To move quickly to an answer, move your cursor over one of the questions listed immediately below.

1. What is Joint or Fractional Ownership?
    
   

   • It is where a group of shareholders (normally 3 -13) purchase a share in a company that owns a residential leisure property.
   • Via a fair roster system, occupation of the property is shared.
   • A contribution is made by each shareholder towards the maintenance of the property.
   
    
2. What are the benefits to the shareholders (“joint-owners”) of a company that owns a leisure property?
    
   The benefits to these shareholders (“joint-owners”) are numerous:

   • Better value for money – you only pay for your holiday and not for the remainder of the year.
   • No maintenance problems – Seeff Fractional Ownership ensures that you do not have to spend valuable holiday time fixing leaky taps!
   • Holiday accommodation at exclusive destinations.
   • Unlike timeshare, any increase in the value of the property accrues to you, the owner.
   • The most exclusive addresses in South Africa normally increase in value faster than the average – until joint-ownership, enjoyment of this growth was only available to the super-wealthy.
   • Ability to rent out your un-utilised weeks.
   • Lower maintenance costs because they are shared between all shareholders.
   • Less concern about security because of higher year-round occupancy.
   
    
3. What type of Joint Ownership models are there?
    
   Theoretically, there are countless ways to structure the shared ownership of a property. At Seeff Fractional Ownership we prefer to keep things simple and transparent.
   
   Accordingly, until we are satisfied that a fractional ownership model is simple and transparent to investors, we choose not to offer it. The current ownership models on offer are:
   
   

   • a group of investors who will purchase a company that will acquire a completed home , or
   • a group of investors who will purchase a company that will acquire a piece of ground on which a premium luxury home/villa/lodge will be built.
   
    
4. How is the property managed and who manages the company in which I am buying a share?
    
   In both of the above models, the property as well as the company that owns the property needs to be managed. At Seeff Fractional Ownership we cater for the management of the property and company in the following way:
   
   

   • For the first year of ownership Seeff Fractional Ownership will insist on managing both the property and the company that owns the property. This is vital as it demonstrates to new shareholders the range of administrative tasks necessary to offer a hassle-free holiday in a shared property. Also, new shareholders of a fractional ownership company often don’t know each other and thus prefer to outsource the management of their asset to a trusted name like Seeff. After a year, shareholders normally know each other and are in a position to decide whether to continue with Seeff Fractional Ownership’s management service, to appoint a new management company or to manage the property themselves.

   
   Seeff Fractional Ownership is committed to not only providing a value-for-money property management service, but also to provide bulk discounts on administrative services - discounts which are passed on to all the fractional ownership members under Seeff Fractional Ownership management.
   
    
5. Is there transfer duty applicable on such a purchase?
    
   In respect of properties that are to be sold into a fractional-ownership company for the first time, the price that we advertise is an all-inclusive price i.e. if transfer duty is applicable upon the purchase of a property; it is paid from the funds invested by the shareholders when they pay the all-inclusive purchase price.
   
   This of course is valid only if the buyer is a natural person. Should the buyer be a corporate (Pty, CC or trust) the additional transfer duty at the prevailing rate will be payable by the buyer.
   
   In respect of shares in fractional-ownership companies that come up for re-sale, the selling price of the share is set by the selling shareholder. The buyer is then responsible for payment of the prevailing transfer duty in addition to the purchase price of the share.
   
    
6. What is the average cost involved in furnishing the house?
    
   Seeff Fractional Ownership furnishes the homes to a high standard with superior furnishings that normally cost between R300,000.00 and R400,000.00 This will generally include leather sofas, solid wood carpentry, decoration-in-theme, TV’s, Decoder, DVD player, all necessary “white goods” etc. A golf cart is also included (where applicable).
   
    
7. What are the monthly rates and upkeep costs?
    
   The monthly levy varies from one leisure estate to the next and also according to the size of the residence. The following detail is a general guideline to the cost of the monthly levy and the services covered by the levy.
   
   

   Leisure Estate	Approximate Monthly Levy per shareholder (2007)
   Sparrebosch (Pezula)	R530.00
   Zimbali	R580.00
   Zebula/Mabalingwe	R630.00
   Clarens	R550.00
   Dulstroom	R550.00
   Hans Merensky	R660.00
   V&A Waterfront Apartment	R650.00
   Arabella	R570.00

   
   This amount includes:
   Home Owners Association Levy
   Building & short-term insurance
   General maintenance and provision for future maintenance
   Bank Charges
   Maid or Cleaning Service
   Pool and garden maintenance
   Annual Tax Returns
   Cleaning Consumables
   Accounting and secretarial services
   Water, Lights
   Seeff Management Services
   
   This sum will naturally be reviewed at the end of the year when the auditor presents his accounts for the property company and you, as shareholders, vote on the level of the levy for the following 12 month period.
   
   
    
8. How do I actually pay the purchase price?
    
   The timing of the payment of the purchase price depends on the fractional ownership model employed to acquire the property.
   
   

   • When a completed home is being acquired by a fractional-ownership company, a 20% deposit is payable upon the signing of the Offer to Purchase the shares in the fractional ownership company. The balance of the purchase price is payable before transfer of the property into the company. Normally, this balance is payable 6-12 weeks after the payment of the deposit.
   • When a fractional-ownership company is acquiring a piece of ground on which to build a luxury residence, a 20% deposit is payable upon the signing of the Offer to Purchase the shares in the fractional ownership company. Thereafter, 5% of the purchase price is payable each month for 6 months after the deposit was paid. The remaining balance of 50% of the purchase price is payable 6 months after the date on which the deposit was paid. For example, a share costs R300,000.00: A deposit of R60,000.00 is paid on 1 January 2006. R15,000.00 is paid at the end of each month from February 2006 – July 2006. On 30 August 2006, the outstanding balance of the purchase price, being R150,000.00 is paid.

   
   Should you wish to arrange financing for the purchase of your share, Seeff Fractional Ownership has an in-house finance package to suit you. Each fractional ownership company has its own bank account. Your purchase price (as well as your monthly levies) is deposited into this account. This account is managed by an independent accountant and not by Seeff Fractional Ownership.
   
    
9. When planning holidays do all owners get a set time during the year or is it based on a first come first serve basis?
    
   Various roster systems have proved effective at different resorts. At Seeff Fractional Ownership, experience has taught us to determine a roster for each residence before we begin to sell shares in the fractional ownership company.
   
   Through trial and error we have determined that the resorts close to Johannesburg and Cape Town (Zebula/Mabalingwe, Clarens, Dullstroom and Arabella) are best served by a 4 x 1 week roster, while the other coastal resorts operate best with a 2 x 2 week roster.
   
    
10. Is my money safe in the joint-ownership company’s bank account?
     
    Each fractional-ownership company’s bank account is administered in terms of Standard Bank’s Third Party Fund Administration (TPFA) Scheme by the accountant of the fractional ownership company. The TPFA scheme obliges the accountant to purchase fidelity insurance to cover claims in the event of any fraudulent misappropriation of company funds. TPFA scheme bank accounts are superior to regular bank accounts as they attract call rates of interest and lower than normal bank charges.
    
    To ensure that your life is hassle-free, the accountant of the fractional ownership company is authorised to make payments from the company bank account. It is important to note that the proceeds of your investment into the company’s bank account are managed by the accountant and are appropriated as per an approved appropriation plan unique to each individual fractional ownership company. This is particularly relevant when Seeff Fractional Ownership are managing a turn-key project to provide a fractional ownership company with a newly built home.
    
     
11. How can I be sure that the accountant is appropriating my joint-ownership company’s funds correctly?
     
    To be able to provide the maximum assurance to you the investor, Seeff Fractional Ownership’s insists that the services of a completely independent and registered auditing firm is employed. The independent accounting firm is responsible for the day to day running of the accounting and secretarial affairs of each fractional ownership company, while the independent auditing firm alluded to above is responsible for auditing the affairs of each fractional-ownership company annually. In this way, an inherent “double-check” exists to prevent and detect irregularities.
    
     
12. What about Capital Gains Tax?
     
    Our experience has shown us that the value of your share in a fractional-ownership company will probably increase significantly. As the purchase of this share is an investment, any increase in the value of this investment will constitute a taxable capital gain if you sell your share.
    
     
13. Why do some investors buy shares in different joint-ownership companies?
     
    There are two main reasons for this. The obvious one is because investors enjoy a variety of leisure pursuits and hence will invest in a game farm and a golf estate residence for example. The second reason is more strategic – the value of a premium leisure property is highly dependent on the vagaries of the property market in the immediate vicinity. By investing in one property by means of conventional, 100%, outright ownership an investor is subjecting his investment to these vagaries. By diversifying his leisure property investment into a portfolio of fractional-ownership shares, the investor is significantly reducing the risk of extreme vagaries in the value of his investment – something that only extremely wealthy people have been able to achieve in the past.
    
     
14. If I can’t use my scheduled weeks in the property, how could I let them?
     
    It is important to remember that the property is owned by the fractional-ownership company in which you own a share. The shareholder’s agreement that all shareholders enter into upon investing in a fractional-ownership company stipulates that each shareholder has the right to let the weeks allotted to him. Accordingly, a shareholder could either let weeks in the property himself or request Seeff Fractional Ownership to let the weeks. Seeff is experienced in the letting business and have a constant flow of people requesting to let houses in leisure estates.
    
    Rental administration charges levied by Seeff are generally in the region of 10% -15%. Seeff Fractional Ownership’s only request is that shareholders provide them with reasonable notice of their intention to let their weeks. Obviously if you do market and manage the letting of your weeks yourself, there will be no charge from our side. Should you use Seeff, we will be ruthless in screening possible tenants as we undertake to protect your precious investment. We also have another 200 offices around the country to assist in letting your holiday time.
    
    The last point worth mentioning under this question is that if the shareholders of a fractional-ownership company are not comfortable with the letting of the property, the right of a shareholder to let his weeks could be withdrawn by the amendment of the shareholders agreement. Obviously, the shareholder’s agreement can only be amended by the shareholders themselves in the manner prescribed by the shareholders agreement.
    
     
15. Why did Seeff form a Joint Ownership Division?
     
    Many affluent property investors have realised that they, on average, only utilise 4-6 weeks per year of their leisure property investment, yet they still incur the hassle and full maintenance costs of the property. This, coupled with the fact that premium leisure property investors prefer a range of experiences instead of being stuck with one property, as well as the general increased cost of outright ownership in exclusive destinations, has created enormous demand to participate in fractional ownership. To date, Seeff Fractional Ownrship has project-managed over 40 fractional-ownership (fractional) transactions of premium leisure residential properties.
    
     
16. Why should I invest through SJO?
     
    The Fractional Ownership Division is made up of a strong team of professionals within the Seeff structure:
    
    

    • Henry Greyling: CEO
    • Stuart Manning: Director
    • Samuel Seeff: Director
    • Gavin Bornman: Sales and Marketing Director

    
    Our key advantages are:
    

    • We have the integrity to manage your entire investment experience properly.
    • We have the credibility and expertise to secure premium property at the lowest possible purchase price on your behalf.
    • The Seeff brand is one of the most reputable in South Africa, where we have been operating for over 40 years and remain committed to 1st class property services.
    • We have successfully been offering this product to the public since 2003.