What have you not all heard or read about it! There are approximately 4 million time-share owners world-wide and always a hot topic in the media. Hidden cameras and undercover journalists are in a constant frenzy to find and present its latest victims. Also words like vacation or holiday ownership, fractional, holiday or vacation club, and multi-destination plans are commonly heard of. But only in the rarest of cases the reports are correct or even clarify what the deal really is with this vacation model. Let’s have a look in the following article what we are really dealing with.
The following summarized and simplified information does not claim to be complete or replace professional advice, but rather should serve as food for thought.
WHAT IS „TIME-SHARE“?
In its literate sense and meaning the client buys the right to occupy a vacation home every year for a set period of time. Usually we are talking about high-end luxurious apartments or bungalows that belong to a company or co-operative that has sold their right of residence. Also household names like Hyatt, Disney, Hilton, and The Four Seasons are quite busy on that market. Basically, the apartments can be divided into the 52 weeks of a year. But only 51 weeks can be sold since one week is reserved for maintenance. Also offered are normally free or paid services similar to a hotel. Usufructuary rights are commonly registered via the compounds or trustees name and can be passed on, sold, rented or given as a present. Usually timeshare resorts are registered with timeshare vacation exchange networks that offer their clients vacation in other registered resorts around the world as well as all the services you would usually expect from a travel agency such as flights or rental cars.
HOW MUCH IS „TIME-SHARE“?
In order to make use of above mentioned vacation rights you buy residential rights in form of weeks in a resort. The price can be between 5.000 and 25.000 Euro, depending on category and season. You need to ad yearly maintenance and administration fees, which are usually set every year by the owners. Also, these fees should be mentioned in the contract.
The laws there change constantly. At the moment you can cancel in written form within 14 days, and should be reimbursed with the full amount, although nothing or even the opposite is mentioned in the contract. In any case you should consult with a lawyer.
a. A comparably small amount of money is needed, since you only buy that part of a property, which your really need.
b. Package holidays in an equally high-end and luxurious resort are a lot more expensive in the long run than the investment and yearly maintenance fee.
c. You can spare yourself the headache of a foreign property (maintenance, tax,…)
d. Many times you will see the same people again in the resort and can make new friends.
e. You do not have to pay non-resident tax if you own up to two weeks as a non-resident.
f. Worldwide quality vacation possibilities because of the timeshare vacation exchange network.
a) The yearly maintenance fee must be paid every year whether you use the weeks or not. Similar to the utilities of your own home.
b) It might take longer than expected to sell the weeks in case you don’t want to or cannot use them anymore. And sometimes you can sell them only for a smaller price. However, be aware if someone approaches you with a buyer who wants to pay a lot more than anticipated, and if you have to pay upfront for the mediatory service.
WHAT IS NOT „TIME-SHARE“?
In the last years more and more holiday models emerge under the name of time-sharing. Some of them are:
- Bookings for holidays
- Memberships in a holiday or vacation club
- Holiday shares or points systems
These are NOT time-share but rather similar to package holidays, but at a smaller price for much better quality. Often these models give you the possibility to first test a time-share resort and draw your own conclusions. Many then decide to buy a share, if available in order to secure their luxurious vacation for little money.
Summing up there is to say that the initial time sharing model is not a bad idea, especially if you plan to return every year at the same time to the same resort, and also have no problems if the exchange to another resort might not be able.