WHAT LEGAL RESTRICTIONS APPLY TO FRACTIONAL OWNERSHIP?
Legal restrictions on fractional ownership can be grouped in four general categories: (i) national or state real estate law, (ii) local real estate law, (iii) private deed restrictions, and (iv) national or state securities or investment law. Even where a group of friends and family is purchasing the property to share, and therefore fractional interests will not be marketed to the general public, legal restrictions on fractional ownership may apply at some point in time, particularly when one of the co-owners needs or wants to re-sell his/her fractional share. In the US, fractional ownership real estate law varies from state to state. Which law applies depends on where the shared property is located, how and where the interests will be marketed and, in some cases, where the buyers live. To determine which national or state real estate laws apply to a particular fractional ownership arrangement, it is necessary to determine how many interests will be offered, the general structure of th
