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The Difference Between Shared Leased Contracts and Shared Deeded Contracts
What is the difference between shared leased contracts and shared deeded contracts. Timeshare Defense Attorneys offer a detailed guide. Call for more information.
What You Should Know About Timeshare Contracts
It is likely that you or someone you know has been “wooed” by timeshare salespeople. They tell you the allure and benefits of owning a timeshare vacation property. All without informing you of the actual technicalities involved in timeshare ownership.
It may be prudent for you to know the essential details that were likely left out of a sales pitch. Like, what type of contract you have been presented with and what it means. It is not too late, even if you are already a timeshare owner. It can be helpful to know what shared deeded and shared leased contracts are and their differences. It will help you understand your ownership stake in your timeshare.
How Timeshare Ownership Works
A timeshare arrangement involves having several people share a property’s costs and ownership or ‘right-to-use.’ The property is typically a vacation property. However, other types of properties can also use the timeshare model. The property is shared amongst the “owners,” so they are all guaranteed a predetermined time period at the property. This is usually one or two weeks per timeshare unit.
Owners share timeshare maintenance fees, property taxes, and special assessments. One can own interest in a timeshare property in two ways: by shared deeded contracts or shared leased contracts. The differences though few, are critical in determining many things. For example, it could affect how easy it is to get rid of the property.
Shared Deeded Contracts
Shared deeded contracts vest ownership rights of a property in the purchaser. These rights are to be shared with other owners (or co-owners). That is, you share the deed as the name implies. With a shared deeded ownership, the timeshare company confers ownership percentages to people in proportion to the time period purchased in the timeshare property.
This might convince some people to view a deeded timeshare ownership as an investment. This view, though, may not be entirely accurate. The reality is that, unlike other real estate, shared deeded ownership requires the consent of all the other owners before any significant changes can be made to the property. It also consumes a lot of money for a relatively limited usage experience. Moreover, their value does not usually appreciate and has meager resale value. So, a shared deeded contract for a timeshare may not be the investment you think it is.
Shared Deeded Timeshare Costs
Shared deeded properties may cost more than shared leased ones. This is because the purchase of the timeshare includes ownership rights.
Shared Leased Contracts
As the name implies, shared leased contracts are contracts for the lease of property. The leasehold is shared among other lessees for a specified period. The resort or company continues to hold the deed for the property and leases it out for use. It is also called a “Right-to-Use” (RTU) contract.
In a leased fixed-week timeshare, you get a particular week(s) in the same resort every year until your lease ends.
Shared Leased Timeshare Costs
Shared leased timeshares tend to be cheaper than shared deeded ones. However, one might find that the cost is still high in terms of maintenance and other assessed fees. Also, the contract of a leased timeshare may prevent or severely limit one’s ability to rent it out. This makes it harder to make any money to offset the timeshare costs.Â
Shared Deeded Contracts v. Shared Leased Contracts
As noted above, despite the similarity in names, shared deeded and shared leased contracts are very different. A few of the most important differences have been enumerated below:
Getting Rid of the Timeshare
Most former timeshare owners would tell you how much of a nightmare it is to exit timeshare contracts. The difficulties surrounding timeshare cancellation are what makes them so notorious.
The type of contract you signed may further hinder your ability to eliminate the timeshare. With shared deeded ownership, proprietary rights to the property reside in you. As such, you can transfer this right as you deem fit. This might be by selling it (although that will be very tough to do), willing it, or simply giving it out.
However, getting rid of a shared leased timeshare is much more challenging as you have no title to the property. You may find yourself stuck with increasing annual maintenance fees. But don’t worry; a skilled timeshare attorney may be able to help you find a way out of this challenging situation.
Usage Limitations
Shared deeded ownership usually comes with a little more freedom and flexibility surrounding how you use the property. Timeshare companies usually reserve more control in leased timeshare contracts. Think of the timeshare company as the landowner and yourself as the renter of the property.
You may also consider speaking to a timeshare lawyer to know if your contract allows you to participate in a timeshare exchange program.
Contract Duration
The timeshare industry is known for trying to rope people into contracts for as long as possible. This involves long lease periods and providing few options for exiting the timeshare contract.
With a deeded title, the ownership never expires. In other words, once the contract cancellation period has passed, the owner is stuck with the property for life. Even after their death, it goes into their estate. This is unless they sell it or get rid of it through other means.
On the other hand, shared leased contracts usually expire after a specified period. It could be 20 years, 50 years, and so on. It could even be for the lifetime of the purchaser. In terms of short-term use, a shared lease contract may be a better option if one finds a company willing to offer a short lease period.
Contact Timeshare Defense Attorneys for Your Timeshare Concerns
Many people are pressured into signing timeshare contracts without reading the fine print. They then find themselves stuck with an expensive “asset” they no longer want. Consider hiring timeshare attorneys in such circumstances. At Timeshare Defense Attorneys, we have helped many clients regain power from several timeshare companies.Â
With our minds focused on customer satisfaction, you can be sure that we are entirely in your corner. We have the know-how and the experience to help you. So if you need a timeshare attorney in Las Vegas or a timeshare attorney in Florida and beyond, look no further than Timeshare Defense Attorneys. Schedule a free consultation with us today for more information on how we can help you.
