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WHAT IS A FRACTIONAL OWNERSHIP AGREEMENT?
A Fractional Ownership Agreement is simply a written statement describing the terms under which your boat or aircraft will be purchased and used. The agreement states what the responsibilities and privileges of the various co-owners will be. Whether it’s a time-share type agreement for a boat or a list of times when a group of co-owners have the right to use a crop-dusting aircraft, these agreements are written so each fractional owner will be clear what they can and cannot do.
HOW MANY PEOPLE CAN BE A PART OF A FRACTIONAL OWNERSHIP AGREEMENT?
As many as agree to do so. Co-Ownership of a boat or aeroplane can include multiple parties. It’s common for groups of families or small business to agree to share rights to these properties, and divide the share of costs or expenses appropriately. Of course, there will be practical limitations to any use, but as long as everyone agrees to the terms, the fractional ownership agreement can include as many people as you wish.
WHAT ABOUT REPAIRS AND MAINTENANCE?
The co-owners can decide amongst themselves who is responsible for repairs and maintenance. Whether one person supervises all required maintenance and submits a bill to the rest, or if each co-owner agrees to take turns, however the parties wish to allocate responsibility to any area of the ownership details is up to them.
WHAT DO I NEED TO INCLUDE IN MY FRACTIONAL OWNERSHIP AGREEMENT?
Most often, Fractional Ownership Agreements will include conditions that cover all contingencies. The method of funding, cost allocation, transfer of ownership interest and terms of use are all needed to make the agreement complete. These documents should be clear and concise, yet expansive enough to include all information required to make it clear to all parties involved what their responsibilities and privileges are.
The choice to enter into a Fractional Ownership Agreement for a boat, aircraft or other expensive item is a common decision many people make when they wish to purchase these kinds of properties. The most important function of these documents is to make it clear to each owner or potential co-owner what they can and cannot do with their share of the property. A well drafted Fractional Ownership Agreement will allow for everyone to enjoy their new purchase, while a poorly drafter document, or even worse, no agreement at all, will lead to endless problems.
Fractional Ownership of a Yacht Agreement More Information Click Here
