How Does Fractional Ownership Work

Fractional ownership is similar to any other real estate purchase, except that you are only purchasing a fraction of the property instead of the whole property. Different developments and properties have a variety of options. The fractional shares can vary from a thirteenth (1/13th) to a half share (1/2). A thirteenth share, for example, provides one weeks use of the property each season for a total of four weeks per year. If this were all that you wanted, you might want to compare the costs to a timeshare. However, more common on quarter shares, where you use the property one week out of every month, sharing the property with only three other purchasers. Under this unique form of strata title ownership, an owner has registered title to a one-quarter interest in the condominium, estate, or townhouse.

Management of the company is taken care of by a third party or a Homeowner’s Association. In some developments, the Homeowner’s Association leases the units from the developers, and you, as the quarter owner, sub-lease the unit back. In some cases, an annual budget is established and the owners make monthly or quarterly payments to cover the utilities, insurance, taxes and the like.