ABCs of time shares
Puzzled by some of those time-share terms? Here's
the 411 on some common industry jargon:
Accelerated use: Using more than your allotted
yearly time for one vacation. For instance, you purchased two weeks
a year at a condo but arrange to take four weeks this year, four
weeks next year and skip years three and four.
Banking: A system that allows you to save or
"bank" time to use or trade. One example: You own one
week a year at a time share. You might bank your week for a few
years, then take a three-week vacation at your condo. Some programs
have limited banking.
Certificate of use/right to use/time-share license:
Rather than purchasing ownership of your condo, you have contracted
to be able to use it for a specified period. Unlike a deed,
most times you can't pass these on to heirs.
Constitution/bylaws: All of the paperwork between
the developers, owners, management companies etc., detailing the
rules and conditions that govern the property.
Fee simple deed: You actually own an interest
in the property. This is the most common type of deed, says Robert
Freedman, a shareholder with Carlton Fields, PA, who specializes
in time-share and community development law. Like your home, it's
yours forever, and you can pass it on to your heirs.
Lease hold deed: When the underlying land is
leased by the developer long-term. You buy a deed to the property,
but your rights expire when the developer's land lease expires.
Exchange fee: The fee charged by the exchange
company when you trade time at your property for time somewhere
Fixed unit: You are buying the rights to stay
in the same unit each time you visit.
Fixed week: You are buying the rights to stay
during the same week of the year each time you visit. But the weeks
of the year are usually assigned numbers, so the actual dates could
change slightly. May not be the same unit each time.
Floating: By far the most prevalent situation
these days and common with points-system properties, says Freedman.
You buy the right to visit for a certain length of time, but the
date and/or unit are generally not fixed.
Fractional: Generally, a larger ownership share
in a very upmarket property. Usually functions as a second or third
home. Most are fee-simple deeds, says Freedman.
Holiday ownership/vacation ownership: Time
Interval: The annual period that you
are allotted at the time-share property.
Levy/lien: Owner's association or management
company action to take back property for nonpayment of maintenance
fees or assessments. Often similar to "the way a bank would
foreclose if you didn't pay your mortgage," says Freedman.
"Practically speaking, in most cases they just take back the
Maintenance fees: Annual amounts determined
by owner's association or management company for the maintenance
and operation of the time-share property and the time-share program.
Usually includes real estate taxes.
Points: A value system used in some time-share
properties and networks. Rather than purchase a particular quality
level of accommodation or number of days, members will elect to
buy points. They can then trade the points for various lengths or
dates at various resorts, depending on demand and availability.
Sometimes, point-based system properties can use either deeds or
certificates of use. Point values have no real value outside the
time-share program. Exchange companies have their own points systems
and will translate your points into their own value system if you
make an exchange.
Sinking fund/reserves: An account set up by
the property management or the developer to pay for large long-term
maintenance projects, like roofing or pool resurfacing.
Special assessment: An unscheduled charge shared
by all the time-share owners, usually to cover maintenance, special
projects or bills.
Sources: Robert Freedman and The