A Shore Thing

Couples get the benefits of a beach house while sharing the costs

April 12, 2009|By Andrea F. Siegel | Andrea F. Siegel,andrea.siegel@baltsun.com

Over dinner at the Brass Elephant in January, two couples pored over their calendars to iron out this year's schedule for their Ocean City beach house.

They decided when to open the oceanfront town house for the year, which owner has the place each week and which weeks are for renters.

The two Baltimore couples, Deborah and Mark Dopkin and Elissa and Stanley Hellman, bought the house a decade ago and split the cost. The arrangement gives each full run of the beach house while paying only half the utilities, fees and maintenance.

"Having partners is somewhat liberating - no guilt or sense of pressure to run to the beach if you do not use the house all the time," Deborah Dopkin wrote in an e-mail.

With the typical beach vacation home used by its owner fewer than 30 days a year, co-ownership has become a tradition because it eases the financial burden of a second home and also rewards homeowners with many of the benefits.

"It happens quite consistently down here," said real estate agent Grant Fritschle, of the Mark Fritschle Group of Re/Max Premier Properties in Ocean City.

Sometimes relatives pool resources for a beach house or condo. Sometimes friends do. Agents estimate that a small percentage of the area's beach homes are co-owned.

The emotional pull of a retreat aside, the top reason to buy together is financial.

"This gives them an opportunity to own half the property and have half the expenses and have full enjoyment," said Joyce Henderson, a Coldwell Banker agent in Bethany Beach, Del., who sold the Dopkins and Hellmans their home. "It's sort of the best of both worlds. I wish more people did it."

Some Maryland and Delaware agents said there has been a slight uptick in people co-owning a beach house or condo in recent years. With prices down at least 10 percent and people seeking to vacation closer to home, "the buyer pool has gotten larger," Henderson said, especially if families pool resources. Other agents said interest in resort property has revived in recent weeks, just as prices appear to be stabilizing.

A big question is how to make joint ownership work, with or without a written agreement.

Compatibility and flexibility are what matters. A compatible vision for use, for change, for housekeeping and for dividing expenses are key, as is the ability to think of co-owners - whether friends or relatives - as business partners.

The Dopkins and Hellmans knew each other for years before they talked about buying. "We didn't want to put a lot of cash in when we could share the burden," Deborah Dopkin said.

The baby boomer-ish friends, three of whom are attorneys, drew up legal ownership and financial paperwork. Mostly, their agreement relies on being agreeable.

The couples created a separate taxing entity with a bank account they replenish as needed. They split responsibilities. They consult each other on big expenses, like new flooring; when something breaks, whoever is there tells the other and arranges repairs. Summer is for renters, as both couples prefer the beach in the less-crowded spring and fall.

They alternate the "holidays" - Memorial Day, Maryland State Bar Association convention week and Thanksgiving.

"We have one nice little rule: When you leave, you make sure the beds are made," Stanley Hellman said. "With fresh linen."

That each couple likes doing different things at the beach is irrelevant. They stayed there together once, right after buying the house in 1999. But since then, they've stuck to their pact that each couple gets the privacy of getting away without the other.

Real estate agents and lawyers recommend the couples' thought-out approach because it forces people to consider more issues. Agents say while loss of interest is the top reason for selling, failed marriages, decorating clashes and belatedly uncovering incompatibilities create friction.

"The same issues arise no matter how the property is titled," said Gregory Reed, a partner in Ballard Spahr Andrews & Ingersoll in Baltimore who teaches real estate law at the University of Maryland School of Law.

Among the issues: how decisions are made, who can use the property when, allowing rentals, and how expenses will be paid.

Head off disputes and surprises by airing expectations, setting rules and deciding ownership and financial structures, he said.

"With beach property, there is a little bit of a tendency to be less formal about how you document this stuff," he said, noting that even an informally written agreement is a plus.

Owners should anticipate financial shortfalls and what happens if one wants to sell, he said.

"What happens if your partner dies and her kids, who you can't stand, inherit it?" Reed said.

"Having a formal arrangement is very comforting to people," said agent Allison Stine, who heads a Long & Foster team in Bethany Beach and who is selling co-ownerships known as fractionals in a large Fenwick Island house.

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