Most of their friends think the three brothers I know are sitting on a goldmine. It's a family cottage that was built by their late father in the 1960s, in prime Ontario cottage country. The large cottage has a waterfront setting, and enough land around it to ensure privacy. In the tight vacation property market today, it's worth well over $1 million.

But the brothers don't think it's a goldmine at all -- they consider it more of a landmine, because fighting over the use and maintenance of the cottage is threatening to tear the family apart.

Joe, the oldest brother, loves to come to the cottage and tinker around on weekends, fixing up the boathouse, staining the deck and keeping things in tip-top shape. But he resents the fact that he always seems to be doing all the work. His brother, Pete, has a young family and prefers to spend his cottage time relaxing with the kids and reading a good book. He works hard at his job all week, and the last thing he wants to do on the weekend is home improvement jobs. The youngest brother, Ted, is still single and likes to have lots of friends up to the cottage for weekend-long parties. He avoids the cottage when Pete's family is there, or when Joe is on one of his clean-up-the-cottage binges.

The three brothers, all at different stages of their lives, are all trying to work out how to share one cottage during Canada's short summer holiday season. It's a big problem, but they are not alone.

A survey by research company Ipsos-Reid for Royal LePage Real Estate Ltd. says that 34 per cent of recreational property buyers say family feuds are likely to break out if the vacation home is passed down in the family.

The survey reports that 97 per cent of recreational property owners say they currently share their vacation home with other family members, and 11 per cent of those owners say the shared use has already caused a rift within the family.

"The shortage of recreational property, the lack of new development and rising property values are motivating owners to bequeath their vacation home to family," says Sherry Chris, vice-president, network services for Royal LePage. "This trend is perpetuating the cycle of low listings, which means even more challenging conditions lie ahead for recreational property buyers, and some planning considerations for family relations."

Chris says recreational property owners should try to come up with a succession planning strategy to minimize family strife.

Among the solutions is to have the cottage held in trust for a specified length of time -- even until the last child dies. The trustees would determine who would use the cottage and when, and would also administer ongoing expenses. This solution, however, would be tough for my friend Joe. It would drive him to distraction because he wants to handle his own maintenance chores.

Another possible solution is spelling out in the will that the cottage must be sold, with the children having the first option to buy it. Proceeds of the sale would then be divided among the children as stipulated in the will.

The Royal LePage report says that since 81 per cent of cottage owners plan to pass the property on to the next generation, would-be vacation property buyers are going to encounter a tight market for years to come. That market is currently being driven by baby boomers approaching their vacation home-buying years, with many buying year-round recreational properties as full-time retirement homes, says Royal LePage.

All residential real estate has been booming in Canada during the last year, and vacation property is no exception. Low interest rates and stock market volatility have prompted people to re-direct their non-income funds into secondary property, says the company. The strong American dollar is making Canadian recreational property attractive and affordable for U.S. residents, and some areas of the country are also seeing buyers from Europe.

The least expensive vacation market in Canada is Newfoundland, where a standard cottage on waterfront property starts at $31,500. You can get waterfront properties starting at $50,000 in Nova Scotia and New Brunswick and $60,000 in Prince Edward Island.

In Saskatchewan, prices start at about $140,000. British Columbia offers bargains in areas such as Beaver Lake and Silver Lake, but for Cranbrook, prices start at around $275,000. Quebec's Eastern Townships start at $220,000, while Manitoba's Lake of the Woods area is set at $225,000.

In Ontario, prices start as low as $125,000 in places like Wiarton, Thunder Bay and Haliburton. In the ritzy Muskoka districts, prices for a standard waterfront cottage -- if you can find one -- start at $390,000.

With supply tight and prices rising, the trend to "fractional" ownership, among family members and others, is growing. Whether cottagers are sharing with family or friends, the best way to avoid disputes is to have a clear policy about who gets to use the cottage, when they can be there, and how the cottage maintenance and expenses will be managed.

Published: May 23, 2002

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Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He has been writing about Canadian real estate, home building and renovation issues for more than 30 years. You can contact Jim at .