Home Beat – Timeshares

Timeshares are one of the more well-known and, perhaps, complex vacation options. Many of you have probably heard of timeshares, but the underlying components of the contracts and ownership are often misunderstood. 

There are two basic types of ownership.

Shared Deeded Ownership: This style of ownership is the more common of the two. Shared deeded ownership grants a specific percentage of the real property, linked to the amount of time purchased (days, weeks or months per year). Every part owner is granted a deed representing the allotted time they own. These agreements are generally either fixed or floating. Fixed agreements require the owner to vacation strictly on their agreed dates. Floating timeshares allow owners to offset their vacation by a few weeks depending on availability. 

Shared Leased Ownership: Here, the developer of the timeshare retains the deeded title (ownership). Interested parties lease the property from the developer over a certain term of years that can last until the lessee’s death. Leased timeshares come with greater restrictions on transfers of ownership (trading or selling) than deeded timeshares. 

Merrimack Valley residents Christine and Rob Logan have owned their timeshare in Lincoln, N.H., for well over 15 years. The Logans purchased a shared deeded interest in a resort near Loon Mountain after being invited to a free weekend vacation and sales meeting. “We really like the flexibility the timeshare has offered us,” Christine says. “We have floating weeks that allow us to move our vacations within the same season as our original agreement.” 

Timeshare trading allows you to switch your timeshare for vacations in other states or countries, as long as you can find a willing trading partner. This requires a timeshare trading company, in which owners can become members and trade with other members within the company. A good example of the utility of trading would be if a timeshare owner has plans that interfere with their fixed timeshare period. This owner could then trade their timeshare with another owner in the same area at a different time, or could elect to trade their vacation altogether to a completely different time and area. 

©Cheryl Casey – stock.adobe.com

This is a feature the Logan family used often. “Timeshares allowed us to go places we would have never been able to travel. We have traded our vacation to New Hampshire to travel to Hawaii, Florida, St. Martin’s, the Dominican Republic and Vermont,” Christine says. The caveat: Your timeshare is ranked depending on location and the season in which you hold ownership. Timeshares in the White Mountains of New Hampshire are among the highest rated for the winter season. This gave the Logans the trading power to go virtually anywhere and trade for vacations in different seasons. 

Despite the positives, the contractual obligations of a timeshare are noteworthy. According to Phillip Robertson, a broker for Century 21 Cahill Associates of Dorchester, Mass., “Real estate contracts can be financially detrimental if not reviewed carefully. Holding partial ownership of a timeshare can be a problem if you are not expecting the maintenance fees or longevity of the agreement.” Considering the complexity of contract law, it is surprising that many timeshare contracts are signed without the presence of a personal lawyer or real estate agent. 

If you are thinking about purchasing a timeshare, it is important to follow some general guidelines:

Take the appropriate amount of time to make a decision. You wouldn’t buy a house without proper planning or a conversation with family and/or a personal financial representative. Timeshare sales often occur at a sales pitch or “free lunch,” but you don’t have to decide at the meeting. 

Speak with a legal professional. They can provide more information about the contract you are entering. This is the best step to properly understand the responsibilities you are taking on.

Research the tradability of your potential timeshare. Some timeshares hold low trade value. If this is the case, prepare to vacation at the same location year after year. 

Among the other available options, consider Airbnb and hotel rewards programs. There are other options out there. Many Airbnb hosts and hotels allow guests to book on an annual basis if they enjoyed their stay.   



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