What is timeshare?
WHAT IS TIMESHARE?
This is apparently the most challenging question in the business of timeshare.
Timeshare is also known as “vacation ownership”, it is ownership of a particular property for a specific time range. This is the most basic definition of timeshare. The knowledge of timeshare just became popular but timeshare has existed since the early 1960s. While the legal structure of timeshare ownership in the United States provides for “ownership,” what is actually owned is time usage. Timeshare Purchase Agreements are complicated, and many times very one sided. The contracts give Timeshare Developers and the Resort Management Company much of the power in the relationship. Owners should exercise caution before buying a timeshare.
A little history about timeshare.
Timeshare began in the United Kingdom in the early 1960s. This system of vacation became popular after the Second World War. During this time different families purchased a property and shared it among themselves for different seasons of the year. It was just a way for every family to get a feel of the place at the season of their choice.
Over the years this simple home sharing venture has grown to become one of real estate’s biggest business strategies in different parts of the world.
Timeshare was first introduced into the United States in the year 1973 by the Caribbean International Corporation (CIC). It offered a 25 year vacation licence rather than an ownership. CIC assured a maintenance of specific accommodation which was provided in the specified season and time interval agreed upon. The contract between CCI and their client attracted the sum of $15 per which was to be paid according to the terms of the contract. The contract also contained a $25 switching fee, which was charged if the client decided for any reason to switch resorts location.
In the past, the fee paid was reasonable and fair compared to the amount that would have been spent if the clients had picked to stay in a hotel with standards provided by CIC timeshare services. In 1999 due to inflation of the dollar, the cost per night of the time share increased to $52. Clients are allowed to give their timeshare accommodation for rent or as a gift. Irrespective of how occupied or not the timeshare is during the period stipulated to a client, the client is expected to pay the sum of $15 per night as agreed. This “per night” payment is what is known as the maintenance fee today. As we all know, and have experienced, the average timeshare owners’ maintenance fees have increased dramatically, making timeshare ownership more of a burden, than a benefit.
Over time the concept of timeshare caught the eye of many entrepreneurs and business men. The idea of selling a room 52 times to 52 different owners at the average price of $7,000 – $25,000 per week was absolutely mind blowing. Sooner or later it was expected that the real estate developers would step in, and that is what happened. The Florida Real Estate Developers stepped in to create legislation which would define timeshare ownership in Florida and make them fee simple ownership transactions (which attracted additional fees, we know how timeshare developers love additional fees). The home owners associations was also initiated. The fee simple ownership transaction paved way for timeshare location exchange companies to be created. Companies such as Interval International and RCI where spawned so timeshare owners could exchange their week with other timeshare owners in any given area.