TIMESHARING AND FRACTIONAL OWNERSHIP SCHEMES

Timesharing and fractional ownership schemes

A time-sharing scheme is legally defined as a scheme, undertaking or enterprise, whether in Australia or elsewhere, that operates for a period of three years or more and in which participants are, or may become, entitled to use, occupy or possess the property for two or more periods.

Interests in time-sharing schemes are regulated by ASIC as financial products under the Corporations Act.

In a traditional time-sharing scheme, investors acquire “points” or interests in the scheme which they can then use to book holidays at any of the scheme’s properties. The custodian for the scheme generally holds the legal title to all the properties owned by the scheme.

A fractional or shared ownership scheme is a form of time-sharing scheme, however, the investors are on the title to a property as a tenant-in-common with other investors, and potentially share in any capital gain (or loss) arising from the change in the property’s value.

We can:

EQUITIES FUNDS

Funds which invest in securities like shares are one of the most common forms of managed investment vehicles in Australia. Single asset or multi-sector, active or passive: the range of investment classes and strategies is very broad.

PROPERTY FUNDS

Property funds can take many forms including development funds, AREITs and property securities funds. They can be single or multi-asset, fixed term or open-ended. Each presents its own unique challenges.

HEDGE FUNDS

ASIC considers that a hedge fund is a registered managed investment scheme that is promoted by the responsible entity using the expression and as being a ‘hedge fund’, or exhibits two or more of the characteristics of a hedge fund.

MORTGAGE FUNDS

A ‘mortgage scheme’ is a managed investment scheme that has, or that is likely to have, at least 50% of its non-cash assets invested in 'mortgage loans' and/or unlisted mortgage schemes.

PLATFORMS, WRAPS AND MASTER FUNDS (IDPSS)

Platforms, wraps and master funds are industry terms for what ASIC refers to as investor-directed portfolio services (IDPSs) or IDPS-like schemes.

PRIVATE EQUITY AND VENTURE CAPITAL FUNDS

PE funds, venture capital limited partnerships (VCLPs) and early stage venture capital limited partnerships (ESVCLPs) are investment vehicles with unique features that require specialist legal advice.

SERVICED STRATA SCHEMES

To avoid the need to register a management rights scheme as a managed investment scheme with ASIC and obtain an AFS licence to operate it, promoters and/or operators need to comply with ASIC’s class order relief.