What type of documentation is needed for a vacation fractional ownership arrangement?
Every fractional ownership group needs a document or group of documents detailing their rights (especially usage/rental, alteration, financing and resale) and obligations (especially cost allocation, dues structure, repair/replacement, and rules). Each document must be prepared in view of the fact that it will only be used if the owners disagree, and will only be useful if it can resolve the disagreement (more on this later). Fractional ownership documents fall into two general categories: (i) those that are recorded in the chain of title to the co-owned property and thereby become binding on each subsequent owner without that owner’s signature, and (ii) those that are unrecorded and bind only those that sign them. The principle advantages of recorded documents, often called “Declarations” or “CC&Rs” (which stands for “Covenants, Conditions and Restrictions”), are that they reduce the risks of co-ownership (particularly the risk that there will be a co-owner that is not bound by the do
