Fractional Ownership Contract

Fractional Ownership Contract Template for Switzerland

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Key Requirements PROMPT example:

"I need a Fractional Ownership Contract under Swiss law for a luxury yacht shared between three corporate entities, with equal ownership splits and a professional management company to handle operations and maintenance."

Document background

The Fractional Ownership Contract is essential for situations where multiple parties wish to share ownership of a valuable asset while maintaining clear legal rights and responsibilities under Swiss law. This document type is commonly used for high-value assets such as real estate, aircraft, or luxury items where full ownership by a single party may be impractical or economically inefficient. The contract addresses crucial aspects including ownership structure, governance, usage rights, cost sharing, and exit mechanisms, while ensuring compliance with Swiss legal requirements, particularly the Code of Obligations and Civil Code. It's designed to prevent potential disputes by clearly defining all aspects of the shared ownership arrangement and providing robust mechanisms for decision-making and conflict resolution. The document is particularly relevant in Switzerland's sophisticated financial and property markets, where structured shared ownership arrangements are increasingly common.

Suggested Sections

1. Parties: Identification of all co-owners and any management entity

2. Background: Context of the arrangement and description of the asset being fractionally owned

3. Definitions: Key terms used throughout the agreement

4. Asset Description: Detailed description of the asset subject to fractional ownership

5. Ownership Structure: Definition of ownership shares and rights attached to each share

6. Purchase Price and Payment: Details of initial investment and payment terms

7. Management and Administration: Governance structure and decision-making processes

8. Rights and Obligations: Detailed rights and responsibilities of each co-owner

9. Usage Rights: Rules governing the use of the asset by co-owners

10. Costs and Expenses: Allocation of operating costs, maintenance, and other expenses

11. Transfer Restrictions: Limitations on transfer of ownership shares

12. Exit Provisions: Procedures for selling shares or terminating participation

13. Dispute Resolution: Mechanisms for resolving conflicts between co-owners

14. Governing Law and Jurisdiction: Confirmation of Swiss law application and jurisdiction

15. Term and Termination: Duration of the agreement and termination procedures

Optional Sections

1. Asset Manager Appointment: Required when a professional asset manager is engaged to manage the property

2. Insurance Requirements: Detailed insurance provisions, particularly relevant for high-value assets

3. Tax Provisions: Specific tax arrangements and obligations, especially relevant for international co-owners

4. Maintenance Reserve: Creation and management of a reserve fund for major repairs/maintenance

5. Right of First Refusal: Procedures giving existing co-owners priority in purchasing available shares

6. Forced Sale Provisions: Circumstances and procedures for forcing the sale of the entire asset

7. Mortgage and Financing: Required when the purchase involves external financing

8. Usage Schedule: For assets requiring time allocation among owners (e.g., vacation properties)

Suggested Schedules

1. Schedule 1 - Asset Details: Comprehensive technical description and documentation of the asset

2. Schedule 2 - Ownership Schedule: Detailed breakdown of ownership percentages and initial capital contributions

3. Schedule 3 - Management Procedures: Detailed procedures for day-to-day management and decision-making

4. Schedule 4 - Usage Rules: Specific rules and procedures for asset usage and scheduling

5. Schedule 5 - Cost Allocation: Detailed breakdown of cost sharing and payment procedures

6. Schedule 6 - Valuation Methodology: Agreed methods for asset valuation in case of share transfers or exit

7. Appendix A - Asset Documentation: Copies of relevant asset documentation (titles, certificates, etc.)

8. Appendix B - Due Diligence Reports: Technical, legal, and financial due diligence reports

Authors

Alex Denne

Head of Growth (Open Source Law) @ ��Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Real Estate

Aviation

Luxury Goods

Maritime

Hospitality

Investment Management

Private Equity

Wealth Management

Commercial Property

Tourism

Transportation

Asset Management

Relevant Teams

Legal

Asset Management

Property Management

Investment

Wealth Management

Compliance

Risk Management

Operations

Financial Control

Client Relations

Transaction Management

Relevant Roles

Legal Counsel

Asset Manager

Property Manager

Investment Director

Wealth Manager

Corporate Lawyer

Financial Controller

Risk Manager

Compliance Officer

Operations Director

Partnership Manager

Transaction Manager

Portfolio Manager

Private Client Advisor

Real Estate Manager

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