Timeshare ownership explained...

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A timeshare is a collective model of vacation real estate in which multiple buyers own or lease allotments of usage for the same property. The timeshare model is used for many different properties, with units offered in vacation resorts, condominiums, apartments, and campgrounds.

• A timeshare represents distributed ownership or leasing of vacation property where multiple buyers have exclusive use of a property for a period of time.
• Timeshares are available for many kinds of vacation properties, such as resorts, condominiums, and apartments.
• Timeshares are available in fixed periods (the buyer has specific dates each year) or floating periods (use of the property is limited to a season during which it can be reserved, typically on a first-come, first-served basis).
• Scams abound in parts of the industry, especially in the secondary market, where owners are attempting to sell or rent their timeshares.

Timeshares are vacation properties where ownership or occupation is divided between several parties. Timeshares are popular in vacation locales where owners may want repeated use of a property without the cost of full ownership. Timeshares confer upon its buyer the right to annual exclusive use of a vacation property for a defined period, generally measured in one-week increments.

Timeshare properties include homes, condominiums, and resorts. The timeshare model has also been used for recreational vehicles and private jets.

Typically, timeshares are in one of the following models.

A fixed-period timeshare gives a timeshare buyer the right to exclusively use the property for a specific week or weeks each year. The main advantage is that the buyer can plan an annual vacation at the same time every year. The disadvantage of this method is that it may be very difficult to change the dates for the fixed period if work or school schedules change.

A floating-period timeshare gives exclusive use of the property for a week or weeks during pre-set dates or throughout the year. While it is more flexible than the fixed-period system, the floating date model could mean the specific dates you need are already booked, e.g., during the busiest times of the year, and may need to be reserved well in advance.

This system adopts points to represent timeshare use. Just as the cost of booking a hotel will depend on the resort location, size of the vacation unit, and dates, the points vary similarly, though they are usable for one or more resort properties. Those who own points can use them on exchanges within one company's resorts (internal exchange) or with other resorts (external exchange). While the points system provides buyers with increased vacation choices, there can be vast differences in the properties and across times of the year for how far your points can go.

Timeshares are typically structured as shared deed or shared lease.

Shared-deeded ownership gives you a percentage of the physical property corresponding to the period bought. For example, one resort condo sold in timeshare increments of one week can technically have 52 total deeds. Buying one week would confer a one-fifty-second ownership interest in the unit, while two weeks would give you a one-twenty-sixth interest, and so forth. Shared-deeded ownership interest is ordinarily held in perpetuity and can be resold or willed to other parties.

Shared-lease timeshares give you the use of a specific property for a fixed or floating period each year for a certain number of years. In this structure, the timeshare developer retains the deed to the property, unlike the shared-deeded model, where the buyer gets the deed for a fraction of the property. Property transfers or resales are also more restrictive than with a deeded timeshare. As a result, leased timeshares typically have a lower value than a deeded timeshare.

Holding a leased timeshare does not afford fractional ownership of the underlying property. According to the ARDA, fractional ownership is more typical in the luxury segment of vacation properties, offering more services and amenities.2