The concept of buying a share of holiday apartment, lodge or villa in a resort, known as timeshare, is now more than 30 years old.
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.
Usually two weeks ineach year are set aside 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 outcome will be a holiday at a level of luxury and with a freedom of movement you might otherwise not 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.
While much tighter regulation has been introduced since the early days it still makes sense to ensure that safeguards are built into the timeshare agreement to 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 later time share holiday schemes have matured, are much better regulated and increasingly popular, provided you have done your homework and checked not only that the resort is right for you, but also that the terms of the initial purchase agreement and protection against excessive increases in maintenance fees are robust and that the scheme is a member of a reputable time share trade association.
Author Resource:
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.
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