Shared Residence Ownership
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Frequently Asked Questions
Shared ownership vacation homes (also known as Fractional Ownership homes) are something that have been around for years but are just now hitting the investment real estate market (i.e. vacation homes, townhouses, condos, etc.). For years business men and women have been using the shared ownership technique to purchase everything from private jets, yachts to expensive jewelry. Shared ownership, suitably structured, allows unconnected buyers, or family & friends, to combine their resources and collectively own and share a beautiful vacation property at a fraction of the cost
An owner is able to resell, rent, gift or will this shared ownership interest in real estate, subject to an agreement with the other owners, similar to if it was a whole ownership interest in real estate. The documents require that an owner offer to sell his shared ownership interest to the other owners prior to listing or marketing their interest for sale. This simply gives the other owners the right of first refusal. This is not required in the case of estate planning. The price offered to the existing owners shall be commensurate to the price being offered to another party unless the other party is a relative of the present owner. In that case, the agreement between the two parties shall be their own understanding and not directed by the other owners. In all cases, any new owner must be approved by a majority the existing owners and the right to purchase by a new shared ownership member shall not be unreasonably withheld.
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People that have been interested in the property thus far are all professionals and mature successful adults. Some are retired or about to retire, others are younger families. They all have many restrictions on their time due to their personal and professional obligations. They are interested in owning a beach home, as they tend to, or would, spend time there as it is, and want the convenience of owning their vacation destination. They are attracted to the fractional concept due to the shared responsibility for the property at a fraction of the cost of whole home ownership.Back to the Top
Yes; you can buy as many shares as you like.Back to the Top
Yes; you can buy a share with a friend, family member or business associate. Each of your names would go on title, and you would be treated as one entity by the management company and other owners. It would be up to you how to split the use and responsibility. All members would be presented to the Developer and then the other owners whichever stands to be the case of ownership at the time.Back to the Top
You are entitled five weeks per year to use the Villa. We have proposed a plan of usage based on successful fractionally owned properties in other locations. It allows for weekly rotation from Sunday at 4PM until Sunday at 11AM. In order to accommodate arriving guests, this rule will be enforced by the housekeepers and honored by the shared owners. Any and all exceptions will be made 48 hours in advance and only with the Operator.
Once we have a super majority of owners we will poll them on the reasonableness of the calendar. If the group wants to change the calendar, we will do so. Because of the small number of owners, potential conflicts in family and business schedules may be able to be accommodated through the cooperation of all owners.Back to the Top
For the first year a number will be assigned to the owner in the sequence the owner has entered into this agreement and becomes a member of the Home Owners Association (HOA). The following year, No. 1 will become No. 2 and No.10 will rotate to No. 1 and so forth, to start the priority rotation.
This system may be changed by a vote of the “super majority” of owners. There will be an open reservation calendar of weeks and if there is a conflict for an owner desiring one of those weeks, the priority number system will decide the owner eligible to receive the property. There will be considered 4 major holidays per year. Once an owner has reserved one of these holidays, he will not be eligible for another major holiday until the following calendar year. Christmas, New Years, Thanksgiving, Easter are considered to be the “major” holidays until changed by a super majority vote of the owners. If a owner requests the Christmas New Year time period the Operator will consult other owners and see if this request can be accommodated. A complete outline of how the reservation system shall operate is available for review.Back to the Top
Yes, the rental program is managed by the Operator. All rentals are required to be confirmed with the operator in advance with information required in our rental policy. Any damage or other costs created by the rental party will become the responsibility of the owner assigned the week of occupancy and not the responsibility of others. A deposit will be requested by the Operator when acting in behalf of a shared ownership interest.
If the Operator is requested to find a rental party and is successful in doing so, the rental amount received will be split 65% to the owner’s monthly due and maintenance fund and 35% to the Operator unless other arrangements are agreed upon between the shared owner and the Operator. All taxes of any kind that may result by the rental will be deducted and report by the Operator prior to the dissolution of these funds and a reported submitted to the owner receiving this income benefit. There is a more extensive rental program available to be released to all potential fractional owners.
Owners will be offered available time in addition their 5 weeks available for personal rental use at a greatly discounted rate. This program is being developed and will be an enhancement to the benefits of shared ownership of the Villa.Back to the Top
Yes; the annual budget includes daily cleaning and an annual 'deep-clean' service. A maid will be available Monday thru Saturday for 6 hours per day. There is generally no maid service provided by the Operator Sundays except for the preparation of the Villa for the new arrival after your departure.Back to the Top
Currently, the documents do not permit pets to arrive with their owners. Also smoking is not permitted inside the Villa. Should the owners collectively want to permit pets or smoking, the documents can be modified by a majority vote.Back to the Top
Ruiz, Schatz & Dickens, S. A. (RSD) has being appointed to be the Operator by the Developer for an initial 3 year period starting January 1, 2011. After that date a new Operator will be designated or RSD can be reassigned this responsibility by vote of a super majority of owners. The decision of who will be the Operator will be confirmed 3 months prior to the end of the initial 3 year term of RSD. RSD will collect the money quarterly from all of the owners, pay all of the bills, arrange for maid service, security on the property, and ensure that the property is properly maintained. A quarterly statement will be sent to each other showing the use of the funds as well as the balance for reserves.Back to the Top
Yes, each owner will be a member of the Home Owners Association (HOA) and have one vote on all property matters for each Trust beneficiary ownership interest owned. There is no worry about the HOA fees as yours is included in your quarterly dues. This all inclusive fee takes care of the Operator fees, insurance, water, electric, paper goods, house cleaning, management, taxes and more.Back to the Top
The annual amounts to be paid are based on an estimated annual budget. Each owner will be responsible for 1/10th of the annual budget to be paid quarterly. This budget will be created by the Developer and assigned to be collected by the Operator and sent to the shared owners at the beginning of the 4th quarter of each calendar year. It is estimated at this time that the maintenance and replacement costs will be a monthly amount of $ 395.00 which will be paid by a quarterly payment of $1,170.00. The developer will hold the unsold shares until they are sold and pay the difference of what is collected for maintenance to the Operator less the management fees but not to exceed $ 1170.00 per unsold share plus Developer’s shared held. The Villa will be maintained in the condition as seen when purchased by the shared owners.
As this is not a brand new property but a well maintained property, it is not expected that the Developer will be able to anticipate all replacement items the first five years of operation of the shared ownership program. A budget will be created each year and presented to the owners. Until a super majority of owners is reached, the Operator will be considered the expert in creating this budget and not become a conditional budget for the owners to reject. After a super majority is reached, the owners will vote each year to approve the proposed budget..Back to the Top
Yes, just like any other real estate. The documents provide for offering a right of first refusal to all other owners before selling your share. You could offer it for sale yourself or list it with a Realtor of your choice. Please see the first part of this FAQ regarding “What is Shared Ownership”.Back to the Top
No provision is made at this time for the financing of the purchase of this fractional ownership interest by the Developer.
A wire transfer is required for payment starting with a 30% deposit. The wire can be in domestic currency or in U.S. dollars. Account information will be provided for this purpose depending on the currency being utilized for the down payment and final payment.Back to the Top
The ten-person shared ownership takes the best aspects of timeshare flexibility and ease of ownership and combines them with the best aspects of traditional second home ownership, legally-deeded property and peace of mind knowing where you and your family and friends are going to spend many happy times together.Back to the Top
Properties typically offered for shared ownership are considerably more upscale and offer substantially more usage than a traditional timeshare. They are much more flexible because of the small number of owners and they also represent a more significant percentage ownership and appreciation opportunity. Most important is that the owners of this investment will own the Trust beneficiary interest and be on the title of the property whereas a time share owns a portion of calendar dates.Back to the Top
Totally hassle-free ownership...... because there is daily cleaning services and at this time, full stock and inspection is done. The management service fixes the problem and bills the owner for the repairs. If anything is missing or damaged they will repair or replace immediately.Back to the Top
No! Shared ownership is SIMPLE. It is similar to a typical real estate transaction involving a purchase agreement between buyer and seller and the agreement with the Developer. A knowledgeable lawyer is available at a modest cost of $ 800 to assist the purchaser and or his Realtor through the process.Back to the Top
You are the ideal shared ownership prospect if you want the benefits of a resort vacation home but cannot justify the expense and time commitment of a fully owned second home. Many vacation properties are unused for much of the year, but still require maintenance and upkeep, at a considerable cost. Shared ownership with an Operator provides a cost effective way to own a second home in some of the most desirable locations at a fraction of the cost and with a minimum amount of effort and responsibility. The point is not to arrive at your vacation home and start dealing with the needs of your home away from home but to just enjoy yourself!