Family cottages are filled with memories, of barbeques, bonfires and family celebrations. But with fond memories can also come a lot of obligations and headaches when it comes to deciding the future of the cottage. The last thing you want is for your loved cottage to create a drift between your loved ones.

A cottage sharing agreement (a.k.a. a cottage succession agreement) helps protect future generations of your family from arguments on scheduling, property fees, and selling the property.

What’s a cottage sharing agreement?

A cottage sharing agreement details agreed-to guidelines that are used to safely pass cottage ownership and control from one generation to the next. The goal is for the property to stay in the family for many generations to come.

Inheriting a family cottage is a fairly straightforward move. The majority of problems can come up through the siblings' joint custody of the property. Planning out cottage succession helps everyone involved create guidelines around things like how they are going to use the property, how to divide up costs and work around the property and how to resolve potential conflicts. These carefully thought-out rules can help keep the peace in the family over the years.

What should the cottage sharing agreement include?

Ideally, all cottage sharing agreements should be made between active parents and their children, to avoid any surprises or tension after the will is read. The more complete a cottage sharing agreement is, the better it will serve the family. Here are seven things to consider and include in the agreement:

  1. How are you going to use the cottage? Should all children use it together or will time be split evenly between siblings? Are guests or non-family relations allowed to use the cottage in any circumstance? Is there a period of time that no one should be using the cabin?
  2. What are the “house rules?” When a child stays at the cottage, what are their responsibilities? What items are prohibited - i.e. pets or smoking?
  3. Can you rent it out? Can any of the children rent out the cabin during their allotted time or during non-use? Should rent profits be split equally or funneled back into the cottage?
  4. Dividing up costs: How will costs like utility bills, municipal taxes, and insurance premiums be split? Who is in charge of paying these bills
  5. Fixing it up: Which improvements should be budgeted for to ensure the well-being of the cabin? How will the children budget for updates and repairs? How should collective decisions be made - e.x. majority vote or unanimous vote?
  6. Inheritance guidelines: If an heir should die, should the surviving spouse inherit the share of the cottage? Should the share be passed down to the person's children?
  7. Creating a family council meeting: Things will change over the years as you share the cottage. It can help to set up a regular yearly meeting between your family to get together and discuss everything around your cottage.

Keeping Family Peace

Even the most carefully thought out cottage agreements won’t prevent the occasional sibling squabble or family friction. Instead, the goal is to diffuse majority of the problems before they become an issue.

Creating a cottage sharing agreement can be overwhelming, but it can help you save time and avoid issues. Cottage succession planning can involve several experts, including financial advisers, appraisers and other professionals to get the job done well.

The Cottage Sharing Agreement is a legal contract so it can help to start the process with a lawyer who can identify the issues, provide recommendations and a draft Cottage Sharing Agreement to discuss with your family. Remember that you are doing all this work now to protect your family's happiness in the future.


Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.