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Planning your next vacation? Perhaps timesharing - the use of a vacation home
for a limited, pre-planned time - is on your list of options. Timesharing is
a popular way to take a vacation, but problems can occur. Consider the risks
and the benefits before you sign a contract. 
There are two basic types of timesharing plans. In a deeded plan,
you buy an ownership interest in a piece of real estate. In a non-deeded
plan, you buy a lease, license, or club membership that lets you use the
property for a specific amount of time each year for a specific number of years.
With both types, the cost of your unit is related to the season and the length
of time you want to buy. The purchase will cost thousands of dollars. Before
you sign any papers or pay any fees, understand what you're buying.
Timeshare Pointers in Making Your Desicion
Practical Factors. One reason people buy timeshares is the
convenience of pre-arranged vacation facilities. Consider whether you'll be
able to use a timeshare facility year after year. Are your vacation plans sometimes
subject to last-minute changes, or do they vary in length and season from year
to year? Does the property have flexible use plans? Are you — and will
you be — in good enough physical and financial health to travel to your
timeshare? If you're evaluating a timeshare plan with units in several locations,
ask whether the club has enough units to satisfy demand.
Investment Potential. Never consider the purchase of a timeshare
as an investment. Timeshare resales usually are difficult. You may face competition
from the original seller. Or, local real estate agents may not want to include
the timeshare unit in their listings. Once all the timeshares have been sold,
ask if the developer will be setting up a resales office on site. Total
Costs. The total cost of your timeshare includes mortgage payments and
expenses, such as travel costs, annual maintenance fees and taxes, closing costs,
broker commissions, and finance charges. Annual maintenance fees can range from
$300 to $500. Since these fees can rise at rates that equal or exceed inflation,
it's important to ask if there's a fee cap for your plan. Keep in mind that these
fees must be paid whether or not you use the unit. To help  evaluate
the purchase, compare your total timeshare costs with rental costs for similar
accommodations and amenities for the same time and in the same location. Document
Review. Don't act on impulse or under pressure. Take the documents home
to review. Ask a professional or someone familiar with timesharing to review the
paperwork before you buy. If the seller won't let you take the documents, perhaps
this isn't the deal for you. A good offer today usually will be a good offer tomorrow.
Legitimate businesses don't expect you to make snap decisions. Find out if the
contract provides a "cooling-off" period during which you can cancel
and get a refund. If not, ask to include this clause. Most states where timeshares
are located require a cooling-off period. If there is no cooling-off period, be
sure you understand all aspects of the purchase and carefully review all materials
before you sign. Oral Promises. Make certain all promises
made by the salesperson are written into the contract. Exchange Programs.
These programs allow you to arrange trades with other resort units in different
locations for an additional fee. However, these trades usually cannot be guaranteed.
There also may be some limits on exchange opportunities. For example, you may
need to make your request far in advance. Or, even at an additional cost, you
may not be able to "trade up" to a better unit at peak time in an exotic
location. When you trade, expect a unit of approximately the same value as your
own. Reputation Research. Your resort will be a good place
to vacation only if it is run properly. Research the track record of the seller,
developer, and management company before you buy. Ask for a copy of the current
maintenance budget. Learn what will be done to manage and repair the property,
replace furnishings as needed, and provide promised services. Will these arrangements
be adequate? Will they extend over a long period of time, or just the near future?
Visit the facilities and talk to current owners about their experiences. Local
real estate agents, Better Business Bureaus, and consumer protection offices also
are good sources of information. Unfinished Facilities. Purchasing
an undeveloped property is extremely risky, but if you decide to do so, commit
money to an escrow account. This is one way to protect your financial investment
if the developer defaults. Also get a written commitment from the seller that
the facilities will be finished as promised. Default Protection.
Learn your rights if the builder or management company has financial problems
or defaults. Check to see if your contract includes two clauses concerning "non-disturbance"
and "non-performance." A non-disturbance provision should ensure that
you'll continue to have use of your unit in the event of default and subsequent
third party claims against the developer or management firm. A non-performance
protection clause should allow you to keep your ownership rights, even if a third
party is required to buy out your contract. Contact an attorney who can provide
you with more information about these provisions. Foreign Properties.
Be especially wary of offers to purchase timeshares or vacation club memberships
in foreign countries. If you sign a contract outside the United States for a timeshare
located in another country, you generally will not be protected by U.S. federal
or state contract property laws. For More Information
Usually, timesharing is regulated through the Real Estate Commission in the
state where the timeshare property is located.
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Owner's responsibilities and liabilities
When you make the decision to purchase a timeshare, you must also commit to
mainitaining the timeshare. There are a varying set of rules that come with
timeshare ownership.
Owners responsiblities:
1) Stick to the resorts policies
2) Adhere to reserved dates, regardless of whether the owner uses it or rents
it out for that specified period.
3) Keep the rental agency abreast of all situations and inform them of any changes
that have risen. If need be - compensate the agency.
Owner's liabilities:
1) The owner understands the agent is not guaranteeing any amount of days of
 occupancies
or particular income but will put their efforts into generating a competitive
rate in all rental situations.
2) The owner will considered the agency blameless in damages or expense sustained
either by the owners or other persons using the timeshare property.
3) If the owner seeks retribution in regards to any damages, it will solely
be upon the owner and the agency will not be included.
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