I have a group of about 30 or so people. We are, more or less, a club. We would like to buy property as a group. We don't want the property to be tied to an individual within the group. We want the property to be belong to the group as a whole. Is this possible? If so, how do we go about doing this? Thanks.
Oil / Gas Attorney
There are several ways to do his, but each has pros and cons. You can:
1. Form an LLC, limited partnership, or corporation and have that entity own the property. Members of your group would own the entity.
2. You can all be named as the buyers (grantees). If you do this, you might want to have a written agreement signed by all of you to take care of various issues (ins., maintenance, taxes, use rights, etc.). You may want such an agreement even if you have an entity hold title.
The most important consideration is how you deal with the co-owners who are rigid, inflexible and refuse to compromise (there are some in every group of this size, whether or not it has come to your attention yet). Make sure that whatever vehicle you use for the group purchase is designed so that it prevents a minority from easily ripping the entity apart, or forcing a premature sale of the property. You might also want to write in the formation documents that the group has the first option to buy if any individual wants to sell his interest or shares. Also consider a provision for mandatory binding arbitration if there is a problem, to limit any potential litigation expenses.