Timeshare Resale Definitions ARDA-ROC : Timeshare Resales : Resales : Timeshare Resale Definitions

Timeshare Resale Definitions
 

Amenities

Extra recreational features that increase the enjoyment of a timeshare vacation. Resort amenities often include swimming pools, tennis courts, jacuzzis, spas and fitness facilities, golf, boating, skiing, water sports, amusement park discounts and children’s activities. Many amenities are standard features while others may carry an additional cost (such as golf, spa services, sports equipment, etc.), depending on the resort.

    Tip: When advertising your timeshare for sale or rent, make sure to emphasize the available recreational
    facilities as resale buyers will be interested in what your resort has to offer.
 

 

American Resort Development Association (ARDA)

The professional trade association representing the timeshare (otherwise known as vacation ownership) and resort development industries. Members range from privately held to publicly traded companies and international corporations with expertise in shared ownership interests in leisure real estate. The membership also includes timeshare owner associations (HOAs), resort management companies, and consumer owners through the ARDA Resort Owners Coalition (ARDA-ROC).

 

ARDA Code of Ethics

A set of standards for conduct and behavior that each individual and corporate ARDA member agrees to follow as part of their membership in the association. You can obtain a copy of the current version of the Code by visiting http://www.arda.org/ethics/.

 

ARDA Model Timeshare Resale Act

A set of practice standards and legislative guidelines developed by ARDA that may be used by state government agencies in developing legislation to regulate the timeshare resales and secondary market. The Model Act is available here.  

 

Banking or Deposit

Depositing a week of timeshare into an exchange system or inventory pool. If you decide to “bank” your timeshare week or points with an exchange company or timeshare developer you are agreeing to put off use of your current use period or points to a later date.  Usually this is done to allow you more exchange or reservation power.

    Tip: If your timeshare is banked and you are trying to resell, this will affect the first date your 
    timeshare will be available to a new buyer and is something you should be prepared to 
    disclose to all potential buyers.
 

 

Biennial Timeshare

Use of a timeshare week every other year. Owners are often referred to as either “odd” or “even” year owners.  

    Tip: If you are reselling, be sure that your advertising makes this clear to potential new buyers.  

 

Bonus Weeks

In an effort to increase travel to certain destinations, resort and exchange companies may offer extra weeks to their members for a modest rental or cleaning fee, without requiring the timeshare owner to relinquish a week in return. Developers may also offer unreserved weeks to their owners in a similar fashion. 

    Tip: In a resale situation, be sure you understand whether this benefit is—or is not—
    available to a resale buyer.
 

 

Closing Costs/Fees

Expenses paid by the buyer and/or seller at the time of closing on a timeshare purchase. These typically apply to real estate timeshares, as with any real estate transaction. 

    Tip:  When reselling, be sure your sales contract specifies who (seller or buyer) is responsible 
    for any of these costs.
 

 

Condominium Timeshare

A type of timeshare ownership that includes ownership of an individual week within a condo unit and within a multiple-unit building or complex. Owners get fee title to the space as well as a percentage ownership interest in the common areas, which may or may not include the recreational facilities. Purchasing an interest in a timeshare condominium is nearly always the purchase of an interest in real estate (deeded).

 

Deed or Deed of Trust

The legal document used to evidence the conveyance of title from one owner of a real estate timeshare interest to another.

 

Deeded (or Real Estate) Timeshare

A timeshare that includes an interest in real property and is generally resold like any other piece of real estate. Also sometimes called a fee timeshare or a timeshare estate.  (See “Right-to-Use Timeshare” for the other basic type of timeshare.)

 

Estoppel Letter

An estoppel letter is typically used in a transfer or conveyance of real property timeshares before the closing transaction. It is a document sent to a bank (or other lender) or to the homeowners' association requesting the payoff amount of the mortgage, assessments or taxes due to incorporate these amounts into the settlement statement for the buyer and seller of the timeshare. All assessments and payments due must be incorporated into the amounts due at closing and paid at the time of the closing on any timeshare resale. 
 
    Tip:  If you are thinking about reselling, ask your resort manager about this process. 

 

Exchange Company

The system that allows timeshare owners to trade the timeshares they own for  comparable timeshare interests in different timeshare resorts around the world. Most resorts are affiliated with an independent exchange company. However, many resort companies offer an internal exchange mechanism that allows timeshare owners to exchange to resorts within their company’s portfolio of resorts.

    Tip:  Be sure you understand how any exchange banking, affiliation or services 
    will affect your timeshare (or the new owner) if you are selling it.
 

 

Fixed Ownership

A type of timeshare ownership in which the owner has the right to occupy a specific identified unit and specific week year after year (e.g. you own week 52 in unit 100). In some resorts, it is possible that only the week (week 52) or the unit (unit 100) might be fixed.

 

Floating Ownership 

A timeshare arrangement in which owners have the right to occupy a particular type of unit (a two bedroom unit) or the right to reserve in a particular time of year (winter or summer) but they must make their reservation on a first-come, first-served basis or within the rules and regulations established by the resort.

      Tip:  Whether you are selling a fixed or floating timeshare, it will be important that your 
      potential buyers understand the differences.
 

 

Home Resort

The resort location where a timeshare or points owner has a guaranteed right to make a reservation according to the terms and conditions of the resort’s reservation policies and procedures. 

       Tip: Some points based systems (both those that do offer a real property interest and those 
       that don’t) offer a home resort option. You should make sure when you sell your timeshare 
       interest to indicate whether or not your timeshare interest or timeshare points are associated 
       with a home resort.
 

 

Homeowners’ Association (HOA)

The non-profit association that is comprised of all of the owners of a particular timeshare resort that is responsible for managing and administering the day to day operations of the resort. Membership in the HOA is mandatory and the specific rules and regulations that govern their existence will be found in state law as well as the HOA articles and by-laws. The HOA may also own the common areas and amenities. In almost all resorts, the HOA is ultimately responsible for managing the resort, but the elected members of the Board will set policy and usually hire a management company or manager to handle day-to-day operations.  

 

Lock-off Unit 

A type of timeshare unit consisting of multiple living and sleeping quarters designed to function as two or more discrete living units for purposes of occupancy and exchange. The unit can be opened up to form one large unit or can be “locked-off” into two or more separate units, allowing the timeshare owner to split the vacation into multiple stays or bank all or a portion for exchange purposes.

       Tip: Potential buyers need to understand this advantage. 

 

Maintenance Fee

Also called an annual assessment. A fee that timeshare owners are required to pay, usually on an annual basis, to cover the costs of running the resort, including daily management, upkeep, improvements and reserves. Real property taxes may be included in the fee or billed to timeshare owners separately. 

       Tip: When reselling, potential buyers need to know the amount of these fees, whether 
       taxes are included, and when they are due.
 

 

Points

A symbolic representation of the timeshare owners’ use rights, which can often be purchased in less than weekly increments. A developer will assign a point “value” to each day or week based upon unit size, location and seasonality.  When making a reservation, a points owner will take these “values” into consideration when selecting the unit, location and length of stay. A purchaser in a points-based system can often purchase additional points in order to have a longer stay, a larger unit and so forth. Points are also used by some resort companies for both internal and external exchange.

       Tip: Developers offer points in both real estate and non-real estate timeshare plans. So,     
       even though you might use points to make a reservation, it is still quite possible that you 
       received a deed or other real property interest (such as a beneficial interest in a trust) 
       when you purchased. This is important to understand when reselling as it will affect your 
       closing procedures and costs.
 

 

Postcard Company

See Timeshare Transfer Company.

 

Real Estate Broker

A person or company that holds a real estate broker license under one or more state real estate licensing laws.  Licensed real estate brokers may assist timeshare sellers, buyers and renters in all aspects of a real estate transaction, including the advertising of the owner’s timeshare for sale. Real estate brokers may also employ and supervise licensed real estate salespeople who are also able to assist in all aspects of selling your timeshare interest.

 

"Relief” or “Rescue” Company

See Timeshare Transfer Company. 

 

Rescission Period

Also known as a “cooling off period.” The period of time required by state laws during which a purchaser can cancel the timeshare purchase contract without penalty and receive a refund of monies paid to the timeshare developer. Timeshare rescission periods vary from state to state, but range from three to 10 days, the most common being five days.

       Tip: Few states require a rescission period for purchasers of timeshare resales so make sure 
       you know if the state where your timeshare is located has one. ( Florida does have a 10-day 
       rescission period that applies to all timeshare resale transactions, including consumer to 
       consumer resales.
)

 

Right-to-Use Timeshare

A timeshare owner’s right to occupy a unit at a resort for a specified number of years and where no real estate interest is conveyed. Right-to-use owners do not receive a deed or any other form of real property interest. These types of timeshares may also be called licenses or memberships.

      Tip: This is important to understand when reselling your timeshare as the procedures for 
      conveying your timeshare to a new buyer will be different than for a deeded or real property 
      interest timeshare.
 

 

Timeshare Developer

The party or company who develops and owns the timeshare project prior to its sale to consumers. The developer is responsible for constructing the timeshare units and amenities on-site, selling the product and in many cases providing management services for the property usually though a separate but affiliated company.  

 

Timeshare Documents

Called by various names under state law (including timeshare instruments) and depending on the structure of the timeshare plan, these are important legal documents which establish the timeshare resort or club. The documents may include a declaration, owners’ association articles and bylaws as well as rules and regulations. 

      Tip: You should obtain copies of these documents from your HOA or manager for any new buyer.  
      Depending on the state where your timeshare interest is located, you might be required by state 
      law to provide any new purchaser with these documents.
  

 

Timeshare Resales

The industry term for selling timeshare interests on the secondary market by a consumer purchaser to a third party, usually another consumer. 

 

Timeshare Resales Activity 

Where a person or company, directly or indirectly, for consideration (payment, fees, commissions, money, valuable benefits), engages in any of the following regardless of whether done in person, by mail, telephone, the internet, or any other type of communication:

                • Selling or offering to sell or list for sale an owner’s timeshare interest.
                • Buying or offering to buy any owner’s timeshare interest. 
                • Transferring or offering to assist in the transfer of any owner’s timeshare interest.
                • Invalidating or offering to invalidate the purchase or ownership of any owner’s timeshare interest.
                • Advertising or soliciting to advertise, list for sale, offer, or promote the sale, purchase, transfer or 
                invalidation of any owner’s timeshare interest.

 

Timeshare Resales Advertising Company

A company that offers to advertise your timeshare for sale or rent for a fee, usually paid in advance.  

      Tip: In many states, a company or its representatives can only offer to advertise your timeshare for 
      sale or for rent unless they have a real estate license. Only those companies with a real estate 
      license may actually sell your timeshare (much like a person has to have a real estate license to 
      sell your house). Make sure you understand all of your responsibilities, such as who is responsible 
      for actually conducting the sale and if you are renting or selling your timeshare, who will notify your 
      HOA about the names of your renters or buyers.  (see also “Real Estate Broker”)
 

 

Timeshare Transfer Company

A company or third party who, for an up-front fee, offers to transfer one or more timeshare interests from a current owner to another person or company. These companies are also sometimes referred to as “relief,” "rescue," “postcard,” or “transfer” companies. 

 

Timesharing

Shared ownership of vacation property which may or may not include an interest in real property. Timeshares allow buyers to purchase an increment of time, typically one week, in a fully-furnished condominium, villa or apartment. About two-thirds of timeshare interests today are interests in real property. 

 

Vacation Club

A marketing term often used to describe various types of timesharing that usually involve use of or access to more than one resort location. The term may also be used to describe other non-timeshare offerings such as discount travel clubs and other travel related services. 

 

Vacation Ownership

A term often used to describe resort timesharing and other forms of shared ownership of leisure real estate.

 


  Additional timeshare terms may also be found at vacationbetter.org/Timeshare 101. 

 

 



Timeshare Resale Definitions

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