What's up with Magnolia Private Residence?

Funny how they used the term "Limited Lots available!".

That phrase is to investulators like a ringing bell is to Pavlov's pooch.

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That phrase is to investulators like a ringing bell is to Pavlov's pooch.

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*DING*

Now's the time to buy!

Magnolia Cottages

I was looking for Magnolia Cottages today. I found them, and then I thought--- why does the sign say PRC (Private Residence Club)? And why is it called so many different names? Does anyone have expertise in this development that they wouldn't mind sharing? I see the prices are all over the place...
Mind you, I know all about PRC's but the owner I was talking to didn't refer to that at all- and neither do any of the current SFH listings... Is it only the building under construction that is doing the PRC?

Just need some insight...Thanks!

Re: Magnolia Cottages

I am not an expert by any means, but I have stayed in one of the cottages. I think the PRC is just the condo building toward the front (on 30A), the cottages are in the back. There is a member on the board that has a cottage there, dusque, I think.

I know when we rented there was group that was managing several cottages that sounded like they were all fractionals. Many different owners with a management company representing them.

Re: Magnolia Cottages

The PRC is only the building in the front. The homes can be owned by an individual or group of investors, but generally homes are not sold as time shares. Oh, and those were not originally sold as such.

Re: Magnolia Cottages

The Cottages and the PRC are two different Home Owners Assoc, however the same developer. PRC was in a little trouble there for awhile, however I hear they are going to resume building. We will see.

Re: Magnolia Cottages

The PRC is only the building in the front. The homes can be owned by an individual or group of investors, but generally homes are not sold as time shares. Oh, and those were not originally sold as such.

The single family detached homes cannot be sold as time shares.

Re: Magnolia Cottages

The single family detached homes cannot be sold as time shares.

True, I'm sorry I didn't clarify. I meant that the homes were not originally sold as timeshares and depending on the covenants/restrictions they most likely cannot be resold as time shares.

Re: Magnolia Cottages

I think I must have misread your statement, thinking that you were referring specifically to the homes in Mag Cottages. My reply is intended only for the detached homes in Mag Cottage, though it applies in many other neighborhoods too. A detached home owner cannot just decide to make their unit a "time share" one day, and declare it done. More commonly, if they might create a corporation and sell shares/interest to the corporation, but that is a different type of ownership and the deed is held by one entity, the corporation. A person could not sell their portion of the home. They could only sell their portion of shares, which has nothing to do with a real estate sale. It would be a sale of securities.

Re: Magnolia Cottages

Okay, not arguing just trying to clarify, cause I think we are just restating the same thing differently.

The detached homes of Magnolia Cottages were never sold as time shares and in general detached homes are not sold as time shares. You are correct in the corporate holding entity not being a time share.

The condominium like structure in the front of the complex is a time share.

I think the confusing term here is fractional ownership. This is simply a marketing term to stay away from "time share". To my knowledge the State of Florida has never moved away from the term time share, it is just another way to say it.

Re: Magnolia Cottages

Up until the last paragraph, I agree that we are on the same page. However, a time-share is not a fractional ownership. They are two different types of ownership. "Fractional ownership" is not just a fancy marketing term. "Private Residence Club," is, however. A time-share has no ownership of the underlying asset. Technically, that may be confusing for some people, and the limited usage in both cases may be similar enough to think that time shares are the same thing as fractional ownerships, but they are legally not the same.

Re: Magnolia Cottages

Okay, not arguing just trying to clarify, cause I think we are just restating the same thing differently.

The detached homes of Magnolia Cottages were never sold as time shares and in general detached homes are not sold as time shares. You are correct in the corporate holding entity not being a time share.

The condominium like structure in the front of the complex is a time share.

I think the confusing term here is fractional ownership. This is simply a marketing term to stay away from "time share". To my knowledge the State of Florida has never moved away from the term time share, it is just another way to say it.

Sorry, I brought up that term. I just knew that the we were told that there were many owners of the same groups of cottages we were looking at. I don't really know how it was set up.

Re: Magnolia Cottages

Up until the last paragraph, I agree that we are on the same page. However, a time-share is not a fractional ownership. They are two different types of ownership. "Fractional ownership" is not just a fancy marketing term. "Private Residence Club," is, however. A time-share has no ownership of the underlying asset. Technically, that may be confusing for some people, and the limited usage in both cases may be similar enough to think that time shares are the same thing as fractional ownerships, but they are legally not the same.

Okay, I'm in the dark now, what is the difference?

Re: Magnolia Cottages

Don't be sorry for bringing it up. Maybe someone else had the same question. What you were told seems to be a little confusing, but as gayboi noted, the actual cottages are single family detached homes, which include their own lot. Ownership would be individual.

Re: Magnolia Cottages

Going by Magnolia this morning and saw several workers and trucks in front of building ( fractional ownership). Are things starting up again here?

Re: Magnolia Cottages

I note some confusing terminology when reading this thread. Sorry for the long-winded response, but I touch and feel Florida timeshare law with great frequency and felt the need to chime in here.

Chapter 721 of Florida Statutes regulates "Timeshare Plans" whether physically located in or just marketed in Florida. A "Timeshare Interest" under Florida law can be a "timeshare estate" in which the purchaser is deeded a 1/51 interest (or any fraction) in the real estate, or a "timeshare license" which grants only use rights for a specific number of months/years. Florida is one of a few states which also regulates personal property timeshare plans, which covers use rights sold in cruise ships, RVs, houseboats, etc.

My main point here is that Florida statute does not separately define fractional ownership as a legally distinct product. This is a marketing term typically used to describe a larger timeshare estate interest, such as a quarter-share. Fractionals are generally more expensive because (i) they are typically higher end than traditional weekly timeshares, and (ii) the fraction of property sold is usually larger.

It is entirely possible to timeshare a single family home if zoning and underlying covenants permit (that's a big IF). SJ is correct that the more common way to accomplish the same goal is to sell shares or memberships in a corp or LLC which owns the house.

If you want to create a timeshare or fractional regime - or share use of a property owned by a single entity for this purpose - consult a lawyer who does this stuff on a regular basis. Even the best general practitioner may not know the pitfalls and nuances involved in structuring different types of regimes and regulations for use.

Thanks for indulging my dry and boring distinctions.

Re: Magnolia Cottages

Going by Magnolia this morning and saw several workers and trucks in front of building ( fractional ownership). Are things starting up again here?

That is the rumor. They were doing some clean up around the site in Feb. when we were there.

Re: Magnolia Cottages

I heard that the developers of the Private Residence Club (the part of the development that is nearest Highway 30-A where construction has been abandoned) are in serious financial trouble and the contractor pulled off the project because they were not being paid. I also heard there are a lot of local suppliers who have not been paid. The Magnolia PRC sign has been covered up with a tarp. Does anyone know the real story?

I hope the problem gets resolved with that big building (and over time I believe it will, the question is how soon) because I think that's a very nice community. I like the style of the homes, the paved road (reminds me of the yellow brick road), and the layout of the streets. It's in a good location and it's very near a public beach access (I think - they may have a deeded beach access). I definitely wish the cottage owners the best and hope it gets straightened out soon. Personally, I wouldn't have built that big building, but people will get used to it and maybe it will bring something good. Shade from the sun in August when walking back from the beach? Coffee shop or other interesting food place on the first floor? Don't really need more of those because we have good ones already, but if the space is there and someone can make a nice business/living out of it and serve the people around it, I'd support it.

I hope the problem gets resolved with that big building (and over time I believe it will, the question is how soon) because I think that's a very nice community. I like the style of the homes, the paved road (reminds me of the yellow brick road), and the layout of the streets. It's in a good location and it's very near a public beach access (I think - they may have a deeded beach access). I definitely wish the cottage owners the best and hope it gets straightened out soon. Personally, I wouldn't have built that big building, but people will get used to it and maybe it will bring something good. Shade from the sun in August when walking back from the beach? Coffee shop or other interesting food place on the first floor? Don't really need more of those because we have good ones already, but if the space is there and someone can make a nice business/living out of it and serve the people around it, I'd support it.

Paula, you're always so positive.

I believe they have just about finished the Magnolia Private Residence Club. It should be interesting to see how the sales go. They are offering Fractional Ownership, not time share, on the condominium building. The main difference is that Time share gives the owner the right to time, Fractional Ownership gives you a deeded interest in the property. Most Private Residence Clubs are much nicer, offer more time, and offer more services than time share. From the documentation I have read, they have the potential of having a very nicely run property if it is managed correctly.
The cottages in the back were purchased by individual owners. The two other Private Residence Clubs along 30-A appear to have happy owners. There should be no reason this one doesn?t follow there lead.

They are offering Fractional Ownership, not time share, on the condominium building. The main difference is that Time share gives the owner the right to time, Fractional Ownership gives you a deeded interest in the property.

Just to clarify - Florida statute does not recognize a difference between timeshare estate and fractional ownership. Both are regulated under Chapter 721 as "timeshare". While it is true that some timeshare developers offer contractual use rights only, many (if not most) developers convey deeded interests to the intervals sold, often 1/51 or 1/52nd interest in a condo unit together with a percentage interest in common areas. A fractional offering is simply the conveyance of a larger fraction, which equates to more days of use per year.

No disrespect intended. Looks like a lovely property. I received a nice mailer from the developer - I think it was something like a 1/6 interest starting at $160,000. Best wishes for a successful season!

I wasn?t sensing any disrespect. You are 100% correct that Florida law makes no differentiation between the two. There is good reason for having them both covered in the same chapter.
There are some projects that advertise as Fractional Ownership that appear to be nothing more than a dressed up time share property. On the other hand, when you look at the Private Residence Clubs on 30-A, the management, the interest offered (1/6, 1/8, excreta); surely you can see a difference in the Fractional Ownership properties that have been offered on 30-A to date and a time share.

I do not disagree. A 1/8 interest in a private residence club on 30A certainly feels like a different animal than a 1/52 interest at a typical Orlando timeshare property. Marketing will have a different feel also, even if regulation is the same.