Fractional Ownership – How it differs from Timeshare

The following is an extract from an article published in The Globe and Mail about Fractional Ownership of holiday property, which is similar in concept to Timeshare, but with one fundamental difference.

Fractional ownership represents the evolution of the family country holiday home. And because of the exchange opportunities some fractionals offer, it can also be seen as a hybrid of country holiday home life and the exotic overseas resort.

Today, busy families in the US can purchase a one-tenth share in a luxury cottage set in an amenities-rich resort that guarantees them five weeks usage a year, and in many cases lets them swap some of that time for an overseas adventure.

Owners pay a management company to do the maintenance, so there’s no need to open and close the cottage, cut the lawn, weed the garden, scrape and paint, or replace the roof and windows. All they need to concentrate on is relaxing.

Fractional cottages are not timeshare – where purchasers own the right to “use” a property. Fractional buyers own a portion of the title or deed to their cottage and pay a portion of the costs. In most cases, each share entitles a shareholder to five weeks a year – 35 days – in the same cottage, although some buyers purchase more than one share, giving themselves access to more weeks. As owners, they can sell their share, lend it, rent it out or will it to an heir.

There are three reasons fractional ownership makes sense: it’s an affordable way to enjoy a million-dollar-plus cottage in a resort environment; it eliminates the need for repairs and regular cottage maintenance; and through exchanges, it opens up similarly glamorous resort properties around the world.

Fractional ownership is an ideal way to buy a portion of a luxury product. It’s a good alternative to buying something you’re not using all the time. Studies show the average cottage owner spends just 29 days a year using their property, yet they pay property taxes, upkeep and utilities on a full-time basis. With fractionals, those costs are divided among the interval partners.

fractional ownership is the fastest growing segment of the tourist industry in the world, partially because of the strength of the business model itself, but also because of “broader trends” in society. This is an era when consumers want the best in life but aren’t willing to save up for it.

If you want to own an impressive second home, complete with personalized services and located in an expensive resort area but can’t quite justify the expense because you’ll only be using it a few weeks or months of the year, this type of real estate arrangement may appeal to you.

read the full article here

Fractional Ownership is a slightly different concept to timeshare, but the basics are similar. Owners pay maintenance fees to a management company, which may rise unexpectedly or at rates way above inflation; and owners may find they have difficulty obtaining fair exchanges when and where they want.

At Owners Action, our objective is to support the consumer in timeshare disputes. We have entered into dialogue with thousands of timeshare owners from which we have discovered a pattern of abuse, deception and even fraudulent issues that have been systematically perpetrated by many of the major timeshare industry players to the detriment of owners.

If these issues affect you, contact us NOW to find out how we can help.