timeshare (sometimes called vacation ownership ) is a property of shared ownership or usage rights. This property is usually a condominium resort unit, where several parties hold the right to use the property, and each owner of the same accommodation is given their time period. Minimum purchases are a one-week hold, and high-season weeks demand a higher price. Units may be sold as partial ownership, lease, or "right to use", in which case the latter does not claim ownership of the property. The ownership of timeshare programs varies, and has changed over the decades.
Video Timeshare
History
The term "timeshare" was invented in England in the early 1960s thriving on a holiday system that became popular after World War II. Share a holiday home, also known as a vacation home sharing, involves four European families who will buy a holiday cottage together, each having exclusive use of the property for one of the four seasons. They rotate seasons every year, so every family enjoys an excellent season equally. This concept is widely used by related families because collective ownership requires trust and no property managers are involved. However, some families vacation for one full season at a time; so property-sharing vacation homes are often empty for a long time.
Giat thinking in the UK decided to go further and divide the resort rooms into ownership of 1/50, have two weeks each year for repairs and upgrades, and charge maintenance fees for each owner. It took nearly a decade for timeshares in Europe to evolve into a smooth and successful business venture.
The first timeshare in the United States began in 1974 by Caribbean International Corporation (CIC), based in Fort Lauderdale, Florida. It offers so-called vacation licenses 25 years rather than ownership. The company has two other resorts vacation permit holders can alternate their holiday week with: one on St. Croix and one on St. Thomas; both in the US Virgin Islands. The Virgin Islands property started their timeshare sales in 1973.
The contract is simple and straightforward. The company, CIC, pledges to maintain and provide a prescribed type of accommodation (studio unit, one bedroom or two bedrooms) for use by a "license owner" for a period of 25 years (from 1974 to 1999, for example) determined and the number of weeks agreed, with only two additional charges: $ 15.00 per diem (per night), freeze for a fee for the lifetime of the contract. The contract has a switching fee of $ 25.00, if the licensees decide to use their time at any of the other resorts. The contract is based on the fact that licensing fees, and small per diem, in comparison with the projected increase in hotel tariff costs over 25 years to more than $ 100.00 per night, will save a lot of licensing licensors' licenses over licensing agreement ranges. Between 1974 and 1999, in the United States, inflation pushed the current cost per diem to $ 52.00, validating cost-saving assumptions. License owners are allowed to rent, or give their week as a gift in a given year. The only rule is that $ 15.00 per diem must be paid every year whether the unit is occupied or not. This "must be paid annual fee" will be at the root of what is known today as a "maintenance fee", after the Florida Real Estate Department is involved in arranging timeshares.
The concept of timeshare in the United States attracted many entrepreneurs because of the tremendous profits that could be gained by selling the same room 52 times to 52 different owners at an average price in 1974-1976 of $ 3,500.00 per week. Soon, the Florida Real Estate Commission stepped in, enacted laws to regulate the Florida timeshares, and made them simple ownership transactions. This means that in addition to the owner's vacation week price, maintenance costs and homeowner associations should begin. This simple ownership also generates timeshare location exchange firms, such as Interval International and RCI, so owners in certain areas can exchange weeks with owners in other areas.
Cancellation, or cancellation, of a timeshare contract, remains the industry's biggest problem to date.
Maps Timeshare
Legislation
This industry is regulated in all countries where the resort is located. In Europe, it is regulated by Europe and by national law. In 1994, the European Community adopted "The European Directive 94/47/EC of the European Parliament and the Council on the protection of buyers in respect of certain aspects of the contract relating to the purchase of the right to use" timeshare "immovable property, which has been under review recently, and resulted in adoption on January 14, 2009 on the European Directive 2008/122/EC.
Established rules in Mexico
On May 17, 2010, the Ministry of Economy of Mexico through the Directorate General of Standards set new rules and requirements for developers of timeshare services. The new rules are outlined in Official Mexican Norms (NOMs), which comprise a set of official standards and regulations that apply to various activities in Mexico. The following institutions are involved during the new standardization:
- Mexican Resort Development Association (AMDETUR)
- National Fund for Tourism Development (FONATUR)
- Federal Consumer Protection Office (PROFECO)
- Ministry of Economy (SE)
- Tourism Secretary (SECTUR)
NOM is officially called: "NOM-029-SCFI-2010, Commercial Practices and Information Requirements for Timeshare Rendering Services". This sets the following standards:
- Marketing companies are not allowed to offer gifts and ask for prospective timeshare owners without clearly mentioning the true purpose of the offer.
- The requirement to cancel the timeshare contract should be more practical and not burdensome.
- NOM recognizes timeshare consumer privacy rights. It is strictly prohibited for timeshare providers to discard consumer personal information without written approval.
- Verbal promises must be written and stipulated in the original timeshare contract.
- Timeshare providers must comply with all obligations written in the timeshare contract, as well as internal timeshare resort rules.
- The bills intended to be made to the consumer must be clear and clear in the timeshare application form, including membership fees, and all additional costs (maintenance fees/exchange club fees).
To create new regulations that apply to any person or entity that provides timeshares, the definition of a timeshare service provider is substantially extended and clarified. If the timeshare provider does not follow the rules set out in the NOM, the consequences may be substantial, and may include financial penalties that can range from $ 50.00 to $ 200,000.00
Usage methods
Owners can:
- Use the time of use
- Rent their own use
- Provide as gift
- Donate to a charity (in case the charity chooses to accept the burden of related maintenance payments)
- Exchange internally within the same resort or resort group
- Redeem externally to thousands of other resorts
- Sell through traditional or online ads, or by using licensed brokers. The timeshare contract allows transfer through sales, but is seldom resolved.
Recently, with most points system, the owner may choose to:
- Set their usage time to point system to redeem for airline tickets, hotels, travel packages, yachts, park amusement tickets
- Instead of renting all the actual usage time, lease a portion of their points without actually getting usage time and use the rest of the points
- Rent more points either from an internal exchange entity or another owner to get a larger unit, more holiday time, or to a better location
- Save or move points from one year to another
However, some developers may limit which options are available on their respective properties.
Owners may choose to stay at their resort for a specified period, which varies depending on the nature of their ownership. In many resorts, they can rent out their week or give them as gifts for friends and family.
Used as a basis for attracting mass appeal to buy timeshare, is the idea of ​​owners swapping their week, either independently or through exchange agents. There are several exchange agents, but only two are often mentioned in the industry. They are the two largest: RCI and Interval International (II), combined, has more than 7,000 resorts. They have a resort affiliate program, and members can only exchange with an affiliated resort. It is most common for a resort to affiliate with just one of the larger exchange agencies, although resorts with multiple affiliations are not unusual. One timeshare purchase resort determines which exchange company can use to make the exchange. RCI and II charge an annual membership fee, and an additional fee for when they find an exchange for asking members, and prohibits members from renting the week in which they have exchanged.
Owners can also exchange their weeks or points through independent exchange companies. Owners may exchange without resort to having a formal affiliate agreement with the company, if the ownership resort agrees with such arrangements in the original contract.
Due to the promise of an exchange, timeshares often sell regardless of the resort location they prohibit. What is not often expressed is the difference in trading strength depending on the location, and the season of ownership. If a resort is in Hawaii or Southern California, it will exchange very well depending on the season and the week set for the particular unit that is trying to exchange. However, timeshares in desirable locations and high season time slots are the most expensive in the world, subject to the typical demand of each highly traded vacation area. If you happen to have a timeshare in Palm Springs, California in mid July or August for example, your strength of trade is greatly reduced, as they want to come to the resort when temperatures are over 110 degrees Fahrenheit a bit.
Variety
The contracts that are set up versus rights are used
The main difference in the type of vacation ownership is between deeded and right-to-use contracts.
With dedicated contracts resort use is typically divided into week-long increments and sold as real property through proprietary fractions. As with any other part of real estate, the owner can do whatever it wants: use the week, rent, give away, leave to the heirs, or sell the week to other potential buyers. Owners are also responsible for the same share of real estate taxes, which are usually collected with condominium maintenance fees. Owners can potentially reduce some property related costs, such as real estate taxes from taxable income.
Enacted ownership can be as complex as having direct property ownership where the deed structure varies according to local property laws. Leasehold Certificate is public and offers ownership for a fixed period after repossession to the rights holder. Sometimes, rental infrastructure is offered sustainably, but many deeds do not convey the ownership of the land, but only the apartment or unit (housing) of the accommodation.
With the correct contract used , the buyer has the right to use the property in accordance with the contract, but at a certain point the contract expires and all rights are returned to the property owner. Thus, the use rights contract grants the right to use the resort for certain years. In many countries there are severe limitations on foreign property ownership; thus, this is a common method for developing resorts in countries like Mexico. Care must be taken with this form of ownership because the right to use often takes the form of club membership or the right to use the reservation system, where the reservation system is owned by a company that is not in the owners' control. The right to use may be lost by the death of the controlling company , because the right to use a buyer's contract is usually usually only good with the current owner, and if the owner sells the property, depending on the contract structure, and/or current laws in foreign places.
The right to use the problem is the main reason in the domestic places, that the Real Estate Department is involved with the purchase of timeshare, and the timeshare sale is converted to simple ownership cost . With Simple Fee Ownership , security increases, along with fees, which now must include HOA costs, and maintenance costs : lifetime sustainable costs for owners and their heirs, except or up to timeshare transferred/sold to new owners.
A variant form of real estate-based timeshare that incorporates the deeded timeshare feature with the right-to-use bidding developed by Disney Vacation Club (DVC) in 1991. Buyers Timeshare DVC, the so-called DVC member receives a deed conveying the undivided real property ownership in the timeshare unit. Each DVC member's property interests are accompanied by annual allotment of holiday points proportionally to the size of the property interest. holiday points system DVCs are marketed as very flexible and can be used in various upgrades for vacation spots in DVC resorts in accommodation from studios to three-bedroom villas. DVC vacation points can be redeemed for holidays around the world in non-Disney resorts, or may veer to or borrow from years to come.
The DVC dot structure, which has been used in all timeshare resorts, has been adopted by other large timeshare developers including Hilton Grand Vacations Company, Marriott Vacation Club, Hyatt Residence Club and Accor in France.
Week-fixed ownership
The most common sales unit is a fixed week; The resort will have a calendar that mentions the weeks beginning with the first calendar week of the year. Owners can have a deed to use the unit for a specific week. For example, week 26 usually includes the fourth holiday of July, week 51, Christmas, and so on. If the owner owned a 26th Week in a resort, he can only use a certain week each year.
Ownership of the floating week
Sometimes units are sold as floating weeks. Ownership will be specific to how many weeks the owner has and from which week the owner may choose to stay the owner. An example of this might be a floating summer week in which the owner can ask every week during the summer, generally weeks 22 to 36. In this example there will be competitions for major holidays such as Memorial Day, Fourth of July, and Labor Day. The weeks when school may still be in session will not be so high in demand. Some floating contracts exclude major holidays so they can be sold as fixed weeks.
Rotating or flex-week ownership
Some are sold as rotating weeks, usually referred to as flex weeks. In an effort to give all owners an opportunity for the best weeks, the weeks are played forward or backward through the calendar, so that in the first year the owner can use week 25, then the 26th week of year 2, and then the 27th week at year 3. This method gives a fair chance for each owner for the first week, but unlike the name, it is not flexible.
Program points
Resort-based points programs are also sold as delegated and as a right to use. The program points each year give the owner a number of points equal to the level of ownership. The owner in the points program can then use these points to make travel arrangements within the resort group. Many program points are affiliated with large resort groups that offer a large selection of options for the purpose. Many of the resort points programs provide flexibility from traditional stay weeks. Members of the resort point program, such as WorldMark by Wyndham and Diamond Resorts International, may request from all available inventory of the resort group.
Members of the points program can often request a fraction week as well as a full week or several weeks. The number of points needed to stay at the resort in question will vary based on the point graph. The points graph will allow for factors such as:
- Resort popularity
- The size of the accommodation
- Number of nights
- Season's wish
Type and size of accommodation
The timeshare property tends to be apartment-style accommodation ranging from studio units (with space for two), up to three and four bedroom units. Larger units can usually accommodate large families comfortably. Units usually include a fully equipped kitchen with dining room, dishwasher, television, DVD player, etc. It is not uncommon to have a washer and dryer in the unit or accessible at the resort property. The kitchen area and facilities will reflect the size of the particular unit in question.
Units are usually listed based on how many units will sleep and how many units will sleep privately. Traditionally but not exclusively:
- Sleeps 2/2 is usually a bedroom or studio
- Sleep 6/4 is usually a two bedroom with sleeper sofa
(timeshares are sold worldwide, and each place has a unique description)
Private sleep usually refers to the number of guests who do not have to walk through the sleeping area of ​​other guests to use the restroom. Resort resorts tend to be tight on the number of guests allowed per unit.
The unit size affects the cost and demand at each resort provided. The same is not true comparing resorts in different locations. One-bedroom units in desirable locations may still be more expensive and demand higher than two-room accommodation in a resort with less demand. This example may be one bedroom in a desirable beach resort compared to a two-room unit in a resort located inland from the same beach.
Sales incentives
Timeshare often provides incentives for potential buyers to take the tour property:
- Stay at a holiday resort at a discounted rate (Holiday resort is a timeshare, and sales are destination)
- Prizes (which can range from suitcase to toaster to tablet)
- Pre-paid tickets (to movies, games or other forms of entertainment available in the resort's public areas)
- Gambling chips (usually in timeshare resorts that have legalized gambling)
- Various prepaid activity coupons, usually for use in or near the vacation spot
A vacation timeshare prospect presented this incentive in exchange for a marketing company's promise that they agree to take a timeshare tour before the end of their stay. If holiday prospects refuse to take the tour, they may find their accommodation prices increased significantly, perhaps directed to leave the property, and all incentives being withdrawn or canceled. Tour
Prospective buyers (hereby referred to as prospects ) sit in a hospitality room (a term defined by the land sale industry in the 60s) with plenty of tables and chairs to accommodate the family. Prospects are given tour guides the right to use compared to the actual real estate transactions through ownership >. Because timeshares are sold internationally, these laws vary from place to place. After a warm-up period and coffee or snacks, there will be a podium speaker welcoming the prospect to the resort, followed by a film designed to fascinate them with exotic places they can visit as timeshare owners.
Prospects will then be invited to tour the property. Depending on the inventory available on the resort, the tour will include accommodation according to the guides or travel agents best suited to the needs of the prospective family. After the tour and then back to the hospitality room for a verbal sales presentation, the prospect is given a brief history of timeshare and how it relates to the current holiday industry. During the presentation, they will submit a resort exchange book from RCI, Interval International, or any exchange company associated with a particular resort property. Prospects will be asked to notify the tour guides of the places they want to visit if they are timeshare owners. The rest of the presentation will be designed around responses given prospective buyers to the question.
If the guide is licensed, the prospect will be quoted at the retail price of the particular unit that best suits the needs of the prospective buyer. If the tour guide is not a licensed agent, a licensed agent will now sign in to present the price. If the prospect responds with a "no", or "I want to think about it", the prospect will then be given a new incentive to buy. This incentive will usually be a discounted price that will only be good today ( good today is an incorrect statement, and has been used as a sales closing tool since the first day of the industry's beginning timeshare). If again, the answer is "no", or "I want to think about it", the sales agent will ask the prospect to talk to one of the managers before the prospect leaves. It is at this point that the prospect realizes that the tour is actually just getting started.
A sales manager, assistant manager or project director will now be called to the table. This procedure is called: "FOR", or get submit a human to find the incentives usually in the form of less expensive less expensive units or inner trading units than the other owners. This tactic is commonly used as a sales tactic, as the resort is not interested in reselling the already-circulated property . Similar to the car sales industry , managers and sellers know in advance what the lowest price will be offered to prospects, long before the prospect arrives for the tour. If one incentive does not move potential customers to buy, others will follow soon, until a prospect buys, convince a normally polite sales crew that does not mean no, or has risen from the table and out of the building.
Timeshare sales are often a high and fast-paced affair. Some people get caught up in the excitement of a sales presentation and sign a contract, only to realize later that they may have made a mistake.
The US Federal Trade Commission mandates a "quiet period" that allows people to cancel some kind of purchase without penalty within three days. In addition, almost all US states have laws that specifically regulate cancellation of timeshare contracts. In Florida, a new timeshare owner can cancel a purchase within ten days. The law differs according to jurisdiction, whether the buyer outside the country is subject to the cancellation period of their country of residence, or the cancellation period of the country in which the timeshare purchase is made (for example, in Florida, the 10 day cancellation period applies to all buyers, a Texas buyer who will only have five days in Texas, has an entire 10-day period allocated by the Florida Statute).
Another common practice is to ask prospective buyers to sign a "cancellation cancellation", using it as an excuse to lower the timeshare price in exchange for the buyer releasing the right of cancellation (or paying a fine, such as losing 10% of the purchase price, if the sale is canceled). However, such waivers are not legally applicable anywhere in Mexico or the United States. If a timeshare purchaser recently wishes to cancel or cancel a timeshare contract, the intention to cancel must be made within a specified period of time in writing or in person; phone calls will not be enough.
In recent years, the timeshare cancellation industry has been set up by companies that provide one simple service: timeshare cancellation. However, some of these companies are suspected of being deceitful. In March 2018, the Consumer Guides for Timeshare Exit were published during the National Consumer Protection Week, which was the first resource made for timeshare owners to help educate them about the various scams and red flags associated with the timeshare of the cancellation industry.
It is likely that new timeshare owners can buy the same product from existing owners in the timeshare resale market drastically less than what paid buyers from resort developers, simply by doing a computer search. In many cases, appropriate or similar accommodation purchased will be happily transferred by unhappy timeshare owners. New buyers usually only pay the minimum real estate transfer fees and agree to take over the maintenance costs, since existing owners can not find buyers for their timeshare without paying the re-sold companies thousands of dollars to be absorbed for resale. The reason for this anomaly is that the lion's share of the new timeshare cost is the sales commission and marketing costs, and can not be taken by the timeshare owner.
Another reason a new owner might want to cancel, perhaps a buyer has made a big financial commitment in the excitement of a sales presentation, and now at home, the new owner has buyer's regrets. Or, the new owner may not know exactly what to buy and how the timeshare works, or not realize at the time of purchase that the cost of ownership maintenance is a lifelong commitment. Or, maybe the new timeshare owners feel they do not have time to research the company that the new timeshare was purchased, as it was purchased during the first visit to the timeshare resort.
Criticism
Critics consider timeshare units too expensive. The Federal Trade Commission of the United States provides consumers with information on timeshare pricing and other related information. Also known as the Universal Lease Program (ULPs), timeshares are considered securities by law.
Many timeshare owners complain about the overly high annual maintenance cost (including property tax).
Timeshare developers argue that prices compared to hotel stays in the long run are projected lower to timeshare owners. However, hotel guests have no monthly vacation mortgage payments, upfront fees, fixed schedules, maintenance fees, and predefined vacation locations. Many owners also complain that the increased cost of timeshare and the associated upkeep and maintenance costs, increases faster than hotel rates in the same area.
The industry's reputation has been hurt by the comparisons of timeshare sellers with second-hand car sellers because of the sales pressure given to potential buyers to "buy today". "The discount price I quote you is only good if you buy today", is the industry standard for closing sales on the first visit to the resort. Many left the timeshare tour complaining of endless salespeople they had to deal with before they finally left the tour . The term "TO", or "surrender" man, was created in the land industry, and quickly evolved into a timeshare industry. After the original tour guide or seller gives potential buyers pitch and price, "TO" is sent to lower the price and secure the down payment.
However, the biggest complaint of all is the fact that timeshare resold by private owners is almost impossible. In many cases, owners who want to sell literally can not give timeshare away . Timeshare resale companies have sprung up that actually charge the owner to assume his timeshare ownership, using the excuse that the resale company should bear maintenance costs along with marketing costs, until that expense can be transferred to a new buyer.
Timeshares are generally treated as real property and can be resold to other parties. However, timeshares do not value its value, and therefore should not be considered a money-making investment. In addition, as much as 50% or more (simplified estimate) of the original purchase price of a timeshare from the developer or resort goes towards marketing costs, sales commissions, and other expenses, which can realistically not be recovered by the owner. Most timeshares are resold at nominal rates as low as $ 1, so the new owner is only responsible for maintenance and other routine expenses. The resale price can be considered a timeshare market price.
There are brokers and agents who specialize in reselling timeshare units on behalf of their owners. This arrangement usually involves recording fees, commissions, or both, paid by the owner to the broker/agent. In return, the broker/agent markets resale to prospective buyers. This marketing may take the form of printed materials, Internet postings, radio and television advertisements, and direct telephone applications. Most of the costs associated with resale of a third party in advance and are non-refundable, regardless of whether the unit sells, or how much.
Depending on the terms of the timeshare contract, the owner may rent the week or their interval to the other party in return for payment to the owner.
There are third parties who will try to hire timeshares on behalf of their owners as a one-off event or annual event. The broker/agent will try to find a suitable tenant in exchange for fees and commissions. In addition to hands-off experience for owners, third parties usually handle money transfers as well.
The obstacles in finding a suitable tenant remain the same as the real estate owner, with the corresponding obligations that regularly rent out any real property: ensuring payment before transferring usage to the lessee and coverage for any damage to the unit by the lessee.
Donation charity
Charities sometimes receive timeshare donations. They should be able to convert timeshare into cash to benefit from donations. Charities do not want to be required as owners and bear the same annual costs that donors face. Unless a charity can convert it into cash by resale or lease, the acquisition may be a liability rather than an asset. Some charities charge a fee to the Donors, and do not intend to pay maintenance fees. They take the obligation and ignore all bills and collecting threats until the original Financial Company that buys the paper, decides to cover up the property. A charity that will receive a valid donation will ask the donor to hold the title when they have an experienced broker trying to sell the timeshare and convert it into cash.
The IRS says if a timeshare is sold by a charity within a 36-month time donation, the actual cash received determines the withholding of income. If timeshare is not sold, a maximum of $ 5,000 may be deducted without appraisal. To receive a higher rating, a licensed appraiser must assess the property. This should include actual timeshares that are sold as comps. It must provide specific information only found on the sales contract or record of deed, must use the cost of land replacement and repair (resort prices) in the calculation, and no sales are depressed as a comparison.
See also
- List of timeshare companies
- Fractional financing
- List of home types
- Vacation Rentals
- Full resort
References
Source of the article : Wikipedia
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