Though they are considered legal pieces of property, timeshares and the contracts that bind them can be as varied as cars. There are many different types of timeshares, so it is very important to understand what you are getting and the terms of your agreement before you make any commitments or signs any kind of contract.
What You Need to Know
There are two basic kinds of timeshare contracts: deeded timeshares and “right-to-use” timeshares. These two kinds of properties and the terms of their contracts work very differently, so understanding these properties and what you get when you buy into them can save you a lot of hassle in the future.
- Deeded Timeshares – Even though you don’t have unlimited access to the property, in a deeded timeshare you legally own a portion of that property along with the other owners. Usually, you would get the property for a week each year (also known as a 1/52 agreement). But, as with any legal contract, there are a variety of variations that can occur and you may have the property for longer (perhaps a 1/12 agreement in which you get the property for a month) and you may be restricted on when you can use the time. Since you legally own a piece of the property, and since timeshares are considered pieces of real estate, they are subject to the same laws (including costly foreclosure should you fail to pay). Deeded timeshare contracts are also usually indefinite commitments, meaning you are responsible for your portion of the property until you transfer the deed into someone else’s name.
- “Right-to-Use” (RTU) Timeshares – These are just as they sound. You have the right to use the timeshare under the terms of the contract and agreement you sign, but you do not own any portion of the property. Think of it like rent, and these agreements usually have an expiration date and far more restrictions on when and how you can use the property than deeded timeshares do. Many people have thought they were buying a deeded timeshare when they are really buying a RTU (and vice versa) which can cause a variety of conflicts between the developer or resort manager and the timeshare owner.
What You Can Do
In order to avoid problems with your resort, it is extremely important that you fully understand the terms of your timeshare contract, what it means, and what you are buying. Smooth sales reps may make you think there are no problems and that you are just signing a “standard contract”, but in the timeshare industry there is no such thing.
If at any point you become confused and would like further clarification on exactly what kind of timeshare contract you are signing, you have every right to get in touch with a lawyer or someone you trust to review it for you. Owning a timeshare can be a very fun and rewarded experience, but you have to be comfortable with what you are getting into and agree with the terms of your agreement first.