Copyright (c) 2010 Alison Withers
It is more than 30 years since the timeshare concept of holidaying by buying a share of holiday apartment, lodge or villa in a resort was first introduced.
The most common method is to purchase club membership but it’s also possible to buy either a freehold, leasehold or licence shareholding to use the accommodation for an agreed number of weeks per year and for a fixed number of years. You will have to pay an annual maintenance fee once the initial purchase is made.
There will usually be two weeks in each year for maintenance, when the accommodation is not available to timeshare owners.
In conjunction with all the other share owners you will be a member of the home owners’ association, usually set up by covenant to cover the buildings’ continued management.
Timeshare can provide high quality holidays at a cheaper rate because the developer has no ongoing promotion costs. In essence once the start up costs have been covered, the accommodation is self catering and has guaranteed occupancy through the time share system, so that some of the savings can be passed on to the time share scheme members.
Another benefit is that there are no reservation problems as there might be with a hotel and you can have guests or a couple of friends to stay. You can budget well in advance for your holiday and take advantage of deals on services like air fares and car hire.
While the units are self-catering, meaning you are not tied to hotel meal times, there are usually on-site bars, restaurants and snack bars for times when you don’t feel like cooking for yourself.
The result is a holiday at a level of luxury and freedom of movement that you might not otherwise be able to afford.
One of the disadvantages of the time share scheme may be that you don’t want to holiday in the same place year after year. However, in the mid-1970s an international exchange scheme was set up allowing people to swap time and place whenever they feel the need.
In the early days the industry developed a bad name partly due to over-zealous selling to hapless holiday-makers in European resorts and partly due to a number of over optimistic developers using their time share apartments as collateral for funding other projects.
Although there has been a tightening of regulations since the early days it makes sense when considering a timeshare to make sure safeguards are built into the agreement that protect your investment against a downturn in sales or the financial reversal of the developer.
It isn’t a common problem, but there is a possibility that the developer’s property could be taken over by the bank if there are cash flow problems, perhaps because the sale of units has been sluggish, and then the apartments could be rented out as longer term accommodation.
Once some apartments have been sold as time shares, however, it can be difficult to change the project’s nature, so the mroe timeshares are sold the greater the security for each owner becomes.
On the whole, maintenance once all the units have been sold should not be a problem since it’s controlled by the timeshare owners themselves control the management through their membership of the home owners’ association.
Thirty years on therefore the time share holiday is established, much better regulated and continues to be popular, provided you have done your homework in checking that the particular resort is right for you, the terms of the initial purchase agreement, your protection against excessive maintenance fee increases and whether the scheme is a member of a reputable time share trade association.
A timeshare holiday can offer choice, flexibility and a degree of luxury that might otherwise be unaffordable. But although the industry is much better regulated than it was when it started 30 years ago it’s still sensible to check the terms and conditions of the agreement before buying. Consumer journalist Ali Withers reports.