A timeshare represents an interest purchased to use and occupy resort accommodations and facilities for a period of time within each year over a period of years. Legal rights and obligations vary depending on the agreement made. The three common types of timeshare agreements are fee simple ownership of real property, lease or license arrangement and a point system. One of the problems with timeshares is that consumers buy without knowing what type of timeshare interest they have bought and then do not understand their rights and obligations.
Virtually all timeshares have fees associated with ownership. Annual fees include a charge for maintenance and possibly property taxes and insurance. These fees usually cover the costs to pay for managers on the property, individual unit upkeep, refurbishing needed on the property, pools, golf courses, tennis courts and gyms. Resort owners determine the fee. The timeshare owners do not. Without an agreement that bans it, the timeshare resort company can raise annual maintenance fees and impose special assessments any time.
Exchange companies are not resort owners, but they arrange for about 80 percent of the world's timeshare vacations each year by trading timeshare owners' vacation weeks or accumulated points for a fee. Some companies have reciprocal agreements with other resorts around the country and around the world. Owners who want to trade vacations weeks or rearrange schedules may have problems doing so. They may be competing for the most popular vacation times and holiday periods with other timeshare owners. They may find the time slot they desire is not available.
Developers have been known to mark up new inventory heavily. Later, owners discover that the resale value of their timeshare is less than anticipated. If you are a timeshare owner and cannot sell, you may continue to owe the annual fees. In general, timeshares are not an appreciating asset. In fact, they can be a depreciating asset that is difficult to sell.
While you continue to pay fees, standards of service and maintenance can be uneven or decline as time passes. Discover what recourse you have before you buy. When you buy a timeshare, the developer may encourage you to buy on impulse and to consider only the cost of vacation accommodations. It is wise to consider the entire cost of vacations, including airfare, car rental, meals and tours.
