Friday, August 09, 2013

More Q & A About Timeshares

Once you've decided that buying a timeshare is the right move for you, a lot of other questions arise.

These questions are more technical but it's important that you understand these aspects of timeshare ownership.

1. What do fixed and floating mean? 
A fixed program means that the owner owns the right, and can only use, a timeshare unit during a particular week (a "fixed" date) every year. A floating program gives the owner the flexibility to choose a week generally within a specified time period or season.

While a floating program gives you flexibility it also puts you in competition for prime holidays and high-demand seasons.

2. What is "deeded," "non-deeded," and "right-to-use"?
Deeded contracts are a deeded interest in real estate and are officially called "timeshare estates" under most state law. With deeded contracts your fractional ownership of a resort is considered real property.

That means that you can use the week, rent the week, give it away, sell it, and even leave it to your heirs. You are also liable for a portion of the real estate taxes, which is usually collected as part of the timeshare maintenance fee.

Right-to-use is a non-deeded interest, and the two terms refer to the same thing, officially called "timeshare use" under most state law. It is also known as "membership." In this case you do not own real property, but rather the right to use specific property for a certain number of years.

Because many countries have severe restrictions to foreign ownership of property, right-to-use is a popular method of foreign timeshare resort development.

3. What is a points system?
The points program generally gives you a number of points based on your level of ownership. You can then use the points to request such things as "fractional weeks," meaning staying just a few days rather than an entire week, different unit sizes, different seasons, etc. In other words, purchasing points gives you an opportunity for more flexible vacations.

Points can often be used for other things such as rental cars, cruises and hotel nights. Points programs differ with each resort so make sure you understand exactly what the resort is offering. Points are also sold either as deeded or right-to-use.

4. How is the timeshare industry regulated?
The American Resort Development Association (ARDA) is an organization that works with legislators at both the federal and state levels to ensure such things as the right of rescission, truth in advertising, and that your timeshare is protected from the developer's debt.

You can be an active owner and join timeshare homeowners associations as well as the ARDA's coalition, both of which champion the cause of the timeshare owner.

For general timeshare questions see our previous post Basic Q & A About Timeshares.

Photo Credit: Wyndham Bonnet Creek Timeshare Resort

2 comments:

  1. Anonymous9:34 AM

    Does anyone know what happens to a timeshare when the owner dies? Are the heirs stuck with it?

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  2. If the owner has a deed to the property, the deed can be left to heirs. In the U.S., individual heirs have the right to disclaim a gift given to them, but typically that just means it stays in the estate for the executor to deal with in some other way.

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