Private Residence Clubs
WHAT IT IS
Fractional Residences, otherwise known as Private Residence Clubs, or PRCs, are high end club based on the concept pf fractional ownership. Owners purchase a share of a property and the size of the share denotes the amount of time that they can use the property. If a quarter share is purchased, it entitles the buyer to use the property thirteen weeks a year. Typical shares are 1/6, 1/7, 1/8, and 1/10. Or the owner can buy shares in the club itself. Many clubs also allow their owners to exchange the time they have available in their own property with different destinations within the club's membership structure.
The PRC, unlike many fractionals, are located in high end, prime vacation settings (beachfront, mountain, leisure resort, urban chic), and offer a range of private luxury villas, freestanding homes, and high end, often high rise apartments. Each property is furnished to the same high quality as an ultra-luxury hotel.
WHAT IT ISN'T
It isn't a timeshare, where typically owners share space for time, and own the time; but with PRCs, the owner owns either a share of the property or a share of the club itself. It is not a destination club, where members are not owners; PRC owners actually own a piece of the residence or the club.
HOW MUCH IS IT?
Typically, the cost of a PRC ranges from $250,000 per share to nearly a million. The average fraction is 1/8.
INCLUDES
In many PRCS, the membership deposit includes a dedicated concierge, housekeeping daily, pre-arrival grocery shopping, destination hosts, and in some ski and golf butlers, and yacht memberships.
THE PLAYERS
The Ritz-Carlton Club and Residences | The Four Seasons Residences
Fairmont Heritage Place | The St Regis Residences
The Timbers Resorts | Resort Equities | Calistoga Ranch
Palazzo Tornabuoni | Seven Canyons | The Phillips Club
Residences At The Little Nell | Capella Pedregal
TOP DESTINATIONS
Aspen | Vail | Cabo San Lucas | Tuscany | New York Paris | London | Florence | Hawaii | Caribbean | SedonaQUESTIONS TO ASK
1. What is covered by the annual Home Owners Association (HOA) fees? Services covered by annual dues vary from company to company.
2. What is not covered? Other potential fees can consist of access to resort facilities and other luxury services such as health memberships, restaurants, pools, ski lift tickets, stocking fridge, green fees, as well as housekeeping and gratuity. Make sure you know what your fees cover.
3. 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.
4. Are units rented out when members are not in? Property management rules do vary, but it is rare for the management to rent out a unit without owner consent.
5. 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.
6. 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.
7. How do I resell the property? There are two options for resale: sell the unit yourself, or go through the company's broker.
THE FINAL WORD
As with any major purchase, be sure to be comfortable what what you are guaranteed, as well as what services are included and what services are a la carte.
Also, make sure you are comfortable, long term, with the locations offered by the PRCs, as you will be going there, and other places offered by the company for a long time to come.
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