Ownership
Draft structure and house rules for the two families. These are starting points for discussion, not legal terms; the checklist at the bottom is what to take to a lawyer.
Structure
Two-member Colorado LLC, 50/50 by default (the split is adjustable in the What-if calculator)
- The LLC owns the lot, the plans and the house; each family holds a membership interest equal to its equity share.
- Capital calls, distributions and votes follow equity share unless the operating agreement says otherwise.
- The construction loan and the permanent mortgage are LLC obligations; expect the lender to require personal guarantees from all four adults.
Using the house
- The main floor and the owner side of the house alternate between the families in two-week blocks.
- Blocks for the coming year are scheduled each October; an unclaimed block opens to either family on 30 days notice.
- Either family may host guests during its own block. Neither family uses the house during the other's block without consent.
| Holiday | Even years | Odd years |
|---|---|---|
| Christmas week (Dec 23–29) | Redden family | Partner family |
| New Year week (Dec 30–Jan 5) | Partner family | Redden family |
| Presidents' Day weekend | Redden family | Partner family |
| Spring break (mid-March) | Partner family | Redden family |
| Fourth of July | Redden family | Partner family |
| Labor Day weekend | Partner family | Redden family |
| Thanksgiving | Redden family | Partner family |
The lock-off
Rented by default. Family overflow use of the lock-off is capped per season (the caps feed the Rental page) and is booked through the manager's calendar at least 60 days ahead, so it never displaces a confirmed guest.
Family overflow caps: Ski season 14 nights · Summer 7 nights · Shoulder 0 nights. Rental figures below come from the Rental page.
Money: rental income first, then equity
- Rental net income is deposited to the LLC operating account.
- It pays shared expenses first: mortgage, property tax, HOA dues, insurance, utilities, snow removal and the maintenance reserve.
- Any shortfall is funded by monthly capital contributions in proportion to equity.
- Any surplus is distributed annually in proportion to equity, after topping the reserve up to an agreed floor.
| Item | Favorable | Mid | Unfavorable |
|---|---|---|---|
| Rental net operating incomeNegative in an unfavorable year is treated as a shared expense | $58,104 | $23,535 | -$2,205 |
| Shared expenses (lock-off plan: mortgage + carry, annual) | $355,179 | $524,992 | $740,891 |
| Rental loss added to shared expenses | $0 | $0 | $2,205 |
| Covered by rental income | $58,104 | $23,535 | $0 |
| Shortfall funded by families | $297,075 | $501,457 | $743,096 |
| Surplus distributed | $0 | $0 | $0 |
| Item | Favorable | Mid | Unfavorable |
|---|---|---|---|
| Redden family (50%) | $148,537 | $250,728 | $371,548 |
| Partner family (50%) | $148,537 | $250,728 | $371,548 |
| Item | Favorable | Mid | Unfavorable |
|---|---|---|---|
| Redden family (50%) | -$148,537 | -$250,728 | -$371,548 |
| Partner family (50%) | -$148,537 | -$250,728 | -$371,548 |
Shared expenses use the lock-off plan's mortgage and carry; rental income is the Rental page's net operating income. All inputs are model estimates unverified · low. Try other splits in the What-if calculator.
Decisions and exits
- Routine spending under an agreed threshold: either family may approve. Above it, both families must approve.
- Selling, refinancing, or changing the rental policy needs unanimous consent.
- Deadlock: a 30-day cooling period, then mediation, then the buy-sell clause.
- Right of first refusal: a family that wants out offers its interest to the other family first, at an appraised value.
- Death, divorce or bankruptcy of a member triggers the same buy-sell mechanics, so an interest never passes to an outsider by default.
- If neither family buys, the house is listed and the proceeds are split by equity after debts.
Checklist for the lawyer
| Topic | Why it matters |
|---|---|
| Entity choice and state of formation | LLC vs tenancy in common; Colorado formation; partnership tax return and K-1s. |
| Operating agreement: capital, calls and dilution | What happens when one family cannot or will not fund a capital call. |
| Usage rights and scheduling | Make the block calendar and holiday rotation enforceable, including guest and pet rules. |
| Rental policy and income allocation | The expense waterfall, who signs the management contract, and how family overflow nights are accounted for. |
| Buy-sell, right of first refusal, valuation method | Exit path, appraisal mechanics, payment terms and timing. |
| Death, divorce, disability or bankruptcy of a member | Keep interests inside the two families; interaction with each family's estate plan. |
| Lender requirements | Personal guarantees, entity borrowing, and whether the lender allows LLC title on a construction-to-perm loan. |
| Insurance and liability | STR liability, umbrella policies, and indemnity between members. |
| Local STR and lock-off compliance | Mt. Crested Butte license, HOA covenants, occupancy limits and tax registration. |
| Dispute resolution | Mediation and arbitration clauses; the deadlock procedure. |
| Property tax and income tax | Second-home vs rental use, depreciation on the lock-off, and Colorado nonresident filing if applicable. |