FAQs

Fractional Ownership FAQs

Q: What is fractional ownership?
A: Fractional ownership also known as shared ownership is a form of second home real estate ownership. An owner becomes a “partner” with other owners in the same unit. The unit is professionally managed and maintained so your stay is completely hassle free.

Q: Why did the concept of fractional ownership develop?
A: According to current studies the average second homeowner uses his or her property only 17 days per year but pays for 365 days of the year. Fractional ownership developed as a sensible, problem-free way to balance your vacation time usage to your investment in a second home.

Q: Is fractional ownership the same as owning real estate?
A: Absolutely. You enjoy all the rights and privileges of owning fee simple deeded real estate. That is, you can sell your property at any time at any price, will your share to your heirs, rent it, allow friends to use it or invite guests to share it.

Q: When I buy a fraction in The Cocomo Retreat, what do I actually receive?
A: When you purchase a share in The Cocomo Retreat, you become a shareholder in the corporation Cocomo Retreat S.A. which holds the real property. Each buyer receives their share in a Costa Rican corporation called an S.R.L. (equivalent to an L.L.C. in the USA) This share represents the fraction of the property owned by the purchaser.

Q: Is the fractional ownership concept the same as timeshare?
A: With fractional ownership you have ownership and a deed to the property. With timeshare you only have a right to use and may or may not have deeded ownership.  Another significant difference is that the owners retain control over the management of the property whereas in a timeshare, owners are subject to the whims of the developer.

Q: What about selling my unit?
A: Like any other form of real estate, owners can sell their share at any time. As with any real property, you can sell it at market value, will it to your heirs or even give it away if you choose.

Q: Will my unit be rented out to help offset some of the costs of ownership?
A: Typically, owners use a portion of their share for personal vacations and deposit the remaining weeks into our professionally managed rental program to defray the cost of maintenance fees and potentially produce a stream of income. The management company will receive 40% of the gross rent with the remaining 60% going to the owner.

Q: What if I don’t know the other owners?
A: Few people know the other owners before their purchase. There are rules, bylaws and management services that keep the property running smoothly. There is no overlap in calendar dates and no need to interact socially if you don’t wish to. However, there may be an annual meeting and through joint ownership, long-term friendships will often form.

Q: Who pays for maintenance and repairs?
A: Your monthly maintenance fee (USD $75 for the beach front apartments or USD $45 for the beach house) covers all of  the costs for maintaining and managing the property including the cost of all minor replacements and minor wear and tear, taxes, insurance, water, electricity, security and on-site management. Owners or guests are responsible for substantial repairs if damage is incurred during their use.

Q: Is transfer duty payable when I receive my share certificate?
A: There are no transfer taxes or stamps to be paid when transferring the interest in the property. There will be legal fees associated with the registration of your interest in the property.

Q: How is management of the property addressed?
A: In the first year of operation, a management company will be appointed by the developer.  After year one, the home owners association, composed of shareholders, will have the opportunity to vote on changes to the rules and regulations which govern the property.  The management company will present a yearly budget as to how the funds are to be used as well as details regarding how the funds were used in the previous year. This Assembly takes place once a year and provides each shareholder with one vote per share.

Q: Is the property insured?
A: Yes. The Property is insured through the National Insurance Agent of Costa Rica. The beneficiary of the insurance is the Cocomo Retreat S.A. which would collect on behalf of the shareholders. The insurance amount would be divided between the homeowners in the proportion to the value of their participation.

Q: How far in advance will I need to book my vacation to The Cocomo Retreat?
A: In the beachfront apartments, green season weeks are available to owners on a 12 month advance reservation system. Winter weeks do not require a reservation and can be kept for use by the owner on a perpetual basis.  The beach house shares are comprised of fixed time and do not require a reservation. Of course, owners may deposit their unwanted time into the rental pool and reserve any other weeks at any time, based on availability.

Q: Can I use my own conveyancing attorneys?
A: The transfer of the share is performed by an attorney familiar with the Cocomo Retreat project and fractional ownership laws in Costa Rica.  The cost of the transaction is US$1,200.00 and includes the formation and registration of an S.R.L. corporation (equivalent to L.L.C. in the USA). The end buyer may retain their own attorney to look over the structure used, but that cost will be borne by the buyer and is in addition to the fee charged for the transfer and registration of ownership.