Cottage-Law.com Blog

How We Hold Title to Real Estate Ownership

There are two ways to hold title to real estate:

• directly, or
• indirectly

Direct Ownership
Real Estate Law governs the rights and duties of “direct owners”. The granting of these rights and how real estate laws impose duties on direct owners often surprise cottage owners. It’s real estate law surprises which put the family cottage at risk. Real estate laws of direct ownership do not promote keeping the cottage in the family for multiple generations, and the threat of partition and turmoil always exist.

Indirect Ownership
Entity Law, which are Laws of Trusts, Partnerships, Corporations, and Limited Liability Companies, govern the rights and duties of “indirect owners”. Entity Law is extremely flexible and accommodates the complex realities of commerce.

A Cottage Succession Plan relies on indirect ownership and addresses inherent cottage sharing problems and allows you to manage your cottage like a business. A flexible Operating Agreement will determine everything about your cottage.

A Limited Liability Company (LLC) will change the way your family owns an interest in the family cottage. Instead of a “direct ownership” in the cottage property real estate, each family member becomes an “indirect owner” of membership units in your LLC.