9+ SAMPLE Timeshare Contract

What Is a Timeshare Contract?

First of all, what does timeshare mean? Well, it refers to a shared ownership concept of a real estate property, typically used for vacation purposes, in which numerous purchasers possess allotments of usage, often in one-week increments, in the same estate. Units in a timeshare can be purchased as a partial ownership, lease, or “right to use,” in which case the buyer has no claim to the property. These are usually available for different types of real estate properties such as apartments, condominium units, and beach resorts.

A timeshare contract is a legal document that is used to legally bind the timeshare purchaser to pay the seller a set sum each year to own or have the exclusive use of the property on a set date. Buyers that get involved in a timeshare contract will often settle for a short timeframe, typically spanning one to two weeks. The cost of a timeshare contract is determined by the time of year and location of the property. Furthermore, a timeshare contract will also legally bind the buyer to pay the property’s yearly maintenance payments. The cost may be high, but it is shared by the property’s various owners.

Factors to Consider When Agreeing to a Timeshare Contract

Here are a few of the important factors to consider before entering a timeshare contract:

Different Variations of a Timeshare

Listed and discussed below are some of the different variations of a timeshare:

Deeded Week Timeshare. This is a variant of timeshare in which the owner receives a deed for their week and owns it outright. In real estate terms, it is frequently referred to as fee simple. Because it is a deeded week, the holder has the choice to sell, rent, or give away their timeshare. When timeshares first became popular, deeded week timeshares were by far the most frequent. There are still timeshares available like this, but many businesses have recently shifted from deeded weeks in favor of versatility.Floating Week Timeshare. A floating week timeshare is a timeshare term that refers to the opportunity of an owner to pick the week of their choice in which they reside at their chosen property within a specific season. When an owner buys a summer holiday floating week timeshare, they could usually visit their property during an open week as long as it is within the season that the timeshare is purchased.Points Based Timeshare. Points-based timeshares are the most widespread and, probably, the most popular form of a timeshare today. In this type of timeshare, a  timeshare owner will buy a timeshare in the form of points for their main resort. The points may then be redeemed for stays at other properties in the brand’s network or used to stay at the owner’s own resort. Points programs award the owner a specific amount of points proportional to the level of ownership each year. In a points scheme, the owner can then use the points to make vacation plans inside the resort group. Many points schemes are associated with significant resort organizations such as Disney Vacation Club and Marriott Hotel, providing a wide range of destination alternatives.Right to Use Timeshare. This type of timeshare does not come with a deed, but they often come with an agreement that specifies how long the person has a right to use the timeshare. In a right-to-use type of timeshare, a purchaser has the right to use the asset in line with the contract, but the contract expires at some time and all rights simply go back to the property owner. Many right-to-use timeshares expire after a set period of time (typically 30 to 99 years), depending on the terms of the initial agreement. Owners can, however, nonetheless sell their shares to somebody on the resale market.Biennial Ownership Timeshare. A biennial timeshare is one type of timeshare that allows its clients to hold usage rights every other year. Biennial timeshares are distinguished by the year in which they can be utilized, which is either odd or even. These are ideal for vacationers who only wish to use their timeshare every other year.Leasehold Timeshare. Leasehold timeshares are distinct from other types of timeshares in that they are not owned in perpetuity and also have an expiration date. They do, however, have the same rights and advantages as regular timeshares. In the case of a leasehold timeshare, you could have the first right of refusal to continue ownership before the property’s expiration date.Fixed Week Timeshare. The majority of people refer to this as typical timeshare usage. With a fixed week timeshare, you have permission to access your unit every year during the same week. Furthermore, each year, fixed week ownerships should be in the same resort, in the same unit size, and even during the same week. The majority of these ownership kinds can deposit online or via an agent up to two years before the start date of your week.

Steps in Purchasing a Timeshare

As stated throughout this article, having a timeshare can prove to be a great way to secure a property to be used as a vacation place by you and your relatives or friends. You may already have a few thoughts going on in your head as you think about purchasing a timeshare. Once you’ve figured out the place that you want, here are the steps to follow in purchasing a timeshare for that place.

  • 1. Pick a Timeshare Type

    This is the first thing to do once you’ve chosen a place and you’ve decided that you’ll commit to a timeshare. In this step, choose a timeshare type that suits your preferences or lifestyle. If you decide to own only a part of the property you’ve chosen, a deeded ownership would be the best for you since you only buy a certain time period each year of that particular unit, and upon purchasing the said unit, it makes you a part-owner of that property. If you prefer more flexibility over your property, then the “right-to-use” type of timeshare would fit you best. In this type of timeshare, you can buy a specific time period in a year, or you may buy the right to a certain period of time in a year.

  • 2. Pick a Reputable Company

    After deciding on which type of timeshare you’ll be choosing for the particular location you’ve chosen, proceed to this step. In this step, you will now decide on the company from which you will buy a timeshare. It is essential to note that whether you buy a new or used property, and regardless of the type of timeshare you’ve chosen, you should choose a company that already has built a respectable reputation. It’s also good practice to pay the property you’ve chosen a quick visit and to talk to people who already own timeshares in that place if the situation calls for it. Another good practice would be to look at any feedback/complaints that are present online.

  • 3. Trial

    After picking a reputable company and paying the property a visit, this is the next thing you can do. It’s good practice to give the place a trial before committing to a timeshare purchase. What does trial mean, you may ask? Well, it simply means to rent that particular place for a short span of time in order to try out the amenities and surroundings as well as to get a better idea of how well things are run by the company in that place. Additionally, renting the place will help you decide if you really like it or not.

  • 4. Perform a Maintenance Inquiry

    After giving the place a trial by renting it and deciding that you really like it, it’s time to proceed to this step. Since you pay maintenance fees every year as a timeshare co-owner of the place, it is good practice to perform a maintenance inquiry and identify well ahead of time the maintenance policies of the said company regarding the place you’ve chosen. Things you can do regarding maintenance inquiries include asking the amount of time needed for repairs to be carried out if there are damages present, as well as how expensive the maintenance costs can be per year. If possible, you can also try asking the company for a written copy of their maintenance policies. If things need legal recourse, you have a document to refer to.

  • 5. Review the Contract

    After finishing the maintenance inquiry and finding yourself satisfied with their policies, it’s time to review the contract. In this step, it’s good practice to get someone who’s knowledgeable, such as a lawyer, in case you know too little about contracts involving real estate properties. By letting a lawyer perform a thorough review of the contract, you can be sure that you’re not getting the short end of the stick when you eventually decide to sign it.

  • 6. Pay the Timeshare

    After everything else has been completed and you’re satisfied with what you’ve witnessed, proceed to this step. You may choose to pay the fees in cash, if possible. Since the interest fees of a timeshare usually have a steep incline, it is not advisable to take a personal loan in order to pay for the timeshare fee. Also, be prepared to pay for the maintenance fees of the property, as well as any assessment fees that may pop up.

FAQs

Are timeshares for everyone?

Sadly, they’re not for everyone. While some owners of timeshares end up being pretty satisfied with their purchase and their decision since they have another property they can use at a given period of time, more often than not, there are other people that end up regretting their purchase and having a buyer’s remorse.

I want to get rid of my timeshare without consequences. How do I do it?

If you’ve had enough and decide to simply quit paying your timeshare fees and additional charges, they might report your default to credit agencies, causing your credit score to suffer. When you can no longer pay for the timeshare, you should sell it or renegotiate a contract with the timeshare provider to keep your credit.

Are Timeshares a Great Investment?

Buying a timeshare as an investment is almost never a wise idea. Because there are so many timeshares on the market, they rarely have a high resale value. Instead of rising in value, most timeshares depreciate after purchase. Many can be quite difficult to resale. If saving or producing money is your first priority, the absence of investment opportunities and recurring expenditures associated with a timeshare can definitely prove to be undeniable disadvantages.

When everything else is said and done, having a timeshare/entering a timeshare contract is simply down to a matter of choice for someone who has lots of money as a spare. In this article, sample templates of a timeshare contract are present so that you have something to look at when you need to make one or decide to enter a timeshare contract in the future.