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Fractional Ownership demystified - 6 December 2007

A new trade body aims to improve the public’s perception of one of the most popular new ways for buying a property overseas, as well as providing a route through what could potentially be a complicated and long-winded process.

The Fractional Ownership Trade Association (FOTA), is being set up Piers Brown, founder of Fractional Life, the asset-sharing specialist, in order to distance the concept of fractional ownership from that traditionally-held view of the concept as the ‘new timeshare’.

The association will protect both fractional ownership operators and their investing public by a series of legal and technical documents, as well as providing a code of conduct that will give customers a framework of acceptable practices should they feel confused by the range of schemes and agreements in operation across the industry.

Piers Brown commented, “The 'not for profit' association's aim is to introduce some formalities and standards into this new sector and to try and ensure levels of integrity by operators.” This was backed up by Eric Gummers of Howard Kennedy solicitors, who said, “Fractional ownership is potentially quite complicated. A trade organisation would be good because it would sort out the people who are serious and separate them from those who aren't. It's also good to provide standards; some ethics or codes to ensure that customers get what's promised.”

One of the association’s aims will be to distance itself from the idea that fractional ownership is just another form of timeshare. While timeshare property has cleaned up its image enormously in the past few years, the two concepts differ hugely in operation and the final property status. Fractional ownership customers, though they often do not have the flexibility of destination enjoyed by timeshare investors, actually own their share of the bricks and mortar of the property that can be passed on, sold or bequeathed.

 

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