The issues relating to the use of the asset that need to be covered in a Trust Deed or sharing agreement?
This is the second of four sections that cover all aspects of sharing
- Part 1 – Ownership, exit strategy and costs
- Part 2 – Use of the asset
- Part 3 – Fittings, handover and condition reports
- Part 4 – Meetings and disputes
There are an infinite variety of ways of arranging when sharers use of the asset. “How often do you want to use the asset” is a key criterion for compatibility.
Here are some possible scenarios:
- If the asset is mainly for weekend use such as a property, cars or boats, then you may choose alternate weeks, but have the handover midweek, on a Wednesday (say) so that the sharers can use the asset for long weekends.
- If the asset is a long distance from the sharers and so used mainly for longer periods, then for two to four sharers, it may be best to slice the periods into months, but in this case, choose a mid month handover, the 8-11th of the month is sometimes preferred. This means that your changeover will not hit the middle of the Christmas period.
- Are the holiday periods important to any or all of the sharers? Does everyone want to use the asset at Christmas and/or any other holidays. Again there are many possibilities. If you are sharing a property on a rotating month basis, then you may wish to have a “double” month each year, so that Christmas period rotates too.
- If the asset is used on an ad-hoc basis, like jewellery, then the agreement may simply be that the first sharer to book a date gets to use the asset on that date.
- Another way of determining the dates when the asset is used is to get together periodically, maybe annually, to agree the dates for the next period. The next period may start some time after the meeting, for example, you meet in September to agree the dates for the following year. There are then several ways of establishing the dates. For example, if four sharers each have the right to twelve weeks per year, or four weeks in each of the three seasons, high, medium and low, then you can each work out your preferred weeks. If you can’t all have exactly what you want without easy compromise, then draw names out of a hat for each period. For the high season, the first sharer out of the hat gets their preferred time. The next name gets their preferred time of the remaining dates and so on.
Even if you have a complex set of rules and dates for all sharers to use the asset, you may also want to allow sharers to vary the dates. The simplest mechanism is for the sharer wanting to use the asset outside their allocated times, to contact the sharer who is allocated that time and ask if they are using it. If the sharer with the right to use the asset is happy, they allow the other sharer to use the asset. These changes in dates should always be confirmed in writing (email is fine).
If there are lots of sharers, or the date changing gets complex, consider using a system like ShareZen which is designed to help you manage boat shares and all types of private syndicates. It would probably work well for booking any shared asset, unless you want complex rules to be enforced. Or you could employ a third party to manage the process.
Can the asset be used by anyone other that the sharers (and their families)?
This is usually an important issue for any asset and will also affect your insurance needs. The options for who can use the asset are:
- Sharer only (such as cars or aircraft if they are at the controls, jewellery)
- Sharer and partner (such as cars, mobile homes)
- Sharer and family/friends (such as property, mobile homes, boats)
- Immediate family where already known to all other sharers but sharer absent (may be acceptable for property, mobile homes, boats)
- Family and friends but sharer absent (may be acceptable for property, mobile homes, boats)
- Let out to unknown others (definitely something that all sharers must agree to)
Areas for the sole use of each sharer and common areas
Are any areas of asset that are designated for the specific use of each sharer? For example, for property and possibly boats, each sharer may have a room, wardrobe, drawer or shelf that is only for their use. There may also be a cupboard in the kitchen and/or a shelf in the freezer that is only for their use.
Are any areas of asset that are designated for supplies that are shared by sharers? Again, for property and possibly boats, there will be often be cupboards for cleaning materials that are shared and, some food stuff (such as herbs, spices, tea, coffee, sugar, are often best shared). Linen may be shared, or specific to each sharer, or a mixture of the two. Logs and coal are usually best shared.
You will need to agree how any shared supplies are restocked: cleaning material could be restocked by the cleaner, food supplies may simply be replaced when they are used up.
Are there any other rules of use?
For example, the sharer may not smoke, but is anyone allowed to smoke in the asset? (such as property, mobile homes, boats and cars). Similarly, the sharer may have no children, but are any children allowed in the asset? Or pets?
What are sharers to do if they break or damage something? What if the broken item is hard or impossible to replace? Is this paid for out of general maintenance or by the individual sharers?
How are all the sharers going to communicate with each other? By email copied to all only or by telephone too?