A new company that offers co-ownership of luxury property in Dubai has been announced.
Set to launch on July 1, a top executive at Shard said the company offers 1/8 ownership — with names of each co-owner on the title deed.
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Investors or end-users will be able to use the property for 44 days every year — either for personal living or for additional income by renting it out.
“In each property, only eight investors or stakeholders are allowed, who can have the option to either rent it out or use it for staycation. Properties listed on Shard are off-market. We are putting them on the website and scouting for buyers. If there is no interest in the property for a month, we take it off the website. But if there is interest, we keep it online for up to three months,” István Juhász, CEO and co-founder of Shard, told Khaleej Times.
The co-ownership or fractional ownership model is already popular in the US, Europe and Southeast Asia and Shard is the first platform to introduce it in the UAE’s booming real estate market. It alleviates the burdens of sole ownership, such as large financial outlays, complex paperwork, and property maintenance.
Shard has listed a number of apartments, starting at Dh200,000. There are villas, too, including a Palm Jumeirah mansion that costs almost Dh5 million for each share. The same rules are applicable for all properties and co-owners, irrespective of prices.
Fees, utility bills
The prices listed on the Shard website include all charges, such as a four per cent Dubai Land Department (DLD) fee, conveyancer fee, all legal fees, trustee fees, agent commission, and others.
The utility bills will be paid on a pro-rata basis; so, if the co-owner stays for a certain period of time, he/she will shoulder the utility bills and other costs for this duration. All fixed costs are shared equally among all the eight co-owners.
Buyers or investors can schedule their stay in the property through the Shard app, just like booking hotel rooms on Booking.com and other similar platforms.
“There are certain rules as each property involves eight people. Hence, there are limits to how many stays you can have, and how long those stays can be. Also, people can book two years in advance, but they’re not allowed to book two consecutive Christmas holidays as we need to be fair to all owners,” said Juhász.
In terms of selling the stake in fractional ownership, the asset is very liquid and the stakeholder can exit at any point in time at any price he/she wants to.
“But the sale will first go to the other 7 co-owners and Shard. If none of them is interested, it will go to the open market for sale through the Shard platform and the seller can also bring a buyer. However, Shard will carry out a mandatory KYC & AML of the buyer. The other co-owners have a right to buy, but no right to object at the sale of the share. Only Shard have the right for refusal due to KYC & AML reasons,” he added.
Shard has partnered with real estate agencies and proptech companies, such as BetterHomes, Huspy and others, to list and acquire properties in Dubai.
The Shard platform launches on July 1 with nine properties for sale.
“We looked at the best practices around the world including the US, Mexico and Europe and some in Asia. We looked at the best platforms and hyperlocalised Shard for Dubai. This is not something we invented from scratch, we looked at 15 other systems of co-ownership from around the world and created a system based on that,” he said.