Timeshare properties represent for many Americans an opportunity to own a
piece of the good life. It's like owning a summer cottage in your dream
destination, except that you don't have to assume the financial
responsibility of a mortgage, utility bills and maintenance hassles. Major
timeshare corporations such as Resort Condominiums International (RCI) have
enjoyed tremendous success. Consumers who invest in reputable timeshare
properties literally have the world at their fingertips; they enjoy the
option of trading out their timeshare for other properties in every corner
of the world.
Timeshare properties are offered to consumers in two different forms:
deeded and non-deeded. Deeded timeshare requires that you purchase
ownership interest in a piece of residential real estate property.
Non-deeded timeshare requires owners to purchase a club membership, license
or lease that gives them access to a property for a specific amount of
weeks each year for a predetermined number of years. How much you pay
depends on how many weeks you want to spend in your timeshare property, as
well as the time of year during which you want to use it. Choose the season
heaviest for tourism in any region, and you're going to pay more for the
privilege of using your timeshare property. And yet, a well-managed
timeshare property offers owners the flexibility of swapping weeks
according to their schedules, the option of dining in their own home while
on vacation (a money-saver), and a more comfortable, relaxed atmosphere for
their vacations (especially if children are present).
Sound too good to be true? That depends. There are, indeed, pros and cons
to timeshare ownership. Before you sign on the dotted line, you'll want to
consider the following guidelines as recommended by the Federal Trade
Commission.
As with any purchase that costs thousands of dollars, you should
understand what you are getting before you sign any papers or pay any
fees. The general information here should be accompanied by careful
analysis and possibly professional advice concerning all aspects of a
particular timeshare purchase.
The Federal Trade Commission suggests that you consider several points
before you purchase any type of timeshare:
Are you able to plan your vacations several months in advance without risk
of cancellation due to last-minute changes? Because you're sharing your
property with many other owners, you must secure your preferred weeks well
ahead of time. If you tend to travel at the same time each year, timeshare
is better-suited for your lifestyle. But if your vacations vary in length
and in season from one year to the next -- and are subject to 11th-hour
changes that could drastically alter your plans -- you may want to think
twice before signing a timeshare contract. Even if you plan to use your
timeshare in a single location -- for example, in the mountains of Colorado
-- find out where the timeshare company maintains other properties. You
should have the flexibility of using your membership in other locales. Ask
how many units the management company has at each location. While the
company may speak highly of its geographic diversity, if you consistently
find yourself shut out because of a shortage of units, that diversity is
hardly an advantage.
Demand all costs in writing. Sure, timeshare sounds like a deal -- and it
often is -- but you may be surprised at how high your "expenses" are. As a
part-owner, you're required to foot the bill (along with the other owners)
for maintenance. Maintenance fees average anywhere from $300 to $500 per
year and up, and can increase according to fluctuations in the economy, or
as the exclusivity of the area in which you own your timeshare increases.
Before you commit to a timeshare property, ask if the management company
has placed a cap on maintenance fee increases. Ask for a detailed report of
exactly what services your maintenance fee covers. If any of these services
aren't performed to your satisfaction or they're not performed at all, what
will the management company do to correct the problem? You may also wish to
compare the costs of investing in a timeshare property in your preferred
vacation spot with the cost of simply renting a property in the same
destination and the same season for the duration of time you'll be on
vacation.
With all of the information floating around on the Internet, consumers
have a near-limitless amount of data at their fingertips. Consumer
protection sites are growing in number on the World Wide Web, and the
Better Business Bureau holds a wealth of eye-opening information. Use this
to your advantage, and investigate the performance record of your
prospective management company -- as well as the property developer --
before you commit to a timeshare property. Even if you hear glowing reports
about the property, don't commit to ownership sight unseen, if you can help
it. Visit the property, walk around and talk to owners. Ask them about the
responsiveness of management to maintenance requests.
If the property is still under construction, obtain a written document
from the timeshare seller that the facilities will be completed by the date
promised to you, in the condition promised to you, and with all of the
amenities promised to you. According to the FTC, consumers who are
considering purchasing timeshare in an unfinished property should allocate
a percentage of their money for escrow, which could offer them some
protection in the event that the developer defaults on the property.
Don't give in to pressure. Any representative who presses you to sign on
the dotted line quickly is worthy of your suspicion. If, ultimately, you
decide to sign, ask your representative if you have a grace period during
which you can cancel the contract, should you have second thoughts.
According to the FTC, most states in which timeshare properties are present
have instituted "cooling off" periods for consumers which guarantee a
refund if a consumer changes his or her mind within a specified period. If
management representative tells you that there is no grace period, you
don't necessarily have to run in the other direction; just be aware of the
permanence of the commitment you're preparing to make. And read every last
term of the contract before you sign it. If the representative has made any
verbal promises to you, get them in writing; some of those "carrots" may
contradict the terms of the contract, and therefore wouldn't hold weight in
the event of a dispute.
Find out your rights as an owner if either the builder or management
company defaults for any reason. Read your contract carefully for one of
two key terms: "non-performance" or "non-disturbance." A non-performance
clause allows a consumer to retain all ownership rights in the event of
default. Your rights to ownership stand even in the event that a bank or
other third party must buy out your contract. A non-disturbance clause
guarantees that you will continue to have access to your timeshare property
after a default, and even if a third party makes claims against the
developer or management firm responsible for your property.
When purchased wisely, timeshare properties open a world of opportunity to
aspiring second-homeowners. One of the easiest ways to determine with whom
to place your trust remains talking to family and friends who have invested
in timeshare. Take your time in your decision, and you'll choose a
well-managed property that will create a pleasant vacation for you and your
family will enjoy for many years. And you'll have the assurance that if you
trade your weeks for a property in another region of the world, your
experience will be much the same.
Also See:
Timeshare Properties Provide Flexibility, Affordability
Despite Bad Rap, America Again Top Timeshare Market
Published: January 13, 2000
Use of this article without permission is a violation of federal copyright laws.
