Tell me the nitty gritty of sharing ownership of a car/property/etc
May 26, 2017 8:12 AM   Subscribe

Do you, or have you ever, shared ownership of a large, valuable asset among a group of people? For example: co-owned a car with a friend; shared a vacation property between extended family or a group of friends; shared the cost of expensive equipment (for hobby, not business reasons) with acquaintances. I want to know how it went. Did it go bad, and if so, why? What do you think could have prevented the bad parts? Did it go well, and if so, what aspects were key to successful sharing?

I'm a member of a number of professionalized and well-managed "sharing economy" things (car share, tool library, co-op woodworking space). Those are great! But recently I've had an opportunity to join some less-official, friends-and-family sharing arrangements. And I have reservations.

When I've tried to get advice from friends about it, I either get "Everything will be fine! Just do it!" or "It will go horribly wrong! Stay away!" but none of my friends have actually done it. I want to hear from people with direct experience. If you've done it, would you do it again?
posted by 100kb to Grab Bag (14 answers total) 6 users marked this as a favorite
 
When I was married, my ex and I shared ownership of a weekend home with another couple. Most of the time, we alternated weekends. The three of them liked grass, flowers and other growing things. My time was too precious to me for that. I would have preferred whatever grew naturally, or rocks and sand. I was outvoted and had to waste a lot of time on their fucking plants.

Secondly, we had a child (toys etc.) and they didn't. Much time was wasted putting all our stuff away and taking it out again, so our stuff would be invisible when they were there.

Finally, while we had a proper buy-out procedure in our partnership agreement (you will have one too I hope), when it came time for us to sell (to them or a third party, whatever) the other couple fought us on whether the professional appraisal we obtained was realistic and they got us to reduce our price. Not something we should have had to negotiate.
posted by JimN2TAW at 8:29 AM on May 26, 2017 [2 favorites]


I have a friend group and we would often talk about these kinds of arrangements but they never came to fruition. For one, I think people just like to do whatever they want to do. See Jim's comment above - don't want to be beholden to someone else's plant standards! Secondly, I think people are mostly incredibly terrible talking about money in part because power and status and worth are equated with money in our culture. We literally hold people with money in higher regard on every level no matter what their actual actions are. So, when we talk about money, we generally get very uptight about it and it hampers these kinds of friendship relationships. And when it comes to disentangling from a shared monetary transaction, you will generally lose the friendship because people's thoughts about money are tightly bound to their sense of self-worth.

I think it takes a real dedication to communication and a frankness about how difficult money conversations are. There should also be a regular period of check-in that is strictly adhered toward where the agreements are checked in on and everyone's happiness with the arrangement is sorted and maybe a vote to continue on in the arrangement for a specific amount of time.
posted by amanda at 9:23 AM on May 26, 2017 [2 favorites]


A proper "pre-nup" spelling out startup procedures for the vacation season at the property.
Assignment of tasks.
Phone list, and what constitutes a necessary call.
Rotating responsibilities
At least two person, rotating bookkeeping.
Specifics as to the state of the property after use, arrive at common standards for cleanliness and appearance, and fund for outdoor maintenance if that is wanted
Closing specifics for the property for the off season, if it is a cabin that does not have winter access.
Clear schedule for use, and who may use the place, ( can it be an Air B&B?) for instance
Emergency contacts locally, and automatic responses to local water emergencies, or fire emergencies, until an owner can arrive. It is like an HOA.

Clear communications and brainstorming up front makes things much better than Monday morning quarterbacking. Knowing your partners and their personal habits, and talents, makes things move more smoothly if they are written into the plan for maintenance and shared use. You have to know the people really well, and you have to legislate among you that nothing can be persistent that prevents the enjoyment of the place, or the use for which it was invested in.
posted by Oyéah at 9:31 AM on May 26, 2017 [4 favorites]


You might want to look at how people in the general aviation community set up shared ownership of airplanes -- my father owned 50% of a plane in the 70s (he later bought out the other partner's share). There are a lot of small flying clubs where 2-5 people own chunks of a plane they could not otherwise afford. The downside for your purposes is that people are willing to spend on good legal advice and solid contracts for a 5 or 6 figure expense -- while some ideas might be useful to you for things that aren't that expensive, it may not be worth the lawyer time (which might explain why I see partnerships and other joint ownership less for lower-value assets?)
posted by Alterscape at 10:05 AM on May 26, 2017 [2 favorites]


I share ownership of a house with an ex. Not the same as a friend but, it is still one of the biggest mistakes of my life. After that experience, I pretty much fall on the "don't do this" side of things, or at the least, don't do this without really thinking through everything. Your friends who are all like, "just do it!!" ? They are not being good friends to you. Something like this should be thoroughly considered so that you can plan for all possible outcomes (or at least, that's how I am. Maybe your personality is different and you are okay with more random outcomes). I mean, something like property ownership involves a shit-ton of money. I'm not rich so I really try to be careful with financial planning.

The biggest problem is that as time goes on, one or more parties might change their life goals, or what they want to do with the property, etc. And then the other party(ies) are stuck beholden to someone elses whims. In my case, my life took me in a different direction than my ex, and I now live in a different state and I'm still stuck with this house because he lives there and we've had disagreements about how to handle it. I would love to buy my own house where I currently live, and the fact that I share ownership on a house with my ex is really holding me back. Even when I was with him and lived there, we disagreed over things like how the yard should be managed and by who, what repairs would be made and when and who was paying for them, etc.

The other thing with sharing ownership of property is that your credit is tied up with other people. In my case, it turned out my ex was not so trustworthy and would do things like, not pay the mortgage or bills on time. That affects my credit too! It was really aggravating, and forced me to basically take over all the financial management just to make sure I didn't get screwed.

Anyway, really think it through. Plan for the worst. Understand that you might lose friends if things go badly. Spell out everything, and communicate everything with your partners if you do this. Good luck.
posted by FireFountain at 2:12 PM on May 26, 2017 [2 favorites]


Best answer: I share ownership of a large (>500ac) rural property with 20 other people. We have a company structure, plus an additional incorporated association, and a couple of members who donate a generous amount of their time to the legal administration of these bodies. We all pay a monthly fee (>$50pm) for things like road maintenance and weed control.

It works because of: a) the two generous people; b) we all have a reasonably similar view on the purpose of our property, and our goals for it.

All that said, we have already gone to court with one member and can foresee potential future issues with a couple more.

Would I do it again? Yes. My financial investment is not worth as much as the social rewards I get from being part of this group.
posted by Thella at 3:03 PM on May 26, 2017 [2 favorites]


Don't do it with friends, or with an informal agreement.

I went in with 5 other people in the neighborhood and bought a 1.1 kilowatt demolition hammer. We drew up some rules (no taking it out of the neighborhood, no use by non-signatories or contractors, no lending, equally shared maintenance costs, no refunds if you move out). We were all neighborhood buddies.

One neighbor immediately wanted to take it to his remote mountain cabin for a few weeks in the summer. He shouldn't even have asked, right?

When the first (small) repair bill came, like 20 bucks apiece, Mountain Cabin neighbor wanted out because they had never used it. Drama and discussion preceded consensus, and since it was an unconsummated relationship, we all coughed up an equal share to buy him out.

People got protective of the jackhammer after that first repair, so there were meetings and discussions and a new clause added to the agreement, prohibiting the destruction of concrete over a particular thickness.

Two of the neighbors had a falling out about something else, so someone had to mediate between them when one had the jackhammer and the other wanted to use it because they couldn't talk to each other anymore.

One neighbor heard about the neighborhood jackhammer, and wanted in. Fine, we had an empty slot, so he bought in.

This same neighbor lent it to his contractors to use for 10 hours a day, several days in a row, on concrete on a weekend, and another neighbor heard it happening, and wanted out, because he hadn't used it yet and he figured it was "used up" (real quote). We bought him out, too.

Mountain Cabin neighbor wanted to borrow the jackhammer to do just a little work, after we bought him out. We were undramatic in our refusal. He shouldn't even have asked, right?

Some neighbors are bad with tools. Tools bits were lost or stolen, and never replaced. The jackhammer needs oil, like a chainsaw needs bar oil, to work right. Some neighbors didn't notice this, and would run it dry and wreck a particular part inside. More repair costs, billing and collection.

After the authorized service representative closed their office in the area, it was impossible to easily fix, and nobody wanted to pay the price of shipping in addition to service. I started fixing it for the cost of the (cheapish) parts since it's hard to charge for your labor when you have no credentials. My unpaid labor was increasingly utilized as the cost of misusing the tool went down.

When one neighbor moved out, still having never used it, we had to refuse him a refund. He shouldn't even have asked, right?

Thanks for listening.
posted by the Real Dan at 3:32 PM on May 26, 2017 [7 favorites]


Response by poster: Great answers so far everyone, thank you! Thella, can you give more details on HOW you figured out you "...all have a reasonably similar view on the purpose of our property, and our goals for it." How did you know what questions to ask? Did you have a professional facilitator? Was the lawyer who incorporated for you the one who did that part?

Also interested in hearing that from everyone else: what went into setting up? How formal were you? Or did you just formalize things as problems happened?
posted by 100kb at 4:53 PM on May 26, 2017


Anecdata: My brother and I get along pretty well, have owned a business together, and both have SLR cameras that accept the same kinds of lenses. There was a nanosecond where we talked about the theoretical idea of both buying in on a particular expensive lens and it was almost immediately followed by us both laughing and saying "nahhhhh" at the same time.

There can be exceptions, but commercial rental companies exist for a reason, and the problem that tends to come up as with the jackhammer story is that people do not tend to treat the co-op and the obligations thereof as a Real Thing. If any of those people had rented a jackhammer from a rental place, they would have likely followed the rules of said rental place. But because it's neighbors/friends the parties to this agreement tend to think they can flake, and a small, outnumbered segment of grownups in the group have to do extra work to deal with all the idiots.

I have not participated in (because not a pilot) the fractional aircraft ownership concept, but I believe those agreements work if and when the aircraft is effectively owned by a club, non-profit, or business to which the aircraft belongs, and the members sign a contract which rigidly spells out how it works. By comparison, there are car-sharing services such as zipcar.com, and it presumably works because people are wired to follow rules when it's perceived as a vendor/customer relationship (and because zipcar is presumed to have lawyers who won't take "yeah, I needed the car for that job interview so I knew you'd understand" as an answer.
posted by randomkeystrike at 8:19 PM on May 26, 2017 [1 favorite]


Best answer: I owned and lived on a rural property with 5 (originally) to 3 (finally) other people for 20 odd years. We all knew each other pretty well in the beginning, some of us were related and some in relationships together. Sounds like a recipe for disaster, I know, but we managed it somehow, even through divorces and ownership changes and a whole range of other tough stuff.

We got, often unsolicited, advice from many people, most of whom assured us it would end badly. Even through what ended up being some difficult stuff we maintained an overriding commitment to behaving decently toward each other. And we did. And that meant that we came out of it still respecting each other. I'm still, at a minimum, friendly with everyone, more than 15 years after we sold the place.

Having watched a lot of other people do this as well, I can say with some confidence that no legal structure or rule set will protect against people behaving badly. Bloody minded, selfish and self righteous fools mess things up no matter what the rules say. Avoiding poor behaviour becomes even more important when someone starts doing bad things too obviously. It's easy to be decent when everyone's nice and all that. I also think rules & regulations can be good for guidance too. They just don't help when people lack goodwill and decency. It seems that one can't legislate such things.

I entered into it as an idealistic twenty-something and now, as a divorced and somewhat less idealistic fifty-something I actually don't think I would do it again. That is primarily due to a major increase in risk aversion on my part though, so I don't think it's necessarily a good reason.

In a nutshell, I think the key to making this kind of thing work is to only do it with people you know will behave honourably and ethically when things get hard. And that is not easy to determine unless you've been with them through adversity already.

The elements that really worked in our favour were that we didn't overthink it - in fact possibly the opposite - and we didn't count everything down to the last shekel. Never assume malice when any other plausible explanation exists and always be good to each other. I know it sounds like hippy dreams but it actually got us through some insanely tough stuff.

Oh, and never collectively own anything with a small engine. That never ends well.
posted by mewsic at 10:53 PM on May 26, 2017 [2 favorites]


Liability is the biggest issue, especially with something like a motor vehicle. You don't want to be held liable for, say a drunk-driving accident and fatality caused by one of your co-owners.
posted by Thorzdad at 4:30 AM on May 27, 2017 [1 favorite]


We own a two flat with one of our friends. He has one unit and we have the other. It has been about 10 years and things are still going well. We had originally had the half thought of doing a coop sort of thing with a lot of friends but not everyone was ready to buy at that point so that didn't go through. In retrospect I'm glad it didn't. I don't think it would work. The guy we bought with was not my closest friend from that crew but we had deep agreement on the most fundamental issues (paying the bills on time, what homes are "for", expectations (or lack of) for privacy, etc.) and where we differed, we differed in complementary ways (for the most part). In some ways it is like getting married. You want to have agreement on the big issues and the ability to let lots of little things go completely. Things that I think have helped.


> The aforementioned agreement on things. We knew that friend for 10-15 years so we all were pretty informed of each other's character. Knowing everyone is going to act decently even in challenging situations (as Mewsic says above) is probably the biggest key.

> One of the things we agreed on was the need to NOT have this be an informal agreement. We hired a lawyer and drew up formal contract that spelled out everything. We picked a lawyer who specialized in family and property for LGBTQ folks as we figured she'd have the most knowledge in setting up family (or family-style) situations for people that protected everyone. We all carry life insurance to carry our share in case things go wrong. We also got insurance on the property itself and each carry our own "renters" insurance to cover the stuff. Having the formal preparation for "when things go wrong" helps settle the mind.

> We maintain a joint bank account that we pay a set amount into that covers the mortgage + taxes + insurance + extra (to cover the unexpected and common bills).

> It helps that we are relatively well off (of course that generally helps everything) and our personalities/job situations pair off where we are generally at home while he has a high-stress job that requires him to be gone a lot. We like doing house and home maintenance work (as well as anyone can. heh) and he contributes a bit extra to our general fund.

We've had some disagreements with priorities and people not contributing enough to the fund, of course. Things come up. But we've not had to invoke any of our partnership-disagreement/voting procedures as outlined by our contract, however. We talked them through and were able to come to agreement. We all hold our partnership more sacrosanct than the property. We all trust that we are keeping each other's interests in mind. We like each other but also have our own lives.
posted by Wink Ricketts at 6:51 AM on May 27, 2017


Best answer: Thella, can you give more details on HOW you figured out you "...all have a reasonably similar view on the purpose of our property, and our goals for it." How did you know what questions to ask? Did you have a professional facilitator? Was the lawyer who incorporated for you the one who did that part?

Most of us met up while activists for an environmental campaign. The property is a private extension of that campaign (habitat maintenance). Any new shareholders are aware of that purpose and the limitations imposed on their use of the land by that purpose. We didn't have a professional facilitator because we had internal facilitating skills from our activism. We had external legal advice on our legal structures and also legal expertise within the group.

It hasn't all been plain sailing as I mentioned in my earlier comment. Leaving the company is hard - a new shareholder must be approved before an old shareholder can sell their share. And we now have about one third of our members who would like to leave, but can't yet due to this rule. Some members live on the property and others like me use it as a weekender (we each have our own 'sites'). Neither is it a financial investment for the individual shareholders unless they make improvements to their site (i.e. a house). Any improvements made by a shareholder to their site can be realised by them if they sell their share.
posted by Thella at 1:57 PM on May 27, 2017


I read this book about it when I was thinking of sharing a car with a neighbor, and it was really helpful.

I share an electric lawnmower with another neighbor. It works well, but that's in part because neither of us are skint and we'd both rather just say "okay I'll pony up for a new blade" or whatever than bicker about it.
posted by metasarah at 8:51 AM on May 31, 2017


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