Buying a piece of Paris

Tuesday, July 08, 2008

By SHELLEY EMLING

Palm Beach Post-Cox News Service

PARIS — Many people fantasize about owning a little place in France, with its culture, history and seductively unhurried lifestyle.

But who can afford it? Properties are prohibitively expensive, especially with the weakened value of the dollar against the euro.

Many Americans have found a new way to live out their dream through fractional ownership, a concept popular in the United States but just catching on in Europe.

Karen Deffina of Palm City came close to buying a property in France on several occasions but never closed the deal. Then she went on the Internet and learned about fractional ownership.

Two years ago, she purchased a share in a three-bedroom home in the picturesque village of Cruzy, a 30-minute drive from the Mediterranean Sea.

"The house was extremely comfortable with all the amenities, and the village was set in the middle of vineyards and was as charming as you can imagine," she said.

Still, she recently decided to sell because of the challenges of the rotating booking system. But when she retires, she plans to purchase another share in a fractional in France.

Foreigners make up more than 8 percent of all property buyers in Paris, with Americans ranking second behind Italians, according to the Paris Chamber of Notaries, a trade association of real estate professionals.

Experts say the number of fractional developments is growing.

"From a small start a couple of years ago, I am seeing the number of available properties roughly double each year," said Tony Tidswell, a real estate consultant in southern France.

Most fractional ownership plans don't allow redecoration but do handle daily maintenance. But the real draw is being able to use a luxury property in a stunning locale at an affordable price.

A company called Fractional Paris offers a professionally decorated 800-square-foot, two-bedroom apartment with a terrace in Paris. Prices start at 120,000 euros, or about $186,000.

"A similarly appointed apartment with a terrace would cost today's buyer well over 1.1 million euros if bought outright, plus the associated headache of purchase and closing costs, renovation and furnishings," said Laura Sanders, marketing and sales director for Fractional Paris.

Steve Navaro, a Colorado-based lawyer who develops fractional ownership properties in Paris, said group ownership is an economical way to visit France frequently despite a declining dollar.

"We completely furnish and decorate properties so that you can pretty much walk in, bring your toothbrush and stay for a month," he said.

Properties also include basement storage areas with lockers for each owner so they can leave wine, heavy coats, family photos or other items they don't want to lug back and forth from the U.S.

It's the home-away-from-home allure that makes fractionals more appealing than a time-share arrangement, said Ginny Blackwell, a New York-based entrepreneur who founded French Property Shares, a fractional ownership company.

Generally, a company owns the property and offers shares, allowing fractional buyers to use it from a few weeks to three months a year.

A management company oversees maintenance while the weeks available to each buyer rotate each year so that one person doesn't always get the best slots.

Fractional ownership also can provide an investment opportunity. It differs from a traditional time share because an owner can build equity in the property and benefit from any rise in the property's value.

By comparison, time shares are contracts specifying the right to use a property certain weeks of the year.

But experts warn that fractional properties in France should be considered luxuries — not investments.

Tidswell said it's still not clear under French law whether fractional owners would be subject to French commercial taxes if they accepted renters for unused time. Some fractionals allow this; others do not.

Most buyers seem to care only about having a base from which they can enjoy France.

Bill Walker, a longtime anchor with WSOC-TV in Charlotte, N.C., and his wife, Eva, recently purchased a share in a French apartment.

"We love Paris and think this is an ideal way to continue our love affair in retirement," he said.

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