Common Ownership Issues in Family Cottages – Part I: Management

Believe it or not, co-owning family cottages can create issues between the common owners. Seriously! These “issues” (which can sometimes decimate familial relationships) are typically concentrated into four areas: management issues, payment of expenses, usage, and the transfer of ownership. But fear not, with sufficient planning these issues can be managed (see what I did there?) or possibly even avoided altogether.

Initially, most family cottages are set up by an individual or married couple who then manage the cottage themselves. Because management in this instance is centralized, it is generally carried out informally, yet efficiently. Decisions regarding improvements, maintenance, and more are decided free from bureaucratic incompetence! But, when ownership of the family cottage is transferred to multiple owners (typically multiple children), management becomes more . . . complicated.

Siblings may disagree (a polite way of saying bicker and fight) about maintenance, improvements, service providers, and more. What if the siblings can’t agree on whether to build a deck? Or what color to paint the living room? Solving these types of issues requires designated leadership to protect all parties involved and preserve relationships. As such, implementing a mutually agreed management structure and cottage plan is the way to go. Siblings could create and appoint members to committees that vote on certain matters. But let’s be honest, that sounds boring and inefficient. Ideally, management will be more concentrated whereby a single person will manage the cottage. All parties involved can establish a set of rules to provide consistency in management no matter who the manager may be at any given time (this also sounds boring, but it’s necessary).

What’s the bottom line? If your family cottage does not have a plan or written set of rules – get one. And consider centralizing management to the extent possible. Consistency and efficiency will make everyone happy!

If you have questions regarding managing your family cottage, email me at jwheeler@hilgerhammond.com or call me at 616.458.3600. And be on the lookout for Part II: Payment of Expenses.