A Family Affair

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Let’s face it, managing a multi-unit dwelling is anything but simple, especially when it’s jointly owned with family (or others).

Over the last 50 years, real estate has helped create significant wealth for what are now second and third-generation families and partners. In many instances, the initial builders or founders have passed and left behind their legacy of several buildings of different value with as many as five, ten or more heirs. The founders leave behind assets likely producing declining cash flow (as more and more capital needs to be reinvested back into the aging asset), and illiquidity.

While some second- and third-generation family members may work in the business, many do not. As a result, tensions may arise regarding who is being paid by the family business and who is not. Even if family dynamics are positive, the fact of the matter is that the ownership has gone from one (or a few) founders/developers to numerous second-generation family members and possibly to dozens of third-generation family members.

With each generational change, there are more and more stakeholders and each of those owners are further removed from the original business. While the original ownership structure chosen by the founder may have been appropriate at the time of development, as subsequent generations take the reins, those structures need to be reassessed and redesigned to best suit the current shareholders. Ideally, this review should be done every 15-20 years as new generations enter the picture.

Read the White Paper Here:
https://svnrock.ca/family/