Timeshares

Timeshare Glossary of Terms

Accrual Program: Some resorts offer their owners the ability to move unused weeks from the previous year, for use in the current year.

All-Inclusive Resort: An All-Inclusive resort is one that charges an additional flat fee for various activities, meals, beverages, services, and/or entertainment during your stay. Some timeshare resorts are Mandatory All-Inclusive, while others are Optional All-Inclusive. The All-Inclusive fee, and the included services, meals, activities, and/or entertainment, varies from resort to resort, and is subject to change without notice. When planning your vacation at an All-Inclusive resort, be sure to have a good understanding what is included and not included in that resort's All-Inclusive package.

Annual Budget: A report, prepared by a Property Owners Association, which provides an accounting of how the maintenance fee revenues will be spent during the upcoming year.

Anniversary Date: Some resorts define a ‘Use Year’ by Anniversary Dates, rather than on a traditional calendar year. The Anniversary Date is defined by the date in which the original purchaser bought the timeshare from the resort developer. If the timeshare is subsequently re-sold to another party, the original Anniversary Date usually remains intact.

A.R.D.A.: (Also known as American Resort Development Association) A.R.D.A. is the Washington D.C.-based trade association representing the vacation ownership and resort development industries. Established in 1969, ARDA today has over 1,000 corporate members ranging from privately held firms to publicly traded companies and international corporations with expertise in shared ownership interests in leisure real estate. The ARDA membership community includes timeshare owner associations (H.O.A.’s), resort management companies, industry vendors, suppliers and consultants, as well as owners through the ARDA Resort Owners Coalition (ARDA-ROC). For more information on A.R.D.A., visit www.arda.org.

Banking: Also known as Space Banking, the process of depositing a week of timeshare into an exchange system or inventory pool.

Biennial: Use of a week every other year. Owners are often referred to as either "odd year" or "even year” owners.

Blue Weeks: A color-code designation used by R.C.I., indicating lower demand weeks at a resort. R.C.I.’s color-coding is as follows: Red = High Demand, White = Moderate Demand, Blue = Lower Demand.

Bonus Time: Some timeshare resorts offer Bonus Time, which is additional rental time at your home resort, which is offered at deeply discounted rates. This privilege is only extended to timeshare owners at that resort.

Bonus Weeks: (Also known as ‘Getaway Weeks’ or ‘Extra Vacations’) Timeshare exchange companies offer their surplus weeks for rent at deeply discounted rates. This privilege is extended to exchange company members only. Timeshare ownership is required as a prerequisite to acquiring an exchange company membership.

Boutique Exchange Company: An exchange company, other than R.C.I. or I.I., which perform the same services, but is smaller in scale. Some timeshare owners prefer Boutique Exchange Companies to the larger exchange companies.

Brokerage Fee: (Also known as a Commission) The fee collected by a licensed real estate broker, as compensation for procuring the sale, and representing a buyer and/or seller during a timeshare sales transaction. A Brokerage Fee is typically collected only after the sale is finalized.

By-laws: Rules for conducting of the internal affairs of the Property Owners Association, to regulate the day-to-day operations, and which usually are appendices to a master deed and recorded.

Campground Membership: Similar to the timesharing concept, in which the Member is allowed usage of a Campground, or network of Campgrounds, for a prescribed amount of time each year.

C.C. & R.’s: Also known as Covenants, Conditions, and Restrictions, The basic rules establishing the rights and obligations of owners (and their successors in interest) of real property within a subdivision or other tract of land in relation to other owners within the same subdivision or tract and in relation to an association of owners organized for the purpose of operating and maintaining property commonly owned by the individual owners.

Closing Costs: The costs involved with the transfer of property from Seller to Buyer. Closing Costs usually include escrow fee, transfer tax, membership transfer fees, document preparation, and recording fees. The escrow holder typically carries out the payment of these funds. Additional Closing Costs can also include a title search and policy of title insurance.

Day Use: If a resort offers day use, a timeshare owner can access the resort’s services and amenities 365 days per year, such as the pool or health club, even while not in residency.

Deed: A written instrument which when properly executed (signed) and delivered (accepted) conveys title to real property from one party, the grantor to another party, the grantee.

Deed of Trust: (Also known as a Trust Deed) An instrument in use in many states in connection with loans secured by real estate (and timeshares), taking the place of and serving the use of a common law mortgage, by which a trustor places the legal title to real property with a trustee to secure the repayment of a sum of money to the beneficiary or the performance of other conditions. Just as with a mortgage, this is a legal document by which a borrower pledges certain real property or collateral as guarantee for the repayment of a loan. However, it differs from the mortgage in a number of important respects. For example, instead of there being two parties to the transaction there are three. There is the borrower who signs the trust deed and who is called the trustor. There is the third, neutral party, to whom trustor deeds the property as security for the payment of the debt, who is called the trustee. And, finally, there is the lender who is called the beneficiary, the one who benefits from the pledge agreement in that in the event of a default the trustee can sell the property and transfer the money obtained at the sale to lender as payment of the debt.

Developer Pricing: The price the resort developer charges for a timeshare. Developer Pricing is considered retail pricing.

Escrow: At the time buyer and seller have agreed to terms of the sale, the transaction is then turned over to a neutral third-party escrow holder, for a fee. The function of an escrow holder is to carry out the terms of the purchase and sale agreement, and to facilitate the exchange of any consideration for the sale. Escrow fees typically do not include a policy of title insurance, but if the timeshare interest is deeded, a policy of title insurance may be purchased for an additional cost.

Estoppel: See Property Owners Association Statement.

Even Year Use: See Biennial.

Exchange: A process in which a timeshare owner deposits one of his/her use weeks into an exchange system or inventory pool, and trades the week for another week in another location. This process should not be confused with exchanging ownership; it is simply trading one week for another week in a particular year. See also Interval International, R.C.I., and Boutique Exchange Companies.

Fee Simple Estate: The greatest interest that one can have in real property which is unqualified, of indefinite duration, freely transferable and inheritable.

Five-Star Resort: A rating system designated for outstanding resorts within the Interval International exchange system. The award criteria are comprehensive and encompasses all aspects of the vacation experience. After qualification, resorts must maintain high levels of exchange guest satisfaction, as measured by a Customer Satisfaction Index (CSI), and periodic on-site inspections by Interval personnel. Resorts that meet the rigorous standards for Interval International Five Star status receive an Interval International Five Star Award. The Five-Star rating is the only designation Interval International uses to rate a resort. They do not designate non-Five-Star resorts with one, two, three, or four star ratings.

Fixed Weeks: This is the timeshare ownership system that a resort developer may use to permanently assign the unit and/or Week during each year of your vacation ownership.

Floating Weeks: Also known as flex weeks. This is the timeshare ownership system for resort developers who give ownership flexibility through a variable unit and/or Week assignment during each year of your vacation ownership. A year-round "float" is most often found in resorts with similar seasons, like Hawaii or the Caribbean.

Fractional Interest: Ownership of several weeks per year in a property or resort. Typical Fractional Interests range from 4-13 weeks per year, unlike timeshare interests, which are usually 1 week per year.

Gold Crown Resort: An R.C.I. resort recognition program. R.C.I.'s resort recognition program honors resorts that consistently offer superior vacation experiences. The Gold Crown award requires resorts to meet more stringent standards in these areas. Additionally, Gold Crown resorts are rated highly in the areas of resort amenities, unit amenities, and guest services. Although the Gold Crown distinction is a higher award, owners at Silver Crown resorts or even standard resorts can still trade into properties with the designation. R.C.I. has 3 resort designations: Gold Crown, Silver Crown, and Hospitality Award.

Green Weeks: A color-code designation used by Interval International, indicating lower demand weeks at a resort. Interval International’s color-coding is as follows: Red = High Demand, Yellow = Moderate Demand, Green = Lower Demand.

Home Owners Association: (See Property Owners Association).

Home Resort: The resort property in which you own your timeshare.

Hospitality Award: An R.C.I. resort recognition program. The Hospitality Award is given to resorts that have consistently achieved high remarks in the areas of check-in/check-out and hospitality by RCI members. The Hospitality Award can be recognized by an icon with the gold box with a pyramid of people inside.

Internal Exchange: Large resort developers, who have a collection of various resort properties, offer their timeshare owners the ability to exchange a week from their home resort, to another week within the developer’s collection of resorts.

Interval International: (Also known as I.I.) One of the world’s largest timeshare exchange organizations, whose main function is to facilitate trades among timeshare owners who would like to vacation in other Interval International-affiliated timeshare resort locations, outside their Home Resort. A member ‘deposits’, or ‘banks’, one of their upcoming use weeks into the Interval International system, and places an exchange request for another affiliate resort in the Interval International system. By depositing a week from your home resort, you are simply exchanging one of your weeks for a week at another resort. Ownership is not transferred. Enrollment for a Membership in Interval International is optional. However, your home resort must be affiliated with Interval International in order to participate in their exchange program. For more information on Interval International, visit www.intervalworld.com.

Leasehold Estate: An Estate of land, property, or timeshare, which is held for a prescribed amount of time. See also Right-To-Use.

Lock-off unit: Also known as a lockout unit, a type of timeshare unit consisting of multiple living and sleeping quarters designed to function as two discrete units for purposes of occupancy and exchange. The unit can be combined to form one large unit or can be split or "locked-off" into two or more separate units, allowing the owner to split the vacation into multiple stays or bank all or a portion for exchange purposes.

Maintenance Fee: Also known as Property Owners Association (P.O.A.) fees, or Home Owners Association (H.O.A.) fees. Maintenance Fees are typically invoiced on an annual basis by the resort in which you own your timeshare. Maintenance Fees are mandatory, and cover your proportionate (pro rata) share of the operational costs of the resort, including maintenance, utilities, management, insurance premiums, and may also include reserves for future large expenditures, such as furniture replacement, roof replacement, etc.. Property taxes may or may not be included in the maintenance fee.

Odd Year Use: See Biennial.

Points-Based Timeshares: Points are a unit of measurement, like currency, which allows a timeshare owner to ‘spend’ his/her points differently each year. Unit size, resort location, time of year, and days in residency will determine how many points an owner will need to spend. For example, a larger unit size would require the owner to spend more of his/her points than if the owner chooses to stay in a smaller unit. If the owner chooses to stay in a smaller unit, there may be extra points to apply toward a longer stay. At the beginning of each use year, the timeshare owner’s account is typically replenished with more points to spend.

Points Conversion Program: An offering whereby timeshare owners pay a fee to convert their weekly interval for the equivalent in points.

Property Owners Association: (Also known as a P.O.A, or Home Owners Association) The association which runs a timeshare resort, with a governing board comprised of timeshare owners, elected by other timeshare owners at the resort. Their primary purpose is to determine and administer the rules and regulations, and make many decisions benefiting the resort, on behalf of the body of timeshare owners at the resort.

Property Owners Association Statement: (Also known as an ‘Estoppel’, or ‘Home Owners Association Statement’) A statement, which is generated by the Property Owners Association of a timeshare resort, which discloses the current status of a timeshare owner’s account. Typically, a Property Owners Association Statement is generated during the escrow process, so as to disclose the account status to buyer and seller.

Purpose-Built: A term used in the timeshare industry, identifying a property that has been built for the purpose of timesharing.

R.C.I.: (Also known as Resort Condominiums International) One of the world’s largest timeshare exchange organizations, whose main function is to facilitate trades among timeshare owners who would like to vacation in other R.C.I.-affiliated timeshare resort locations, outside their Home Resort. A member ‘deposits’, or ‘banks’, one of their upcoming use weeks into the R.C.I. system, and places an exchange request to vacation at another affiliate resort in the R.C.I system. By depositing a week from your home resort, you are simply exchanging one of your weeks for another week at another resort; you are not transferring ownership. Enrollment for a Membership in R.C.I. is optional. However, your home resort must be affiliated with R.C.I. in order to participate in their exchange program. For more information on R.C.I., visit www.rci.com.

Reconveyance Deed: A commonly used instrument executed by a trustee reconveying or returning the legal title to real estate secured by a trust deed back to the trustor (borrower) upon full payment of the debt. See also Trust Deed.

Red Weeks: A color-coding designation, used by both Interval International and R.C.I, indicating which weeks the highest demand weeks at a resort.

Rescission Period: Sometimes called a "cancellation" or "cooling off" period. A period of time during which a consumer has the right to cancel a purchase contract and obtain a full refund of his/her deposit with no penalty. Dictated by state statute and company policy, rescission periods vary from state to state, but range on average from 5 to 7 days. This is another example of the strong consumer protections built into timeshare sales.

Right-To-Use: A timeshare owner's right to occupy a unit at a resort for a specified number of years. Leasehold Estates and Membership Agreements are an example of Right-To-Use timesharing plans.

Right-of-First-Refusal: A right, usually given in writing by a timeshare owner at the time of purchase, to a resort developer, which gives the developer a first chance to buy the timeshare if the owner decides to re-sell. The owner must first have a legitimate offer from a buyer. The owner then presents the legitimate offer to the developer, at which point the developer can step into the place of the buyer under the same terms and conditions, or forgo the purchase, and allow the buyer and seller to move forward and consummate the sale.

Silver Crown Resort: An R.C.I. resort recognition program. RCI's resort recognition program honors resorts that consistently offer superior vacation experiences. The RCI Silver Crown® requires resorts to meet established standards, based on member comment card ratings, in the areas of unit housekeeping, unit maintenance, resort maintenance, hospitality, and check-in/check-out procedures. R.C.I. has 3 resort designations; Gold Crown, Silver Crown, and Hospitality Award.

Space Banking: See ‘Banking’.

Special Assessment: An assessment, in addition to annual maintenance fees, whereby additional funds are necessary to defray costs for large, unforeseen expenditures surrounding the ongoing maintenance and upkeep of a resort. Most resorts have reserves earmarked to pay for large future expenditures, such as furniture or roof replacements. Special Assessments do happen, but are relatively uncommon. A timeshare owner’s pro rata share of a special assessment is usually nominal, because timeshare resorts usually have several thousand owners.

Timeshare: A term used to describe a method of use and/or shared ownership of vacation real estate where purchasers acquire a period of time (often one week) in a condominium, apartment or other type of vacation accommodation. Timeshare is also known as "Vacation Ownership" or “Timeshare Interval”.

Timeshare Calendar: A calendar which indicates week numbers, corresponding to all 52 weeks of the year. The Timeshare Giant Calendar is a great reference tool when planning your yearly timeshare vacations: www.timesharegiant.com/calendar .

Timeshare Resale Market: The marketplace in which timeshare owners offer to re-sell their timeshares to interested purchasers.

Title Search: A procedure, typically conducted by a title company during the escrow period, which determines the status of the title. Title Searches can determine if title is ‘clear’ and ‘marketable’. This procedure is usually conducted during an escrow period, in connection with the purchase of a policy of title insurance. A title search may not be conducted if a policy of title insurance is not purchased.

Upfront Fees: (Also known as Advance Fees) Various timeshare resale or timeshare advertising companies will charge an upfront fee for their services. When paying an upfront fee, it is important to understand the services that the company will perform for the upfront fee. It is important to note that it is not necessary to pay an upfront fee in order to sell your timeshare. There are also licensed brokers who charge a brokerage fee for their services, only after the timeshare has been sold.

Use Year: A typical Use Year runs from January 1- December 31. However, some developers define the commencement of a Use Year according to the anniversary date in which the original purchaser bought from the resort developer, or on a fiscal year. For Example, if the commencement of a Use Year were June 1st, then the Use Year would run from June 1st – May 31st.

Vacation Ownership: A term used to describe a method of use and/or shared ownership of vacation real estate where purchasers acquire a period of time (often one week) in a condominium, apartment or other type of vacation accommodation. Vacation Ownership is also known as “Timeshare”.

Vacation Club - A term used to describe various types of timesharing and usually involving use or access to more than one resort location and other vacation and travel services. However, the term is used for many different purposes, including "clubs" which may have nothing to do with timesharing.

Week 53: Occurs once every 5 years, a year will have 53 weeks in it, rather than just 52. The 53rd week of the year is usually assigned to the Property Owners Association, a New Year’s week owner (yielding that owner 2 weeks for that year), or another owner.

White Weeks: A color-code designation used by R.C.I., indicating moderate demand weeks at a resort. R.C.I.’s color-coding is as follows: Red = High Demand, White = Moderate Demand, Blue = Low Demand.

Yellow Weeks: A color-code designation used by Interval International, indicating moderate demand weeks at a resort. Interval International’s color-coding is as follows: Red = High Demand, Yellow = Moderate Demand, Green = Low Demand.