Timeshares are, for some, a welcome compromise. They represent an economical way to enjoy a different climate, culture and lifestyle for a few weeks or months out of the year.
For others, however, they have proven more of a burden than a benefit. Here are some legal and financial issues that may arise from entering this complex and diverse real estate market.
Real estate ownership
Timeshares generally give people the right to stay at vacation properties. Exactly how they do that might differ from one company to the next:
- Some are real estate parcels that one may occupy during prescribed times
- Some allow people to build up points and use them at multiple properties
- Others guarantee an amount of time but not dates or specific units
Only certain types of timeshares qualify as real estate. However, that does not necessarily make them the same type of investment as a family home.
It is notoriously difficult to resell timeshares. Many are for sale and they often have high maintenance costs. As a result of this problem, many companies advertise their ability to help.
However, when these companies ask for money in advance, it is possible they are engaging in unethical business practices. Those timeshare owners who have purchased or sold other homes might want to remember that conventional real estate agents typically only take commissions at closing.
These same issues with reselling might eventually pass to heirs, especially those who are not as enthusiastic about the timeshare as their loved ones were. The approach many people use is to discuss the matter openly and build the estate plan accordingly.