Weekly insights about property in France!

Subscribe and don't miss an issue!

No, It’s Not Timeshare, It’s Fractional Ownership!

Volume XIX, Issue 1

Living area of Residence Luxembourg

Yesterday you may have received a Nouvellettre® about a share of a Fractional Ownership property in Paris we are offering on behalf of the current owner—La Résidence Luxembourg. It was not a property I personally developed, but I know the developers well and know they did an excellent job of creating a wonderful home-away-from-home for the 13 owners.

We had an overwhelming response to the announcement and the share sold at full price within minutes. Those who responded had lots of questions, so I hope to answer many of them here today.

For those of you who understand what a fractional ownership property is, you know that it’s the perfect answer for someone who wants to spend part of the year here (or wherever it’s located) without the cost and hassle of 100 percent of property ownership. Let me explain fully, for those who may have it confused with a timeshare.

No, it’s not a timeshare, although the usage of the property is shared with the other owners. A single property purchased in fractions or shares could have any number of owners, but of course more than one. Two equal owners would each use it 50 percent of the year, for example, while 13 owners (as in this case) would use it four weeks a year. The usage calendar is determined by the developers or the owners and there are many ways to consider how to make the usage fair and equitable. In this case, the owner has two weeks a year in the Spring (second week of April) and two weeks a year in the Fall (second week of November). However, owners may trade weeks between them. In this case, this is a very amenable owner group! (Usage starts and ends on a Friday for this particular property.)

Interestingly, the lawyers who specialize in such properties will tell you that the fewer the owners the more problems, due to a sense of proprietorship. When you are one of 13, it’s a lot easier to let go of the details and let others do the worrying for you, especially when a professional is engaged to manage the property and remove all the operational hassles. The costs of operating the property are shared by the owners, so that keeps the expenses down as well.

Americans make the best buyers of fractional ownership properties. This is because culturally we are used to opening our homes and to sharing in general. Other cultures don’t have such an “open door” policy and therefore don’t feel as comfortable sharing their homes with “strangers.” Australians and New Zealanders are similar and also willing, but other western nations aren’t as keen on the idea.

It all started with the American company, NetJets, who pioneered the concept of allowing businesses to purchase shares in a jet to reduce costs. The shareholders reveled in the ability to reduce their costs to own and operate the jet while it gave inexpensive access to others who couldn’t afford to own a jet on their own. The idea was so brilliant that it’s now the norm in aviation and has been successful with other luxury properties, such as yachts, high-end motor homes…and apartments in Paris.

I got involved with fractional ownership in the mid 2000s. A couple of different developers came to Paris, bought up properties, structured them as fractional ownerships and sold the shares. Our company and staff searched and found the properties for a few of the developers and have sold many, if not most, of the shares available in the Paris market over the years. I’ve developed a couple of properties myself: Le Palace des Vosges, a luxurious two-bedroom apartment in the 400 year-old Place des Vosges, and Ma Maison Miron, a studio apartment in one of the three oldest buildings in the city (see our website for more information).

Photo of Place des Vosges in Paris

Place des Vosges, where Le Palace des Vosges is located

One of the oldest buildings in Paris, where Ma Maison Miron is located

One of the oldest buildings in Paris, where Ma Maison Miron is located

Le Palace des Vosges launched just as the financial crisis crippled the world—in the fall of 2008 when we first purchased the property—through the fall of 2009 when the renovation was complete and occupancy could begin. In spite of its difficult beginnings, the property found its 13 owners and most have kept their shares, with only a small handful having resold them to new owners.

Paris fractional property Le Palace des Vosges

Fractional property Le Palace des Vosges

Ma Maison Miron launched and sold out in less than two months late in 2019. The first 10 shares sold within three hours of our announcement of it. At the time, it was the least expensive property on the market, possibly the smallest (18 square meters), but the most perfect in every way—location, amenities, decor. As a result, the quick sale didn’t surprise us.

Paris fractional property Ma Maison Miron

Fractional property Ma Maison Miron

With this concept you actually own your share, not just your usage time as one does with a timeshare. And your share can be resold or bequeathed to your heirs as you would like. In every case in which I’ve been involved the owner has resold at a profit, in line with the increased value of the property and in line with other fractional shares on the market.

A share is not valued at its percentage of the market value of the property. It is considerably higher, as there are costs and profits associated with the development of the property as a fractional, making it more expensive. So there’s no need to look at property values, divide by the number of shares and come up with the amount you should pay for the share. That won’t work. Share values must be compared with other shares on the market, period.

Bedroom in Paris fractional property Le Palace des Vosges

One of the bedrooms in Le Palace des Vosges

Should the owners decide to sell the property in its entirety, the owners would receive their percentage of the proceeds and therefore might not recuperate their investment…however, it takes unanimity by the owners to make that decision to sell (dictated by most properties’ by-laws). That might take place long after the property was purchased and therefore it has increased in value over time. So, ultimately, ownership in a fractional property can not only be a great way of “parking” your money in something that gives you great pleasure, but makes a great investment, too…as long as you buy into a good property (like in any real estate investment). (I have never known one in France to sell in its entirety!)

Photo of the kitchen in fractional property in Paris, La Maison Miron

The kitchen in Ma Maison Miron

It’s not possible to take a mortgage in France to buy a share, however you can take a line of credit or second mortgage in the U.S. to raise the money. With the sale of the shares so popular, you best be ready with the cash to make the deal! In the case of yesterday’s share in La Résidence Luxembourg, the share had many offers at full price, in cash. The buyers will basically pay the seller and the attorney will process the transfer of the share. It’s that simple and can be very quick.

I am confident that we fully know how to develop a successful fractional ownership property based on all these years of first hand experience. There are some key elements to their success:

1. Location. The property must be better than perfectly located—a jewel in the crown of its domain. Location can be subjective, since people like some parts of the city over others. Keep that in mind. But we all know that location drives the value of property!

2. Sexy. Something has to be very “sexy” about the property—meaning attractive—whether that be a special view, a balcony or terrace, or other feature that distinguishes it from others.

3. Decor and Amenities. The property must be professionally, perfectly decorated, furnished and appointed. It must be missing nothing! It must appeal to a wide range of people without being boring or plebeian…in fact, it should have real personality. (At least, that’s what I think.) Owners can ultimately do what they like with the property once all the shares are sold, but keep in mind that too many cooks in the kitchen might spoil the broth…meaning, let a professional decorate it and let go of your personal taste and needs.

4. Usage Calendar. The usage must be globally acceptable to as many people as possible. In fact, I believe our own usage calendar is the smartest one out there and it’s been proven by the success of the properties we developed. It is fully rotational, with each share allowing for four weeks a year in two different times of the year, with easy trading of weeks among the owners. Over the course of 13 years, every owner would experience every week of the year.

5. Legal Structure. There is only one right way to set up the legal structure of the property in France. We employ specialist attorneys to set up the structure which includes a French property company (SCI—Société Civile Immobilière) owned by two U.S. non-profit corporations. The shares are then bought and sold in the U.S. with no changes to the SCI, saving tons of time, hassle and taxes. I will not go into detail on this issue because explaining French law needs a tome in itself. But this is the best and simplest way of setting up the title, even though it’s not at all simple from the French point of view! (Nothing is simple in France.)

6. By-laws. The by-laws must make sense and be agreed upon by all owners in advance of purchasing. That helps pull together like-minded owners. And that’s a big plus to a successful property. To give you an example, one of the by-laws may be that rentals are not allowed, except by the developers of unsold shares—designed to cover the operational costs of the property. Usually, friends and relatives are certainly allowed, but the owner must take responsibility for their stay. Another would prohibit pets, and so on and so forth. It’s very similar to the by-laws you might have governing a homeowner association of a multi-family building, but in this case, it’s just one property and all the owners must abide by the laws.

7. Professional Management. This is key to making the property function like a well-oiled machine. All it takes is one person to oversee the weekly housekeeping and keep up with the maintenance. Other people employed by the governing body of the property could be an accountant or an attorney to take care of tax and legal issues, but one of the owners might be willing to take on those kinds of responsibilities. I do not recommend that the owners try to skimp by eliminating this key element to fully enjoying the property without the hassles!

8. Financial Administration. The owners all share in the operational expenses making it very inexpensive—annual taxes, utilities, management costs, etc. The property will require a bank account in France from which it can pay for these costs and someone to oversee the bank account. It could be an owner or the manager who performs this task. It is best to set up a budget and an annual reserve fund for future maintenance expenses, such as repainting, replacement of furnishings, etc. The reserve fund is held by the property account, but is owned by the shareholder and is passed on if and when the share is sold to a new owner.

9. Homeowner Association. A board of directors will be set up, a president elected or appointed and the association will be run similarly to that of an entire building. An annual meeting to discuss the budgeting and all issues of the property should be held like clockwork. The more formal and serious the owners consider this aspect, the more smoothly and better run will the property be. There is usually one or two owners who are willing to take on the task of being president—people who like to take charge and get things done. Let them!

10. Communication. Setting up a way for the owners to communicate among themselves is a way of unifying the homeowner body, making friends and creating a congenial group of owners. One way is to create a Facebook Group exclusively for the owners so they can all share in their experiences, trade their usage weeks or make decisions about the property during the year.

Now that I’ve given away all our secrets to the success of a fractional ownership property, perhaps you’d like to own a share yourself, or become a developer yourself. We can help you achieve both.

When there is the opportunity, we offer shares that come on the market from existing properties. And like La Résidence Luxembourg, usually sell them very quickly. If you are a shareholder and wish to sell your share, please be sure to contact us if you wish to have such success!

If you wish to purchase a share, then you must be patient for when the next property comes on the market. Be sure to read our Nouvellettres® or keep an eye on our special website page.

If you wish to develop a property and reap the benefits of owning a share and/or making the profits, keep in mind that this is not just for you. It’s a business and must be run like a business. The investment is larger than just the price of the property and closing costs and you cannot take a mortgage to make this investment because of the nature of the legal structure. (The banks will not lend to an SCI if it is owned by U.S. corporations.) There is room in the market for properties in Paris, Nice and the Riviera and in the countryside (depending on where).

We are willing to work on projects with investors who fully understand the nature of the business and are willing to let go of their personal desires in the interest of creating a successful project. We are working on two such projects here in Paris that will be ready for occupancy later this year!:

Interior decorater Martine di Mattéo

Martine di Mattéo

1. One-bedroom in Le Marais. This is a spacious one-bedroom apartment in an amazing location just near the Saint-Paul Métro stop on the first floor of a small building, with windows on two sides for lots of light and great views. The beams have been exposed and the fireplace is wood-burning. It has one bathroom (shower), but two toilets, a fully equipped kitchen and is air-conditioned. The bedroom is equipped with twin beds that convert to a queen-sized bed and there is a sofa bed in the living room for guests. The apartment has been a successful rental property, but will undergo new renovation and decoration by our illustrious interior architect, Martine di Mattéo in preparation for the new owners. I am the developer with an investment partner, so I will oversee every detail and ensure that it is perfect in every sense.

A one-bedroom fractional property development in Paris

The building for the one-bedroom fractional property development

2. Two-bedroom/two-bathroom in Le Marais. This is a spacious two-bedroom/two-bathroom apartment, again in an amazing location just near the Saint-Paul Métro stop, with a large wrap-around balcony and stunning views overlooking the Eglise Saint-Paul on the fifth floor of a bourgeois Haussmannian building. It has one bathroom with a large tub and the other with a shower, a fully equipped open kitchen and is air-conditioned. The master bedroom is equipped with twin beds that convert to a queen-sized bed and there is a sofa bed in the second bedroom for guests. The apartment has been a successful rental property, but will undergo new renovation and decoration, again by our illustrious interior architect, Martine di Mattéo in preparation for the new owners. Just like the one bedroom, I am the developer with an investment partner, so I will oversee every detail and ensure that it is perfect in every sense. We know very well how to outfit a property so it’s missing nothing!

Photo of the two-bedroom fractional property development in Paris

The two-bedroom fractional property development

The shares of both properties will be priced very affordably for the quality and location of the properties. We are not yet prepared to take your deposit for a share, but we can put you on a special mailing list so that you will learn about the launch of the sales before anyone else! To show your sincere interest, email us.

Note re Covid-19: Your share in a fractional ownership property IS property ownership. If you can’t get to France during the Covid-19 pandemic, then sadly you won’t get to use your property, fractional or otherwise…so you might as well let others (friends and relatives or other owners) use it if they can. This is on an individual basis and situation, and a decision made by the owners collectively.

A bientôt

Adrian Leeds appears on House Hunters InternationalAdrian Leeds
The Adrian Leeds Group


Postmarked from Paris


Adrian Leeds on House Hunters InternationalP.S. Fractional ownership is a great solution for people who want to spend time in France every year and feel like a real resident without the hassle and expense of owning their own property. It’s a good and solid investment that will give you pleasure for many years to come. If you wish to participate in this concept, then let us know by emailing us [email protected] to be on a special mailing list so you can learn about new shares for sale before anyone else! And be sure to visit our site from time to time.

P.P.S. If you weren’t able to catch yesterday’s new House Hunters International episode, you can watch it now.  Have fun!


Leave a Comment

Let Adrian create a custom strategy for you

You can live or invest in France-now.

Property for sale

what's happening

Check out upcoming events, conferences, or webinars. Join us!


Learn about French Property Loan Information.

French Property Loan logo

Read & Subscribe

Dive into more by reading the Adrian Leeds Nouvellettre®

Better yet, subscribe to both and get the updates delivered to your inbox.

Adrian Leeds in red beret and sunglasses

Get started with your dream of owning property in Paris.

Advertise with Us

Deliver your message to 15,000+ Francophile readers in our Nouvellettres®

Save money on currency exchange. See who we use and recommend.