The law of trusts developed in England and Wales during the Middle Ages under the jurisdiction of the King of England. Whereas the common law historically regarded property as an indivisible entity, the Lord Chancellor had the discretion to declare that the real owner in equity (i.e. in all fairness) was a person other than the title holder. Thereafter the legal and equitable rights in property were separable. Trust law emanates from the common law and remains an accepted and widely used legal construct within the American legal system. The Uniform Trust Act is now widely adopted and provides consistency state to state.

A Trust is a legal entity created by a transfer of property from one person (grantor or settlor) to the trustee to hold for the benefit of others (beneficiaries). A Trust is often employed to transfer some, but not all, of the bundle of rights associated with real estate.

The Trust model is ideally suited to any product or industry where rights in property are divided between different people or entities. Trust-based ownership or membership structures are particularly useful for;

• Timeshare Resorts
• Vacation Clubs
• Private Residence Clubs
• Fractional Interests
• Travel Clubs

Together with other shared ownership type products.

In a traditional deed-based structure a developer-grantor drafts and records up to 52 deeds for every unit, and then owners pay recording fees and taxes upon every transfer – sales, non-arms-length transfers, re-sales and default-based foreclosures. This structure is cumbersome, unwieldy and expensive.

As compared to traditional deed-based ownership, the benefits of the trust structure are numerous:

Added Due Diligence and oversight provided by an independent trustee with fiduciary obligations to the member-owners,
No Conflicts of Interest. The Trustee’s duty of care (among other legal obligations) is to the beneficial owners,
Reduced Transactional Costs (deed preparation, transfer taxes, recording fees, title insurance and foreclosure procedures),
Reduced Operational Costs,
Improved Inventory Control, and
Greater Flexibility with respect to substituting properties in and out of club inventory.

First and foremost the Trustee is responsible for taking title to the property being put into Trust for the beneficiaries. With this responsibility comes reasonable due diligence requirements on the Trustee with respect to real property that is being transferred. As sales commence, the Trustee maintains a membership registry and establishes inventory controls. The Trustee issues beneficial interest certificates to interval purchasers evidencing their ownership interest or right to use. The Trustee also, where necessary, maintain in the Trust register an up-to-date record of mortgages or consumer loans placed against the owner/members’ interests. If owner/members wish to sell or otherwise transfer their interest, the Trustee facilitates this process simply.

Utilizing an independent, specialist, institutional Trustee like FNTC America adds a layer of supervision and separation from the developer that prevents over-selling, protects and preserves the purchasers’ property, provides consumer confidence and enhances the value of the resort product.

FNTC America together with its sister company (FNTC UK) First National Trustee Company are the world's largest Timeshare trustee, with over 30 years of experience providing trustee services to the Vacation Ownership Industry. FNTC America act as trustee and provide trustee services to the Timeshare and Shared Ownership Industry. Collaborating with resort developers legal advisors, FNTC design and implement flexible and cost effective solutions to support Timeshare resorts, Home Owners Associations, Management Companies and Hotel Groups.

For more information on how FNTC America can help your business please email FNTC America or contact by phone at (+1) 866 978 2571.