How best to handle a gentleman’s agreement regarding land ownership?
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How best to handle a gentleman’s agreement regarding land ownership?
I own hunting property there as well. I have two out-of-state friends that hunt my property and are forced to buy an out-of-state hunting license each year to hunt. If you hunt your own property, you are not required to buy a license. Is there a way that the 3 of us could enter into a gentleman’s agreement where I could make them part owner for a $1.00 (with some slick wording that I reserved the right to buy it back at any time for $1.00, they cannot alter the land, sell the land, etc.) so the license purchase waiver for landowners would apply?
Asked on January 11, 2012 under Real Estate Law, Virginia
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
You can possibly come up with some language in a written agreement with your two friends where they can purchase an interest in your land for a nominal interest where you resrve the right to re-purchase the land from them.
The problems that I see are as follows:
1. a sale of a fractionalized interest in the land to your friends could very well trigger some tax issued for you which you may not want to have.
2. the transaction that you are proposing could be viewed as a transaction that is really not a sale but rather some means to deprive your state out of revenue from hunting license sales.
One way to deal with the request that you have written about is to "gift deed" a small fraction in the property to your friends where you have the option to buy back the gifted percentage. I suggest that you consult with a real estate attorney as how to draft such an agreement.
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