Kaverna has created a modern solution to the age-old problem of reselling fractional ownership interests.
The age-old resale problem
When you own a home, you can reasonably expect to be able to sell your home at market value. But, with timeshares and other fractional offerings on the market, it’s not so simple. It really comes down to understanding one thing: the marketplace for selling your home is separate from the marketplace for selling your time or fractional ownership in a home.
For example, timeshares are purchased based on the market value of the home but are sold based on the market value of the timeshare – two separate marketplaces. The marketplace for timeshares is not only much less efficient, but historically has not matched the values of the home market. We worked with the industry’s top lawyers to create the Kaverna Exit Plan, which aims to tie the value of Kaverna shares to their underlying asset, the home, by enabling the home to be sold at full market value.
Solution – The Elective Exit Plan
The Elective Exit Plan allows owners to vote on selling the whole home at market value, while protecting buyers looking to hold onto their share for the long term. The goal of the Elective Exit Plan is to tie the value of Kaverna shares to the value of the whole home, making it easier for you to sell your share individually, while providing a backup plan.
Because owners can vote to sell the home, buyers in the market for these shares consider the market value of the whole home, so the share value is tied to the value of the home – as well as the multitude of additional benefits one gets when owning a Kaverna. This cannot be said of timeshares and most other fractional offerings.
How it Works
The unanimous vote is straightforward – if all owners want to sell the home, they can sell the home at any time.
The majority vote procedure is designed to protect all owners: it ensures that owners who are motivated to sell have a defined path to selling the whole home after adequately exploring the market for individual shares, while protecting owners looking to hold onto their shares for the long term.
Policy 1: An owner can only commence a majority vote 36 months after the last sale of any share in their Kaverna, including their own share. This ensures that new owners are protected from being out-voted into a home sale shortly after buying their share. In addition, a share sold in their Kaverna within the last 36 months would indicate demand for individual shares and therefore a market worth exploring before selling the whole home.
Policy 2: An owner can only commence a majority vote after the “Majority Vote Period”, a designated 12-month window where we work together to sell their share. Like we do for all Kaverna owners interested in selling their share, we will market their share to our extensive network of interested buyers. For an owner who is ready to sell their share, we’ve made it easy to explore the market for individual shares, and then, if they are not satisfied, to express their concerns with the other co-owners and call for a majority vote to sell the whole home.
Policy 3: An owner can always market and sell their share without entering the “Majority Vote Period,” but in order to commence a majority vote, an owner must enter the “Majority Vote Period,” during which they cannot make or hold reservations more than 30 days in advance. This protects satisfied owners of Kaverna shares by disincentivizing a whimsical and impatient seller from calling a majority vote to sell the whole home without having adequately explored the market for individual shares.
Policy 4: If a majority vote is reached, co-owners who did not vote to sell the home can transfer their interest to any other available Kaverna, using our Kaverna Transfer Advantage protocol. We will waive the one-time transfer fee for owners who transfer to another Kaverna under this circumstance. In the unlikely event where a majority vote is reached, this policy allows satisfied owners to continue enjoying the many benefits of being part of the Kaverna network.
The Elective Exit Plan is fully outlined, in an easy-to-read way, in our package of legal documents, which you will be able to review ahead of purchasing your Kaverna. Reach out to us if you have any questions.