Types of Timeshare Ownership: Deeded Versus Right-to-Use
by Lauren Smith Janzen
Considering a timeshare purchase? The first question you need to ask is whether you want a deeded or a right-to-use ownership. To answer this, you’ll need a full understanding of the legalities involved in both options.
Deeded timeshare ownership
With deeded timeshare ownership, you own a deed or title to an actual piece of property. This property can include either the real estate alone, or the real estate and land. Often, the real estate involved is delineated in the contract by the size of room and the increment during the year (usually one week) that you own. As a real owner, you can sell, donate, or pass on your timeshare, and the deed transfers accordingly with the original terms.
Because deeded property involves actual ownership, if you purchase a deeded timeshare, you will be able to vote for issues that affect timeshare holders. This is similar to belonging to a homeowner’s or condominium association.
With deeded timeshare ownership, holding the deed to the property means you can profit from a raise in the market value of the property. However, resorts often sell timeshares at inflated prices to cover the marketing expenses the resort incurs. Therefore, timeshares often depreciate after purchase. That noted, the timeshare resale market is advantageous to the buyer rather than the seller. If you plan to use your timeshare and pass it to your heirs, reselling the timeshare may not be a weighty consideration.
Right-to-use timeshare ownership
Right-to-use timeshare ownership, as its name suggests, confers a temporary right to use the property. Right-to-use ownership allows the buyer to use the property for a certain period of time, after which it reverts to the original owner (such as the resort property holder). There is no title or deed for right-to-use because there is no ownership of physical property.
With right-to-use ownership, you can still sell the property or pass it on as inheritance. However the rights still expire after the originally designated term.
Points programs
In addition to the sale of property, some timeshare resorts have programs in which owners can purchase points to apply to room rental. You can enroll in a points program by buying a share under either a deeded or right-to-use contract. You then use the points to make reservations at a variety of properties owned by the resort. The resort may weigh the points system; for example, a large, more popular resort room on a holiday weekend would cost more points than a smaller room in the off-season in a quiet locale.
Timeshare ownership, whether deeded or right-to-use ownership, brings with it the full legal weight of property ownership, including both rights and responsibilities under the law. It also involves the annual fees and taxes that all property ownership entails. Once you have considered the pros and cons of deeded and right-to-use timeshare ownership, you will be prepared to move forward with your decision to purchase a timeshare. You’re one step closer to your vacation!
