Are you in the market for a Luxury Fractional or Private Residence Club (PRC)? Do your homework and ask the following questions to help ensure blissful vacations for years to come.

When purchasing a wholly owned second home, you would visit the property, ask a lot of questions questions and go over the fine print on the sales document, to make sure you are not paying for a foundation that will crumble in a few years. Comparably, when buying a luxury fractional property or a private residence club membership you should be just as conscientious, but also ask the following questions which are specific to buying into shared ownership homes.

Can I expect to stay in the same residence each time at my PRC? Although it is possible to stay in the same unit, it is not a given. For maximum usage efficiency, private residence clubs often allocate properties by membership type (i.e. square footage, number of bedrooms, etc.). However, if you are purchasing a luxury fractional on a fixed week basis, so that you have the same weeks of use every year, it's likely that you'll have exclusive access to your specific residence, unless otherwise stated in the club's policy.

How does the reservation system work? Many members want to know when they can book the major holidays like Christmas, July 4th week, Memorial Day, etc. The answer is not simple. Plans vary from company to company ranging from fixed week plans to floating weeks, hybrid usage or seasonal impact plans. Read our article on "Fractional Reservation Plans & Usage Systems".

Check-in and check-out dates are also company specific - although if you are an owner and want to change your arrival dates, most clubs are somewhat flexible as long as you let them know in advance.

Planning ahead is great for some, but can become problematic for owners who have unpredictable travel and work schedules. If reserving vacation time months in advance is not practical for your lifestyle, be sure to ask how flexible the club is with unforeseen timetable changes and how far ahead you have to make your reservations. It is crucial to carefully consider the reservation policy before you buy.

Will we have the option to exchange our property? What costs are involved? Private residence clubs are ideal for destination hopping. There are several high-end fractional exchange companies that will set up exchange and travel options through a portfolio of partner properties and travel companies. Many of the luxury branded PRC company's, such as the Ritz-Carlton Club, offer exchanges between their club properties and also allow you to swap time for nights at their hotels, which means you can have a variety of locations to choose from. Although check to make sure that your three bedroom fractional lets you swap into more than just a standard hotel room. Some club memberships include exchange fees, while others charge.
While spending the majority of your weeks at your home property is desirable, you still want to have options. Buying a luxury fractional from a multi-property company could be your answer. Before buying, review the other destination locations to see if they appeal to you.

How many years has this PRC been operating? How many phases are there now and how many will there be at its completion? What is the estimated completion date? Knowing the structure of the PRC and its future plans for expansion is important for securing long-term investments. As additional residences are constructed, more members will join, ultimately changing the overall makeup of the company. Buying into a relatively new PRC, without a past performance record, might be less expensive, but you risk more not knowing if your investment value will appreciate over time. On the flip side, if you become a PRC member during the final completion stage, the price tag will be greater, but there will be a negligible risk factor.

How are fractions characterized? The number in the fraction represents a portion of the year. This number is based on factors such as seasonal demand, average length of stay, and size of residence. The fraction of a private residence club is typically from one sixth to one eighth but can vary drastically depending on availability and exclusivity. Luxury fractional properties tend to be more exclusive and can allow for smaller fractions. Not all companies determine their fractions the same way so be sure to find out exactly how many days or weeks you are purchasing.

Financial Matters

Do you have any financing or lenders in place to help provide a mortgage? High-end PRC and luxury fractional markets will often have partnerships or programs in place for financing. Be sure to inquire about these options.

What is covered by the annual Home Owners Association (HOA) fees? Services covered by annual dues vary from company to company, but may include staff salaries, supplies, maintenance, landscaping, trash removal, refurbishing of property and facilities, utilities, property taxes, transportation, bookkeeping and insurance.

Other potential fees can consist of access to resort facilities and other luxury services such as health club memberships, restaurants, pools, ski lift tickets, stocking fridge, green fees, as well as housekeeping and gratuity. Make sure you know what your fees cover.

Are there any planned increases in annual fees? Annual fees are subject to change as the cost of living rises at the resort location. Be sure to ask if there are any other planned increases, especially if you are buying into an early phase of a PRC. And check if there is any cap on these increases eg CPI = X%.

Renting & Selling

Are units rented out when members are not in residence? Unused time at a luxury fractional property is offered to owners for extra usage. The residence could potentially be left unoccupied if no owners are able to use the time. Owners can rent the property through the management company if they are not using their allotted weeks. Property management rules do vary, but it is rare for the management to rent out a unit without owner consent.

Is it possible to rent out our weeks when we are not using them? Renting can be an option for PRC and luxury fractional owners, but there are strict guidelines surrounding the issue. Most clubs will not allow owners to rent out units on their own. Rental managers are available to handle rentals on behalf of the owners. This preserves exclusivity and keeps up a higher-end company image. Owners can allow friends or business associates to use their weeks on a non-rental basis to be treated as the owner's unaccompanied guests.

Are rental pools an option for my PRC or luxury fractional? The private and exclusive nature of this high-end market does not allow for rental pools.

What is the legal nature of my ownership? Since you have bought a portion or fraction of a property, you will receive a deed to hold until you either sell it or will it to loved ones. A lease or right-to-use contract may be obtained on rare occasion. This can occur if you are a foreigner trying to buy property in a country that does not allow ownership by non-citizens.

How do I resell the property? There are two options for resale: sell the unit yourself, or go through the company's broker. Usually there is no right of first refusal. However, it is courteous to approach the current fractional owners about purchasing your share before you place it on the open market. Make sure you understand the company's resale policy. New buyers might not have the same rights or privileges as the original owners did.


Are you a fractional owner. Let us know if you think there are other questions that a prospective owner should ask about. Use the contact us link below.

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