There are lots of terms you may come across in timeshare that you might not necessarily be familiar with. We like to make things nice and simple for you, so here you go! The A-Z of timeshare in one easy blog post!
Accrued Time: A term used by timeshare exchange companies to mean weeks that have been accumulated from previous years that can be used in the current year.
Affiliated: Affiliate resorts are those with whom your exchange company has an agreement so that you may stay with those resorts as part of your exchange contract.
Banking: Exchange companies have what they call a ‘bank’, into which a week of timeshare can be deposited. It can also be known as ‘Space Banking’. You may also hear the term ‘Block Banking’ or ‘Bulk Banking’ which means that the resort management (usually) deposit a large number of weeks into the exchange company ‘bank’ at the earliest possible time. The aim of this is to give members the maximum bargaining power for their timeshare exchange.
Bonus time or Bonus week: These are terms meaning an additional week of use which can sometimes be given to a member as a goodwill gesture or as a ‘thank you’ for signing up. It is sometimes also offered in cases where additional weeks are temporarily available. Sometimes a small charge is payable.
Club/Trust System: Members belong to a club and the accommodation unit and any associated facilities at the resort are held by Trustees. These Trustees licence a ‘Right to Use’ for members.
Constitution: The Constitution is, effectively, the rules by which the timeshare resort is run. It is the set of legal documents which establish the relationship between the different parties in the timeshare resort, and includes the owner, developer, trustee, and management company.
Cooling Off Period: This is a legally required period in which the consumer has time to consider their purchase and to change their mind if they wish. No payment can be taken during this time, and if the consumer wishes to cancel within the cooling-off period, there will be no obligation to pay any sums at all. This period is usually 14 days.
Deeded: The Deeded system refers to the outright ownership of a timeshare week, secured by ‘Deed of Title’ and often registered at the central Land Registry. However, deeded timeshares are not legal in the UK (therefore the Club/Trust system prevails here). In Spain, the Escritura system is a Deeded system.
Developer: The developer is the company that owns the freehold to the timeshare resort. It is they who construct the accommodation and facilities. They earn their profits from the initial sale of the units to timeshare members.
Developer’s Price: This is a sum estimated by resale companies to illustrate the savings to be made by buying with them. It refers to the full timeshare unit retail price of the developer.
Escrow account: This is an account wherein money and assets, such as the Ownership Certificate, are held by a third party until the terms of a purchase agreement are satisfied. The third party is usually an accountant or solicitor. Once all is in agreement, both parties then agree to release the money to the seller and issue the Seller’s Certificate to the buyer.
Exchange Company: The Exchange Company arranges for you to exchange your timeshare with a unit in an Affiliated resort. There is an Exchange fee for this and usually also a Membership fee.
Exit Program: Sometimes offered by timeshare companies, an Exit Program exists to allow timeshare members to buy their way out of their contract. This is usually an expensive option, but one of the few that is readily available.
Fixed Time: A fixed time (or fixed week) contract means that your membership is for a specific week in a specific unit at the timeshare resorts. It is the same every year.
Floating Time: Floating weeks are now coming under legal scrutiny and are actually already illegal in some countries. These contracts allow the member an unspecified week in an unspecified unit and often in an unspecified resort. The member needs to book way in advance to secure the exact dates desired, which they do in competition with all the other members. If they cannot or do not book their chosen week, they must wait for a week to be allocated to them each year.
Fly-Buy: These are holiday packages in which the resort pays some or all of the cost of a holiday on the promise that the holidaymaker will attend a sales presentation and/or tour of the resort. Though this can be a place where you come under some pressure and may have to endure a long and arduous presentation, if you can resist the lure then it’s a good deal. Of course, you are under absolutely no obligation to buy anything whatsoever, and if you do find yourself persuaded to sign up, there is always the 14-day cooling-off period in which you can cancel.
Fractional Ownership: A small group of members, usually around a dozen, decide amongst themselves how the timeshare weeks are shared between them. It is halfway between a timeshare and full ownership of the unit.
Guest Certificate: A guest certificate is issued by the Exchange Company and authorises a nominated guest (your friend or family member) to use the timeshare exchange instead of you.
Holiday Club: A Holiday Club promises you a week or weeks’ holiday in what is usually timeshare accommodation.
Leisure Charge: Sometimes charged in addition to your maintenance fees for the use of leisure facilities at the resort. These are those which are shared with other guests and members.
Levy: This is a charge usually made to members of a timeshare points club in order to pay for club admin. It’s payable in addition to maintenance fees and other charges that might be made for the use of your timeshare week. A Levy may also refer to a one-off charge by the Owners’ Club or Management company in order to pay any major or unexpected costs.
Linked Agreement: Beware of Linked Agreements, which exist as a method of circumventing the laws related to the taking of deposits. The salesperson may make it seem that two agreements (i.e. the Timeshare Purchase Agreement and some sort of extra holiday scheme or voucher) are unrelated, but this is not the case and breaches the law.
Lock off: An accommodation unit that can be divided into two independent units that each have their own access.
Maintenance Fees: Sometimes called ‘Management Fees’, these are the annual fees that are paid by the timeshare member to cover the day-to-day running costs of the resort.
Management Company: Usually owned or controlled by the resort Developer, the Management Company is contracted to carry out the day-to-day management of the resort for which you pay your maintenance fees.
Marketing Company: The Marketing Company is, as the name suggests, responsible for marketing and is separate from the Developer. Though the Developer may handle the on-site marketing, they probably employ a separate Marketing Company to manage any marketing that goes on elsewhere, such as online or at other resorts or locations.
Occupancy Size: The Occupancy Size of a unit refers to the number of individuals that can use the unit. Usually comprised of two numbers, the first number is the total capacity of the unit when allowing for additional beds etc. The second number is for the number of people that can have total privacy (private access to bathroom and so on), which more realistically represents the occupancy size of the unit.
OTE: Now the RDO (Resort Development Organisation), the trade body for timeshare was previously called OTE, the Organisation For Timeshare In Europe.
Owners’ Club: All timeshare resorts have an Owners’ Club, to which all timeshare members at the resort belong. Sometimes the Owners’ Club is a company, but is generally just a Members’ Club.
Ownership Certificate: This Certificate confirms your right to use or the title to the property. It may also be referred to as a Holiday Certificate or Timeshare Certificate.
Perpetuity: The word in itself means ‘forever’, which gives you some idea of what it means when it shows up in your timeshare contract. It is now illegal for a timeshare contract to exceed a maximum of fifty years.
Points Clubs: As a member of a timeshare Points Club, you hold points which entitle you to use a certain period in a unit each year from a set choice of resorts. There has been some controversy over Points Clubs in recent years, and in many cases they are being ruled to be illegal.
Property Bonds: Similar to Points Clubs, Property Bonds are a system for owning shares or bonds in a company that owns timeshare properties.
Recourse Agreement: This is an agreement between a Developer and a Finance Company where the Developer pays of outstanding debts if the consumer with the finance agreement defaults.
Repossession: The Club or Management Company can remove your rights to use for breaching the Constitution. This usually occurs as a result of non-payment of Maintenance Fees. These rights will then be sold to cover the debt. Repossession cannot occur on Deeded property.
Resale Brokers/Agents or Resellers: These are companies whose business is to either buy timeshare weeks from existing owners for the purpose of selling them on to new owners, or to act as agents that put sellers and buyers in contact to facilitate a timeshare sale. They make money, usually, by charging commission on the sale.
Resort Development Organisation “RDO”: Previously the OTE, the RDO is the trade body that governs timeshare.
Sales Inspection Visit (‘SIV’): A term used by Developers for prospective buyers to stay at a resort for a few days at a low fee, on condition they attend a sales presentation.Though there’s no obligation to buy, the SIV is a promotional tool to encourage a purchase. See also Fly-Buy
Season: Weeks in a year are divided into different segments by Exchange Companies, usually signified by a colour. Amber Weeks are sometimes known as ‘White Weeks’, Blue Weeks are off-peak times and are sometimes also called ‘Green Weeks’. Each segment represents different levels of trading power and monetary value based on the season’s popularity.
Sinking Fund: A Sinking Fund or Sink Fund is a portion of your Maintenance Fee that is dedicated to keeping the furniture, fittings, main structure, and sometimes the leisure facilities of the resort in perfect condition for the full period of your membership.
Timeshare Directive: A European Parliament order to all nation states within the EU to implement Timeshare laws
Timeshare Interval: The period for which you are permitted to use your timeshare unit.
Trading power: The Trading Power of a timeshare week refers to its value. It’s used by Exchange Companies to ascertain what equivalent exchange unit and resort you can be offered in exchange for your own. This is influenced by factors such as the size of your unit, the popularity of your timeshare week, the quality or star rating of the resort, and the popularity of the resort itself.
Trustees: Timeshare Trustees can be a bank, a group of individuals, or a Trust company that holds the accommodation in trust on behalf of the timeshare holders. It is they who grant you the Right to Use through the Ownership Certificate. Some have added responsibilities, like ensuring the continuity of the Owners’ Club, but all Trustees have the role of providing security to owners should the developer go bust.
- Thursday, 23 November 2017 10:44