Buying a Time-Share With Ownership Variations

Know what you're getting into before you buy a time-share vacation property

Buying a time-share. © Elizabeth Weintraub

Technically, owning a time-share means that at a specific "time" you have access to the "share" you own in a property. Time-shares have been sold for cruises, recreational vehicles, campgrounds and many other types of travel-oriented properties, but their most popular use is for shares in condominiums at large time-share resorts. Many flexible ownership variations give you options beyond a single time-share destination and one specific time of year.

Time-shares became popular in Europe in the 1960s when escalating property prices made it nearly impossible for most people to afford a full-time vacation home. By creating a shared ownership, developers were able to reduce the costs for each owner and allowing resort owners to successfully market and sell properties to a greater number of clients.

Time-Share Costs

Time-share owners pay for access to their unit. Developers often offer financing for new time-shares, but most resales — units purchased from individual owners — are paid for in cash.

Time-share owners share maintenance fees, management fees and upkeep costs for common areas such as pools and tennis courts. Fees vary and should be disclosed to you when you buy a unit.

Ownership Variations

There are many time-share ownership variations, and a few are described below. Your ownership might differ, or it consist of a combination of plans.

It's important to read all the fine print before you purchase a time-share, because once you do, you are most likely committed to paying its annual costs for a substantial amount of time.

  • Fixed Unit, Fixed Week, Deeded Time-Share. You receive a deed that states you own a specific time-share property at a specific time each year. For example, you might have Thanksgiving week every year in the same two-bedroom condo unit on the second floor with ocean views.
  • Floating Time Agreement. The dates when you can use your time-share are flexible. Reservations are on a first-come basis, since all owners likely have the same option. You likely won't get the same unit each time, and your dates may be completely flexible or limited to certain times or seasons of the year.
  • Right-to-Use Time-Share. This variation is a lease. At its end, you no longer have any rights to the property. Lease terms are often long, typically 20 to 30 years, and the only way to get out of the lease is to sell your share to another buyer. Some developers offer secondary marketplaces for their resorts, while others leave you on your own to sell.
  • Vacation Clubs or Points-Based Programs. Time-share owners choose from a variety of vacation destinations. Each stay uses points, which vary for the time-share unit and season purchased. The is an example of a points-based vacation club, with resorts and cruises all over the world available to its members.

Buying From a Time-Share Developer

Developers are the people who build and sell new time-shares. In the United States, their sales practices are usually controlled by state laws. Become familiar with time-share laws in the state where you plan to buy by researching the commission schedules for the state where the development is located.

Agent pages are often the best places to find information about laws that govern the initial sale of time-shares.

Be sure that you understand time-share laws that apply to purchases made outside of the United States before you buy a unit. 

Buying a Time-Share Resale

Preowned time-shares, or resales, can typically be purchased for a fraction of the cost of a new unit. Resale values can give you a clue to the desirability of the time-share program and properties.

Do your homework. Understanding the variables and all of your rights as a time-share buyer will give you more confidence when negotiating for the property.