The Fractional Ownership Agreement serves as the foundational document for establishing and managing shared property ownership under Swiss law. This document is particularly relevant for luxury properties, vacation homes, or high-value real estate assets where multiple parties seek to share ownership and usage rights while maintaining legal clarity and protection. The agreement becomes necessary when two or more parties wish to formalize their shared ownership arrangement, detailing everything from initial purchase and ownership percentages to ongoing management and eventual exit strategies. It must comply with Swiss property law, including cantonal regulations and the Lex Koller restrictions on foreign ownership. The document is especially important in Switzerland's premium real estate market, where fractional ownership has become an increasingly popular alternative to full ownership, particularly in tourist destinations and luxury developments.
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1. Parties: Identification of all co-owners and their contact details
2. Background: Context of the agreement, description of the property, and purpose of the fractional ownership arrangement
3. Definitions: Key terms used throughout the agreement including Property, Ownership Share, Usage Period, Common Areas, etc.
4. Ownership Structure: Definition of ownership shares, rights, and obligations of each co-owner
5. Purchase Price and Payment: Details of initial purchase costs, payment terms, and share valuation methodology
6. Management and Administration: Structure for property management, decision-making processes, and voting rights
7. Usage Rights: Schedule and allocation of usage periods, reservation system, and rules for occupancy
8. Operating Expenses and Maintenance: Cost sharing arrangement, maintenance responsibilities, and reserve fund requirements
9. Transfer of Ownership Shares: Procedures for selling or transferring ownership shares, including first right of refusal
10. Default and Remedies: Consequences of breach, default scenarios, and enforcement mechanisms
11. Insurance: Required insurance coverage and cost sharing arrangements
12. Termination: Conditions and procedures for terminating the agreement or dissolving the ownership structure
13. Governing Law and Jurisdiction: Specification of Swiss law application and jurisdiction for disputes
14. Notices: Communication procedures and contact information for official notices
1. Property Manager: Detailed section about the appointed property manager's role, when professional management is used
2. Rental Program: Rules and procedures for renting out units when owners are not using them
3. Financing Arrangements: Terms related to any collective financing or mortgages, if applicable
4. Special Assessments: Procedures for extraordinary expenses and capital improvements
5. Guest Privileges: Rules regarding guests and non-owner usage
6. Amendment Procedures: Specific procedures for modifying the agreement, if different from standard terms
7. Exit Strategy: Detailed procedures for collective sale or dissolution, if contemplated
8. Tax Considerations: Specific tax-related provisions and obligations, particularly for international owners
1. Property Description: Detailed legal description of the property, including plans and specifications
2. Ownership Schedule: Detailed breakdown of ownership percentages and corresponding rights
3. Usage Calendar: Annual calendar showing allocation of usage periods among owners
4. House Rules: Detailed rules and regulations for property use and maintenance
5. Operating Budget: Annual budget and cost allocation framework
6. Management Agreement: Copy of agreement with property manager, if applicable
7. Maintenance Schedule: Schedule of regular maintenance and replacement requirements
8. Insurance Specifications: Detailed insurance requirements and coverage specifications
9. Owner Contact Information: Complete contact details and emergency contacts for all owners
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