the answer can become murky. Informal agreements may be ignored, misremembered, or altered on a whim due to (perceived) changes in circumstances. The family cottage, once an unifying source of fun and enjoyment for the family, can instead tear a family apart.
This is why we encourage our clients to memorialize the answers to these difficult questions in a legal document. That document may take the form of a co-ownership agreement (if the property is owned individually) or through an operating agreement (if the property is owned by an LLC for liability protection). In either case, the document should address a number of topics including, but not limited to, use schedule (who can use the cottage and when), maintenance responsibilities (routine upkeep, repairs, and who pays for what), cost-sharing (property taxes, utilities, insurance, improvements), decision-making process (how major decisions will be made—by consensus, unanimity, etc.), rules and conduct (e.g., guest policies, pet rules, cleaning expectations), and succession rights (how and to whom does ownership transfer).
If you own a lake house or cottage and want to ensure success for your children and succeeding generations, please reach out to us. We would be happy to work with you to tailor such an agreement to your unique circumstances.
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The content has been prepared for informational purposes only; it should not be construed as legal advice, does not create or constitute an attorney-client relationship, and readers should not act upon it without seeking professional counsel.