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| HOW DO VACATION FRACTIONAL GROUPS START? |
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© March 16, 2007 by D. Andrew Sirkin.
Any reproduction or use of this document or any part of its content
requires the written consent of the author. Mr. Sirkin is chief attorney for Paris Pied-à-Terre Fractional Ownership. Contact Mr. Sirkin at
dasirkin@earthlink.net, or visit www.andysirkin.com
In many cases, vacation home sharing starts when a group of buyers create the co-ownership structure. For example, an individual buyer might assemble a group of family or friends, use a qualified Realtor to locate a home or condominium, and then work with an attorney with vacation home co- ownership experience to create the usage and ownership arrangements, and create the co-ownership agreement.
In other cases, a builder, property owner or his/her Realtor makes an elective decision to market a property as fractional interests, either because he/she thinks this is the best way to maximize the sale price, or because he’/she wishes to sell only part of the usage rights. This type of formation works best for when the seller or Realtor develop the co-ownership structure and agreement before marketing (as discussed below), and each buyer is given the opportunity to review and approve the structure and the agreement before becoming committed to purchase.
Finally, there are real estate developments designed specifically for fractional ownership, or which include a fractional ownership component. In these arrangements, there will be more than one house or unit participating in the fractional structure, and both amenities (such as recreational facilities, for example) and management is shared by many fractional ownership subgroups. In some cases, the a co-owner uses during a particular stay is determined by availability rather than by ownership, so that the co-owner does not necessarily use the home he/she owns.
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