Cottage agreement checklist

What to keep in mind while creating an ownership contract

By Peter LillicoPeter Lillico

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List all tasks and responsibilities

  • Create a master list of all that’s involved in taking care of the cottage, no matter how small, obvious, or infrequent the task

Determine the division of labour

  • Find a fair way to allocate tasks: rotating? equally? in proportion to usage?
  • Who is responsible for opening and closing, or in charge of maintenance and repairs if, say, the outboard breaks or the fridge dies?
  • Who operates the bank account and organizes and pays the utilities, insurance, taxes, etc.?

Agree upon usage among the owners

  • Who gets to use the cottage—owners, family of owners, friends?
  • If friends use the cottage, does a co-owner have to be present?
  • Can the cottage be rented to others? How will revenue be shared?

Allocate usage among owners

  • Is it a free-for-all (anybody can come up at any time) or will there be periods of exclusive usage (you can have July if I can have August)?
  • Create a mechanism for fairly allocating exclusive usage and making changes if necessary
  • Determine any periods of shared usage (regatta weekend? the weekend of the cottage association annual meeting?)

Work out a mechanism for retaining ownership within the group

  • Will ownership automatically pass to children?
  • Do you want a prohibition of transfer to others, with rights of first refusal for the existing owner group?

Work out the financial realities

  • Plan for paying routine bills such as taxes, insurance, electricity
  • Plan for paying non-routine expenses, such as septic repairs, cottage improvements, a new outboard
  • Plan for deciding issues: unanimity, majority rules, or veto in certain circumstances
  • How is the annual budget calculated, and by whom?
  • How much is contributed monthly or annually to the bank account for cottage operations?
  • How will you handle an urgent need for a cash contribution for major emergency repairs?
  • If an owner wants a new dock, bunkie, or satellite dish, do the others have to agree? Unanimously or majority rules? Do the others have to contribute to the cost, even if they don’t want the “improvement”?

Don’t wait until it’s too late

The time to start a cottage agreement is before trouble arises. Agree upon realistic targets to accomplish tasks. Here’s an example:

  • No later than Labour Day, sit down and start discussion of the topics
  • By Thanksgiving, list the points of agreement and areas of concern
  • Before Christmas, meet with your lawyer to discuss and prepare a draft agreement
  • By Groundhog Day, have the draft distributed to all co-owners for comment and discussion, and revisions or additions
  • By April Fool’s Day, provide any updates to the lawyer to hammer into final shape
  • By Victoria Day, the agreement is signed and it’s time to focus on fun things, such as getting the water system up and running!

This article was originally published on November 23, 2010


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