Timeshare – Frequently Asked Questions

What is timeshare?

Timeshare means buying the right to spend a set period in a holiday property each year for one year or longer. Most timeshare resorts are linked to an exchange organisation that offers to arrange exchanges, for a fee, with owners in other resorts. There are many names for timeshare including holiday ownership, vacation ownership, fractional ownership, shared ownership and multi ownership!

What is a fixed week?

In the ‘fixed week’ system you own rights to a specific week, usually in a specific apartment/villa which you can either return to every year or swap through the exchange system for something similar in another part of the world and in another time period.

What is a floating week?

In the ‘floating system’ (which includes points clubs) you own a week or longer, within a season. Each year you have to book the specific week that you want, subject to availability.

What are points?

Points are a form of holiday currency that have become an alternative to the traditional fixed or floating week ownership type. Members of a Points club use their Points to pay for holidays, selecting their holidays from accommodation that is in the club’s stock of accommodation. Each unit of accommodation is valued in Points based on the apartment size, season, location, demand and the quality of the resort. In some points schemes, members may be able to save or borrow their points from year to year. The points system has proved to be very popular as it has increased holiday choice and flexibility and for many has meant more holidays, reflecting the change in holiday patterns of consumers today.

What is fractional ownership?

Fractional ownership gives buyers ownership of, or occupancy rights to, a property for an agreed number of weeks each year to enjoy themselves, or rent out for profit. In the United States, it is the fastest growing segment of the property market – and now it is catching on in Europe. Many fractional deals are, in a word, timeshare and you will find that you are signing a timeshare contract! You then have the right to use the accommodation on an annual basis and you also have the protection afforded under the timeshare legislation. Some fractional deals are share based. You- along with say 4 or 5 others – buy a long lease for a percentage of a property, while the freehold is held by the management company. Owners may sell their share whenever they want, either through the management company, or a local estate agent, or pass it on when they die in the same way as they would in an entire property. Others have a short lease period of as little as five years, after which the property will be sold, with the profits shared between the owners.

What other types of timeshare are there?

Timeshare has diversified greatly since the 1970s and 80s and it is now possible to purchase shared ownership of yachts, boats, jets and even handbags! But be careful about your rights as present timeshare laws do not currently cover moveable properties, for example canal boats.

How does the exchange system work?

Through an exchange programme owners can swap their week for a wide variety of new destinations, experiences and holiday adventures. It is an easy process and owners can trade their week or points for different accommodation at a comparable resort around the world. To exchange, the owner places their week into an exchange company’s pool of available resort weeks and chooses an available resort and week from that same pool. The exchange companies charge an exchange fee plus an annual membership. Often the resort developer you purchase from will pay a new owner’s first year membership fee.


How are timeshare resorts rated for quality?

Interval International. Every resort that is affiliated must meet Interval’s quality standards and provide the calibre of vacation experience that its members expect. By meeting the already high affiliation standards, all of Interval’s member resorts are recognised for their quality. However in 2008 Interval launched a new multi-tiered Resort Recognition Programme. This was designed in co-operation with PriceWaterhouse Coopers’ U.S. Hospitality & Leisure and is based on extensive research and resort reviews and includes two levels of recognition — Interval International Select Resorts and Interval International Premier Resorts, its top recognition tier. Those recognized as Select and Premier Resorts exceed Interval International’s affiliation requirements, with Premier being the highest level of recognition. The Resort Recognition Awards will be reviewed annually. Feedback from regular property inspections and member vacation evaluations remain important considerations in this process.

RCI. The RCI Resort Recognition Programme was introduced with the aim of rewarding affiliated resorts that offer high standards of product quality and service. To honour those resorts that consistently exceed these high standards and who provide exceptional holiday experiences, RCI has created three distinguished awards. These are RCI Gold Crown, RCI Silver Crown and RCI Hospitality awards. The RCI Resort Recognition Programme is based on member feedback, which is received via Comment Cards returned by members. For resorts to obtain an RCI Gold Crown award, in addition to meeting the required thresholds on Comment Card scores, they must have certain resort facilities in order to be eligible for this award, and have been inspected by an independent evaluator.

How am I protected if I buy timeshare in Europe?

If you buy a timeshare in the European Economic Area, you have a 14 day cooling off period from the day the contract is signed. The vendor must not pay any money during this time, the documents and contract should be in your own language and the contract should include:

* The vendor’s details

* The price

* The location

* Description of the property

* If the property is under construction, a completion date

* How the property is to be managed

* Maintenance and repair of the property

* The provision of services such as water or electricity

* The consumer’s right to cancel and the procedure for cancelling or withdrawing from the contract. If you decide to cancel the contract, any linked credit agreement is also cancellable

How long is the cooling off period and how do I cancel the contract?

If you buy anywhere in the European Economic Area you have a 14 day cooling off period. To cancel your contract during the cooling off period, you should write to the seller, ideally by recorded delivery, at the address given on your contract and state that you are cancelling the contract.

If I cancel my contract, do I also have to cancel the credit agreement?

If the timeshare seller provides or arranges for a credit agreement for you to buy the timeshare, this agreement is cancelled automatically if you cancel the timeshare contract within the cooling-off period.

How much does timeshare cost?

Prices will vary depending on what you are buying. You also pay an annual fee for the management and upkeep of the property. This can vary from £200 to over £500 a year for a week of ownership. Don’t forget to budget for your flights, transfers and travel insurance costs.

How can I pay for my timeshare?

You can pay for your timeshare through cash or savings, a personal loan, your credit card or through the resort developer’s own finance scheme.


Will my timeshare increase in value?

You should not regard your timeshare as a property based financial investment – you are buying tomorrow’s holidays at today’s prices.

What is a trustee?

The trustee is the legal owner of the title to the holiday ownership units, whereas the developer is the beneficial owner, who is entitled to sell the benefit of the occupancy rights to the consumer. The trust system is common in the United Kingdom but is also recognised in many other parts of the world. The trustee receives and records confirmation that the developer has good title to the property and that he has obtained all relevant planning permissions and building licences. The trustee then takes control of the occupancy rights of the holiday ownership property throughout the period of the project, thus preventing the developer from selling or mortgaging those rights or doing anything else which might adversely affect the consumer’s enjoyment of his holiday ownership/club membership throughout the lifetime of the timeshare agreement. If appointed by the developer to do so, a trustee can also provide a service which ensures that the purchase monies it receives remain protected until it is satisfied that there are sufficient weeks and/or points in the system that are secured under a trust arrangement and are ready for immediate use. At this point the trustee is able to provide the consumer with a Holiday Certificate evidencing his holiday ownership entitlement and hence release the purchase monies to the developer. The Trust System protects the consumers’ rights of occupation from any demise of the developer, once the trust arrangements have been fully completed.

What is escritura?

‘Escritura’ means “deed”, and the “Escritura System” is a system of timeshare sometimes used in Spain and Portugal whereby the consumer is given an “escritura” (or “title deed”)as proof that he/she is the owner of a particular week or weeks in a specific property. This can be registered at the local Land Registry and is similar to house buying in the UK as it guarantees your ownership rights.

How can I sell my timeshare?

When the time comes for you to sell your timeshare, firstly check to see if your resort or developer operates a resale service. If not, you can sell privately or through a resale company – these are now governed under the same directive as timeshare and must provide you with a cooling off period.

If selling through a resale company, you are strongly advised to use a member of the trade body, RDO. RDO members sign up to a code of conduct and will give you extra levels of protection than required by law. For further information, go to www.rdo.org

How are the management fees calculated?

Management or maintenance fees are the cost to operate the resort and the fee, which is normally set by the management company, is divided up amongst all resort owners. A portion of the maintenance fee is to build up reserves to pay for the non-recurring costs such as furniture and appliances. A reserve is also typically set up to pay for other costs incurred because of physical deterioration of the resort.

What is an Owners’ Committee?

A group of people, normally no more than 5 or 6, the majority of whom will be timeshare owners. These committee members are volunteers elected by their fellow timeshare owners, who serve on the committee for a specified period of time, after which they can either put themselves forward for re-election or be replaced. Committee members are usually elected at the Club’s general meeting. In some clubs, the developer is allowed to have one or two representatives on the committee – the Club Constitution sets out the rules governing the election of committee members.

What is the role of an Owners’ Committee?

Not all clubs/resorts have Owners’ Committees, however, for those that do, the committee’s powers can vary enormously from one club to another. For example, there are those who act merely as an advisory body to the developer, putting forward the views of the members on different matters. The developer may use this type of committee as a sounding board when he is thinking of making any changes to the resort, or when there is a major maintenance programme to be undertaken. In conjunction with the management company, he would probably also consult with the committee on any increases in management fees that it was felt were necessary. There are other resorts, however, where the committee plays a much more active role, having the power to do all things that may be necessary for the carrying out of the objects of the club and for its general management, including delegating any of its powers to the management company. A club whose constitution provides for this type of committee will usually be run entirely by the committee once the club is more than 50% sold out. A committee will typically meet around four times a year, at least one of those meetings generally being at the resort.


Do I have to go to the same resort every year?

As long as your resort is affiliated to an exchange company, you can ‘swap’ your timeshare for something similar at up to 5,500 resorts worldwide. If you are a member of a Points or multi-destinational club, you can take holidays at any of the resorts within the Club’s portfolio.

Can I rent out or gift my week if I decide not to use it one year?

If you wish to let your family or friends use your timeshare, ask the resort for a guest certificate. There may also be procedures in place for renting out your timeshare, giving you an income which might cover your annual management fees.

Why does a timeshare presentation tend to be quite lengthy?

Sales presentations tend to be of a 90 minute duration or longer to help you fully understand the timeshare concept, to tour the resort – or to watch a video presentation of the resort if you are not on site – and to give you the opportunity to ask any questions you may have.

Who can I go to if I have a query?

The European trade body, RDO (Resort Development Organisation) provides advice on buying and selling timeshare and offers free assistance to customers of its members. Go to www.rdo.org for further information. TATOC (The Timeshare Association) which represents the interests of over 250,000 timeshare owners, operates a telephone and internet service if you have queries about timeshare, resale or holiday or discount travel clubs. Go to www.timeshareassociation.org or ring 0845 230 2430 for further information.

Disclaimer: the contributors to this web site accept no responsibility for the information provided, although best endeavours have been used to supply factually accurate advice and guidance. Variations may apply between resorts, timeshare clubs and due to national laws. This information is not a substitute for taking professional legal advice to cover your particular situation.

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