Membership criteria for SAAFI revised

Source: VOASA

Thys Geyser, Chairman of the South African Association of Fractional Intermediaries (SAAFI) and Director of Pam Golding Fractional, was the only South African delegate to attend the recent World Fractional Ownership Conference held in San Francisco, USA, hosted by the world’s guru of fractional ownership concept Richard Ragatz. Says Geyser: “This conference is committed purely to fractional ownership, and was attended by 750 delegates with 70 speakers over the 4 days, representing the intellectual property of the world on fractional ownership.”

Before attending, Geyser had assumed that South Africa lagged the US market by 3-4 years – given the fact that they have had fractional ownership for 12 years and South Africa only for around 4. “I found this not to be the case. In terms of the evolution of the industry in South Africa, we have caught up with the US in a big way and are almost on a par with them already, and are very close to the cutting edge.”

It was also found that in terms of legislation and industry regulation in the USA and South Africa, we currently have similar issues. “In the US they define the market by equity-based products (fractional ownership, private residence clubs, etc.) – and non-equity or time-based products (timeshare, destination clubs). The general public get confused about the two, but there is a very clear line between them - you are either buying equity, or you are buying use (time). The fundamental underlying issue of fractional is that it is equity-driven. The biggest difference here is that the US has perfected their legislation and the industry is tightly governed, whereas in South Africa the legislation still lags in this growing industry.

“The timeshare people in the US suggested that the fractional ownership folk affiliate with them. However, the fractional delegates chose not to do so, although they do subscribe to the timeshare legislation. They feel that they do not sell time, they sell ownership, and they want their own body and specifically don’t want the close association. The situation is exactly the same in South Africa, and this issue is currently on the table.

“In South Africa there is TISA (the Time Share Institute), a self-regulating body representing timeshare and applying timeshare legislation, who say they are already regulating with proper legislation for timeshare, and have suggested that fractional ownership members join with them. The fractional market, currently without dedicated or specific fractional legislation, but represented by SAAFI, want to be compliant - but we don’t necessarily want to be part of the timeshare fold. We wish to seek our own avenue, and hence have engaged with the Department of Trade and Industry. By choice and association, we would rather have our own association for joint ownership of property – whatever that property may be.”

Geyser has brought back to South Africa pointers that he is now implementing among the SAAFI membership. “In terms of legalities – in the US, at the inception of a fractional ownership offering, they spend an enormous amount of time making sure that every product is registered with the regulator and that all related aspects are examined.

“In the past in South Africa, members could affiliate with SAAFI, becoming an accredited SAAFI member, and we then expected them to comply with our regulations. We have changed this, with immediate effect since our recent SAAFI Executive Board meeting. There will now be three different categories of membership – developer; broker/sales company; or management company. For every specific project undertaken, the member must submit legal documents with a list of compliance criteria, and demonstrate that everything is compliant at the outset, from their legal documents to their marketing promises. If they comply, SAAFI will approve the project, after which members can take it to the consumer.”

All existing members of SAAFI will have to reapply, and new members will have to ensure that they comply with all requirements both as a company and ongoing on a project by project basis, which is the way it works in the USA. Adds Geyser: “We are a self-regulating industry, and this will further strengthen our endeavours to protect the consumer.”

Contact Thys Geyser of SAAFI on 083 452 4774