Shared wisdom

Here’s a word you’re not going to hear from a lot of developers these days: time-share. The term is still loaded with images of worthless surplus condos, pushy developers vanishing into bankruptcy and ruined investments. Today the term of choice is fractional ownership, which adorns glossy pamphlets alongside photos of shiny new homes snug in their luxurious resort lots. But the very concept of shared property ownership is still enough to set off one’s internal conspiracy alarm, so here are a few tips to help keep your co-purchase free of nasty surprises.

Don’t take a mortgage for granted
Despite having been around in B.C. for a decade, fractional ownership can still be a fairly new concept in the offices of many mortgage brokers, warns Davis LLP partner Brian MacKay. Although some banks and credit unions have come to trust these buys as worthwhile investments, many simply don’t have experience with them and won’t touch these deals, he says. “I’ve seen a lot of people get in trouble by thinking they would get financing and having it fall apart.”

Know what you’re buying
Although the term is rarely used, most properties available for fractional ownership in B.C. are considered time-shares according to provincial law, says Russell Benson, a partner with McCarthy Tétrault’s Real Property and Planning Group in Vancouver. “Purchasers should be aware that it is a time-share, albeit in sheep’s clothing,” he says. The important thing to look out for is whether you’re buying a registered interest in the property or just a licence for how and when you can use it, he explains. The difference is that having a registered interest allows you to get a mortgage and benefit from any increased value of the property. A licence for the use of the property, on the other hand, is a temporary arrangement that will decrease in value as it expires.

Good fences
Most people who get into fractional ownership don’t want to constantly deliberate with their fellow owners, says Benson. The property management company will set up a system to handle the logistics of maintaining the property, he explains, and owners should take a good look at how that’s set up before they’re committed. “The

Disclosure check
Laws governing fractional ownership spell out what the developer must disclose to you when you buy a property, MacKay says. Generally buyers will get to see the disclosure package once they’ve signed a contract for the purchase. At that point, they have seven days where they can withdraw from the deal at no cost. MacKay’s advice: get that document to a lawyer as soon as possible to guard yourself against any surprises.

Navigate: Back to the article
Navigate: Table of contents
Navigate: BCB's YouTube archive

• 1 read

Bookmark this Article   Ask   Del.icio.us   Digg   Google   Facebook   Reddit   Live   Yahoo MyWeb   Furl   StumbleUpon