Shareblock Option Protects Timeshare Investors

Keith Stewart, the billionaire developer of the award-winning Pezula Private Estate in Knysna, has reassured investors in the Pezula Private Residence Club that their timeshare property investments will be protected under the Shareblock Act - should government's proposed moratorium on foreign land ownership come into effect. By Glenda Nevill

Pezula recently launched the Pezula Private Residence Club, a timeshare ownership scheme that includes residences at three premier destinations: Pezula in Knysna, Shamwari in the Eastern Cape and Franschhoek in the Western Cape.

Because of investor anxiety regarding government's mooted moratorium on foreign land ownership, Stewart has simplified the offering as he does not want any uncertainty with regards to timeshare ownership within the Pezula Private Residence Club. It will now be structured as a shareblock company.

A shareblock scheme, as defined by the Share Blocks Control Act, 1980, Act No. 59 of 1980, means any scheme in terms of which a share confers a right to or an interest in the use of immovable property.

Although there are other ways of structuring timeshare rights, share block schemes have proved popular. Under a share block scheme, a shareblock company - rather than an individual - obtains rights to land and buildings for use or occupation by the shareholders of the company.

'This means that timeshare investors' shares in the Residence Club would be the same as owning shares in a company that manufactures goods, for example,' says Andy McPherson, managing partner of law firm strb Smith Tabata Buchanan Boyes.

Shares in Pezula Private Timeshare Residence Club commence at R600 000 (inclusive of VAT) for the first 20 shares. Thereafter, the price will increase to R650 000 (inclusive of VAT). There will be an annual management fee of R15 000 per share which will cover all operating costs, including the regular refurbishment of the residences.

The investment opportunity is limited to only 70 shareholders who will have ownership and use of five luxury residences on the Pezula championship golf course in Knysna.

The Pezula Management Company will allow a member to rent their timeshare out if they are not able to use all or a portion of their time in a particular year.

A limited number of members will ensure a flexible reservation system, enabling timeshare owners to gain access to Pezula.

The timeshare units, 234 square metres, are spacious with two bedrooms, luxurious en suite bathrooms, spacious living and dining areas and well-appointed kitchens and a private heated plunge pool.