Other commonly used terms synonymous with timesharing include: resort timesharing, vacation ownership, multi-ownership, interval ownership and shared vacation plan. The timeshare concept has been applied to numerous other areas such as recreational vehicle and mobile home parks.

Timeshares have grown, with thousands of resorts in Canada and the U.S. and around the world. These resorts range from Ontario cottage country, to British Columbia or Alberta ski resorts, to Florida condos, to Mexican beach villas.

For further information, refer to my books, 101 Streetsmart Condo Buying Tips for Canadians, and The Complete Guide to Buying and Owning Recreational Property in Canada, as well as the website: http://www.homebuyer.ca

There are two main categories: “right to use” and “fee simple” ownership.

Right to Use
This concept is much like having a long-term lease, but with limited use for perhaps one, or maybe two weeks per year. It is similar to prepaying for a hotel room for a fixed period every year, 20 years in advance. In other words, you don’t have any portion of ownership or equity in the property, you only have a right to use it for a fixed or floating time period every year. The “right to use” concept involves condominiums, recreational vehicle parks, and other types of properties.

The opportunity for return on your money in a “right to use” timeshare is limited or non-existent. This is because there is generally very little demand in the after-sale market, as well as other restrictions on resale or pricing of the resale. In practical terms, timesharing is primarily a lifestyle and convenience choice.

Cautions When Considering Right to Use Timeshares
•    You may tire of going to the same location every year, as your needs may change over time. Be aware that even the timeshareprograms that include an exchange option (switching for a week in a different location) are not always as anticipated for availability, flexibility, convenience, or upgrade fee. Sometimes the home timeshare development will discontinue its exchange option, or for various reasons, is no longer allowed to participate in the international exchange system.
•    Make sure you know what you’re getting. Some people who purchase the “right to use” type think they are buying a “fee simple ownership” portion.
•    Be wary of hard-sell marketing. In most instances, you are offered “free” inducements (buffet, cruise, etc.) to convince you to listen to the pitch. The dream fantasy is heavily reinforced, and high-pressure sales pitches, given by teams of salespeople, can go on for hours and can be very persuasive—if not aggressive. Furthermore, very manipulative techniques are sometimes used to get you to sign a credit-card slip as a deposit.
•    There is usually an ongoing management     fee for maintaining the premises.
•    Timeshare sales in some provinces in Canada and some U.S. states may be covered by consumer protection, in terms of your right to get your money back by “rescinding” or cancelling the contract within a certain time period. This is frequently not the case in Mexico and other countries.
•    The legal aspects are generally more complex and expensive when dealing outside Canada.
•    The resale market for timeshares is either non-existent due to developer restrictions, or can be difficult, and can involve a considerable discount in the final sale price, and could also involve developer fees for approving a transfer of timeshare. You need to do your homework in advance.
•    Timeshares are a dream for some, but a nightmare for others. If possible, speak to at least three other timeshare owners in the project you are considering in order to get their candid opinion before you decide to buy. Never give out your credit card for any reason as a deposit, or sign any documents without first speaking with a local real estate lawyer. Obtain a lawyer’s name from the local lawyer referral service or provincial or state bar association. Don’t let yourself be pressured.
•    Check with the local Better Business Bureau. Then sleep on it for some time. If the deal seems too good to be true, it probably is.

Fee Simple Ownership
This means that you are on title to the property. There are different formats. One involves owning a portion of the condominium (for example, one-fiftieth of the property). Each one-fiftieth portion would entitle you to one week’s use of the premises. Other people would also buy into the property. Normally you would be allocated a fixed week every year. In other instances, it could be a floating time, with the exact date to be agreed upon depending on availability.

In some cases, you might purchase a 10 per cent to 25 per cent share. This format is sometimes referred to as “fractional ownership.”

If your fee simple property sells, you would receive your proportional share of any increase in net after-sale proceeds. You would also normally be able to rent, sell, or give your ownership portion to anyone you wished.

Make sure you obtain advice from a real estate lawyer to review the documents, before you commit yourself to any purchase of a fee simple or timeshare.  CL