Fractional ownership often comes with new terminology. This fractional ownership A-Z glossary of key terms gives you simple, jargon-free definitions to help you understand co-ownership quickly.
Fractional Group helps buyers and developers navigate co-ownership with confidence. As an independent fractional-ownership specialist, we connect verified properties, informed buyers, and trusted developers across Europe’s leading destinations. Our mission is straightforward: to provide clarity. Whether you’re exploring your first co-owned home or managing a fractional development, this A–Z glossary offers clear, scannable definitions and context for each term.
Prefer answers to the most frequently asked questions instead of definitions? Common fractional ownership questions answered.
A
Allocation – The method of dividing the staying time fairly among co-owners.
Annual Costs – The shared annual expenses for running and maintaining the co-owned property.
Appreciation – Any increase in the property’s value resulting in a rise in your share’s worth.
B
Beneficial Ownership – Your legal right to enjoy the property’s value growth and usage.
Bylaws – Basic rules agreed upon by all co-owners for smooth shared use of the property.
C
Capital Growth – The Increase in property value over time.
Capital Contribution – The amount of money each co-owner pays to acquire their fractional property share.
Closing Costs – Fees due at the final stage of purchasing your share(s).
Co-Ownership – Multiple people owning a property together and sharing the costs.
Co-Ownership Agreement – The contractual agreement outlining the rules between all co-owners of the shared asset.
Company Structure – A dedicated company set up to own one property, like an SPV or LLC.
D
Deeded Ownership – You own a real share of the property, not just usage rights.
Due Diligence – The checks you complete before buying.
E
Equity Share – Your ownership percentage in the property.
Exit Process – The pre-defined method for selling (resale), or transferring a fractional share.
F
Fraction Size – Your ownership percentage in the property (e.g., 1/8 or 1/10).
Fractional Interest – Another description for an ownership share in the property (e.g., ¼, or ⅙ fractional share held by a co-owner).
Fractional Ownership – Pooling funds with others to co-own fractions of a high-value asset, such as property.
Fractional Operator – The company managing the property, stays, and owner experience.
Fractional Share – The asset (or company entity) portion you own (e.g., 1/8 or 1/10 share).
G
Governance Agreement – The contract referring to how decisions are made between co-owners (e.g., voting, dispute, and owner responsibility processes).
H
Holding Company – The legal entity that holds the property’s title.
Holiday Allocation – The guaranteed stay time each year.
I
Inventory – The list of fractional homes currently offered for sale.
International Co-Ownership – Owning a share of a property in another country.
Initial Share Price – The share amount paid by a buyer to acquire their fractional share, often used as the benchmark when comparing resale value.
J
Joint Ownership – Shared ownership of a property, typically through a company.
K
Keyholder Service – The team responsible for preparing, cleaning, and maintaining the home.
L
Legal Pack – All documents explaining how ownership works.
Limited Company – A company structure used to hold the property.
M
Management Company – The company taking care of the smooth running of the property.
Maintenance Costs – Ongoing expenses, such as cleaning, insurance, and utilities, are divided equally among all co-owners.
Management Fee – Payment for property care and owner services.
Market Share Value – The current price of a property’s fractional shares.
N
Night Allocation – The number of nights you can stay each year.
Non-Exclusive Use – Shared use of the property rather than sole possession.
Non-Equity Share – Indicates the holder has usage but no ownership in the property.
O
Operating Costs – The day-to-day running costs of the property.
Owner Portal – An online system for bookings, documents, and updates.
P
Private Residence Club – Often branded, high-end residences that can offer deeded fractional ownership with hotel-style services and amenities. Ownership may apply to available units, rather than a specific residence.
Pro Rata Costs – Your share of costs, calculated on your ownership fraction.
Primary Market Sale – Buying a new share directly from the provider.
Profit Share – Your portion of any capital gains.
Q
Quarterly Allocation – Booking time in quarterly cycles to balance peak periods.
Quarter Share – A fractional ownership arrangement where the asset (or specifically, the company that owns the asset) is divided into four equal ownership shares.
R
Resale – The process through which a co-owner sells their fractional share to another buyer.
Resale Market – A marketplace where owners list their shares for sale
Resale Share – The co-ownership portion of the asset for sale.
Reserve Fund – A portion of co-owner contributions set aside for future major improvements and repairs.
Right of First Refusal (ROFR) – A term often found in the deeded fractional ownership shares contract, stating that the existing co-owners must be offered a resale share before being marketed externally.
Rotation System – A fair scheduling method for sharing high-demand weeks.
S
Scheduling System – The process to book your stays.
Secondary Market – Buying a share from an existing owner, typically through a resale platform.
Shared Costs & Responsibilities – Ongoing costs such as maintenance, utilities, and property taxes are equally divided between co-owners, alleviating the sole responsibilities of property management.
Special Purpose Vehicle (SPV) – A company created solely to own a single property.
T
Timeshare – A model where you buy time, not ownership (the opposite of fractional).
Title – Legal ownership of the property held by the SPV.
U
Usage Rights – Your right to stay in the property according to your share(s).
Utilities – Shared costs for services like electricity, water, and heating.
V
Vacation Home Co-Ownership – Fractional ownership of a second home, allowing co-owners to enjoy exclusive use part-time throughout the year, rather than full-time residency.
Valuation – An assessment of the asset’s value and each fractional share.
Variable Costs – Usage-based fees, such as additional cleaning services.
W
Wear and Tear Reserve – Funds saved for repairs or updates.
Welcome Service – The arrival experience, including a clean, stocked property, ready to enjoy.
X
Exchange Network – A system for swapping stays with owners of other vacation homes.
Y
Yield – The potential financial return generated by the property through rental (if permitted), and property/share appreciation.
Z
Zero-Maintenance Ownership – A fully managed model where all responsibilities are handled for you.
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