Owners selling fractional interests

Sharon,

 I've seen others doing it here as well. Another one I've seen are the splitting of duplexes into condos. I always wonder who gets to decide on maintenance, problems, lawn care, etc in cases like that. There's no association to dictate such things.

Maybe setting up an LLC with rules & regulations & have each partner agree to those outlined terms. Obviously a condo association would have to approve such instrument but that may be a possibility - at least help legally.

 Kee us posted...has anyone consulted a real estate attorney?

Sharon, you need a securities license to sell fractional ownership in Florida.

Interesting discussion here.  I would like to see more real estate attorneys involved here on AR to shed some light on this.  I have no experience with time shares but from the little bit I do know, this sounds like it would fall into that category.  But how would we as Realtors handle a transaction like this?  Good question you raised here.  

Well, there are a lot of ways to pave the road to the courthouse.

This is one of the surest ways I've ever seen.  I hope they save the money they collect for the "shares" because they'll need it to pay their attorneys.

 

Lenn

Wow, that's a radical concept and one that should keep our interest here.  I've never encountered anyone doing this.  I would think the legal ramifications would be daunting.  But who knows?

You've uncovered an area where we could all use more information. I'll be looking for responses to your post. Thanks for asking about this.

Sharon - Fractional interests crossed our radar last month - we have to study up on them however they are part of a much bigger picture for us in 2007.

http://www.forbes.com/business/forbes/2006/1225/068.html    Forbes

 

http://users1.barrons.com/lmda/do/checkLogin?mg=evo-barrons&url=http%3A%2F%2Fonline.barrons.com%2Farticle%2FSB114869210443564948.html%3Fmod%3D9_0031_b_this_weeks_magazine_main     Barrons

 

Here are some related articles, still fishing for the really interesting one of the fella that is making a club out of the joint elite owners.

I'll be interested to hear what people say. Seems to me it could be done but there might be some complicated legal and zoning issues. Lots of complexes don't allow rentals for shorter periods so that would have an impact in a particular area, especially if all residential, and who will manage everything? Could be some additional expenses for the management process (e.g., monthly dues), as well as the initial legal process to get it all set up. The resorts do it all the time - we have several right in our area here in Carlsbad at the La Costa Spa and at the Four Seasons, but wonder how it will or can work for an individual home. Maybe like a condo conversion?

Sharon,

Thanks for the post. Would it no make more sense for the seller to form an LLC? Advertise that the LLC is looking for partners in this venture. The interested parties would provide the down payment and closing cost funds and have the property purchased by the LLC.

 

Sharon,

Quarter-shares have become popular in my resort market.  All of these properties are condominium units, and the management and ownership rules are set forth in excruciating detail in the condo master deeds.  Although four quarter shares are more costly than a whole ownership unit, the price entry point and continuing operating expenses are much less.

Sharon.... I agree..... this would be an interesting topic... but as a few have said.. it would be like a time share in my opinion....  but I have no expertise in this.  Keep us posted....

Sharon ~ when times get tough, people get creative.   I think you are wise to bone up on the particulars before you talk to your prospect.  It looks like it could be both a good and bad idea, depending on how much regulation one anticipates.

kk

Necessity (market adversity) is the mother of invention....could this be a new wave forming?

This sounds pretty complicated to me. That's why I can hardly wait to hear how you resolve it.!!!

This is an old post, but I have a realtor friend that has an attorney brother who does fractional sales. Next time the situation arises, I will refer my friend.