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To enjoy the benefits of vacation ownership, or timesharing, consumers make a one-time purchase
of a share of furnished resort accommodations, choosing from a wide range of products designed
to suit any lifestyle. Vacation owners enjoy spacious accommodations, a variety of on-site amenities
and services, and flexibility in their travel options through vacation exchange. By trading some or
all of the time they own, consumers can take advantage of different vacation experiences at
thousands of resorts around the world.
All shared ownership resort interests come in two basic forms: a deeded interest in real estate
and a right-to-use, or non-deeded, interest. These two basic forms are called by many names,
some required under state law and others adopted for marketing purposes. However, the majority
of shared ownership resorts today convey a use right backed by a deeded interest in real property
by whatever name it may be called. Deeded real estate interests are usually called
"timeshare estates" under state law, and non-deeded interests are "timeshare uses" or
"timeshare licenses" officially, but may also be called "memberships."
Timeshares
Traditional timeshares regardless of whether they are backed by a deed or not, allow buyers to
purchase an increment of time, typically one week, in a condominium or apartment type of
furnished accommodation. Timeshare owners receive either a fixed week or a floating time
reservation arrangement that may vary by unit type and season. More than two-thirds of
timeshare interests today are deeded.
Fractional/private residence club
These owners typically purchase accommodations with related use rights in increments of more than
two weeks and sometimes as long as three months (a quarter share). This type of ownership
is almost always deeded and is a more affordable alternative to a second home. Owners benefit by
avoiding the ongoing maintenance responsibilities of an entire second home, and usually enjoy
a high level of service as part of the product. This product segment is considered the luxury tier
of shared ownership.
Vacation Club
This name generally describes a company or related group of resorts that offers consumers vacation
accommodations in more than one location. When a consumer purchases an interest in a
"vacation club," it is either deeded or non-deeded like any other vacation ownership interest.
If the vacation club interest is deeded, the consumer is usually said to own at a "home" resort at
which he or she has a priority right of use. Even if the vacation club interest is not deeded, the
consumer could still have a home resort or could have a "membership" in the club that entitles him
or her to use any of the club's component resorts. Vacation clubs offer highly flexible use of
multiple resorts, subject to certain advance reservation priorities and rules. Some well-known
timeshare companies market their properties as a vacation club that provides their consumers with
both a deeded interest in real property and multi-site flexibility.
Exchange
An exchange company allows existing timeshare owners to trade their timeshare interests for
comparable accommodations and travel-related services. Most resorts are affiliated with an
exchange company, and many resort companies also offer an internal exchange mechanism that allows
owners to exchange to resorts within their resort group. If an internal resort exchange is mandatory
or long-term, it is usually considered to be a vacation club. Fractional and private residence club
resorts may offer exchange opportunities for their owners as well. Some exchange
companies have a special program for these kinds of resorts.
Points
Points are another aspect of vacation ownership that allows consumers to use their vacation product
in a highly flexible fashion. Points are simply a numeric representation of the relative use management
value of the timeshare or fractional interest purchased, which again can be either a deeded or
non-deeded interest. There are a few companies that offer "pure points" without the sale of an
underlying specific timeshare interest. By purchasing points in any of their formats, the consumer can
use their points to reserve different combinations of accommodation sizes, locations and seasons,
and may also be able to acquire a variety of travel services depending on the rules of the timeshare
company. Think of points like tickets, symbolic of the product or service being used or reserved.
Vacation ownership is highly regulated. The various products described above must comply with strict
standards set forth in state timeshare laws as well as several federal laws before being offered to
consumers. For nearly 40 years, ARDA members have worked with federal and state governments
to support consumer protection legislation. As a result, purchasers have a five- to seven-day
rescission period in most states that allows them time to cancel a purchase contract for any reason and
get their money back. Further, most state timeshare laws require truth in advertising, protect
purchasers' timeshares from the developer's debt, and assure that purchasers receive detailed
information about the timeshare plan they are buying, including the type of timeshare interest,
how to use the product, management and budget information and much more. State timeshare laws
usually apply whether the vacation product is called a timeshare, fractional, private residence club,
vacation club or points product.
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