Timeshares
| Author | Jeffrey Wilson |
| Pages | 1235-1238 |
Page 1235
Timeshares are created when a developer purchases or builds one or more condominium type units and then completes the required legal steps to be allowed to sell week stays in these units. Some states consider some timeshare arrangements to be actual pieces of real estate, making other real estate laws applicable to timeshare owners.
In this timeshare, the timeshare owner purchases an ownership interest in a particular piece of real estate. Usually, the buyer purchases a particular unit and a particular week in the year. That owner will always stay in that same unit on the same week of every year, unless an exchange is made through an exchange company. This arrangement is usually called Fixed Time or Fixed Unit.
In a non-deed timeshare, the timeshare owner purchases a lease, license, or club membership to use the property for a specific amount of time each year for a stated number of years. This is sometimes called a Floating Time arrangement. The purchaser has to contact the resort to make reservations for the exact week required. Some resorts have limitations on how early units can be reserved. Seasonal Floating is the same as Floating Time except that the owner can only reserve time within a particular season
Numerous factors should be taken into account prior to purchasing a timeshare. A review of the background of the seller, developer, and management company, along with a review of the current maintenance budget, will assist the prospective seller in making an informed decision. Local real estate agents, Better Business Bureaus, and consumer protection offices also are good sources of information. While many reputable builders do exist, purchasing an undeveloped property carries additional risks. One means of protection is to hold money in an escrow account in case the developer defaults. The commitment from the seller that the facilities will be finished as promised should be written into the purchase contract with a date certain.
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Timeshares provide the convenience of prearranged vacation facilities, however future circumstances may alter future planning ability. Timeshare plans typically do not include recession provisions for poor health or job loss. Vacationing tastes and favored activities may also change over time. These factors should be considered in evaluating a purchase.
Timeshare resales usually are difficult and often sold at a loss to the seller. Therefore, timeshares are typically not considered an investment as a second or vacation home might be. There are many investment options in the property area, but investment should not be a major factor when purchasing a timeshare. Renting is also difficult and many time-share owners pay advance fees to rental agencies which may not be able to find any renters for that time frame.
Total costs include mortgage payments and expenses, as well as travel costs, annual maintenance fees and taxes, closing costs, broker commissions, and finance charges. Annual timeshare maintenance fees can be high depending on the amenities of the resort. The larger and more upscale the resort, the higher the fees. These fees cover all of the costs of operation but are typically several hundred dollars a year. These fees can and do rise over time. All of these expenses should be incorporated when determining the overall cost of purchasing a timeshare.
Purchase documents for any type of real...
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