What Transfers In A Timeshare Resale?

Excerpt from Chapter 4


What May Not Transfer In A Resale Transaction

One of the factors least understood, and a definite pitfall in a timeshare resale transaction, is in what exactly will and will not transfer to the new owner, especially with the newer club style programs and points systems. Unlike the days of simply purchasing a deed in a location to use or trade, today’s popular timeshare styles, have a “membership” combined with the property ownership. This has brought about second generation ownership concerns.

Many of the brand name developers have maintained their requirement to purchase directly from them in order to have the full entitlement of those proprietary membership benefits, in an effort to hamper resale transactions. The developers may have transferred the title to for the real estate to another party, but they own and are the ones in control of their timeshare programs. Despite resentment caused, realistically, if there were no restrictions or limitations in favor of developers, to impact third party purchases, then it could force the “for profit” developers out of business.

Consequently, the secondary market resale listings of major timeshare companies NOT including some of the “added-value” developer program benefits, was a viable initial reason that the resale prices were so much lower. Logically speaking, buying only “part” of the timeshare program meant that it should be priced lower. And so it was! If you, as the timeshare owner, knew that if you ever needed to sell your timeshare and it didn’t come with all of the developer perks for the resale buyer; then you also knew upfront that you were buying a property with a limited resale value. Of course, if you didn’t know that fact at the time of purchase, it’s because the developer most likely didn’t want to make that point well known.

The ownership and membership benefits considered transferable or non-transferable to a subsequent purchaser vary with each developer. What does transfer with one company, in a resale transaction, may not with another. In some cases, there is no real difference in ownership when transferring title. It’s up to you to find out for sure with the proper questions to your developer or locating that information in the condo documents/disclosure guides of your initial ownership documents…BEFORE the resale transaction takes place!

With some timeshare companies, mostly the hotel/brand names (who created the hotel points option and air mile conversions), the rules are all different and not usually well publicized. When transferring title and membership, there may be a stipulation as to what “points” (villa, hotel, or travel related) can be re-assigned, what resorts in their network can be accessed, whether you have priority, special status privileges, or the ability to have “bonus points” credited or not, and so on.

Unlike when you simply pass your timeshare on to your heirs (through a will or trust), when one does a transference of title due to a gift, donation or sale, there could very well be a different set of rules that apply. For example, when transferring to an outside new owner...


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