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Fractional Ownership or Timeshare?

Fractional Ownership or Timeshare?

So you were on a vacation to Mexico and you were pulled in to a free breakfast and some other free stuff in return for listening to a sales presentation.  You liked what you heard and thought the resort was fabulous and you bought a piece of it.  You particularly liked hearing you were getting “Fractional Ownership”.  The idea of owning something put your mind at ease.

Years later after finding yourself not going back to to the resort to use your weeks in the condo, you decide its time to sell it.  You think “I own this” so you contact a real estate agent in the area hoping you can sell it and make some money on your initial investment.  The real estate markets post Covid are hot and there couldn’t be a better time. 

Then the disappointment comes….. you find out you actually bought “Timeshare”.  Turns out the resort confused you with words like “Fractional Ownership” and what you really bought was Timeshare.

Fractional Ownership vs Timeshare?

Its important to understand what the differences are between true Fractional Ownership and Timeshare.  Timeshare is a right of use contract.  No ownership is conveyed despite the words you see on paper.  True “deeded” Fractional Ownership comes with full rights of ownership in perpituity including paying property taxes each year.

How do you tell if you have Timeshare?

  1. Do you have a contract that is in English only?
  2. Is there a term (ie. 20 years)?
  3. Are words like “Maintenance Fees” mentioned in the contract?

If these are true then you have Timeshare even if there are words all over the contract saying Fractional Ownership.  Yes its misleading alright.

How do you tell if you have deeded Fractional Ownership?

  1. Do you have a 50+ page document that is all in Spanish?
  2. Does the document make references in Spanish to the word Fideicomiso?
  3. There will be no term.  Deeded ownership exists in perpetuity.
  4. Elsewhere in other documents you will see words like HOA Dues and Annual property taxes.
  5. You will also recollect paying 5-7% of the purchase price in closing costs that are separate from the purchase price.

If these are true then you have real deeded “Fractional Ownership”.

Is there a situation where I may not have a Fideicomiso?

Yes, sometimes when deeded “Fractional Ownership” shares are sold the owner neglects to finish the process of closing from the purchase contract into a Fideicomiso.   In this situation you must close into a Fideicomiso in order for a Real Estate Agent to be able to sell your ownership for you. 

Where has true deeded Fractional Ownership been sold in Los Cabos?

This isn’t a complete list but if you have a Fideicomiso or a purchase contract but no Fideicomiso in theses resorts then you have or are most likely to have true Fractional Ownership.

  • Villa La Estancia
  • Esperanza, an Auberge Resort
  • Baja Point 
  • Waldorf Astoria Los Cabos (formerly the Resort at Pedregal and Capella Pedregal)

What are my options if I have Timeshare?

If you have Timeshare then you get to investigate the world of Timeshare resellers and find one that you have researched that is trustworthy.  Most resellers are located in the US.   Google search for both Timeshare resellers and Timeshare reselling scams in order to better inform yourself.  Under no circumstances should you send funds to the reseller.

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