Maintenance & Home Improvement in Equity Sharing
There are many types of repairs and maintenance that must be done on a home, some major and some minor. In general, upkeep on the home is the responsibility of the occupying owner. An equity sharing agreement should delineate the type of maintenance, whether the cost should be absorbed by just the occupying owner or both owners, and should define whether the home repair decision is made solely by the occupant or by both owners. These parameters should be noted in the agreement upfront so that no confusion exists as to "who pays for what and when" in the event of an untimely repair.
Other issues to consider include minimum contractor standards (ensure quality work), soliciting bids from multiple contractors (ensure appropriate pricing), do it yourself issues (can the occupying owner replace the roof himself to save money?), decision making authority (what if the occupying owner and the investor disagree on pricing, contractor approval, or any other matter? What governs the final decision?), and ownership of a project (once decided, who works with the contractor to ensure the project is completed in a timely fashion and on budget?).
The owners should contribute funds each month to an emergency repair fund that effectively "saves for a rainy day" when the property will suddenly need an emergency repair. Having these funds in reserve may help alleviate financial pressure from all owners and help all parties make a clear decision regarding the repairs.