Fractional Ownership Purchases – Can You Claim a Refund?
A fractional ownership purchase is often sold and relates to a specific property, without allowing the use of such property, and the benefit received is converted into points that can be used to book holidays.
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A timeshare sale simply rebranded?
For many years the sale of timeshares has been on the decline, and approx. 10 years ago some of the bigger resorts adopted an approach of selling “fractional ownerships” as opposed to “timeshares”. However, the difference between the two is arguably minimal. CLC, and Diamond Resorts have been some of the leading timeshare resorts that appear to have sold or upgraded existing, or new members to fractional ownership products.
A timeshare owner is sold weeks or points that provide them with the ability to take a week’s holiday (or more) each year depending on what they have purchased, whilst paying maintenance fees each year for the time they are able to spend at the resort. The maintenance fees are payable even if you don’t take a holiday as they are based on the monies needed to ensure the upkeep of the resorts.
A fractional ownership purchase is often sold and relates to a specific property, without allowing the use of such property, and the benefit received is converted into points that can be used to book holidays. Maintenance fees are payable just as they would be with a timeshare, however, the buyer acquires a fraction of the value of the property being assigned, which is to be resold after a given number of years, and the proceeds distributed between the buyers and the resort.
What could go wrong?
In principle, the purchase of fractional ownerships would appear to be quite an attractive proposition, however, everything is not quite as simple as it seems. One of the first points to realise is that a fractional ownership looks like an investment as well as a holiday product.
The next problem is that the terms and conditions are complex and unclear:
- Is the resale of the property guaranteed?
- Does the resort have the option to defer the resale to a date of their choosing?
- Who will value the property when it is listed for resale?
- Will the resale of the property be advertised on the open market for all to see?
- What share of the proceeds will the resort retain?
Before distributing the proceeds to owners, will the resort deduct “outstanding maintenance fees” of other owners from the proceeds, resulting in you being unfairly penalised for other owners’ failures to comply with their contractual liabilities?
There are many risks with these products and those risks may not have been explained when the investor bought the fractional ownership.
We contacted Lincoln Green Solicitors after we heard that a company, we had invested in had gone bankrupt. We passed on all the information we had to Lincoln Green via phone calls and email.
We can tell everyone now that thanks to these solicitors we have got a settlement and we are absolutely delighted. Lincoln Green were so professional in all their communications with us. We were treated so well. We were put so much at ease that it was very easy to relate all the information needed. We cannot thank these people enough especially Karolina and would highly recommend Lincoln Green to anyone who needed help.
How we can help!
We believe that in many cases where “fractional ownership” products have been sold they have in part the characteristics of an investment. The consumer may have been encouraged to borrow money to invest in holidays as well as a speculative investment. We believe that in some cases there may be an unfair relationship in such cases between the lender and the consumer under the Consumer Credit Act.
At Lincoln Green Solicitors Ltd, we can assist you in pursuing a claim to receive the money you have invested under a “no win no fee” agreement. The compensation claim will also include any monies paid for maintenance fees where you have been unable to take a holiday at the resort, along with interest. If you have an outstanding loan in respect of your purchase, then we will also request that such a loan should be cancelled.
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