Timeshares started when families came together to share a vacation space to cut down costs. The idea was to maximize the use of these properties during the holidays and build family traditions. Over time, it has evolved to become one of the largest niches under the real estate business.
As simple and easy as timeshare seems, it can be complicated. There are different types of timeshares, and different forms that timeshare purchases can take. The major forms of owning a timeshare is the deeded and non-deeded timeshare. The actual difference between these two is that one gives full ownership of a timeshare while the other does not.
This is also known as the traditional timeshare or the traditional form of timeshare ownership. This is because when timeshare came into existence, properties were bought and owned as actual real estate properties. The idea of splitting the bill of the property and taking away the stress of managing vacation properties all came as modifications to timeshare as it evolved. Deeded ownership is legally owning the usage rights of a timeshare property. This means all the risks, costs and setbacks that come with owning an actual property become the timeshare owners’ collective responsibility. The deeded form of owning a timeshare makes owners’ feel that they own something of value (which is not the case in reality). The deeded ownership simply means you can lease, share, sell, will and exchange your allotted time (Although, the resorts have been adding restrictions on what would be typical ownership rights, through their power as the management company). Owning a deeded property does not imply that you have the timeshare at your full disposal, it simply means you own the property in a real property legal structure for the time period agreed upon (maybe a week, two weeks, a month, etc.) by the owner and the agency. This form of timeshare involves a lot more legal agreement and documentation than any other form of timeshares.
It is commonly known as the right-to-use timeshare. This is not the total opposite of the deeded timeshare. In this form of timeshare, you own the timeshare for an agreed period (e.g. 20 years, 25 years, a decade, etc.). Here the contract is not a lifetime one. It is limited compared to the deeded contract. The contract also expires or may be renewed (if permitted in the contract). In some cases, it is less expensive than the deeded timeshare. However, like the deeded timeshare, the timeshare owner does not exactly have a say on his property (i.e. what he may and may not do with it). The owner may not lease or sell his timeshare, depending on the contract restrictions.
Ownership of this timeshare is more like a club membership where you own the timeshare for a specific period in the year. You have no legal document of actual ownership. Non-Deeded timeshares are a timeshare company or deeded owner giving you the license to use their property for a period of time.
In the United States, most of the timeshare contracts are deeded. The resort developers highest priority is to continue collecting maintenance fees in perpetuity. This provides a legal requirement for the deed to flow with the estate at the time of the owner’s death. One can see how this would be more beneficial to the resort. They do not need to re-market the timeshare, nor be responsible for finding a new owner. All they need to do is look to collect fees from the next generation.
Also in countries such as Mexico where owning actual real estate properties can be quite tedious and legally stressful, the idea of a right-to-use timeshare still gives one the feel of an owned property at the vacation space of their choice.
Before purchasing a timeshare, one must ensure total understanding of the various types of timeshare and the legal standing in the country or region of their choice.
TS Elimination provides timeshare transfer services for timeshare owners who want to exit their contracts. Contact the TS Elimination team today on www.tselimination.com