Deer camp bylaws?

[CJB]

Ran a search but I didn't see this asked anywhere readily available.

9 members of my extended family, myself included, are all co-owners on some hunting property. Of the 4 original purchasers, only two are still alive and some of us have gone in on a new section of land since then as well. As people pass away or an individual's financial situation changes, it's getting complicated with who owns how many shares, what they can do with them, who they can sell to, etc. I know it's only going to get more complicated as time goes on and my brother I inherit my father's chunk, in addition to my own I already have, and I pass and my kids inherit mine, etc. Kids who don't hunt may inherit their dad's share but don't want to pay dues and taxes and such...

Does anyone have a situation like this that has led them to develop a written set of bylaws or something so everyone is all on the same page? Not trying to get a lawyer involved in deer camp but it's going to get tricky as time passes.

Open to suggestions. TIA

[Ghost]

I'd hope current members get first chance at buying other shares before outsiders.

[CJB]

I'd hope current members get first chance at buying other shares before outsiders.

correct. That's the way it's been but everything is all set up on a gentleman's agreement. Nothing is written down.

[crbutler]

No matter what you do there are going to be people who are not happy.

My family has a duck hunting property that we incorporated many years ago. The bylaws were written back when and the biggest issue is that some of the survivors view it as an investment, although the bylaws pretty clearly state that it is intended to be a hunting property in perpetuity. We are lucky in that we have enough farmland so that the taxes are paid for by the corporation...it does not require cash input (which also complicates things as folks have no incentive to get out if they have no interest in hunting.). The way the bylaws are written, it's next to impossible to change them, which to my mind is to the good (as one of the two biggest shareholders, as long as I can get one other to agree with me I can stop anything I don't like and I can stop bylaw changes myself...while we argree pretty much most of the time, it is set up to make changes very difficult, which annoys the folks that wanted to dissolve and cash out.)

Make sure you have right of first refusal for any share sales, with instructions that interfamily (inheritance) passage is not refusable (so that one money grabber can't take over.)

Also you would do well to incorporate it, and get it insured. Unfortunately, you are probably going to need a lawyer and also a bunch of meetings amongst yourselves to get this settled to avoid issues. If you don't incorporate it, you may well end up with tax issues and competing ownership claims.

[CJB]

Very interesting points. Overall, everything has been smooth up to now. Original purchase was in 1984, so that's a long time with no issues.

The way it's set up now is as follows:

One owner = 1 vote regardless of how many shares they hold
Property taxes are divided by shares held for each individual. More you hold, more you pay (which aggravates some that they pay a lot in taxes but have no more voice than the next guy)
Owners have first right of refusal on any sale and any sale must be approved by majority vote
All owners pay annual dues which goes toward upkeep and our fund for a new building, as our old one is going downhill fast
Unless in dissolution, which requires a unanimous vote, nobody can sell a share for more then the original purchase price.

I don't know anything about incorporating but what exactly would be the benefit of that? And which type would be best - LLC? other? I'll have to do some research on that.
We hold a liability policy but no insurance on structures or personal property. It gets broken into so often in the off-season that we don't really leave anything of value up there anyway.

[crbutler]

The no more than purchase price thing is likely illegal... Like I said, you best decide what you like to do and then talk with an attorney, the reason being is tax law (if the asset is worth substantially more than the share price, they want estate taxes out of it... Been there done that...)

[yukonjasper]

I would highly recommend a written document to make sure everyone understands what the agreement covers and what is meant by certain concepts. You have survived with handshakes because of the relationship of those original parties and the common interests that brought them together to acquire and maintain that property. The further you get from the original group the further those interests diverge and the less people believe they should be held to a verbal contract that someone else entered into. Lawsuits and trouble come from misunderstandings or people trying to twist things to their advantage. The legal document keeps it clean and defines the rules.

Check your PM - I can send you what we currently are using. It should be reviewed by and attorney and adapted to your situation, but it should give you a place to start. The only issue, is that you may now have difficulty getting people to sign on to more restriction and regulation than they believe they are living with today, so it usually is better to start out with something in place. Let me know if you would like a copy. It's in MSWord and I've redacted any specific reference our circumstances. Our circumstances have changed in a couple of very important ways, so we are going to work on the document this winter, which is important to make sure it reflects your current situation as it evolves.

[BigBlue]

Who actually legally owns the land? It can't be a group of dynamically changing 'owners', can it? You'd have to re-do legal paperwork every time a 'share' changes hands if that were the case. I assume that is what the incorporation does... makes the corporation own the property and all the shareholders own the company?

BB

[yukonjasper]

That is true, but its hard to borrow money as an LLP/LLC that doesn't have any assets. The lender will likely force you to individually sign for the mortgage. there is a difference between the Mortgage and Ownership.

[CJB]

Who actually legally owns the land? It can't be a group of dynamically changing 'owners', can it? You'd have to re-do legal paperwork every time a 'share' changes hands if that were the case. I assume that is what the incorporation does... makes the corporation own the property and all the shareholders own the company?

BB

Yeah, see it's complicated. in 84 there were 4 original owners of the first 40 acres. Somewhere around 1990 an adjacent 40 was purchased by the 4 original owners plus 3 new owners. Over the years, two of the original 4 have passed and their interests were handed down to their children. Two of the new owners of the second 40 decided to sell and they were bought out by my generation. Legal deed has been updated to reflect all this and have wives of the original owners removed from the deed but I have no clue as to how much land I actually 'own' lol I don't think it's much. 1/8 of the north 40 maybe.

I need to school myself in the laws of an LLC and figure all that out. Thanks everyone for your input!

[unfitmother]

I just had a flashback to the word problems from math class in 5th grade.

A trust is also an option. That's a good one if selling the land isn't at all a priority, and if smooth inheritance is desired.

[CJB]

I just had a flashback to the word problems from math class in 5th grade.

A trust is also an option. That's a good one if selling the land isn't at all a priority, and if smooth inheritance is desired.

That's pretty much what we're looking at here. I don't see the land being sold in my lifetime if I have anything to say about it. I'll look into that too. Thanks!

[FJ540]

Sounds like a mess.

I would think the shares would have to mature in value as the land has matured in value or you have a balloon waiting for the last man standing and anyone wishing to remove themselves from the group takes it in the shorts (which could be a desired outcome in some situations). I don't think that'd survive a judge's scrutiny, but I can't cite the reasoning with a statute. Tax law could very well be the biggest issue since it would subvert the capital gains process (Uncle Sam's gonna get his!).

My bylaws are much simpler. You do as I say or you don't come back. I actually removed the invitations when our herd was in too much decline because the "bone or bust" rule and prospects of likely not getting a deer seemed to eliminate the desire to come up and help with the chores in the off season. Now that we're on an up-tick, the Mrs. seems more interested in maybe having a go at her own deer (and kiddo has yet to make any interest in hunting, but we might change that this fall yet with tree rats), so those slots are now occupied with family (which was the intent behind the purchase of the land).

I'd talk to an accountant as well. Having inputs into the property (up keep and improvements) could work out to be deductible if it's set up right.