FRACTIONAL OWNERSHIP

Models

There are two models of Fractional Freehold Ownership at QEV.  Either a Quarter share on a rotating basis  or a fixed Twelfth share which may be a calendar month (October-March) or two blocks of two weeks (April-September).

Ownership Structure

Each fractional house is owned by a separate UK-based company and the owners are members of that company.  As well as the owners of shares in the house each company has a Founder Member which has certain rights and obligations under the Articles of Association of the UK company which define and regulate in detail the operation of the company.  The Founder Member was originally Vigia Investments NV but we are aware that a company called Magna Finance Limited appears to have been substituted as Founder Member; formal notice of this fact appears to have recently been served on the owners of shares in some fractional houses.

Sale of Shares

Owners of shares in all fractional houses are reminded that if they wish to dispose of their shares they must comply with the obligations set out in the Articles which include first offering the share to other shareholders in the house and giving notice of intended sales to the Founder Member; failure to do so may lead to legal disputes.  Accordingly those considering selling shares should consult their Company Administrator/Company Secretary (see below) and/or take appropriate legal advice. 

We are aware that in a few cases owners have negotiated with the Founder Member and for a fee have purchased the Founder Membership.

Legal Agreements

In addition, owners entered into legal agreements, under Portuguese law, covering urbanisation services (see C&U) and property management.

Property Manager and Accounts

Each fractional house has a property manager who oversees the operation of the House.  The property manager prepares an annual budget based on the estimated running cost of the house.  These costs include: 

  • IMI (Council tax)

  • Utilities: Electricity and water charges

  • Insurance

  • Maintenance

  • Property Management charge

  • Community and Urbanisation (C&U) charges

  • Sinking fund contributions

  • Fiscal Representation

Community and Urbanisation charges were previously paid directly to the Owners Association by each owner but are now paid by the owning company on behalf of the fractional owners of each house.  For more on C&U charges and services, go to the C&U page.

For each fractional house the property manager operates a house account and a number of personal accounts, one for each individual fractional owner.  Monies paid by owners into their personal accounts are transferred to the house account to cover property-related, shared costs as listed above.  At the end of each year any balance in the house account is divided proportionately between the owners and returned to their personal accounts.  See Personal and House Accounts for Fractional Owners for a schematic representation of these accounts. 

Fractional houses may also maintain a sinking fund to pay for major irregular expenditures for their house, e.g., interior decoration, replacement of appliances and furniture.  The fractional house sinking funds are now held in a segregated account by the  Property Manager.  

House-owning Company Administration

The owners of each fractional house have signed an agreement with an "Administrator" to manage the UK house-owning company.  Initially all QEV fractional houses used Marlborough Trust, a Guernsey-based company, for this role but many  houses have more recently appointed other companies to provide this service. 

A key task of the Administrator is to file the house-owning company's returns as required by UK company law.  The Administrator liaises with the appointed directors and company secretary of the house-owning company as well as with the property manager to ensure that the house-owning company operates according to its Articles of Association.  After August 2014 Marlborough Trust invoiced individual owners for the services they provided.  However we are aware that Marlborough Trust went into voluntary liquidation during late 2016 and a new company, The Fractional Ownership Consultancy Ltd., appears to have replaced it.  

Further Information

For further information please contact Frank Bennett on fractionalrepresentative@qevoa.co.uk. For Updates issued to Fractional owners, go to Updates to Owners

(Updated 20/01/22)