Putting Timeshare and Fractional Ownership in the same category is a mistake!
Fractional Ownership of a vacation home or condominium, while sometimes being referred to as “vacation ownership”, is confused with another shared ownership plan called “timeshare”. This is a mistake. While the various Fractional Ownership plans may share some characteristics with its cousin, timeshare, the differences are significant enough to consider Fractional Ownership in a category of its own.
The mistake is easily made because, currently, the laws and statutes, in most states, that govern timeshare, also regulate Fractional Ownership. As a result, the public offering statements and ownership documents use the term “timeshare” as the only legal description that applies, thus confusing the buying public. There is no doubt that Fractional Ownership of a home or condominium evolved from timeshare which, some thirty years ago, initiated the unique shared ownership concept that took a condominium and broke out ownership into weeks. But, Fractional Ownership is really quite different.
Timeshare is a vacation product for the broadest segment of the population, and as such is a wonderful concept that gives millions of families the opportunity to vacation a week or two in locations and accommodations that may have been beyond possibility without that form of shared ownership.
Fractional Ownership is a different product. Ownership of more than a couple or a few weeks, in its various configurations and usage patterns, is regarded as Fractional Ownership. That may be anything from a one twelfth ownership (4 weeks of usage) to a one quarter ownership (13 weeks of usage). 2002 figures provided by Ragatz Associates shows that 76% of fractional owners have five weeks of usage or more, with 43% having thirteen weeks of Quarter Ownership.
Selling individual homes and condominiums as fractional ownership can be a beneficial marketing approach, even for properties that are not selling well as whole ownership.
As the sense of panic created by recent economic calamities subsides, more and more people are likely to view fractional ownership as a less expensive and lower risk alternative to whole ownership, and a superior alternative to vacation rentals and hotels