After successfully completing this topic, you will be able to
• list the three types of timeshare ownership, and
• describe the licensing requirements for persons who sell timeshares.
Florida has 23 percent of all timeshare resorts with $2.5 billion in sales each year. According to the American Resort Development Association, the average sales price for a one-week timeshare is about $20,000, plus average annual costs of $700 for maintenance, utilities and taxes. High season shares have higher annual fees, often higher than $1,000. Many companies spend as much as 50 percent of their gross income on marketing expenses. A time-share is organized as a condominium. Buyers receive ownership for a fixed period, typically one week each year.
• Time share estate (interval ownership): This is the most desirable, because the buyer gets a deed, and can rent, sell, and bequeath the property.
• Time share license: the buyer gets a lease, a license or a membership.
• Club membership: gives the owner rights to make reservations in more than one timeshare site. Typically, the purchaser does not get rights to any specific accommodation, just the use of a reservation system.
Persons who sell time-shares must have a real estate license unless exempted. Salaried salespeople who work for owner-developers are not required to have a license. Salespersons must have a current, valid license if they are paid by commission. Licensees must comply with all disclosure requirements of the timeshare laws.
Contracts for the sale of a time-share must include a clause giving buyers the right to cancel the purchase within ten calendar days.
Real estate licensees who list time-share properties must include the following words just above the signature line on the listing agreement: “There is no guarantee that your time-share period can be sold at any particular price or within any particular period of time.”
Contracts for the sale of a time-share unit must disclose
• the duration of time of ownership and the total obligation incurred when purchasing,
• the amount of the current year’s assessment and a statement that it might increase,
• whether property taxes are included in the assessment (if not, the amount), and
• what type of ownership is being purchased (deed, license, or membership),