Ownership Interest Defined in the Context of Fractional Ownership
When you have "ownership interest," you have a set of rights and responsibilities that come with property ownership. But why even bother going back to the definition of such a simple concept when you consider getting into second home co-ownership? Because this is a crucial thing to understand early on. With fractional ownership, you have exactly this: ownership of a fraction of your second home.
Having Ownership Interest in a property amounts to a set of rights, regardless of whether you own the entire property or part of it. Those rights include but are not limited to the following:
Right of the procession: You are the legal owner of the property (or part of the property).
Right of use: You have the right to use the property and the building facilities, barring anything deemed illegal or in violation of policies outlined in your purchase contract.
Right of enjoyment: You can enjoy the property to your standards unless it violates local law.
Right of disposition: You can dispose of or sell the property (or part of the property) whenever you choose.
Right of compensation: You have the right to be compensated for property loss or damage.
Right of transfer: You can transfer your ownership interest to someone else.
It is worth noting that the type of ownership interest you hold may alter the scope of the rights mentioned above. For a detailed breakdown of your rights when having an ownership interest in a specific property, always consult your purchase agreement (your Shareholders Agreement in the case of co-ownership).
Having ownership interest in property also entails a set of responsibilities that accompany homeownership. These include but are not limited to paying taxes, utility bills, property maintenance, and upkeep, ordinary property expenses, any other housing association or fees that pertain to the property development your house belongs to, as well as home insurance.
Make sure you thoroughly go over your responsibilities when you sign the purchase agreement (Shareholders Agreement for fractional ownership), and you are familiar and comfortable with all clauses. If you need any clarifications, this is the moment to ask. If you have a property management entity like Flyway, worry not; we will explain this and sort it out on your behalf.
Knowing your rights & responsibilities when holding ownership interest sets you on the right foot to make the most of a fractionally owned second home.
Ownership interest is also key to distinguishing between fractional ownership of a second home vs. buying time in a holiday resort/condo (the so-called 'timeshare'). In the case of fractional ownership, you have an ownership interest. In the case of the timeshare, you don't. It's that simple.
Ok, you might ask, but I am entitled to a specific amount of time on the property in both cases, right? Yes, in both concepts, you get time to stay. However, in fractional ownership, you stay in your asset, while in a timeshare, you stay in someone else's asset. [Read More]
Flyway offers ownership in prime second homes, in top city destinations, through a property-specific LTD (Limited Company). This legal entity facilitates the existence of multiple owners with an ownership interest in the same property. Each Flyway property is an LTD, with a maximum of 12 owners. You can become one of those owners by purchasing the number of shares you want in this LTD. You can own anywhere from 1/12 to 6/12 shared interest in a Flyway Home.
Buying 1/12 share of ownership in a Flyway second home gives you 1/12 'ownership interest' to this property. It doesn't matter if you have 1/12 or half of the property (6/12); you still maintain the same rights in principle.
Your Flyway ownership interest gives you the right to use your city's second home, based on the number of shares you own. Indicatively:
1/12 ownership interest = up to 30 nights of stay
2/12 ownership interest = up to 60 nights of stay
3/12 ownership interest = up to 90 nights of stay
4/12 ownership interest = up to 120 nights of stay
5/12 ownership interest = up to 150 nights of stay
6/12 ownership interest = up to 180 nights of stay
The Flyway App, backed by an intelligent algorithm, ensures you and other co-owners get your desired stays equitably, according to your ownership interest level.
Additionally, precisely because your co-ownership falls under the umbrella of Flyway (acting as the property manager), you are protected if another owner defaults on their ownership interest.
Remember that you and all other co-owners have the right to sell your ownership interest. Still, no one co-owner has the right to sell the entire property.
Finally, Flyway handles the responsibilities that come with holding ownership interest. Or, in other words: the unglamorous part of homeownership that steals your time and energy! To make your life easier, Flyway gathers all the responsibilities you have as a second home co-owner and handles them on your behalf. This means that all bills, expenses, repair and maintenance fees, and insurance, among others, are aggregated and added to your Monthly Operating Expenses. You can access those transparently through the Flyway App and never waste your precious time on boring bill handling!
Flyway takes away your responsibilities and lets you make the most of your rights that come with holding a second homeownership interest.
And a recap on terminology before you go. When you refer to a specific Flyway Home, all of the expressions below have identical meanings:
I have a 1/12 share = I have 1/12 ownership interest = I own 1/12 of a property
Ready to get yourself a beautiful downtown property? Browse Flyway Homes.
If you are interested in learning about the Flyway model or have questions, fill out the form below or Book A Call with a member of the Flyway Concierge team.
Send us your questions, comments or simply declare your interest to buy shares. A member of our team will reach out to arrange a call