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A timeshare is a form of vacation property ownership. With timeshares, the use and costs of running the resort are shared among the owners. While the majority[citation needed] of timeshares are condominiums or cooperatives at vacation destinations, developers have applied the timeshare model to houseboats, yachts, campgrounds, motor homes, cruises and private jets. Image File history File links Broom_icon. ...
For other uses, see Vacation (disambiguation). ...
This article or section does not cite any references or sources. ...
This article refers to a form of housing. ...
A housing co-operative is a legal entity, usually a corporation, that owns real estate, one or more residential buildings. ...
The notion of a timeshare was originally created in Europe in the 1960s. A ski resort developer in the French Alps innovatively marketed his resort by encouraging guests to "stop renting a room" and instead "buy the hotel". The developer was successful in increasing occupancy and the idea spread worldwide. While a useful tool for many, the timeshare industry has also become a magnet for attracting illegal and barely legal methods for the sale and resale of property. For other uses, see Europe (disambiguation). ...
The 1960s decade refers to the years from 1960 to 1969, inclusive. ...
A shaped, twin-tip alpine ski. ...
This article does not cite any references or sources. ...
Methods of use Timeshare is a business model whereby a company buys something and sells small timeslices of it to customers. This concept is most frequently used for vacation condominiums/homes, but it has also been used for high end private jets. In general, "timeshare" refers to the former rather than the latter.
Timeshare owners may elect to:
- Use their usage time
- Rent out their owned usage
- Give it as a gift
- Exchange internally within the same resort or resort group
- Exchange externally into thousands of other timeshare resorts
Recently, with most point systems, owners may elect to: - Assign their usage time to the point system to be exchanged for airline tickets, hotels, travel packages, cruises, amusement park tickets;
- Instead of renting all their actual usage time, rent part of their points without actually getting any usage time and use the rest of the points;
- Rent more points from either the internal exchange entity or another owner to get a larger unit or more vacation time or at a better location;
- Save or move points from one year to another.
Some developers, however, may limit which of these options are available at their properties.
Timeshare owners can elect to stay at their resort during the prescribed period, which varies depending on the nature of their ownership. In many resorts, they can rent out their week or give it as a gift to friends and family.
Timeshares offer owners the possibility of exchanging their week, either independently or through several exchange agencies, to stay at one of the thousands of other resorts worldwide. There are many exchange agencies, of which the two largest are Resort Condominiums International and Interval International. They have resort affiliate programs and members can only exchange to affiliate resorts. It isn't rare to find a dual affiliate resort, but it is more common for a resort to be affiliated with only one of the larger exchange agencies. Together they have over 7,000 resorts. The timeshare resort one purchases determines which of the major exchange companies can be used to make exchanges. RCI and II charge a yearly membership fee and fees for when they find you an exchange. They also bar members from renting weeks for which they already have exchanged. Resort Condominiums International (RCI) is a subsidiary of the firm Wyndham Worldwide (previously Cendant). ...
Interval International is an affiliated exchange company that arranges vacation exchanges for timeshare owners. ...
Timeshare owners can also exchange their timeshare with the smaller independant timeshare exchange companies. Dial an Exchange, Trading Places, Hawaii Timeshare Exchange, Platinum Interchange, The San Francisco Exchange, Timex and Redweek.com are the main independant exchange companies. Owners can exchange with these independant exchange without needing the resort to have a formal affiliation aggrement with the companies.
Timeshare owners may also arrange a direct exchange. This requires locating a timeshare owner with the location and weeks both mutually desire. This form of exchange is rare but since it can save in exchange fees it is often sought after. Several bulletin boards have been created to help timeshare owners meet others and swap.
Timeshares take different forms depending on the seller. The vast majority consist of one week of ownership, i.e. 1/52 year, but some developers sell point based systems that are a different form of vacation currency that allow hotel stays, car rentals, and stays at large networks of resorts.
Kinds of Time Shares
Fixed Week Ownership The most basic timeshare unit is a fixed week; the resort will have a calendar enumerating the weeks roughly starting with the first calendar week of the year. As an owner you may own a deed to use a unit for a single specified week. For example week 26 normally includes the Fourth of July Holiday. If you owned Week 26 at a resort you could use your week every year.
Floating Sometimes a timeshare is sold as floating weeks. The ownership will be specific on how many weeks you own and from which weeks you may select for your stay. An example of this, a timeshare may be a floating summer week where the owner may request any week during the summer season generally weeks 22 through 36. In this example there would be competition for prime holidays such as the weeks of Memorial Day, Fourth of July and Labor Day. The weeks when schools may still be in session would not be so high in demand. Some floating contracts exclude major holidays so they may be sold as fixed weeks.
Rotating Some timeshares are sold as rotating weeks. In an attempt to give all owners a chance for the best weeks, the weeks are rotated forward or backward through the calendar, so one year the owner may have use of week 25, then week 26 the next year and then week 27 the year after that. This method does give each owner a fair opportunity for prime weeks but it is not flexible.
Deeded vs. Right to Use A major difference in types of timeshare ownership is that between deeded and right to use contracts. With deeded contracts the use of the timeshare resort is usually divided into week long increments and these are sold as fractional ownership and are real property. As with any other piece of real estate you may use your week, rent your week, give it away, or leave it to your heirs. While this form of ownership can offer additional security to the owner as a form of physical ownership, deeded timeshare ownership can be as complex as outright property ownership in that the structure of deeds varies according to local property laws. Leasehold deeds are common and offer ownership for a fixed period of time after which the ownership reverts to the Freeholder. Occasionally, leasehold deeds are offered in perpetuity however many do not convey ownership of the land but merely the apartment or 'unit' of accommodation.
With right to use, the timeshare purchaser has the right to use the property in accordance with the contract but at some point the contract ends and all rights revert to the property owner. In other words, the right to use contract grants the right to use the resort for a specific number of years. In many countries there are severe limits on foreign property ownership, so this is a common method for developing timeshare resorts in countries such as Mexico. Disney Vacation Club is also sold as a right to use. Care should be taken with this form of ownership as the right to use often takes the form of 'club membership' or right to use the reservation system. Where the reservation system is owned by a Company not in the control of the owners, the right of use may be lost with the demise of the controlling Company.
Vacation Clubs Vacation clubs are organizations that may own timeshare units in multiple resorts in different locations. Some clubs consist only of individual weeks at other developer's resorts. They are sold both as deeded or right to use and club members may reserve vacation time at any of the owned resort units based on availability. Vacation clubs cater to a wide range of economic backgrounds and income levels.
Points Programs Resort based points programs are also sold as deeded and as right to use. Points programs annually give the owner an amount of points equal to the level of ownership. The timeshare owner in a points program can then use these points to make travel arrangements within the resort group. Many points programs are affiliated with large resort groups offering a large selection of options for destination. Many resort point programs provide flexibility from the traditional week stay. Resort point program members, such as Worldmark, may request from the entire available inventory of the resort group.
Exchange company point programs are not a method of ownership nor are specifically associated with one resort or resort group. With the exchange company points programs the members may be limited to exchanging for weeks deposited by other members.
A points program member may often request fractional weeks as well as full or multiple weeks stays. The number of points required to stay at the resort will vary based on a points chart. The points chart will allow for factors such as:
- The popularity of the resort;
- The size of the accommodations;
- The number of nights;
- The popularity of the season;
- and the specific nights requested.
There is flexibility as well as complexity in point programs.
Important Note on Ownership - With any of the above mentioned ownership methods, a timeshare owner is legally and contractually tied to that ownership.
- These contracts and obligations belong to the timeshare owner until the timeshare is sold or ownership is transferred through some other means.
- Points and floating systems do require the owner to determine their vacation time in advance in order to get the time they want. A high demand week may require the owner to book the reservation on the first minute of the first day lest it be booked by another, more aggressive owner.
- Use a timeshare resales company that has a solid reputation, read about industry warnings and use a good closing company to complete your property transaction.
Rescission Period In many developer contracts (and often required by government statutes and/or regulations) there may exist a Rescission period. The Rescission period outlines how many days after a timeshare purchase, from a developer, that a buyer has an opportunity to change their mind and cancel the purchase. The Rescission period is usually only a few days long and the buyer must follow the cancellation procedure exactly or risk the request to rescind being ignored.
Mexico requires a five-day rescission period on all time share contracts, as stated in article 56 of the Mexican Federal Law for Protection of the Consumer.[1] Some Mexican resorts have drawn up contracts declaring that there is no rescission period, but any such claims are fraudulent.
People must remember that the period of time they are granted to cancel the contract goes by the law where they are legal residents, not where they bought a timeshare. For example, Illinois law allows five business days for a consumer to back out of a contract they signed. So, it is imperative that people are aware of their rights to back out of a contract if they have a change of mind.
Types and sizes of timeshare units Timeshare properties tend to be apartment-style units ranging in size from studio units (with room for two) to three and four-bedroom units. These larger units can comfortably house large families. Timeshare units normally include fully equipped kitchens with a dining area, dishwasher, televisions, VCRs and more. It is not uncommon to have washers and dryers either in the unit or easily accessible on the resort. Kitchens are equipped to the size of the unit, so that a unit that sleeps four should have at least four glasses, plates, forks, knives, spoons, and bowls so that all four guests can sit and eat at once.[citation needed] This article does not cite any references or sources. ...
Timeshare units are usually listed by how many the unit will sleep and how many the unit will sleep privately.
- Sleeps 2/2 would normally be a one bedroom or studio
- Sleeps 6/4 would normally be a two bedroom with a sleeper sofa
Sleep privately refers to the number of guests who will not have to walk through another guests sleeping area to use a restroom. Timeshare resorts tend to be strict on the number of guests per unit. Unit size can effect demand at a given resort where a two-bedroom unit may be in higher demand than a one-bedroom unit at the same resort. The same does not hold true comparing resorts in different locations. A one bedroom with a great location may still be in higher demand than a resort with less demand. An example of this may be a one bedroom at a great beach resort compared to a two bedroom unit at a resort located inland from the same beach.
The concept of vacation timeshare has also been extended to luxury items such as planes and luxury cars. Flying machine redirects here. ...
“Car†and “Cars†redirect here. ...
Scope of timeshare industry The scope of today's timeshare industry in the USA is well-documented. The ARDA International Foundation ("AIF"), which is the research arm of the American Resort Development Association ("ARDA"), reports there are 1,604 timeshare resorts, with 154,439 units, in the USA as of January 1, 2006 (AIF 2006). Though reportedly fewer than six percent of U.S. households own a timeshare, the prevalence of timeshare ownership continues to expand (Scoviak 2005). Approximately 4.4 million households own one or more U.S. timeshare weekly intervals or points-equivalent as of January 1, 2007, an increase of sixteen percent from the prior year.[2]
About half of the resorts in the USA are currently selling timeshares, generating sales of $8.6 billion in 2005 (AIF 2006).
The global scope of the industry is not as readily quantified. Interval International, one of the two major timeshare exchange companies, reports there are 5,400 resorts in nearly 100 countries, with 2004 worldwide timeshare sales estimated at nearly $11.8 billion (Interval International 2006).
A market exists for the resale of timeshare intervals. Many of these can be found searching the Internet as well as an active market in the online auction sites such as that on eBay. Most management companies of individual timeshare resorts also have on-site resales offices which can assist you in selling your timeshare or purchasing additional weeks at the resale price. Some entrepreneurs allow donation of a timeshare for tax benefits. This article is about the online auction center. ...
The internet allows unit owners and those curious to talk to each other using Timeshare Users Group and a message board - see external links at bottom of article.
Pros and cons One of the major benefits of the product is the fact that vacation timeshare is real property. Resort developers purchase land in a location and develop a timeshare resort. They are actually selling consumers deeded weeks of real property at a specific location, meaning customers can do what they wish with the weeks they own. This flexibility includes the opportunity to rent out weeks that are not used or lend them to friends or family. A timeshare unit is real property, which does require constant maintenance. With each unit owned by many people, a competent management team is necessary for it to operate in an efficient and economically beneficial manner.
Many timeshare resorts offer "bonus days" or "bonus weeks," unsold off-peak time that unit owners can rent in addition to the weeks they own at a low rate (because the unit would otherwise be empty at that time). If one has a flexible schedule -- such as retired persons who live within a reasonable driving distance of the resort -- the possibility of renting bonus time can be a significant benefit from timeshare ownership. Some developers with timeshare resorts in multiple locations will also rent bonus time at one property to owners of weeks at their other properties. Typically bonus time will of course not be at periods of peak demand, and there may be other restrictions on when and how bonus time may be rented.
The problems discussed below notwithstanding, Timeshare has the potential to provide a range of vacation experience in a variety of locations, for substantially less than an equivalent resort if rented on the open market. This is particularly the case with overseas travel where a convenient and economical location is sought, rather than a 'holiday' at a given resort. An often overlooked advantage is that timeshare units are usually 'self-catering' with a full or partial kitchen and have readily available laundry facilities. This frees the occupant from the necessity of eating at retail establishments and allows purchase of local products from markets, thus providing a more flexible and economical approach to the daily requirements of life.
To gain the most from a timeshare experience it pays to research any purchase thoroughly. Understand the precise nature of the particular timeshare contemplated, the management scheme and competence, the time of year or other conditions and the details associated with the available exchange mechanisms. The key is to be knowledgeable and flexible. Understand what the benefits and potential problems are, and how to use it to maximum advantage.
The timeshare industry has been widely criticized and even likened to a travel scam. Unlike the customary renting arrangement, where the customer decides every year on the quality and price of accommodations, timeshare requires a major payment up front. Doubts exist as to whether timeshare buyers ever recover the money spent. A confidence trick, confidence game, or con for short (also known as a scam) is an attempt to intentionally mislead a person or persons (known as the mark) usually with the goal of financial or other gain. ...
Many people complain that they cannot trade their weeks easily, or that the weeks they bought are suddenly "unavailable". There are also complaints that owners have to return to the same resort every year, but several companies exist that enable timeshare owners to exchange their weeks into literally thousands of resorts around the world. However, using these companies increases the overall financial cost of owning a timeshare. There are a growing number of independent timeshare exchange organizations available to timeshare owners. One of the biggest issues for exchange is that it depends on another owner to deposit a desired week, which may not happen. Another issue is some exchange systems have hidden rules and the deposit unit may not be strong enough to allow the owners to get the vacation they want. Also, some owners can not make a decision on when to vacation or where to vacation until the last minute, which often results in a bad exchange or no exchange at all.
Other complaints involve issues surrounding the yearly maintenance fee. Some critics talk of ever escalating fees that owners cannot afford, and the resulting financial pressure prohibits them from keeping their weeks. In the worst cases, there are maintenance fees, homeowners' fees, rental fees, fees for trading weeks, property taxes (depending on location), and an assortment of hidden fees that buyers were not aware of when they first bought their timeshares. In addition, if a resort suffers as a result of a natural disaster, it may need some special assessments to recover it.
As real estate, timeshare requires the owner to take an interest in their resort's operation and, unfortunately, most owners are not prepared to do so since they see the purchase as just a vacation unit. Also, when owners first purchase the timeshare, they have little knowledge of the local renting market and local season, and end up getting a time slot they can not use. When they then try to rent it out, they find that there is no chance to rent or the rent income is not able to cover their maintenance fee. People interested in purchasing a timeshare are strongly advised to look online at the secondary market listings for the development they are interested in. Developers put a very large mark-up on new inventory and a new owner will find the resale value of their timeshare to be half or less of what they purchased it for. In the very worst of cases, timeshare resales are virtually impossible and users are stuck paying fees indefinitely. This is what is commonly known as the "timeshare trap," Sometimes, when it happens, owners can talk to the resort and the resort may be willing to take it back if there is no loan attached to it and the maintenance fee has been paid. Sometimes, there are various charity groups that are willing to accept a timeshare if no loan is attached and the maintenance fee is current. With the development of the internet, there are a lot of sites that charge little or no fees to let owners put "for sale ads" that will reach a larger market over the internet. However, it is usually hard to evaluate the value of a timeshare, thus it may take a while to sell or to get a reasonable price. If the unit belongs to a big chain, there is a better chance that enough people know the product and desire to add more vacation time from that product, and will thus increase your chances to sell. There are also numerous timeshare user groups that form various fora. If one happens to have an interest in purchasing a timeshare, one may want to check various internet communities like Yahoo, AOL, Google. If the owned unit is part of a major point system, those groups also provide a place to rent out your points or rent more points from other owners.
Like any other product, timeshare exchange is subject to the law of supply. This should make the exchange mechanism a fair and meritocratic system. For example if a timeshare owner deposits a studio apartment in low season that owner is unlikely to be able to exchange into a villa during a country's high season. In practice the major exchange companies have proprietary exchange formulas that add complexity to the system. The study of and issues revolving around exchanging are beyond the scope of this article and should be researched before making any timeshare purchase. Roundabouts (or carousels) are traditional attractions, often seen at fairs. ...
Meritocracy is a system of government based on rule by ability (merit) rather than by wealth or social position; merit means roughly intelligence plus effort. ...
One aspect that is little known outside of the travel industry is that timeshare companies generally have very generous compensation programs for those sales agents able to convince individuals to take a tour of their timeshare facilities (something that normally takes approximately 90 minutes). With this in mind, a crafty individual can bargain for incredible vacation deals with a sales agent if they are willing to spare a bit of time. At one time, timeshares were known for applying considerable pressure to these touring individuals to purchase (even prompting a South Park episode called Asspen parodying the process), though that is generally supposed to have been lessened after a backlash by customers. The movie Once Around provided a look at the "inside" of a timeshare company. Each timeshare has its own rules for who it is willing to allow to tour, and most only allow one tour per year, though this does not prevent multiple tours from different resorts. An entire industry has sprung up based around this concept, negating the need for the frugal individual to do his own bargaining. This article is about the TV series. ...
Asspen is episode 603 of the Comedy Central series South Park. ...
Several people have discussed what should be the motives for purchasing a timeshare. It is important to review them based on the facts and avoiding to be trapped with false expectations.
Timeshare Donation and the IRS Many owners find they eventually want to sell their timeshare and find it's not the investment they expected. In fact, it's often difficult to resell a timeshare on the secondary market. Unfortunately, forgetting about it or trying to throw it away ends up having the resort coming after you and your credit if they want to get their money. Very few resorts will take back a timeshare, even when it's free and clear, but do check and consider it as an option if they do. There are lots of ways to do it on your own from listing on classified ad sights like Craigslist.com[1], lots of companies willing to help you, and other ways to dispose of it such as eBay or donating it to a nonprofit organization. The discussion here is focused on donation of timeshares in the United States. Please remember we are dealing with what is considered real property (real estate) here, and not with personal property (clothing, art, books, etc.). Also, timeshares that are NOT deeded fall under contract law and are more difficult to deal with so all the discussion here will deal only with deeded timeshares. You can find more information at the IRS site - type in the keyword search "Instruction 8283"[2].
First, make sure you understand what you timeshare may be worth on the secondary market if you try to sell it yourself. A good reference to actual sold prices versus what they were listed for is found at Timeshareadventures.com[3]. Checking with the county recorder where your timeshare is located is another method, although this may not get you the actual prices secondary sales sold for. A local appraiser dealing with timeshares in that locale can help you as well.
Next, decide how you want to do the transaction and how fast you want it completed. Many nonprofit organizations (NPOs) will take your timeshare but there are different ways they do this and it's important you understand what you are really doing. The examples here are for reference and not suggestive of what company you should use.
The two basic methods of taking your timeshare is to either set up something whereby the timeshare will be sold on a cash basis and have the donor continue to hold it until that sale is ready to proceed or have the NPO take title ASAP and let you out of the ownership position without a delay.
The first method will take as long as it takes to find a buyer and can be shortened with a much lower price or lengthened with a higher hold out price. There are a couple of factors involved here. First is whether your timeshare is sellable or not. Many NPOs have a black list of resorts they won't accept. make sure yours is NOT on such a list [4]. The other considerations will be discussed in the IRS section. This method can be described in different ways, "delayed closing", "authorized agent", "double closing", "conversion", etc. but they all end up with the delay and an established sale price as a result of the process [5].
The second is a direct title transfer ASAP to the NPO [6]. This process get you out of the timeshare usually faster but has it's own concerns.
The key to which method you use should be based on the IRS regulations concerning your donation. Without understanding these issues you can face an audit, fines and formidable problems following your donation.
1. There are multiple levels of donation amounts that are dealt with differently.
- A claimed donation of less than $500 can generally be claimed with minimal documentation and does NOT require a Form 8283 - Noncash Charitable Contributions.
- A claimed contribution between $500 and $5,000 requires Form 8283 which must be signed by the NPO as having accepted the timeshare, but it doesn't require an appraisal.
- A claimed contribution greater than $5,000 requires a licensed appraisal be provided by a licensed appraiser AND the appraiser MUST sign the Form 8283.
2. The timing of your donation and it's transfer from the NPO to someone else is critical. It determine how Fair Market Value (FMV) is determined. According to the IRS, "FMV is the price a willing, knowledgeable buyer would pay a willing, knowledgeable seller when neither has to buy or sell." Notice it doesn't say anything about the speed, circumstances or who the buyer or seller are. This can be an important issue in valuation to an appraiser.
- An immediate sale is considered conclusive evidence that your timeshare was only worth the amount received. Therefore, if you owned a $20,000 timeshare and to get out of it quick, a fast sale by the NPO could net you a sale price and donation credit of $2,000, but that's all you can claim.
- If the NPO transfers the timeshare to someone else within 36 months, They must notify you AND the IRS separately of any difference in their original valuation credit they gave you (the NPO gives you a thank you letter or receipt stating their estimate of value of your donation). This is done on Form 8282 Donee Information Return and can result in your oweing back taxes if the amount is less than the donation credit you originally took.
- If the NPO delays any transfer for more than 36 months, there is no requirement of filing a Form 8282 Donee Information Return and the consequences to you are gone, unless there was some other form of fraud on your return.
3. What does it cost you? That's important, especially when you consider the up front costs, donation credit consequences and release from ongoing ownership expenses.
- Many NPOs charge you nothing, provide all the necessary paperwork and can give you up to $5,000 in donation credit without triggering the appraisal. In a 25% tax bracket that ends up getting you $1,250 back on your tax return. The NPO sells it for whatever they can get (let's say $2,000) and keeps the cash. Here's the problem. If they do sell it for $2,000 anytime within the 36 month window, they must notify you of the lower sale price and you must return $750 back to the IRS for a net cash to you of $500. You might want to sell it on your own and donate the cash.
- Some NPOs charge you a service fee but your still get the same deduction credit. You just have to deduct the initial costs from your expected return to determine what you end up with. There are some commercial companies that will do the same thing, but generally charge a much higher fee to take title from you and you get NO credit. Again, if that 36-month window is breached you can be liable for the above consequences.
- A NPO that takes and holds title for a minimum of 36 months receives nothing for your donation until after that time has passed if they can sell it then. In that case, such NPOs usually charge an upfront service fee. Here you don't have to worry about the sale price as the valuation on your timeshare. You now fall under the IRS guidelines for either safely claiming the $5,000 donation credit or having to get an appraiser if you want more. If we go back to that $20,000 timeshare and you have done you homework, you might find that a truer value, and one you could probably get from an appraiser is closer to $10,000. If you can hold out to sell it for that, great. If you can't and are considering donating it, then consider what it costs you up front versus what ends up in your pocket. in the same 25% tax bracket you end up with $2,500 minus the service fee, closing costs, and appraisers fee. Examples of such fees would be $500, $200, and $300 respectively. You would end up with about $1,500 in the end.
The idea of donating your timeshare to the organization you want is great. Unfortunately, they may not want it. Regardless of how you decide to donate, understand and research the IRS laws that apply and determine your risks and rewards for different methods of donating.
See also Residential dwellings can be built in a large variety of configurations. ...
A vacation timeshare tour is a form of advertising used by many Timeshare resorts to encourage individuals to consider purchasing a Timeshare. ...
In business, fractional ownership is a percentage share of an expensive asset. ...
Fractional real estate ownership financing takes two forms: Traditional Timeshare and Larger Share Fractional Ownership Fractional mortgages for shares of 1/26 ownership or 2 weeks or less are considered timeshare financing, and is often provided initially by the project developers. ...
References (2006) State of the Vacation Timeshare Industry: United States Study 2006 Edition. Washington DC: ARDA International Foundation.
Scoviak, Mary. "New Look Of Timeshare", Hotels, February 2005. Retrieved on 2006-12-26. (English) Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ...
is the 360th day of the year (361st in leap years) in the Gregorian calendar. ...
The Timeshare Industry – The Bright Future of Timesharing. Interval International. Retrieved on 2006-12-26. Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ...
is the 360th day of the year (361st in leap years) in the Gregorian calendar. ...
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