Frequently Asked Questions
What is fractional ownership and how do I become a part of it?
Like many vacationers in Europe, we fell in love with the lifestyle in Europe and longed to really live there for part of each year. But how? It seemed impractical and expensive to own and maintain a home we might use for a month or two each year.
Instead, in 1998 we became one of the first to use an American limited liability company to buy a property in France which offered a simple vehicle for other like-minded people to join us in ownership of that farmhouse in France.
International Property Shares offers a unique opportunity to purchase a French or Italian property without a large outlay of capital. As an exclusive member (shareholder) of one
of our LLC’s, you literally own percentage share of the LLC (limited liability Company)
which owns and manages the property.
How is a Fractional Ownership different than a Timeshare?
It is completely different. With fractional ownership, you own your percentage of the property and can easily sell or donate your time to another as well as participate in the appreciation of the property. You typically have the use of 4-8 weeks per year. With a time share you do not "own" your property but have the right to stay there for a fixed week or two each year for a limited number of years.
What is a Property share and how do I become a Part of It?
Like many other vacationers, we found it impractical and expensive to own and maintain a house we generally used for a month or so each year. This is a unique opportunity to purchase deeded property/real estate without a large outlay of capital. As one of only 9-13 members (shareholders) of our LLC's, you literally own a share of the limited liability company, which owns and manages the property. Unlike a lease back plan, our home shares are typically older homes ( or barges) of character and charm and the shares are easy to transfer or resell as defined in the LLC operating agreement.
Why do you use an LLC?
France and Italy have rather restrictive tax and inheritance laws if you buy a property
outright. By using an LLC, the members are governed by home tax and inheritance laws. Our LLC fractional properties are member-formed companies which allow the shareholders to own and manage real estate in accordance with the conditions of the Operating Agreement.
What is an Operating Agreement?
The Operating Agreement sets out the rights, obligations and duties regarding the LLC and its assets and liabilities. An agreement typically includes: Definitions, Formation, Members and Membership Interests, Management, Budgets and Accounts, Meetings, Member Use Rights, Accounting and Records, Transfer of Interest, Distributions, Withdrawal and Dissolution, Indemnification, and Amendments.
What kind of agreement is there between the owners? Is there a management company? What are the expenses associated with management?
The Operating Agreement outlines the rights and responsibilities of co-ownership and must be signed as part of the buying process. Rather than use an outside management company, our LLC’s a member-managed. One member/manager coordinates the annual meeting, distribute financials, assures that annual dues are paid, and is the liaison with our property management agent in France and in Italy. The manager accepts this role in exchange for not paying annual house dues.
What annual expenses might I expect as an LLC shareholder?
Annual property expenses include homeowners’ insurance, taxe d'habitation (property taxes), internet and cable, utilities and a contingency fund. These costs are estimated at around 850 euros/year. From time to time, capital improvements to the house are required. The beauty of a fractional property is that all house costs are divided by the number of shares in the L.L.C.
How does each shareholder reserve time at the house?
Each fractional property has a slightly different format for reserving time but we it is done on a rotational basis. Below you will find an example for a property with 13 owners (4 weeks/owner/year). Each member is assigned a letter from A to M.
If you had Letter F in YEAR ONE, you would submit your first choice of a 4-week period to the manager by the 1st of June for the following year. Letters A-E would have their choice preference before you for that particular booking year. The following season, your picking order would move up three notches to #3.
Annual Time Selection - rotating up 3 slots each year
YEAR 1 YEAR 2 YEAR 3
A 1. D 1. G
B 2. E 2. H
C 3. F 3. I
D 4. G 4. J
E 5. H 5. K
F 6. I 6. L
G 7. J 7. M
H 8. K 8. A
I 9. B 9. B
10. J 10.L 10. C
11. K 11.M 11. D
12. L 12.A 12. E
13. M 13.B 13. F
What are the subtleties of booking time?
My experience over 20+ years is that members are not necessarily competing for the same time slots. In any given owner group, 2 or 3 people often prefer the summer season (July/August) as they might have children or grandchildren to consider. The UK/ European owners can hop over fairly easily throughout the year. Many American and Canadian owners are approaching retirement and prefer to book in the shoulder season.
Is there a caretaker who oversees cleaning and assesses the condition of the apartment?
Yes, each of our LLC’s has an established caretaker who is responsible for cleaning and linens after each visitor. Following each stay, we leave euros in an envelope on the counter for cleaning and turnaround services.
Can we rent out our time?
Our Operating Agreement does not typically allow for commercial rentals. We do, however, have the option of occasionally allowing our family or friends to use our time and pay our operating expenses so long as each guest has read, signed, and will abide by the house rules instructions.
So, what’s next?
Learn whether a shared home in France, Italy is right for you.
To better assess which property is a good fit for you, complete and return the IPS questionnaire.
Decide whether to visit the property or to take a look at our videos.
Contact me to learn more and to arrange a Zoom appointment:
Email: email@example.com Tel: 206 321-3547