Types of Timeshares

TIMESHARE INFORMATION - TYPES OF VACATION OWNERSHIP

Today, there are several types of vacation ownership programs from which to choose, enabling consumers to purchase the type of vacation ownership plan that best matches their lifestyle.

Timesharing or vacation ownership is a term which describes a method of use and ownership. It denotes exclusive use of accommodations for a particular number of days each year. Usually sold by the week, it is also called interval or vacation ownership.

The purchase of a timeshare interval can take various legal forms. Under a fixed-unit, fixed-week deeded agreement, the purchaser receives a deed allowing the use of a specific condominium at a particular time every year forever just like buying a house. Benefits may include the tax advantages of ownership, plus a voice in the management of the resort. Under this agreement, the owner may rent, sell, exchange, or bequeath the vacation interval.

Under a right-to-use plan, ownership of the resort remains with the developer. The purchaser reserves the right to use one or more resort accommodations for a specified number of years, ranging generally from 10 to 50 years, after which all use rights return to the developer. These plans come in a variety of forms, most commonly as club membership.

Vacation intervals are sold as either fixed or floating time. With fixed time, the unit, or unit type, is purchased for a specific week during the year. That week is reserved for the owner every year, subject to cancellation if the vacation owner does not plan to use it in a given year. Floating time refers to the use of vacation accommodations usually within a certain season of the year, often within a three-to-four-month period such as spring or summer. The owner must reserve his or her desired vacation time in advance, with reservation confirmation typically provided on a first-come, first-served basis. The purchaser may also receive a deed under a floating time arrangement. According to a recent national study, approximately 70 percent of timeshare condominiums in the United States are sold as floating time. Some price differences are based on demand within each season.

Vacation clubs or points-based programs provide the flexible use of accommodations in multiple resort locations. With these products, club members purchase points which represent either a travel and use membership or a deeded real estate product. These points are then used like currency to access the various size accommodations, season and number of days at the participating resort. The number of points needed to access the resort accommodations will vary by the members' demand for unit size, season, resort location, and amenities. A vacation club may have a specific term of ownership or be deeded in perpetuity.

Fractional ownership or Private Residence Clubs enables consumers to purchase a larger share of a vacation ownership unit usually from five to 26 weeks. This type of ownership is popular in ski, beach and island resort areas.

Lockoff or lockout units allow vacation owners to occupy a portion of the unit and offer the remaining space for rental or exchange. These units typically consist of two bedrooms and two baths, or three bedrooms and three baths.

Split weeks are popular with consumers who prefer shorter vacations, as the owner may split use of the interval into two separate visits to the resort, such as one three-night and one four-night stay at two different times of the year. Reservations are usually granted on a first-come, first-served basis and are based on availability.

Biennial ownership, or alternate year ownership, allows use of a resort ownership product every other year and costs less than annual ownership at comparable resorts.

(Reprinted by permission of ARDA)