A Time to Share: The 411 on Timeshare Ownership

Since 1996, timeshare plans have piqued the interest of vacationers all over the United States. Low prices and convenience make timeshares an attractive option to buyers. But a thick cloak of categories leaves timeshares a mystery to many purchasers, who sometimes impulse-buy their timeshare and then ask for legal clarification on what their ownership interest is after the fact. Unfortunately, this means it can be difficult for owners to choose how to unload their interest when they do not want to own it anymore. When you purchase a timeshare, you gain access to a piece of vacation property that you can use generally one or two weeks of the year. For example, Joe owns a timeshare in Unit 1 of Condo-Condominiums in Miami for the week of July 1-7 each year. Joe rests assured that he has access to Unit 1 of that condo during that time of year each year, but the rest of the year the condo is owned by other people. While categories exist within categories of timeshares, there are three basic ways to own a timeshare:

• Fee simple: In our example above, Joe owns a fee simple interest in a timeshare that was conveyed to him by deed. The ownership interest can be sold, willed or inherited much like the interest that most people have in their homes;

• Leasehold: Much like a lease on a car, leasehold ownership enjoys many of the same rights as fee simple ownership, but the timeshare can expire at a given date (though perpetual or 99-year leaseholds are not uncommon). Leaseholds in timeshares cannot be willed or inherited. Whether or not the leasehold interest is conveyed by a deed differs by state.

• Right-To-Use: This is similar to a leasehold interest, but the expiration date is typically between 20-30 years and legal ownership is vested in a trust company. While this scheme is becoming more popular in the United States, it is predominately used in Mexico and other countries where deeding a timeshare is illegal.

It is important to know what kind of real estate interest you actually own in your timeshare. If you aim to rent, sell, or pass the timeshare on to your heirs, a deeded timeshare in fee simple is your best option. However, as with other pieces of real estate, the owner pays real estate taxes on his or her timeshare. For more information on transferring ownership in your timeshare, contact the law office of Andersen, Tate & Carr at (770) 822-0900.