Timeshares

The fine print

While the format of these transactions varies, they typically involve the purchase of one room or suite in a resort for a week a year, either on a long-term basis (30-99 years) or as actual registered (deeded) ownership in perpetuity. The costs are high: $18,000 (US dollars, 2006) or more up-front, followed by HOA (homeowners association) or maintenance fees of $500/year and up, which continue for as long as the voyager owns the timeshare. The lawyerly details of what you get vary widely:

A deeded property indicates that you legally own a fractional interest in buildings or land, supposedly in perpetuity, including all liabilities. A "right to use" is not ownership; it's a long-term lease, paid up front, which continues decades into the future. It is often used in countries like Mexico where local law restricts foreigners from buying land. Another variation is to sell ownership not in the actual land (one "home week" in one specific room type, in one specific resort) but to sell an interest in the company or trust that owns or operates the resort. The actual results vary just as widely:

Fixed weeks were the original model, ownership of the same week each year at the same property. Most "legacy timeshare" properties – independent properties built by developers twenty or more years ago, sold off as individual timeshares and turned over to homeowners associations with no further involvement by the original promoters and no further sales effort – fall into this category. Rotating weeks (sometimes mislabeled "flex weeks") move each owner to a different week each year on a fixed schedule. Sometimes this lands in high season, sometimes this lands too far off-season to be of use, but in theory each owner get a prime time slot at least some of the time. Floating weeks are slightly more flexible; prospective owners buy a week a year in a specific season without committing up-front to specific dates (which can be chosen each year, subject to availability). Vacation clubs, memberships and point-based systems are offered by large chains with multiple properties; the buyer gets a certain number of "points" which may be redeemed for accommodation each year anywhere in the ch

Pitfalls

A timeshare contract is a complex real estate transaction with many pitfalls. Don't sign one without expert advice. For the traveller, a timeshare can be inflexible in that it represents a commitment to vacation at the same place (or a venue under the same ownership) one week a year, every year. This can be awkward in years when the traveller doesn't have a week free, can't afford to take a trip or would prefer to vacation elsewhere. A last-minute cancellation is likely to be difficult or impossible if there is a change in plans. Timeshares also carry a high up-front cost as they must be purchased in advance, not merely rented. It's also difficult to predict whether a hotel which was a good place to stay this year will retain the same standards and the same market position in the future. Sometimes a property is renovated and upgraded, with a corresponding increase in prices; sometimes a property or destination goes into decline through years of neglect. Some once-popular vacation destinations have even become ghost towns. If what you got is a club membership, the decay can affect all the premises of the company – it may have financial difficulties or it may have stopped trying to attract new customers, or lures them under a new name. Even if a property gets a major facelift or renovation, the owners of the timeshare will have to pay for that work in higher HOA/maintenance fees. Disbanding an association or converting an existing timeshare building to another purpose (such as apartments or condos) later may be awkward or impossible due to the fragmented ownership structure; it's difficult to get all owners to agree to a single course of action. Like any other bet on the real estate market, the value of an individual timeshare may rise or fall over time. A timeshare should not be considered an investment; the resale value is far lower than the prices the original high-pressure salespeople promoted when the project was launched, if the timeshare can be sold at all. It can also be all but impossible to get out of some of these arrangements – even if a person is sick, elderly or bankrupt (and therefore unable to travel) the terms of the contracts vary widely on wheth