November 25, 2013

Vacation Condo

Timesharing is where a consumer purchases or leases vacation property, and thereby has the right to exclusive use of accommodations for a certain period of time each year. There are different types of timeshare opportunities. The three most common types are:

  1. Fixed-unit, fixed-week agreement - the purchaser buys the deed to the property which allows use of the property for the same time period each year.
  2. Right-to-use plan - the purchaser actually leases the property for a particular time period each year for a set number of years, usually 10 to 15 years. Under this type of agreement, the ownership remains with the developer.
  3. Vacation club or points-based program - the consumer buys points which are then used like currency to purchase time from the amount of available weeks at various resorts. The number of points required to purchase time depends on the season, resort location, luxury, unit size and demand.

There are also variations in how the time can be used, depending on the contract. Some examples:

  1. Fixed time - In this arrangement, the purchaser reserves the same vacation weeks each year.
  2. Floating time - In this case the purchaser does not reserve specific dates each year, but rather, reserves a certain season each year, usually within a three to four month period. The purchaser must then reserve a specific vacation period in advance. Reservation confirmation is usually on a first come, first serve basis.

If you are thinking of buying or leasing a timeshare, be certain that the reality of the resort lives up to the glossy brochures. If possible, visit the resort and arrange for a tour of the units. Look for signs of good management such as well-maintained facilities, tidy grounds, and good customer service. Find out what the annual maintenance fees will be. If you cannot visit the resort, consult reliable sources that are familiar with the area and the development. Ask yourself: Do you like the area and will you enjoy returning to it year after year? Are you buying within the time of year you usually take vacations? Do you like the facilities available at the resort?

Prior to making a commitment, read all the documents carefully and understand what type of timeshare you are being offered. You may wish to have a lawyer experienced in timeshare properties examine the agreement so that you know exactly what you are getting and how it will benefit you.

Check if there is a "cooling-off" period once the contract is signed. In Alberta, under the Fair Trading Act, there is a mandatory seven-day cooling-off period for timeshare contracts. This ensures that consumers have a sufficient amount of time to acquire the information they need to make an informed decision. If a consumer elects to cancel their timeshare contract, they should inform the vendor of their decision in writing within seven days of the signing date.

Keep in mind that timeshares are easy to purchase but more difficult to sell. Many potential purchasers are introduced to timeshares through promotional incentives such as the offer of a prize or gift on the condition that the consumer attends a timeshare sales presentation. Direct mail programs are also used with the invitation to spend a short vacation at the resort; a reduction in price us usually given if the consumer participates in a tour of the resort.

A timeshare is a major investment and the consumer should know exactly what they are purchasing. Remember to ask questions and do not sign any contracts unless you fully understand the agreement and are aware of the consequences. Do not allow yourself to be pressured into signing a contract, and remember that you are under no obligation to purchase after a presentation or tour.

For more information, please check with your BBB or contact the Canadian Resort Development Association at 1-800-646-9205 to see if the company is a member.