What is Fractional Ownership?

It's one of the fastest growing trends in real estate. Fractional ownership is simply a shared ownership of a vacation home by unrelated and/or related parties. Each owner receives a share of an interest in his or her home through either a deeded or ownership interest in an LLC that holds all the beneficial rights to all the assets and services. As a legally approved and regulated product, fractional ownership affords each owner protection from any defaults of other owners. Fractional shares are typically sold from 1/12 (4 weeks) to 1/4 (3 months) interest in a home. Owners have the same entitlements with fractional as if they owned the whole home - they can use it, rent it, gift it, will it or sell it.

In fact, fractional owners are able to enjoy exchangeability with other properties. Fractional ownership makes sense financially as owners have an interest in a property that coincides with the amount of time they intend to use it, while sharing the operating costs with others. This means an "upgraded" lifestyle for less cost. Owning fractionally is truly a very prudent and financially sensible way to own a second home.

Why buy a fractional instead of a wholly owned second home?

There are many reasons. Probably the most compelling is that for a fraction of the cost of whole ownership, you can enjoy all the assets, amenities and services of a home that would normally cost millions of dollars. Plus, fractional ownership allows for full service, not self-service vacationing. All the luxuries of a full service luxury resort are waiting for you and additionally, everything from bill paying to upkeep, maintenance, furniture and fixture replacement is taken care of. Finally, you won't have to tie up millions of dollars in one home in a single destination. You'll have the freedom to purchase fractional interests in other places, possibly creating your own diversified portfolio of vacation homes.

Who should buy Fractional Ownership?

It makes sense for a wide variety of purchasers. First is the individual who wants a home with amazing amenities and services in their preferred vacation destination, but realizes it just doesn't make sense to carry expenses for a home that will be used less than six months annually. Second, this model makes sense for several friends or family members to own mutually or to be purchased by your company for business meetings and conference, or to be used to reward both your employees and your customers. Villa Las Palmas sleeps 18, so multiple parties can stay together comfortably. Finally, because ownership interests are a minimum of 12 weeks annually, multiple parties can divide time amongst each other easily.

How much time will I have available for use?

Each 1/4 Fractional interest provides 12 weeks of usage annually in perpetuity. There are 4 weeks left over that the Management Coordinator may designate for maintenance of the home, but if there is no maintenance needed, these weeks will be added to the Space Available Vacation time.

How does the Owner Usage Plan work?

Consistent with all the benefits of whole ownership, each Owner can (1) select their Planned Vacation Weeks in advance, (2) rent their designated time as desired and (3) use all their remaining time on a "first-come, first-served" Space Available basis. Unlike traditional fractional and Private Residence Club (PRC) Use Plans, this program provides owners the ultimate in value and flexibility.

Can my Fractional Ownership interest be resold or transferred?

Yes. Your interest may be transferred at any time for a transaction fee, per the terms and conditions of the Operating Agreement. The other owners will enjoy the first right of refusal to purchase your interest. If they refuse, then the interest can be listed and sold on the general market. You may select E3Escapes to market and sell your interest, or any other 3rd party representative of your choosing.

Can more than one individual or family own a fractional interest?

Yes. An interest can be owned by a single party, multiple parties or even by companies.

Once I own my property, can I swap Planned Vacation Weeks with another owner or rent if space is available?

Absolutely. Swapping dates and combining weeks can be done at the discretion of the Owners. A password protected online Owner's Clubhouse will be created showing each owner's Planned Vacation Weeks for the year. Owners will be able to communicate to the Management Coordinator who will help facilitate and coordinate requested trades.

Can I rent out time I am unable to use?

Yes. In each usage year, the Association will reserve eight (8) Usage Weeks for Rental to Non-Owners. All net income will be allocated equally among the four (4) Ownership Interests and used to reduce the Owners’ Lodging Fees. Owners may also rent their Planned Vacation Week(s) on their own, or with appropriate advance notice, you may employ the Management Coordinator to attempt to secure a renter for you. A separate owner rental agreement will be established between you and the Management Coordinator that outlines the specific terms. All rental proceeds will go directly to the Owner.

Can I send unaccompanied guest to vacation in Villa Las Palmas?

Yes. You may send unaccompanied guests to Villa Las Palmas during any of your Planned Vacation Weeks.

Is my Fractional Ownership home tax deductible?

In many cases, expenses and income relating to fractional second-home ownership qualify wholly or partly as tax deductible. This is relative to factors of use and rental as defined by the IRS. Please consult your tax advisor for specific guidance on these matters.

Who pays the bills and collects the expenses?

The Management Coordinator will be charged to handle all maintenance and management of the property, as well as administrative functions such as payroll, bill paying and accounting. The Board of Directors will have communication and oversight of the Management Coordinator including a professional third-party audit/review of the books.

Who pays for furniture, fixtures and appliances that require replacing?

There is Furniture, Fixtures, & Equipment Reserve (Capital Replacement Fund) set up for the entire Villa Las Palmas Collection, which will cover replacing all items every 5 years. These are set conservatively by the Management Coordinator with the goal of never needing any special assessments. There is even replacement reserves built in to replace the automobile.

What if damage occurs to the property by individual use and not wear and tear?

Every owner is responsible for themselves or their guests when in residence. Any damage due to negligence (not normal wear and tear) of the owner or their guests will be the responsibility of the owner for direct repair or replacement.
Do the co-owners of fractional ownership homes have to meet in person?
Typically, there is no need for the co-owners to meet. The Management Coordinator is responsible for governing the use of the home as defined in the operating agreement. However, many times owners will already know each other or will have opportunities to get to know each other in order to facilitate the Owner-to-Owner exchange of usage.

Are there annual Owner's meetings?

Yes. An annual owner's meeting will be held to elect Board members and to discuss key financial matters such as current year expenses, current account balances, and next year's budget for annual dues. These meetings will be held via conference call and web meeting. Owners may attend in person or by proxy. Meeting agendas are sent to owners 30 days prior to any annual or special meeting.

How and when do I pay my Usage Fees?

Each owner will provide either a credit card or checking account for direct withdrawal of a portion of his or her annual dues each month.

What happens if an owner fails to pay his/her Usage Fees?

We have carefully set up our program with several remedies to ensure that there is no impact whatsoever on the paying owners. First, a default reserve is established at time of purchase that will be drawn on only when necessary to cover any expense shortfall of a delinquent owner. Additionally, as per the operating agreement, the Management Coordinator will immediately lock out that owner from further usage and will place their Planned Vacation Weeks into the rental program to use any proceeds to cover that owner's shortfalls. If an owner continues to be delinquent beyond a reasonable time, as specified in the Operating Agreement, the Management Coordinator has the obligation to place the interest on the market for sale, with first right of refusal going to the other owners.

Is transportation available to and from Villa Las Palmas?

Yes. As part of the 6-Star Services, airport transfers are included up to six (6) guests and for one round trip to the Airport. Should additional Airport transportation be required, each round trip will be at the rate of $175.00. Additionally, the automobile is available for owner use at all times while in residence. A private driver can also be arranged to take you wherever you like, any time.

Are pets allowed?

Yes. Villa Las Palmas Collection permits up to 2 pets per stay – dogs and/or cats only.

Is smoking allowed inside the home?

No. However, there are numerous covered outdoor areas where smoking is allowed.

Can I leave my personal belongings at Villa Las Palmas?

Yes. Each homeowner will have his or her own space to store personal items, such as golf, fishing, scuba and other equipment or personals. Also, each owner will have a private locker in the wine cellar for favorite wines, liquors and cigars.