Fractional Ownership: Real Estate Access through More Competitive Structures

In today’s economic environment—where consumer purchasing power has declined—alternative models are emerging that provide access to the real estate market without requiring substantial capital commitments. One such model is fractional ownership, which enables multiple investors to collectively acquire and enjoy the benefits of a property in proportion to their investment. This may be for personal use, rental income, or future resale.

This structure is particularly attractive to those looking to diversify into real estate, but also to developers aiming to place units more flexibly in a cautious market. However, for fractional ownership to be implemented effectively, it is critical to establish a solid legal structure that provides certainty to all stakeholders. The trust (fideicomiso) stands out as the most robust legal vehicle for this purpose, as it clearly defines rights, obligations, ownership shares, and the operational rules governing the asset.

Historically, bank-administered trusts have been the default mechanism for such models, although they typically involve high setup and maintenance costs—limiting scalability. Today, however, non-bank trustees, such as specialized SOFOMES (multi-purpose financial institutions), offer more competitive alternatives through collateral trusts (fideicomisos de garantía). These instruments enable precise definition of rental income pool terms, exit rules, substitution and management mechanisms, all while substantially reducing fiduciary costs.

Ultimately, legal structure efficiency is the decisive factor in making a fractional ownership project viable and profitable. In addition to contractual design, it is essential to evaluate which trustee is best suited to each project. A well-negotiated agreement with the right trustee helps control costs and better align the interests of all participants in the model.

At Newlex, we have deep experience in structuring trusts and legal contracts for fractional ownership schemes. We’ve worked with a range of trustees—including non-bank alternatives—to help our clients implement models that are competitive, secure, and operationally efficient. Our mission is to support real estate innovation through legal frameworks that enable its viability and long-term success.