Fractional Ownership

Many of the leading resort brands now include fractional ownership within their product offering to provide more choice and improve their overall business performance.

Fractional ownership can help:

  • Maximize profitability
  • Increase customer loyalty
  • Increase year-round occupancy levels
  • Attract new customers who don’t want the hassle of owning a second home

FNTC's legal structures are ideally suited to facilitate fractional ownership products and provide both developers and consumers with a wide range of benefits.

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How it works

In its simplest form, part of a luxury property is sold as a club membership in segments of 1/4, 1/8 or 1/16, providing the purchaser with an annual fixed or rotating term of use and with access to all amenities. A one off purchase fee is paid to acquire the fraction, together with an annual fee to cover the costs of maintaining the property and any amenities provided.

How the fraction is acquired can vary depending on the property’s location and the long term requirements of the developer. The most common forms include:

  • A club membership
  • A deeded interest
  • Ownership in a company limited by shares or guarantee

Currently, the most popular and successful fraction - in terms of sales - targets consumers who want the use of a property every year but with a planned exit. The consumer buys for a fixed term (i.e. 10 or 15 years) and FNTC holds the legal title to the property in trust on behalf of the fractional owners.

At the end of the fixed term, FNTC arranges for the ‘whole’ property to be sold on the open market. Upon sale, the fractional owner receives a proportionate share of the net proceeds which is disbursed by FNTC.