FNTC can help developers structure their fractional development to meet all legal
requirements of the country in which it is located. It will also ensure the protection
of developers and owners alike.
However the following tips offer a starting point for meeting legal requirements:
- Investigate the laws and legislation in place in the
country in which your property is located.
- Consider the structure of the fractional offering. Is
to be ‘right to use’ like traditional shared ownership models or is it a form
of property investment? Different rules apply to each structure.
- Consider the property you choose – you need to ensure
that the original terms of sale do not restrict its use to that of a single
family home or include ‘no shared ownership’ clauses.
- Check planning restrictions – the property may be
listed or there may be restrictions with neighbouring properties and access.
Be sure you can legally do what you want to.
- Consider carefully the seasonality and demands on
occupation. For example under UK law only four people can be named on a
property title, if you have more owners it will require a different structure
to the ownership title, perhaps using a specialized trustee like FNTC.
- Although different to timeshare, fractional
properties are impacted by timeshare legislation in some jurisdictions. If
developers are selling within the EU, they need to consider the cooling off
period, prohibition on taking deposits during this time, and the provision of
necessary disclosure information at point of sale.
- Spend time on the documentation to ensure it is clear
and future-proof.
- Organise consumer finance. In the present economic climate this may mean that
the developer provides in-house finance to his buyers. FNTC can assist by setting
up a compliant consumer credit administration service. This will reduce infrastructure
costs to an absolute minimum and add considerable value to the business.
An initial, no obligation chat with FNTC’s business development team will give you
all the insight you need to explore the fractional market.
Call us on +44 (0) 207 224 3533 for Europe, or on +1 866 978 2571 for the Americas and Caribbean.