How do timeshares work?
Time-shares or fractional ownership are a contractual transfer of real estate, where the buyer does not actually own the unit. The actual ownership of the property is held by an outside entity (the owner’s management company) that pays a monthly fee to the owner. Buyers purchase time-shares from their respective owner’s management companies, at prices set by the manager, who will tell them what they can sell it for. This process can be repeated as many times as needed until you purchase full ownership of the property.
What is a Timeshare Resale?
A Timeshare Resale is a form of timeshare resale that has been taken up by the industry. It is an archaic method where an individual can buy the rights to use a vacation home or lodge owned by the resort. This differs from other types of timeshare resales because it allows individuals to sell their timeshare plan over and over again at any time, not just during the peak months of travel. There has been a significant shift in the industry, however, for those wanting to sell timeshare plans as opposed to buying them. Timeshares have become increasingly expensive, making it significantly more difficult for buyers to purchase for themselves as a present or personal item.
Is it necessary to pay maintenance fees on a timeshare resale?
If you buy a timeshare resale (or any resale), none of the maintenance fees are waived. Maintenance fees are set to ensure that the resort is adequately maintained, and it’s in your best interest to make sure it stays in good condition for the long haul. If a resort falls into disrepair, other guests may not feel comfortable staying at that property and you lose out on potential revenue.
Differences between Deeded and Right-to-Use timeshare ownership
A Deeded timeshare is given in ownership of the owner, who has absolute control over how and when the timeshare can be used. These are often sold as “ownership”, with implied income-producing potential. It is typically referred to as a timeshare purchase agreement (PPA). It comes with the right to use its facilities for an agreed period of time, after which it is returned to you.A Right-to-Use timeshare is one that best describes what would be considered a lease. These are timeshares where one has the right to use its facilities for months, not necessarily years at a time. The buyer pays a fee each month during which they have access to a specified amount of days per year.
Can I avoid foreclosure on my timeshare?
No, it is impossible to avoid foreclosure. If a timeshare owner’s mortgage goes into default and he cannot make his mortgage payments, the timeshare company has the right to purchase the property at its appraised value, cancel the membership and take possession of the unit (when vacant). This will usually result in an eviction notice being sent to all members who have not paid their monthly dues. The association can also sell off some of the units. Another strategy of recovering money that you are required to pay by court order involves mailing out notices on a regular basis and collecting money from your delinquent board members.
Can I cancel the timeshare?
The short answer is no. You can only cancel your timeshare if you purchased it through a timeshare broker, but the law requires that you pay for the time you use, so you still have to make all of your payments for months when you do not use it. If this happens, and you have to return the unit, at least one person from the organization must be there when you check in, and they will accommodate an early check out if possible. They also must let anyone who bought the same unit or someone who had a similar agreement to stay there while they return their unit. So in total, I would say yes. You may be able to exercise your right to review the terms of your agreement before.
Can I sue the timeshare company if I’m a victim of a timeshare scam?
You can but it’s unlikely you will. Timeshares are not covered by the Magnuson-Moss Act, which protects consumers from fraudulent activity. The owner of a timeshare has only limited liability to protect against claims (like theft) that occur while they are in possession of the property. If you feel you were defrauded out of money or time, your best option is to contact your credit card company and file an investigation claim as well as a dispute with the timeshare company. You may also pursue small claims court if you cannot afford to hire an attorney.
What if you don’t want to use the timeshare every year?
If you don’t want to use it every year, there are many ways to get this done. If you live in a vacationing area, then you can simply buy the timeshare at full price and rent it out yourself. You can also sell your timeshare and rent the home out yourself.