Finance and legal
- generel information.
There are a lot of details to clarify in relation to finance, tax and legal matters, when assembling 21 families co-owning five vacation homes in Canada and the US. 21-5, with the assistance of our lawyers and tax accountants, has gone through an extensive due diligence process to ensure that our owners/families will not experience any unpleasant surprises.
The vacation homes are located in several different areas of Canada and the US. This diversification helps to protect their combined value against any local real estate downturn - as opposed to buying a single property in one location, where your value would be 100% dependant on that locations real estate market.
In short, a 21-5 ownership share is less vulnerable to any local real estate fluctuations than owning a single vacation home in a given market.
Further more, the operational costs are based on the local price levels and therefore also diversified over the five locations.
Based on our extensive experience, we have developed budgets for the monthly operational costs for the owner associations and accordingly provides our owners/families with financial transparency and predictability.
The monthly maintenance fees include, among other things:
- Property taxes
- Property maintenance
- Any strata/HOA maintenance fees
- Owner association coordination and support
Utilities (water, electricity and heating) and professional cleaning are covered by the individual family after each stay.
Every owner/family deposits one years worth of maintenance fees to their owner association's bank account. This way, all owners are protected should one owner not pay their monthly maintenance fees.
If the owner association decides to upgrade and/or renovate one or more of their five vacation homes, this has to be approved at the annual general meeting. No projects are initiated until the funds have been raised.
If major repairs are needed, but not covered by the owner association's contingency fund or insurance, the owners/families will equally pay 1/21 of the costs - which is obviously significantly less costly than being the sole owner of a property in need of repairs. Another advantage of co-ownership.
The 21-5 owner associations are very well regulated with a thorough contractual framework specifically developed with Canadian laws and tax code in mind.
The legal structure for our owner associations has been developed in cooperation with expert lawyers and accountants in both Canada and the US.
The ownership structure is a Limited Partnership (LP) consisting of the 21 individual and equal owners/families.
As an example of the rules and regulation is, for instance, should a family not pay their monthly maintenance fees, the other members of the owner association can decide to expel that family from their association. In that case, the non-paying family must sell their ownership share. If that does not happen, 21-5 will take legal action to do so.
This might sound harsh, but for 21-5 it is more important to protect the association from bad creditors, including a non-paying member of a 21-5 owner association, than protect an individual owner/family with financial troubles. Having said that, we will obviously do our utmost to help an owner in distress to sell their ownership share at the best possible price. But the best interests of the co-ownership has our primary focus.
The 21 families are the legal owners of the five vacation properties
It is the 21 families, and nobody else, who own the five vacation homes. As a member of a 21-5 owner association you therefore become a 1/21 co-owner in the specific five properties.
Right of first refusal
When we assemble an owner association, we meet with all prospective families to ensure the right fit. This approach began in Denmark where it’s called a “coffee meeting”, but in fact it’s more a vetting opportunity benefiting both parties. In case of a resale of an ownership share, we do not go through the same interview process with the potential buyer. However, the other 20 families in the specific owner association, where an ownership share is up for sale, will have first right of refusal to the ownership share at minimum the same price offered by any third party. This serves to protect the best interest of the owner association.
In relations to an estate sale, where either the spouse or children are the beneficiaries, the right of first refusal is not executed.
Read more about finance and legal in the following sections.
“For us, 21-5 is unique because for the price of an ordinary vacation property, we are able to co-own five amazing homes with first-rate locations around the world. We really feel at home every time we are on vacation and there is no hassle like we would have, if we had to take care of it all on our own.”
– Annette Banke & Niels Hermansen
“It makes so much sense to me that I can share my vacation homes with my family and friends, besides sharing them with my like-minded co-owners. 21-5 finds the most beautiful locations and transforms the homes with such great taste and care. This, combined with a professional and friendly property management, makes 21-5 the optimal vacation home concept for me.”
– Pernille Foss
“Our expectations were very high when we decided to join the 21-5 concept. Well, they’ve all been meet, and more so. We love having five vacation homes with no worries. Each of the homes are a gem. The locations are fantastic, the furnishings and decor are spot on and everything just works. A great bonus is the 21-5 team, always nice, engaged and incredibly professional.”
– Lise & Jacob Struckmann
“We don’t want to be tied to a single location. With 21-5 we have the freedom to choose, and we have all the joys of ownership, but none of the hassle - it’s excellent.”
– Lotte & David Holm
“The five vacation homes in our owner association have different themes and therefore perfectly covers the vacation needs of our family for - city, sun, hiking and skiing.”
– Lise & Jesper Nerlov
“The variation among the vacation homes, their destinations and thereby the experiences are completely unique.”
– Niels Korsholm
"We got five great vacation homes in five fantastic locations, that we can share with our children, family and friends. Together with our co-owners we have homes that by far exceeds the quality we could have hoped for if we had bought on our own. We so enjoy that 21-5 takes care of the practical stuff, and we also like that our vacation homes are being used most of the year. It was a big decision to join an owner association, but 21-5 has all the way delivered as promised - great homes, professionally run renovations and top notch service. 21-5 has certainly lived up to our high expectations!"
– Ingrid & Klaus Harbo
"We spent a long time looking for our own vacation home but could not find the right place at the right price. With 21-5 we have achieved a much higher vacation home standard five places around the world giving us much more flexibility and no hassle."
– Lene & Danny Feltmann Espersen
"SCEPTICAL??.. we were. But 21-5 has fully lived up to their promises, and more so. It's a fantastic concept that we can highly recommend to anyone who dream of having five beautiful vacation homes in great locations."
– Gitte & Hans Gotke
The 21-5 concept is a simple and brilliant idea that makes so much sense. Especially when the idea is brought to life, as we've seen, in such an exellent way by the company's staff and executive team.
– Karen & Knud
To participate in a 21-5 association is by far one of the best decisions we have ever made. It has brought us joy and wonderful experiences from the day we signed. Even on an everyday basis it brings us joy just thinking about the 5 fantastic homes we own...
– Bente & Per
We absolutely love our wonderful homes on 5 very attractive destinations. It is an incredible solution because we feel at home in each of the properties at the same time we are avoiding all the hassles and worries that comes with ownership. 21-5 takes care of everything in a very professional and dedicated way....
– Helle & Carl
We are impressed by 21-5's ability to locate the unique locations. All our 5 homes are so wonderful and we would never have been able to find this level of properties and explore the opportunities in them like 21-5 does. The 5 homes have been renovated and filled with gorgeous interior and exterior design which we enjoy to the fullest...
– Anne Marie & Niels
We are so impressed with the dedication and skill with which we have been met by the 21-5 team. Joining 21-5 DK2 is the best decision we have made in many years.
– Bente & Sven
It is very special and joyous to be able to offer friends and family vacations in the wonderful 21-5 homes on beautiful destinations. I am thinking that it must be great for the team behind 21-5 to have SO happy customers. I believe that this concept will become a big and widely popular in the market.
Immediately, we knew 21-5 was something for us. We love to travel and are really happy about the sense of true ownership of each property we have. The 21-5 homes absolutely surpass our expectations, the concept works flawlessly and we are very happy to being a part of 21-5.
– Susanne & Snaebjörn
We are so happy that we said yes and joined 21-5!
– Elisabeth & Kurt
We never regretted joining 21-5. We have gotten much more than we had ever expected. Thank you to the entire team for the second to none service we have received in all of the possible and impossible situations which have arisen. We can only and wholeheartedly recommend 21-5.
– Tine & Elo
We heard about the 21-5 concept the first time from some of our good friends who had read an article...immediately we got excited and only a few weeks later we attended one of 21-5's information meetings in our area. The 21-5 company, with their super charged and always friendly and responsive team has made the 5 beautiful vacation homes the perfect spoiling gift to us and our children.
– Nille & Bo
We are very satisfied having joined 21-5. What we are talking about here is awesome properties on the best locations and homes which are so cozy. We enjoy taking family and friends with us when we visit. We experience a high level of service from the 21-5 organization - no matter who we talk to. We have no concerns as 21-5 handles any challenge. Besides, the acquisition price was very attractive - so far it has also turned out to be a great investment.
– Berit & Leif