Family camps in Maine: Why you should plan for the future

The family camp is an important piece of many Maine families.  However, the family camp experience is not limited to just campfires, swimming and relaxing.  There are a wide variety of legal issues that can come with owning a piece of real estate with others.  Two major issues will almost be guaranteed to come up at one time or another.  First, who is going to be responsible for the burdens of ownership?  Second, how are the benefits of owning a family camp going to be divided?  Often these issues need to be considered while hoping to follow the wishes of the past generation that hoped to keep the property in the family for years to come.

When it comes to the burdens of camp ownership, it's generally the same disputes that come up. When it is time to maintain the property, who is going to step up to put in the time and money?  What if a co-owner is not paying their fare share of expenses?   Who has the decision making authority to make major alterations to the property?  

Alternatively, the benefits will often boil down to the division of time spent at the property. What if a co-owner does not believe that they are getting their fair share of time at the property?  One thing that people often don't realize if that with simple joint ownership, each owner (co-tenant) has a right to use the property at any time.  However, when the piece of property is a small camp, that is clearly not going to work.  This is especially true as the years go on and families grow and eventually the property is divided among more and more co-owners. 

A major concern that comes with all these issues is one unsatisfied family member will be able bring what is called a Partition Action.  This is a lawsuit that can often result in a court ordering the property sold.  If the remaining family members do not have the money to buy out the disgruntled co-owner, this can mean the camp can be sold to an outsider.  

While joint ownership of real estate does present problems,  these problems can be minimized with proper planning.   In the coming weeks I will discuss one potential solution to this problem,  transferring the property to a family owned Limited Liability Company.