Fractional Ownership, is it just another word for Timeshare?
Well it depends on where you are and what scheme you have entered into. In the United States Fractional is regulated by Real Estate laws.
Generally a property is divided up into say Four, with owners each having 3 months use. These properties may be Freehold or Leasehold with either 50 or 99 year leases. In the US the value of these properties tend to follow the values of the property market. It gives the owners a quality holiday home without laying out for a second home. These properties also tend to be on managed resorts or condominiums, so maintenance fees are usually applicable. The positive side to this is when it is time to give it up, it can be sold and if the market value has increased then thank you I make a profit.
The problem now comes with Europe, Fractional Ownership is governed by Timeshare law. It is the resorts that are marketing it, Club la Costa and Diamond being the biggest. So if it is subject to Timeshare laws, then obviously deposits paid within the 14 day cooling off period applies, as does the selling of it as an investment.
During my research I have spoken to many people who have purchased Fractional, all have told me the same thing. They purchased to be rid of their timeshare, and the only way was to take on a fractional, owning several weeks for periods starting at 5 years up to around 20 years. At the end of this period the property would be sold and they would reap the rewards, then being free from their timeshares. Well to me this smacks of what a friend described as “A Pig In A Dress”.
The property is going to be sold, but all fractional owners must agree. Did they all buy at the same time and for the same period?
If not how can any agreement be reached, also who has the controlling shares?
Somehow I cannot see the resorts selling off all the available Fractions, thus losing control.
So what happens at the end of this period, does the consumer revert back to their original timeshare?
This scheme is still in its infancy in Europe, it looks and sounds great with the slick, smooth, fast talking sales rep. But it does look as though it is not property you are buying but the Right of Use. In other words it seems that it is just another way of selling Timeshare. We have already seen another term take over from that dreaded word, Holiday Ownership.
On the Club La Costa Members Blog dated 10th July 2012, it states that First National Trust Company who are the trustees of the Fractional Property Owners Club, said that “this model should never be advertised as an investment”. I wonder if the sales staff have been told this in training, or have they been told to ignore it? We have seen this with other aspects of timeshare sales in the past and look where that has led, litigation for misrepresentation and mis selling.
Is this just another scheme like points or floating weeks to fleece you of your hard earned money?
Only you the consumer can answer that, unfortunately by the time you actually find out you may be the loser of thousands.
If you have been to a fractional presentation or have purchased, Inside Timeshare would like to hear your story and your views. Even if you are happy with your purchase I am willing to publish your comments, unlike many other blogs Inside Timeshare looks for balance.