Understanding timeshare agreements and contracts is a matter of firstly understanding timesharing and secondly knowing your rights.
Hence, here is a quick overview of exactly what timesharing is as well as some of the key areas of timesharing and timeshare contracts you should know about before signing an agreement.
Buying Timeshares vs. Property
Firstly, it is important to understand exactly what a timeshare is as many people, even in 2016, are under the miscomprehension that owning a timeshare means owning property, or a stake in a property. To put it very plainly, this is not true in most cases; as laid out in most types of timeshare contract, a timeshare ‘owner’ in fact owns no part of the timeshare property which they have agreed to timeshare.
What then does it mean to purchase it a timeshare and where does your money go? A person who owns a timeshare in fact most often owns a percentage or share of a lease affixed to a timeshare property. Therefore, if you are looking into timesharing as a means of affording a holiday home or buy into property, you might want to reconsider or at least take a broader look at all the options available to you.
RTU Timeshare Agreements
The most common type of timeshare contract is known as a ‘right to use’ or RTU contract and as the name suggests, this type of agreement permits a timeshare owner use of an agreed upon property for a fixed amount of time during a fixed period.
Most often an RTI agreement will involve being able to use a property for 7 days from a particular date of each year, although RTI agreements can vary with some RTI timeshare owners being permitted use of a property for up to a month or more each year.
What it is important to know is that, as the name implies, a right to use timeshare owner owns no part of the property they use. Rather, the property is more accurately being rented.
Deeded Timeshare Agreements
Deeded timeshare agreements superficially look and operate very similarly to RTU agreements; a deeded timeshare owner like an RTU timeshare owner is permitted use of a timeshare property for a predetermined amount of time in a fixed period each year.
But that is where the similarities end. In fact, deeded timeshare agreements are the exception to the rule when it comes to timesharing. Why is this and how? Well, as the name implies, deeded timeshare unlike RTU involve a person actually and literary buying a stake or share in a property. Hence, deeded timeshares most often involve up to 50 different people (correlating to the amount of weeks in a year) owning equal shares in a timeshare property. Hence, this provides an affordable means for some people to buy and own holiday property.
Regardless of the type of timeshare agreement you buy into, within your contract will be details and an agreement you have made to take responsibility for annual fees attached to the property. Hence, whilst the contract exists you are legally bound to pay annual costs towards the upkeep and maintenance of said timeshare property and possibly even contribute towards the upkeep of the resort in which it is situated.
To learn more about annual fees ahead of taking the plunge and purchasing a timeshare, visit The Timeshare Users’ Group website. Meanwhile, for news about potential changes in the law and legislation surrounding annual fees attached to timesharing, read the Telegraph Newspaper article: Timeshare horrors: fresh hope for 100,000 people locked in costly contracts
The Cooling Off Period
It is of imperative importance once you have signed a timeshare agreement that you go home and spend as long as it might take to re-read the agreement front to back and inside out and that you understand all of what you are reading.
You might think that once you have signed on the dotted line, there is little you can do and that having gone through the contract and ‘the important bits’ before signing, you know exactly what you are doing, but you don’t. You can’t. If when initially reading and going through the agreement there was a single section, page, paragraph or even word you skimmed or missed, the fact is you cannot fully know what you have signed up for.
Hence, and to reiterate the point: re-read your contract. Further, it is important to do this within the first fourteen days of having purchased a timeshare as currently all timeshares bought and sold within Europe are so affixed with a fortnight cooling off period in which buyers can exit their contract and get 100% of their money back without even having to give a reason.
The fourteen day cooling off period is a piece of British and now European legislation brought into being as part of the Timeshare Act 1992 to try and reduce the number of people signing up to timeshare agreements without fully understanding the terms as well as to reduce the number of companies using aggressive sales tactics to part consumers from their thousands.
To learn and read more about the Timeshare Act 1992 and your consumer rights surrounding timesharing, you can do so via the Timeshare Consumer Association website.
Finally, it is also important to be aware that over 10% of timeshare contracts currently in use are in fact illegal, as explained and discussed in further detail via the Timeshare Exist Support Service website. This means that if you already own a timeshare your agreement could in fact be invalid.
Of course, for those desperate to exit a timeshare this could come as very welcome news as discovery of an illegal contract often results in a timeshare owner being award compensation alongside having their initial investment amount returned to them. For those who do not wish to lose their timeshare or end up paying to enter into an illegal contract though, being away of how prevalent this is within the timeshare industry matters.
Therefore to learn whether your timeshare contract is in fact legally binding and to avoid entering into one which isn’t, speak with the Timeshare Exit Support Service team or consult your lawyer before signing anything as costly as a timeshare contract.