Fractional Ownership F.A.Q.
Which type of company will hold the lease to each unit?
Each 199 year lease will be held by a company limited by guarantee. This type of company is often used by non-profit making companies and charitable institutions and club associations. The liability of each purchaser (known as a "member") will be limited to £5.00.
In accordance with UK property law, it has been recommended to us that legal title to the apartments be held in seperate companies limited by guarantee, as referred to above. However, in order to avoid the potential tax implications of property ownership through a company, our accountant has recommended that beneficial owndership of the apartments is held outside of the company and a Declaration of Trust is being used for this purpose.
In addition to the initial purchase price, what additional costs will I be liable for?
The management company will enter into a seperate Management Agreement with the apartment-owning company to cover items specific to the individual apartment, including cleaning/linen/maintenance etc., for which members will be required to pay a management charge. Members will also pay an amount to cover general service costs of the building, which will be split between the various apartments at Astor House according to the size of the apartment. These costs will be reviewed and set for each year and the current years' costs will be advised at the time of initial purchase.
Will I be allocated the same 5 weeks in every year?
No. The allocation system is set out in the Articles of Association of each apartment-owning company. Members will be allocated their 5 weeks in advance on a 10 year rolling programme, a copy of which is enclosed.
Can I switch weeks with other members?
Yes, prvodide that you can find another member that wishes to use your allocated weeks, there is no reason why members cannot arrange between themselves to swap their allocated weeks provided that prior notification is given to the management company.
Can I let my weeks out if I am unable to use my 5 week allocation?
The intention of the fractional scheme is for owners to enjoy their property for up to 5 weeks each year. However, you are free to let out your weeks if you are unable to use them, although you will be responsible for those using the apartment during your allocated weeks. For a letting fee, the management company will be happy to assist in letting your apartment or you are free to arrange this privately (following prior notification to the management company).
Can I sell my fractional?
Yes. You may transfer your membership at any time to another willing buyer of your fractional membership. New members must sign a written consent to become a member and the outgoing member must simultaneously resign their membership. However, each "outgoing member" is first required to offer the other "continuing members" the opportunity to buy their fraction. Should more than one continuing member wish to buy the additional available fraction, then the outgoing member will be entitled to transfer their membership to the highest beidding continuing member. If no continuing member wishes to buy the available fraction, then the outgoing member is free to tranfer the existing group of members. Members can arrange these transfers privately, although it is anticipated that the management company may provide assistance to fractional owners wishing to sell their fractions in the future.
Our experience suggests that most people do not take legal advice on fractional ownership schemes. However, for those that do wish to it is very unlikely that your usual solicitor will be familiar with fractional ownership schemes. In order to avoid potentially significant expense, we can recommend independent solicitors who are familiar with these schemes and therefore offer a cost effective service. Please ask the agent for details.