If you’ve got a tight-knit extended family, you either already have – or one day plan to own – a vacation spot that everyone can come and enjoy at their leisure. It may even be the perfect spot for everyone to gather for the holidays, welcoming more and more people as kids grow up and start families of their own.
But when things go south, that shared vacation home can also become a battleground.
Regardless of the drama a family vacation home can stir up, many buyers are willing to take the chance for a little piece of paradise – whether it’s a seaside spot, mountain retreat or lakeside cottage.
In 2016, 12 percent of homebuyers purchased vacation homes, according to the National Association of Realtors’ 2017 Investment and Vacation Home Buyer’s Survey. Vacation home purchases did drop 4 percent in 2016 from the year prior, NAR reports, but the number of buyers taking on a vacation home is still significant.
Of those purchasing vacation homes, 42 percent made the purchase as a personal or family retreat, as opposed to its use in the future as a retirement home or simply because it was a good deal.
To keep those 42 percent of vacation home buyers from inciting family infighting, it’s important to approach the property’s ownership with an eye toward an equal playing field for all relatives involved.
David S. Fry, an attorney based in Rockford, Michigan, specializing in cottage succession plans and author of “Saving the Family Cottage: A Guide to Succession Planning for Your Cottage, Cabin, Camp or Vacation Home,” says he gives his clients three basic rules for managing a family vacation home: "The first rule is: You’ve got to compromise; the second rule is: You have to compromise; and the third rule is: You guessed it, you’ve got to compromise.”
“Because it is impossible for a single piece of property to be used and enjoyed by multiple owners if they are not sensitive to the needs and desires of each other,” Fry adds.
Here are four ways to encourage peace among family members in a shared vacation home.
Be fair from the beginning. If you’re the elder of the family and the original owner of the vacation home, a plan for equal ownership among your children from the beginning is the best course of action. Putting the vacation home in one child’s name, for example, likely won’t lead to a lasting, communal enjoyment of the getaway.
Working out the nitty-gritty of your estate isn’t fun and may feel morbid, but leaving complicated details like how to leave your vacation home to your heirs makes it far less likely the property will be enjoyed in the way you hoped. The best course of action is to establish the system yourself.
“It is by far easier, less complicated, less time-consuming and less expensive if I work with the people who are looking at passing it down,” Fry says.
Create a separate entity. Even for parents’ own management of the property before passing it down, consider putting the property’s ownership under a limited liability company, or LLC, to make shared ownership easier down the line.
An LLC also simplifies passing on the responsibility of managing the vacation home, and it doesn’t necessarily complicate the purchase process if you use an LLC to buy the property originally, says Chip Craig, Realtor and owner of GreyBeard Realty in Asheville, North Carolina.
One potential spot for complication is finding financing if you're planning to purchase as a group from the start. But that’s not common for shared vacation homes, Craig says, adding that, “It tends to be more cash buyers.”
Share the responsibility. With an LLC made and multiple owners established, written guidelines should determine how responsibilities such as yardwork, scheduling and paying for repairs or hiring a cleaning service are broken down and how decisions get made as they pertain to the vacation home. An equal vote for every owner is often the best way to go when it comes to making major decisions.
“We typically have just a majority rule that will prevent one of the siblings from blocking what the majority of the siblings decide to do,” Fry says.
For the smaller decisions and general care of the property, including hiring a cleaning service and paying utilities, Fry recommends a formal management committee, comprised of one representative from each branch of the extended family to keep fairness for all parties in mind.
As time passes and new generations come of age, it makes sense for more family members to have a stake in the ownership, as well as a fair share of the responsibilities. However, as the number of owners grows, Fry recommends keeping the management committee smaller to avoid a long, drawn-out process for every minor decision.
“There may be 10 or more owners, which is not a very efficient way of managing the property where each owner has a say in each decision that comes along,” Fry says.
How to figure out if you're ready to take the plunge, and what you should do first.
Establish a system for everything. The best way to avoid a blowup is to leave nothing to chance – especially when it comes to planning out who will have access to the cottage for which weeks or weekends throughout the year.
This includes setting basic guidelines that may seem unnecessary at first, but could be important down the line. For example, Fry recommends a written rule keeping any partial owner from moving into the property full time.
[Read: 5 Tax Tips for Buying a Second Home.]
Online services like Family Vacation Home, The Vacation Calendar and SharedKey Inc. offer user-friendly platforms for family members to – in some cases with varying levels of power – change the calendar, request a blocked weekend for use or even share photos and information from a recent stay.
Family Vacation Home was originally created by Barry Beal purely for personal use, as his large extended family of 82 shares a vacation spot purchased by his grandfather. The service, which is currently free to use, provides a common place to post the house rules and updated phone numbers for maintenance and takeout, plus assign an amount of time throughout the year a family member can reserve the house. "That's the hardest thing – who gets to use it when – so here's a transparent calendar for them to use and implement," he says.
Every family dynamic may benefit from a different system, but it’s best to explore your options and establish a clear-cut set of rules and have them in writing for the vacation home – and posting them in a shared space online or at the house helps ensure everyone remembers the rules, Beal notes. As much as we all may be getting along now, no family is immune to spats and grudges. Best not to let the family getaway become collateral damage.
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at firstname.lastname@example.org.