Fractional Ownership Trade Agreement
Tenative proposal for a "Contract" or some kind of "Terms of Operation" for a business, organization, or even applied between just two property owners:
DEFINITIONS:
- The term 'Physical Sources' denotes Capital or Land such as living organisms, tools, real estate.
- The term 'Object' denotes a tangible or ephemeral product, output or purpose of a Source such as the harvest from a farm, a ride in a car, the shade of a tree.
- Ther term 'Type' denotes the class or variety of some thing with infinite potential such as the genetics of an organism, a computer program, video or audio data, the design of a tool.
- The term 'Instance' denotes a single copy of any Type of thing such as a living organism, a CD containing a computer program or video/audio data, a physical tool.
- The term 'Recipient' denotes an entity which receives a good or service.
TERMS
As owner, you may use this Object Instance for any purpose. If you trade, sell, give, lease, rent or otherwise make this Object available to a Receipient you must:
1. Accompany that Object Instance with a paper or digital copy of this agreement. 2. Invest the difference between selling price and production costs in more Physical Sources. 3. The investment made in #2 shall vest to the Recipient as fractional ownership after ??? (time or condition)?
Some resouces to determine how "Common Law" usually effects these arrangements:
http://en.wikipedia.org/wiki/Fractional_Ownership In business, fractional ownership is a percentage share of an expensive asset. Shares are sold to individual owners. A fractional owner enjoys priorities and privileges, such as reduced rates, priority access on holidays and income sharing. Typically, a company manages the asset on behalf of the owners, who pay monthly/annual fees for the management plus variable (e.g. per-hour, per-day) use fees. For rapidly-depreciating assets, the management company may sell the asset and distribute the proceeds back to the owners, who can then claim a capital loss and optionally purchase a fraction of a new asset.
http://1st-of-Pryor.com/co-ownership%20contract.htm This agreement is provided to our pilot friends at no cost and for no consideration. You are welcome to utilize it for whatever purpose you choose. Please modify this agreement to suit your particular situation. However, the First Pryority Bank of Pryor cannot and will not provide any assurance that the agreement is suitable for your situation and we will not provide any warranty or guaranty as to it accuracy, or legal validity. You are electing to use the agreement by assuming any risk as to its legal correctness, validity, or consequences.
http://AndySirkin.com Vacation home co-ownership (sometimes also known as fractional ownership)
http://en.wikipedia.org/wiki/Concurrent_estate A concurrent estate or co-tenancy is a concept in property law, particularly derived from the common law of real property, which describes the various ways in which property can be owned by more than one person at a given time. The parties who own property jointly are referred to as co-tenants or joint tenants. Most common-law jurisdictions recognize three kinds of concurrent estate: tenancy in common, joint tenancy with right of survivorship, and tenancy by the entirety. Many jurisdictions simply refer to a joint tenancy with right of survivorship as a joint tenancy, but a few U.S. States treat the phrase joint tenancy as synonymous with a tenancy in common.
Co-tenants, irrespective of the type of tenancy, share certain rights relative to each other and to the property, except to the extent they have modified these rights through an agreement among themselves:
1. Each tenant has an unrestricted right of access to the property. Where one co-tenant wrongfully excludes another from making use of the property, the excluded co-tenant can bring a cause of action for ouster,', and may receive the fair rental value of the property for the time that he was dispossessed. 2. Each tenant has a right to an accounting of profits made from the property. If the property generates income such as rent, each tenant is entitled to a pro-rata share of that income. 3. Each tenant has a right of contribution for the costs of owning the property. Co-tenants can be forced to contribute to the payment of expenses such as property taxes and mortgages on the entire property.
Co-tenants do not have any obligation to contribute to any costs of repairing or improving the property. If one co-tenant adds a feature that enhances the value of the property, that co-tenant has no right to demand that any others share the cost of adding that feature - even if other co-tenants reap greater profits from the property because of it. However, at partition, a co-tenant is entitled to recover the value added by his or her improvements of the property. Conversely, if the co-tenant's "improvements" decrease the value of the property, the co-tenant is responsible for those decreases as well.
Furthermore, each co-tenant can independently encumber the co-tenant's own share in the property by taking out a mortgage on that share (although this may effectively convert a joint tenancy to a tenancy in common, as described below); other co-tenants have no obligation to help pay a mortgage that only runs to another tenant's share of the property, and the mortgagee can only foreclose on that mortgagor's share. Bank loans secured by mortgages on individual shares of co-owned property is one of the most rapidly expanding areas in the mortgage lending industry.
Finally, co-tenants owe one another a duty of fair dealing. Because of this, any co-tenant who acquires a mortgage claim against the property must give his co-tenants a reasonable opportunity to purchase proportionate shares in that claim.
[edit] Tenancy in common
Tenancy in common is the default form of concurrent estate, in which each owner, referred to as a tenant in common, is regarded by the law as each owning separate and distinct shares which may differ in size. This form of ownership is common where the co-owners are not married or have contributed different amounts to the acquisition of the property. Also, if joint owners had attempted to use another form of joint ownership such as a joint tenancy with right of survivorship or a tenancy by the entirety, and the effort was for some reason invalid, the joint owners would then be tenants in common. If conclusive evidence is not available of the desire to create a tenancy with rights of survivorship or a tenancy by the entirety, courts will determine that a tenancy in common has in fact been created.
Tenants in common have no right of survivorship, meaning that if one owner dies, that owner's interest in the property will pass by inheritance to that owner's devisees or heirs, either by will, or by intestate succession.
[edit] Destruction of a tenancy in common
Where any party to a tenancy in common wishes to destroy the joint interest, he or she can do so through a partition of the property - a division of the land into distinctly owned plots if such division is legally permitted based upon zoning and other local land use restrictions or, where such division is not permitted, a forced sale of the property followed by a division of proceeds.
If the parties are unable to agree to a partition, any or all of them may seek the ruling of a court to determine how the land should be divided up, physically divide it between the joint owners (partition in kind), leaving each with ownership of a portion of the property representing their share. Courts may also order a partition by sale in which the property is sold and the proceeds are distributed to the owners. Where local law does not permit physical division, the court must order a partition by sale.
Each co-owner is entitled to partition as a matter of right, meaning that the court will order a partition at the request of any of the co-owners. The only exception to this general rule is where the co-owners have agreed, either expressly or impliedly, to waive the right of partition. The right may be waived either permanently, for a specific period of time, or under certain conditions.
