We have perused various agreements and promotional material regarding the sale of so-called Factional Ownership interests in property-owning companies granting exclusive use of the properties during certain periods to the purchaser.
The sale of shareholding in the said companies together with the right to usages of the company's property create the impression that this kind of transaction falls within the ambit of the Share Blocks Control Act (59/1980). This is however not the case as various owners share the same property during certain determinable periods of the year - hence the term "Fractional Ownership".
What is very clear is that all these transactions fall within the definition of 'time sharing interest' as provided for in the Property Time-Sharing Act (75/1983). A timeshare confers the exclusive right to use accommodation (immovable property) of the Company or any part/portion thereof for a determined/determinable period during the year.
The fact that the industry refers to certain upmarket shareholding interests as "Fractional Ownership" does not deter from the fact that these are Time Share Interests within the scope of the Property Time Sharing Control Act. All contracts for the sale of their interests must comply with the provisions of the said Act and in this regard cognisance must be taken of inter alia the Section 4 requirement regarding full disclosure, etc.
We do recommend that sellers of the so-called "Fractional Ownership" Timeshare interests immediately address the shortcomings of their existing contracts as these clearly do not comply with the Act.
The website: www.fractionalownership.co.za unfortunately errs in its assumption that Fractional Ownership grants "the added benefit of the ownership of the property through your shareholding"
All that you own is a shareholding in a company which owns the property. Although there is a smaller (and limited) number of shareholders, it still falls under the Property Time Share Act and must be dealt with accordingly.
C J de Jager
Snyman de Jager