What Is Fractional Ownership?

There is a tendency in the world of holiday ownership sales to paint the fractional ownership product as something very different to that of traditional timeshare.  It is however pretty much the same thing – rather than on a leasehold basis, resorts are able to sell off individual properties to multiple owners often dressing it up as an elite club promising extra benefits and higher levels of accommodation and service quality.

Should I Buy Into Fractional Ownership?

Because we are dealing with essentially the same product here, certainly sold in the same high pressure way, you should approach fractional in exactly the same way we would recommend you approach timeshare – that is with extreme scepticism and caution.  Indeed, in some cases these fractional products have been sold in such a way that some courts have described them as nothing more than investment fraud.  In these cases the fractional product has been presented as a financial investment.

The value of the unit purchased is said to be directly tied to the value of the overall property and as such it will be a simple matter to sell on for a good profit at a later date.  Of course this projection is simply the fantasy of a salesperson out to relieve you of your hard earned cash so if you hear this type of pitch during a sales presentation alarm bells should be ringing.

Why Is Fractional Ownership So Popular?

For those with plenty of money to spend on holidays, a high end, luxury apartment within a fractional system can make sense.  In the same way as timeshare you’re only paying for the time you use – rather than owning a holiday home outright – and you have access to superb facilities, professional management and an exchange system which allows to access to many of the world’s most exotic destinations.  If that is your situation and you are comfortable with the finances then al wee and good. But what about those who came into the system via other routes?

For some unfortunates the road to owning a fractional product was a long and arduous one with skulduggery and broken promises at every corner.  In many cases they were sold a selection of timeshare weeks as an investment to sell on.  When those weeks inevitably failed to sell they were left with several maintenance fees to pay and several weeks of timeshare that they couldn’t use.

Once they were in this position it would have been fairly easy for a timeshare salesperson to persuade them to consolidate their “portfolio” into a fractional product that carries only one annual maintenance fee and, according to the salesperson, is more desirable than a timeshare and therefore easier to sell.  So you can see that whilst sales figures in the fractional market seem buoyant it is often because of misfortune that people become members.

Be Aware

Very often the salesperson will tell you that the fractional ownership they are proposing you purchase is not in any way a timeshare or a points club.  Do not let this pitch put you off the truth – for all intents and purposes a fractional product is exactly like a timeshare.  It is covered by the laws and regulations and most certainly is not an investment.  There is only one significant difference between fractional ownership and traditional timeshare – except perhaps the higher standards – and that is that the member’s name is on the actual deed of the property.

It is also worth bearing in mind that the price of a fractional product can be many times that of an equivalent sized timeshare although the contracts will be virtually the same meaning you are committed to ever spiralling maintenance fees for years to come or in many cases forever.

If you have fallen foul of mis selling and are now a member of an unwanted fractional product we may well be able to help you.  The Timeshare Help Centre has been providing assistance in terminating unfair contracts and has a wealth of experience in getting people out of timeshare, fractional and points clubs.

To find out whether you could be able to relinquish your contract or indeed, you have the valid basis for a compensation claim, get in touch with us today for impartial, professional advice.