Types of Land Ownership
(Page 4 of 9)
November/December 1974
By Les Scher
Arrangements must be made in writing at the time the association is formed as to how the funds from a future sale of the property will be disbursed. Each state has its own rules regarding the formation of an unincorporated nonprofit association, and you can get all the necessary information from your Secretary of State or Commissioner of Corporations. Forming such an association is usually easy and you may not require the services of an attorney. Associations are easier to form because the regulations for corporations are avoided.
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A MODEL OWNERS' AGREEMENT
If you are going to buy land with other people, you should get together to discuss and write out in detail the terms of the coownership before making your purchase. The entire group should understand as completely as possible the intentions and desires of each person. The best of friends one year can become bitter enemies the following year over conflicts involving such things as mate switching, being a vegetarian versus being a meat eater, whether to hunt or not, nudity versus modesty, religious fervor versus atheism, or basic personality clashes. The best-intentioned people cannot possibly predict what will happen to them when they become coowners of land, with all the responsibilities that entails, particularly if they are living in the country for the first time.
Often people who have never lived together in the city think they will automatically be able to commune together in the country. Actually, life in the country is more difficult because you must rely to a much greater extent on yourselves, not only for the basic necessities of survival, such as providing water, heat, shelter, but also for more subtle psychological reinforcements. The distractions of the city, which help relieve the pressures of living and working together with the same people day after day, are gone, and individual levels of awareness and personal conflicts are, therefore, emphasized. Although you cannot prevent problems from arising, you can eliminate basic misunderstandings and decide how to deal with potential future problems in an Owners' Agreement.
Each buyer signs the agreement, which should state in writing all the details of the purchase, including such items as each person's rights and obligations regarding the property and its use, the construction of improvements, future resale of the property, financing, decision-making, the sale of one person's interest, individual personal liability, and what happens in the event of a death, divorce, separation, or insolvency.
All financial aspects of the purchase should be specified. Some people might want to live on the land year-round while others might only want to use the property as a vacation home. Are you all going to want to pay an equal share? Each person should understand what his financial obligations will entail, including mortgage payments and maintenance costs, and must be willing and able to meet them.
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