TYPES OF TIMESHARE PROGRAMS

There are three basic types of Timeshare Programs: Fee simple, Leasehold and Right-to-Use ('RTU').

Fee Simple: In this system you purchase an actual deeded interest in real estate, which is recorded with the land court or other proper authorities and for which you receive a title in perpetuity.

Leasehold: This ownership option provides the same basic ownership rights, protections, obligations and interests etc. as the Fee Simple system with the primary exception being that Leasehold, unlike Fee Simple, is not in perpetuity and has a specified expiration date (which may include a first right to renew the ownership interest prior to the expiration of the leasehold).

Right-to-Use ('RTU'): In this system you purchase the right to use a particular unit or unit size each year, but you do not have an ownership interest in the real estate. Traditionally, your right to use that property will expire after a stated number of years, and the property will revert to the developer or the owner of the leasehold property. Legal ownership is typically vested in a trust company. This is the prevailing type of timeshare ownership in the UK and Mexico and many other countries outside of the USA.

Within those 3 types of timeshare, there are a few sub-types:

Fixed week: Where you own rights to a specific week, often in a specific condo/villa (this is called fixed week/fixed unit). This is your "home resort", which you can either return to every year (same week every year) or trade through an exchange system for something similar in another part of the world, though not necessarily in the same week that you own. The advantage to fixed week/fixed unit ownership is the assurance that your specific timeshare unit will be waiting for you faithfully at the same time each year. • An example of fixed unit/fixed week would be that you purchase Christmas week in Unit 152B-- every year you automatically have that week in that unit assigned to you.
• An example of a fixed week that is not in a fixed unit would be that every year during Christmas week you get the size of unit you purchased (i.e. a 2-bedroom ocean view), but not necessarily Unit 152B.

Floating (or Flex) time : Instead of owning a specific week, you own a week (or a time period which may be longer than a week) within a specific range of time. Usually you will not purchase a specific unit (i.e. Unit 152B) but instead will purchase a unit size. It is then your responsibility to contact your resort each year to book the week you want to use. This works on a first-come-first-served basis, subject to availability, so the most desirable weeks are taken up quickly and it behooves you to make your plans as early as your resort allows. Also, if you intend to exchange your week through one of the exchange companies, you must first reserve your time at your resort before the exchange companies will accept it for deposit in the "exchange bank". • An example of floating time would be that you choose a 2-bedroom villa (not necessarily a specific unit) that is available to you any time between, say, June 1 and September 1.

Points/Club Membership: In this system you purchase a specific number of "points" or "credits" that represent a unit size and a time period. These points are then used like money to purchase the vacation time, resort and unit size you desire. (In some point systems you can also use your points to purchase airfare, cruises, hotel stays, etc.) The deed, if any, is generally held in trust by the developer or its designated entity.

Developers assign an arbitrary number of points to establish value for a particular unit size and type, season and week, and the point system for each resort/company is unique. (A vacation in a specific area in a unit of a specific size and type might require 1,000 points in one club and 100,000 points in another club, with the price of the total points required usually being very similar.)

The point values assigned are based on many criteria: Large units require more points than small ones; high season dates require more points than low season dates; resorts or areas in high demand require more points than than those with low demand. • An example of a points program would be that you choose a 2-bedroom ocean view unit during Christmas week in a popular location. That property and time period is then converted to a predetermined number of points, which you can use to purchase vacation time during any time of year, at any of the company's resorts, in any available unit (subject to availability).

In this system, the more points you purchase, the more flexibility you have to vacation when and where you want to, within the confines of the company's resort locations. The flexibility of points means you can usually break up your vacation time into smaller units than a week, taking a 3-day weekend and two 2-day vacations, for example.

A potential drawback to most points based timeshare, especially when used to purchase airline tickets and other products, is that the point values are not inflation proof. While your week of timeshare may be exchanged for two airline tickets this year, next year it may only be good for one airline ticket. Similarly, a company might build a new resort which requires more points to purchase than its older resorts, thus requiring established points members to purchase more points if they want to use the internal exchange into that new property.

Fractional/Private Residence Club:
Fractional ownership offers individuals the opportunity to buy partial ownership of an upscale place in a resort area. If it sounds a lot like a timeshare, that's because it is. The main difference is in the number of weeks sold and the quality of the property.

The arrangements for basic fractionals usually divide the ownership into fourths, eighths, or 13ths, with each owner having an equal number of days a year to use the unit. The owners typically buy their shares from a management company, which handles maintenance and schedules everyone's time.

The big differences between regular timeshares and fractional ownership properties are prices, financing and fees. While timeshares can be had for a few thousand dollars, fractional ownerships routinely run $100,000 or much more, with maintenance fees to match.

A Private Residence Club takes fractionals one step further. These are usually ultra-luxury properties which offer a wide array of special services to club owners, well above and beyond what is typically offered by high-end condominium resorts. This concept establishes exclusivity and a sense of belonging, similar to the country club lifestyle. Depending on the individual property, services typically might include having a luxury car at your disposal while visiting; a staff to stock your kitchen with groceries, run errands and do the housekeeping; your own private splash pool and hot tub, preferred tee times, a butler and/or personal concierge, private chefs, nannies, fly-fishing guides, etc.