Fractional Ownership > Frequently Asked Questions

Fractional ownership is not a new concept, but one that is little understood by many people. Here we have listed the most frequently asked questions in connection with fractional freehold property:

What is fractional ownership?

Fractional ownership is permanently shared ownership of the title to a holiday/investment property that can be used by each shareholder for a set amount of time each year. Together, owners own the land and all the units, furniture, equipment and other amenities exclusive to this property. Ownership can be kept forever, or sold or gifted to someone else.

How many owners would there be?

We recommend four owners as being the optimum number. (i.e. quarter shares.)

What percentage of the property would we each own?

Divide 100% by the number of co-owners (four) and each owner would own 25% or a ¼ share of the freehold.

How much usage does a typical fractional share provide?

Our recomendation would be quarter shares, therefore each owner would be allocated 12 weeks usage.

Fractional ownership offers far more usage options than a typical timeshare agreement due to the reduced number of associated owners.

Who decides who uses it when?

A typical fractional model will incorporate usage calendars which ensure fairness for all four owners. The calendars can either be weekly, 2 weekly or a combined weekly/two weekly.

But really, isn’t this just a new name for Time-Share?

No. The key difference between timeshare and Fractional Ownership is that Time-Share is simply the purchase of “time” in a resort for fixed weeks. With fractional ownership you purchase a share of the property’s freehold title deed, so you own an asset that may increase in value, may be sold or may be passed on to future generations. You also get much longer and more flexible usage of the property than with Time-Share.

Is fractional ownership a new concept?

No. The concept of shared equity ownership originated in the USA and was first used for the purchase of corporate jets. It has also be applied to all sorts of other things such as yachts, cars and jewellery.

Properties in the USA & Canada have been sold fractionally for 10 years although it has only fairly recently been introduced in Europe. In Canada, 40% of holiday properties are sold fractionally.

It is still a very new concept in Turkey but the concept is simple and lends itself perfectly to the holiday home market. We firmly believe that it offers a wonderful opportunity for people to purchase 12 weeks usage of their dream home in Turkey.

Are there any rules and regulations in place on the property?

Yes, there should always be a full set of rules and regulations which will form part of the main contract (your “Agreement for Sale”) and will cover, for example, maximum occupancy rules (to ensure that wear and tear on the property and its contents is fair to all owners) and details of any sinking fund covering dilapidations which is in place.

What is a sinking/dilapidations fund for?

Fractional Ownership owners are often required to contribute to a sinking/dilapidations fund which may be in place to cover general wear and tear on the property, for example the replacement of furniture, equipment, refurbishment and interior re-painting, in order to keep the property in excellent condition at all times. The sinking fund is co-ordinated by the management company responsible for your property.

What happens if another fractional owner in the property encounters financial difficulty? How are the others affected?

The simple answer is that they are not affected. Owners hold title as “tenants in Common” so, financial difficulties do not affect the others. Creditors have no claim on the others or the others’ interests.

Who cleans the property?

From the outset you would enter into an agreement with a professional management company who will arrange regular scheduled cleanings for the owners between one owner leaving and another arriving, but you should check your specific agreement.

In addition, full inventories are taken by the management company between each owner taking up occupancy. Any damages will be made good, the property will be fully cleaned and the bed linen changed in readiness for the next owner.

Typically two weeks a year are set aside for maintenance.

What are the estimated monthly expenses?

These costs will vary from property to property. They will, generally cover virtually everything including taxes, utilities, insurance, maintenance, cleaning, inventories etc. They should also cover expenses that are unique to the region such as pool maintenance. Also worth considering are the costs and damages beyond normal wear and tear, although this should be covered by the sinking fund in most cases. Your agent can help you further in knowing exactly what the monthly expenses are. Don’t forget, whatever the annual maintenance charges are you will only pay ¼ of them.

Can I sell my share?

Shares may be held for generations, in perpetuity, or may be sold, transferred or willed at the wish of the shareholder. You have the right to sell your ownership just as with any freehold property.

Will my shareholding ever be diluted?

The answer to this is “no”. You will own 25% of the property in perpetuity.