It is our firm belief that the success of this project relies on a partnership based on a carefully thought out, comprehensive fractional ownership agreement that clearly defines the terms of ownership, rights of use, responsibilities for costs, rights to investment returns, and exit strategies for each owner. Following is a summary of some of the key elements of this agreement.
Ownership Structure
The Otter Place project is a true fractional ownership arrangement where each investor will own equal title to an LLC organization which will own the entirety of the property including the lot, building, common-use furnishings, dock and a few specific common-use non-motorized recreational items.
Transfer of Shares
Each owner will have rights to sell, gift, will, etc. their share at their individual discretion, subject to first right of refusal among the remaining owners.
Contributions of Funds to Purchase
Each owner will contribute an equal share of the purchase price for land, land improvements, house and common-use furnishings and itemized marketing costs. This is a private party offer with no obligations to any real estate developer or management company. Any fees for a real estate buyers agent shall be paid by the buyer.
Management of Operating Expenses
Responsibility for maintenance and upkeep of the property will be managed collectively by the owners on a revolving basis. Local service providers will be utilized for routine tasks such as cleaning, dock installation and removal, snow removal, etc. as well as for repairs and maintenance as needed. Assessment of operating costs will be equally divided among owners for fixed costs including, the aforementioned services as well as items such as insurance and property taxes. Variable costs associated with use of the property (e.g. cleaning, gas and electricity) will be pro-rated to each owner commensurate with their actual use of the property.
Rights to Use of Property
Each owner will have rights to use 13 weeks of each year, divided into weekly increments beginning and ending on the Friday of each week. The owner assigned a given week will have full access to the entire property and community furnishings and equipment except for the private, locked, basement and pantry storage of the other owners. General staple consumables such as flour, sugar, condiments, spices, etc. shall be maintained and restocked as community property. Owners will select their preferred weeks on an annual basis, using a revolving "draft" style selection process. An online calendar will be maintained and owners will have opportunity to trade weeks with other owners provided they document them on the calendar.
This property will be exclusively for the use of its owners and their friends and family. Zoning regulations as well as the ownership agreement prohibits the property from being rented out on a daily or weekly basis.
Other considerations include: No smoking inside the home, children and pets are allowed, owners and their guests are expected to use the property in a responsible fashion and obey all applicable local laws and regulations. Condition reports will be maintained between stays with any damage beyond normal "wear and tear" to be remedied by the responsible owner.
Power boats, snowmobiles, ATV's etc. are not part of the community property. While owners are free to bring and use these types of vehicles, storage will not be available for them during the time an owner does not have occupancy of the property. Zoning laws allow up to three boat lifts during the summer season. Depending on the needs of the owners, boat lifts may need to be shared.
Making Decisions and Resolving Disputes
It is our vision that we would be able to make decisions regarding the maintenance and use of the property during the course of discussion at the annual meeting and/or mutual agreement when unexpected issues arise. In those cases where owners are not able to come to unanimous consensus, the procedures for resolving disagreement will be clearly defined in the ownership agreement. In the event a dispute is not resolved through application of the terms of the ownership agreement, it will be submitted to mediation or, if that doesn't work, binding arbitration.
The Bottom Line...
We believe this is a truly compelling opportunity to take advantage of fractional ownership to afford a truly luxurious retreat in the beauty of the northwoods of Wisconsin for a fraction of the price of sole ownership. If you are like us, you will want to do your research and validate the advantages as well as uncovering some of the pitfalls to watch out for in a fractional ownership arrangement. We invite you to go online and check it out for yourself. To help you get started, please check out the links posted on the sidebar of this page. We encourage you to contact us for more detailed information using the email link at the top of this page.
