The Different Ways to Own an Oregon Vacation Home

A vacation home does not have to be owned by one person—or even one household. Buyers may own the entire property, purchase it with relatives or friends, hold it through an LLC or trust, or buy a deeded fractional interest.

Timeshares and vacation clubs provide another way to enjoy vacation properties, but they are not necessarily the same as owning a percentage of one specific home.

I know this firsthand. My Oregon LLC owns an undivided 20% interest in a specific cabin, while another owner holds the remaining 80%. We hold title as tenants in common.

Our LLC has its own operating agreement, and we also have a separate agreement governing the cabin. Those documents serve different purposes—an important distinction for anyone considering shared ownership.

With whole ownership, one person or household owns and controls the property. That owner is also responsible for the full purchase price, property taxes, insurance, maintenance and management.

Whole ownership generally provides the greatest level of control, but it also comes with the greatest financial and operational responsibility.

Siblings, cousins, parents, adult children, friends or multiple households may purchase a vacation property together. Ownership percentages can be equal or unequal, depending on each person’s contribution and the terms of the agreement.

Shared ownership can reduce the cost for each household while creating a place everyone can enjoy. However, expectations regarding property use, expenses, repairs, rentals and future sales should be documented before problems arise.

With tenancy in common, each owner holds a separate, undivided interest in the entire property. The ownership percentages do not have to be equal.

For example, a person with a 20% interest does not own one bedroom or one-fifth of the land. That person owns a 20% interest in the entire property.

Rights to use specific rooms, spaces or weeks generally come from a separate co-ownership agreement rather than the deed itself.

A limited liability company may own all or part of a vacation property. The LLC’s operating agreement typically addresses company membership, management responsibilities, voting rights and internal decision-making.

If the LLC owns the property with another person or entity, the owners may still need a separate property-specific agreement. The LLC operating agreement governs the company, while the co-ownership agreement governs how the property is used and managed.

A trust may hold a vacation property as part of an estate-planning or succession strategy. This structure may make it easier to address continuity of ownership and the transfer of interests after an owner’s death.

However, the trust must be coordinated with the deed, financing, insurance coverage and any shared-ownership agreement.

Some Oregon resort properties sell deeded fractional interests, such as one-tenth or one-thirteenth shares. Owners receive a limited amount of scheduled use and share expenses such as maintenance, management and property improvements.

These arrangements may have highly structured reservation, exchange and management rules. As a result, resort fractional ownership can operate very differently from a private arrangement among relatives or friends.

Fixed-week timeshares, deeded timeshare estates and points-based vacation clubs are not identical products.

A fixed-week timeshare may provide the right to use a property during the same week each year. Other programs use points or credits that allow members to reserve accommodations throughout a larger network.

WorldMark-style credits, for example, generally provide reservation access within a vacation network rather than direct ownership of a stated percentage of one identifiable home.

Before choosing an ownership structure, buyers should ask:

• What names or entities will appear on the deed?
• What percentage will each owner hold?
• Who controls the use calendar?
• Can an owner rent out their allotted time?
• How are routine expenses divided?
• How are major repairs and improvements approved?
• Can an owner sell or transfer an interest independently?
• Do the other owners have a right of first refusal?
• What happens after an owner’s death, divorce or bankruptcy?
• What happens if an owner misses a payment?
• Who owns the furniture, appliances and other personal property?
• Who is responsible for managing and maintaining the home?
• Are there HOA, resort or short-term-rental restrictions?

The best ownership structure depends on the buyers, the property and everyone’s long-term goals.

Fractional or shared ownership can provide many of the benefits of having an Oregon vacation home at a fraction of the total cost. However, the paperwork matters just as much as the property. Clear agreements can help protect the investment, define expectations and preserve relationships among the owners.

Are you thinking about purchasing a vacation home in Sunriver, Central Oregon or along the Oregon Coast?

I can help you evaluate the real estate, understand the practical questions surrounding shared ownership and identify the issues you may want to discuss with your lender, CPA and Oregon attorney.

Tanya Peterson, REALTOR®
Principal Real Estate Broker
TanyaPeterson.Realtor

Educational disclaimer: This article provides general real estate information and is not legal, tax or financial advice. Before purchasing a vacation property, have qualified Oregon professionals review the deed, financing, LLC documents, co-ownership agreement, insurance coverage and estate plan.