Is this fair

[robbieoz]

Hi
I hope someone can solve this for me.
Our Company has 4 parcels of land, all different sizes.
Lot 1 is worth Approx $150.00
Lot 2 is worth less
Lot 3 is worth less than other 2.
Lot 4 cost is undetermined but possibly worth more than other 3
In an agreement where we all agreed, I ended up with Lot 3, which is worth the least.
However it was agreed by all that when Lot 4 is sold, I would receive 55% of sale, Lot 2 owner would get 33% and Lot 1 owner the residue.
Now here is the problem.
There are ongoing costs with keeping Lot 4, rates, improvements etc etc.
The other owners say that I should pay 55% of all costs, with others paying their percentage.
But I disagree, but I just cant put my finger on why I disagree, its very hard to work out, but I feel I am being gyped.
Is there a formula...
Hope someone can help.
Rob Bell

[randomlooseends]

To be honest, this reads more like a brainteaser than a business question. I realize you probably cannot divulge too much information due to privacy concerns, but can you tell us a little about what those lots are?

For instance, if you are buying parcels of land, clearing them for development, and reselling them, that arrangement might be fair. You receive 55% of the proceeds after footing 55% of the costs.
In any situation where the lots generate income beyond their sale value, it gets more complex. Let's say these are high-rise apartment complexes in a highly profitable location. Then, the sale value of the lots is overshadowed by the monthly rental income.

[feh]

Hi
I hope someone can solve this for me.
Our Company has 4 parcels of land, all different sizes.
Lot 1 is worth Approx $150.00
Lot 2 is worth less
Lot 3 is worth less than other 2.
Lot 4 cost is undetermined but possibly worth more than other 3
In an agreement where we all agreed, I ended up with Lot 3, which is worth the least.
However it was agreed by all that when Lot 4 is sold, I would receive 55% of sale, Lot 2 owner would get 33% and Lot 1 owner the residue.
Now here is the problem.
There are ongoing costs with keeping Lot 4, rates, improvements etc etc.
The other owners say that I should pay 55% of all costs, with others paying their percentage.
But I disagree, but I just cant put my finger on why I disagree, its very hard to work out, but I feel I am being gyped.
Is there a formula...
Hope someone can help.
Rob Bell

Are there ongoing costs associated w/ lots 1-3? If so, how are they being divided?

[jpg7n16]

Are there ongoing costs associated w/ lots 1-3? If so, how are they being divided?

I don't think that matters. Each owner of the lots 1-3 should foot 100% for only their lot.

The percentage arrangement of costs based on ownership is fine acutally. You're not being ripped off. These are all sunk costs that would have reduced the final sale, so you should be "reimbursed" by your proceeds from the sale. Though I don't see why you would need to finance improvements on a lot that is trying to be sold quickly. Sell it as is. You're not in the business of land development (or maybe you are I don't know)

However, since you are in the largest bind from the burdens of the land, you should be the most proactive about making sure the land gets sold quickly.

-yes, I realize these costs lower your end proceeds from the arrangement. But that's why you need to constantly pressure them to sell. The sooner it sells, the more your end result will match the original agreement.


Could you enter into an agreement to sell your ownership piece to the other parties?? That would solve you of your cashflow problems due to ownership.

[maat55]

The lots should be considered as one. Everyone should have an % of the profits and the expenses should be universal, no different than the cost to produce an widget.

[mikebanker]

i think it's fair. Sometimes it's not worth the trouble.