How to Share the Big Stuff

Some of the most valuable assets in private ownership such as holiday homes, second (or third or fourth) cars, boats, motorhomes and horses are also unfortunately often an insane waste of resources. Many owners have great difficulty using them often enough to keep them in good condition. They finally sell them because the time, cost and hassle of maintaining them are greater than the joy of owning them. But if you love sailing, riding, flying etc, nothing beats the pleasure of owning your own boat, horse or aircraft. However it’s just as much fun if you share it with a few people, in fact it’s usually more fun.

I’ve learnt many things over the five years of running yours2share, but it still surprises me that the list of items for discussion when a sharing arrangement is created varies little with the asset: it could be a house or a horse. The potential partners in a private syndicate need to discuss and agree every aspect at the beginning and whatever they agree should be written into the contract. This discussion and negotiation is a critical aspect of the sharing process. The potential partners learn whether than can discuss and agree issues with each other, whether they are suitably like-minded and whether they have compatible requirements. If they are unhappy about any of these three factors, they should politely make their excuses and leave. No-one has to share these non-essential items.

Taking shared ownership of horse and house as the example, these issues include:

  • Who owns what? Is it a 50/50 split? Or four equal quarter shares? Horses for competition are often owned by an investor and a trainer/rider with the trainer having only (say) a 20% share. Is the asset owned via a company?
  • How to end the arrangement (exit strategy). For both horses (competitive) and houses, a common answer is to agree a date in the future when it will be sold. If the owners arrive at that date and all want to continue, they simply amend the contract to a future date. This also gives everyone a clear idea of when they can withdraw their equity. There are several other related issues to be agreed such as valuation, inheritance and forced sales.
  • Meetings and management: the more owners, the more important this is. It can be relatively flexible up to four or five owners, but it’s good to agree the date of an annual meeting and the items that will always be on the agenda. With many owners, agreeing the management process at the ourset is essential and it is worth considering employing someone to manage the sharing arrangement.
  • The costs and how they are divided: this could be according to the ownership split but there are often other factors.
  • What happens if one sharer damages the house or injures the horse? Work out who pays for what in various scenarios bearing in mind the insurance requirements, policy and costs.
  • Are there any qualifications that the sharer must have? How do you prove that they are a competent rider, pilot, skipper, driver? Property is one of few major asset types that doesn’t generally require competency to be proved. However if the property requires major renovation and the partners intend to do this themselves, it would be wise to ensure that everyone has the requisite skills, equal willingness to do it, and works at the same quality level.
  • Who can use it? For a house this could be just the sharer, their immediate family, friends, acquaintances, strangers, will it be rented out? For competition horses, there may be several trainers and jockeys/riders. For leisure/hacking horses, it is usually only the sharers.
  • How are you going to agree the fittings and fixtures? If you have to furnish a house, you need to have similar taste, and decide how to you are going to choose every item. Taste isn’t such an issue for horses, but the owners may decide to buy a horse box for transporting to competition.
  • Handover: what has to be done at the beginning and end of a sharers period of use and what is done by others. For houses it is often wise to have a cleaner/housekeeper come in between sharers. For horses, particularly leisure use, picking up poo and grooming are often tasks done by each sharer, but can be provided by the stable yard.

These are just a taste of the main sharing issues to be discussed: you can find a fuller version here.

I know that some people who are struggling to live on low incomes may consider sharing holiday homes or motor yachts a bit frivolous. But I think it is worth encouraging everyone at all levels of society to share more.

  • The more middle income families share things, the more mainstream and accepted sharing becomes.
  • People aspire to enjoy and own these “toys”: sharing is an enjoyable and responsible way of achieving this.
  • As more and more people share, the environmental and social benefits are substantial. The impact of fewer second homes and fewer boats has some major advantages. In the UK, where land is limited, the high number of second home owners, and thus the high cost of housing in some areas, has caused real friction with people who want to live there permanently. Worldwide there is a shortage of marina space, and yet building new marinas is often very damaging to the marine environment.
  • Sharing encourages owners to buy better quality items, which last longer and are often more pleasurable to use.

But most of all, we all benefit if people come together to create communities around these assets. Every time I speak to people in well run private syndicates I’m told that their fellow owners are a wonderful group of people: it's the community aspect and shared responsibility that people value the most.

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