Take Your Time to Size Up Timeshares

How would you like to vacation in a place you love, without having to worry about finding accommodations each time you visit or taking on the burden of owning a vacation home? Therein lies the allure of timeshares.

With timeshares, you gain the use of a vacation property for a limited, preplanned time. Some timeshares are deeded arrangements, in which you hold a share�along with many other people�in the ownership of a piece of real estate. In nondeeded timeshares (also known as right-to-use or vacation-interval timeshares), you own the right to use a property for a designated time period, but you actually own no real property.

Right-to-use arrangements sometimes have flexible options. For example, a floating-time option allows you to use the property in a certain season, so you don't have to lock into the same dates every year. In a points system, you buy points to use in any of several resorts a developer owns, which may be in different parts of the country. This arrangement is also known as a vacation club. The points needed for a destination depend on location, time of year, length of stay, and so on.

As of the beginning of 2007, there were 4.4 million timeshare owners in the U.S., according to Timeshares Daily, up from three million just five years ago. As popular as this vacation option has become, consumers still need to be on their guard.

In 2006, the Better Business Bureau (BBB.org) received 1,772 complaints about vacation timeshares, up 32% from the year before. Of the 3,800 industries that the BBB tracks, vacation timeshares ranked 96th for complaints in 2006, according to Alison Preszler, media relations specialist for the Council of Better Business Bureaus, Arlington, Va.

"As with any industry," Preszler points out, "there are bad operators that give the whole timeshare industry a bad name. I also think a lot of people don't fully understand what kind of commitment a timeshare is. It's definitely not something to jump into."

Here are a few points to consider before signing on the dotted line of any kind of timeshare deal.

Think ahead

Timeshares "may sound like a good idea," notes Kevin Jackson, chief investigator at the Hillsborough County Consumer Protection Agency, Tampa, Fla. "But seven years down the road, people find out they're tired of going to the same place." That's a factor to weigh if you're considering a timeshare in a specific location.

Consider, too, how your needs might change in coming years. How long will you be physically and financially able to travel to this location? Will your kids want to keep going there as they get older? Are the accommodations large enough if your family grows?

A timeshare arrangement that allows you to stay at different resorts owned by a developer is a way to avoid the problem of getting bored with one destination. Still, to get the place you want when you want it, you may have to book dates far ahead, perhaps even a few years out. Does that kind of advance planning fit with your vacation-taking style?

Another way to get variety in destinations is to swap timeshares through an exchange company. You and another timeshare owner trade weeks at your respective locations. The exchange-matching service comes with a fee, of course, and it might take some luck to find just the right trade in terms of place and time.

Know exactly what you're getting

Many of the complaints the BBB receives about timeshares center on miscommunication, according to Preszler. People didn't get what they felt the salesperson promised. High-pressure sales tactics are another common complaint, Preszler adds.

"Don't let sales tactics get to you," she advises. "Ask lots of questions. And get everything in writing. If the salesperson says this is how something is going to be, make sure that's how it says it's going to be in the contract�before you sign." Also, check out the timeshare company's complaint history with the BBB or local and state consumer protection agencies.

Check out the property, too, if you're buying a specific timeshare accommodation. You'll be spending a lot of time there over the years, so don't rely on glossy brochures or online photos. Visit the facility to see the setting and quality with your own eyes, and talk to other timeshare owners about their experiences.

If you sign a contract and then change your mind, most states where timeshares are located have laws stipulating a "cooling off period" of a few days, during which you can cancel the deal and get a refund. If there is no such state law, ask to have a clause included in the contract.

Look at all the costs

The purchase price for the timeshare itself isn't your only cost. Add in the travel expenses you'll pay to get to your timeshare. You're also responsible for maintenance fees. Find out exactly what those fees cover and what additional special assessments there may be for property upkeep. You'll also have to pay property taxes if you own a share of real property. You're liable for fees and taxes even in years you never use the property.

What will you do if the day comes when you no longer want the timeshare? You might think you'll just sell it�maybe even at a profit. Many owners find out the hard way that a timeshare can be extremely difficult to resell. And if it does sell, it may go for only a fraction of what you paid for it.

That's why the Federal Trade Commission, Washington, D.C., warns, "You should know that the value [of timeshares] is in their use as vacation destinations, not as investments."

Beware of resale scams

The difficulty of reselling timeshares presents prime opportunities for scam artists. Not only do they promise to resell your timeshare, for a fee, but they also claim to have a bevy of eager buyers waiting in the wings. But no buyer appears, and no sale occurs. The timeshare owner is just out several hundred dollars.

"Some timeshare owners are so desperate to get rid of their ownership responsibilities," Jackson says, "that they're not paying attention to the written agreement, if there is one, whereby there's no guarantee of a sale." He reports similar scams promising to find renters for timeshares.

If you decide to sell, look for other ways, Jackson advises. Sometimes a timeshare resort company has a staff person who handles resales. Also, talk to timeshare neighbors who may want to buy another week or know someone who would. Or you could advertise through online timeshare newsletters and Web sites.

"Avoid cold calls from strangers offering to sell your timeshare," Jackson says, "and who pressure you by saying the deal is only good for today. That's a bunch of baloney."

Whether you're buying or selling a timeshare, you'll get the best results if you take time to weigh your options. After all, "A vacation is supposed to be enjoyable," Preszler notes. "If you don't do your research, it's going to turn into something stressful."

Published December 3, 2007