{"id":1819,"date":"2010-01-09T17:19:14","date_gmt":"2010-01-09T11:49:14","guid":{"rendered":"http:\/\/www.niftylivecharts.com\/blog\/?p=1819"},"modified":"2010-01-09T17:19:14","modified_gmt":"2010-01-09T11:49:14","slug":"what-is-fractional-ownership","status":"publish","type":"post","link":"https:\/\/www.niftylivecharts.com\/blog\/what-is-fractional-ownership\/","title":{"rendered":"What Is Fractional Ownership?"},"content":{"rendered":"
Definition of Fractional Ownership<\/strong><\/div>\n
In its broadest definition, fractional ownership is any arrangement where a group of people (numbering from 2 to 10 or more) share the ownership of an asset and also share certain rights to use the asset. \u00a0The use of the word “ownership” in the definition therefore excludes timeshare arrangements, where there is no ownership of the underlying asset. \u00a0Unfortunately however, some so-called fractional ownership schemes are closer to timeshare than they are to true fractional ownership. \u00a0When investigating whether to purchase a fraction it is essential to know what your relationship to the asset purchased is. \u00a0The best arrangement is to be identified as the legal joint owner of the asset (or in the case of multiple assets, the owning organization).<\/div>\n
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Types of Fractional Ownership<\/strong><\/div>\n
The most cost-effective form is where a group of individuals decide to purchase an asset jointly. \u00a0They then decide on the exact asset to be purchased, draw up ownership documents (perhaps with the help of a legal firm) and purchase and manage the asset themselves. \u00a0This avoids the sometimes substantial profit-margin that developers charge when selling fractional properties. \u00a0This approach does have disadvantages, e.g. the amount of paperwork involved and the possibility of falling out with your fellow fraction owners (over cleaning, maintenance etc.)<\/div>\n
Second in terms of cost-effectiveness would be a developer or owner-led scheme, where the individual fractions were being sold direct from the developer\/owner (but where there were no expensive additional services bundled with the purchase). \u00a0There will have to be a profit-margin associated with this type of arrangement, since the developer\/owner is incurring additional legal and administrative costs. \u00a0If fractions can be sold individually (without all the fractions of an asset being sold) then they are also taking the risk of having unsold fractions tying up their capital.<\/div>\n
The above schemes blur into the next category, which I will call clubs. \u00a0These are sometimes called Ownership Clubs, Private Residence Clubs, Destination Clubs etc. etc. \u00a0Where they differ from simple developer\/owner-led schemes is in the level of luxury\/services provided and (sometimes) in the level of ownership. \u00a0None of these terms have a particular legal meaning so it is up to the purchaser to investigate issues of ownership, booking arrangements, exit arrangements etc. \u00a0A the extreme end of this group there are some similarities with Timeshare -so be warned!<\/div>\n

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How Much is it Costing Me?<\/strong><\/div>\n
Here I don’t mean in absolute terms, I mean how much is it costing in excess of the amount that I would have paid for the asset as a whole. \u00a0Always try and do a comparison with a similar asset purchased outright to gain an idea of what the developer\/owner’s additional costs and profits are. \u00a0At the very least it might help you to negotiate a better price if you do decide to buy! \u00a0You can and should do a similar comparison on the management fees (and pay special attention to any rights to vary them in the future).<\/div>\n
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Conclusion<\/strong><\/div>\n
True fractional ownership isn’t timeshare, but some of the schemes marketed as fractional ownership are. \u00a0Be warned and do your homwork if thinking about purchasing.<\/div>\n","protected":false},"excerpt":{"rendered":"

Definition of Fractional Ownership In its broadest definition, fractional ownership is any arrangement where a group of people (numbering from 2 to 10 or more) share the ownership of an asset and also share certain rights to use the asset. \u00a0The use of the word “ownership” in the definition therefore excludes timeshare arrangements, where there […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[732,5194,5196,5195],"class_list":{"0":"post-1819","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-general","7":"tag-assets","8":"tag-fractional-ownership","9":"tag-purchasing-an-asset","10":"tag-timeshare","11":"entry"},"_links":{"self":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/1819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/comments?post=1819"}],"version-history":[{"count":0,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/1819\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/media?parent=1819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/categories?post=1819"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/tags?post=1819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}