Welcome to the Timeshares section of FindLaw's Real Estate Center. A timeshare is a unit (typically a condominium- or apartment-style structure) that is shared by multiple parties who each use it at different times of the year. Timeshares are very popular in vacation destinations, allowing part ownership of a property that is only used by each party for a few weeks or so each year. The ownership of timeshares depends on a number of factors, including any applicable state regulations of such arrangements. This section provides basic information about purchasing and owning a stake in a timeshare, particularly the legal implications involved.
Deeded vs. Non-Deeded Timeshares
There two main types of timeshare arrangements: deeded and non-deeded. For a deeded timeshare, the owner purchases an ownership interest in a piece of real estate that corresponds to a particular week (or weeks) of the year. Unless an exchange is made, that owner's interest in the unit is limited to the designated week each calendar year. These arrangements often are referred to as Fixed Time or a Fixed Unit.
A non-deeded timeshare typically involves the purchase of a club membership, license, or lease that allows the owner to use the property for a certain amount of time each year. The contract usually states the number of years for which the membership or lease is valid. These also are referred to as Floating Time arrangements. A Seasonal Floating arrangement is similar, but reservations for time are limited to a particular season.
Deciding Whether to Purchase a Timeshare
Before buying into a timeshare arrangement, make sure you've had time to thoroughly research your options and take stock of whether it makes sense for you. One common way to sell timeshares is to offer "free" vacations where the guests are all potential customers; but it's a good idea to wait until you get home before deciding. You should consider the following factors before you decide to buy:
- Practical Factors in General - How long will you be interested in vacationing at this particular location? Would you prefer a variety of vacation destinations?
- Investment Potential - While a second or vacation home is much more expensive than a timeshare, timeshares usually sell at a loss
- Total Costs - Besides the cost of the timeshare itself, you may have additional mortgage costs, closing costs, broker fees, finance charges, and more
- Document Review - As with buying a home outright, buying into a timeshare involves the signing of a binding contract, so ask an attorney to review the documentation if you are unsure about its provisions
- Properties Abroad - Memberships and timeshare ownerships are subject to the jurisdiction of the country in which they're located, without the protections of U.S. contract law
You also may want to see a review of the developer's (or management company's) background and current maintenance budget. Contact local real estate agents or the Better Business Bureau for more information.
State Regulation of Timeshares
Timeshares are regulated to some degree in most states, often with specific protections for buyers and limited rights to cancel the purchase. Check the Real Estate Commission in your state for local regulations. Specific state examples include the following:
- Florida - Buyer may cancel a timeshare contract if seller is notified in writing within 10 days
- Massachusetts - Timeshares are regulated just like other real estate interests under state law
- Texas - Buyer may cancel timeshare contract within six days of signing the contract
Timeshares vary from state to state and among the many options, so make sure you do your homework before signing a contract. Click on a link below to learn more.