Timeshares sure get bad press. Who hasn’t heard the complaining — overlong presentations, high pressure sales tactics, shabby units in far off places. Can it really be all that bad?
Energizer Bunny of Vacation Choices
Judging by experiences of some Ontario timeshare owners, they’re the expense that keeps on giving. While owners typically pay between $2,500 and $10,000 to buy a week to a month of annual vacation stays for life, fees for upkeep can quickly outstrip their investment.
Deeded Ownership is Forever
Some owners become lifers when they fail to check the fine print. It can lead to nasty surprises. Deeded timeshare units transfer to owners’ heirs after they die. That makes family members liable for contracts they didn’t sign.
Living the Timeshare Life
A purple sunset breaks over the tidy, two-storey condos on the Carriage Hills and Carriage Ridge website. The Ore-Medonte, Horseshoe Valley playground is a “winter wonderland” of snow tubing, cross-country skiing and snowmobiling adventuresomeness. Ziplining, open air music concerts, dining and shopping, warm summer days at Wasaga Beach. It all sounds so awesome.
Forever Fun With a Timeshare Contract
And it is, members say. Just an hour north of Toronto, the attractive resorts couldn’t be more convenient. But for aging owners, the worry of passing on a financial burden looms large, a November 2019 meeting of resort members heard. “Life circumstances have changed for people. Some people in the room were older and are now having to use walkers,” Ajax owner Laura Boyko said in a CTV News Toronto interview.
No Payment, No Relief
The crux of the problem for operator Wyndham Vacation Clubs is that some members neglect to pay their annual fees. With no option but to sell the timeshare contracts on the MLS (multiple listing service), realtors for discontented owners are forced to explain the economics to potential purchasers.
Exiting a Timeshare Contract
Carriage Hill and Carriage Ridge investors want a better exit strategy. Wyndham is sympathetic and agrees “…it is in everyone’s best interest to find a long-term solution to ensure the financial viability of the resorts is intact.” Ontario Consumer Minister Lisa Thompson has asked owners for details.
Timeshares Can Be a Great Option
Investors and promoters call timeshares a misunderstood vacation value. Shared ownership keeps purchase and maintenance costs low compared to buying a condo or hotel room outright. The full-service, fully furnished suites frequently have enclosed pools and often restaurants, night clubs or concierge services. For busy families, they take the guesswork out of travelling to unfamiliar locations and sight-unseen apartment-hotel complexes.
Location is Everything in GTA
Living Stone Golf Resort is a championship 18-hole golf course, spa retreat and marina rolled into one, complete with spectacular Georgian Bay vistas. The former Cranberry Resort has been a Collingwood staple for 40 years. Nearby Blue Mountain ski resort is only two short hours from Toronto’s big city buzz. No wonder timeshares are so popular.
Contracts for Every User
And that’s why timeshare contracts come in an array of types.
1. Right to Use
Leasehold agreements for one to two weeks yearly for a set time period. Owners pay maintenance fees and special assessments if buildings need substantial repairs. The units can be rented, gifted or sold.
2. Fee Simple
Deeded agreements that give owners the right to use their unit at predetermined times each year. Like right to use units, owners have maintenance, special assessment and, unless they are included in annual dues, property taxes to pay.
3. Point System (Vacation Club)
Timeshare points that can be used at owners leisure to travel between resorts, fly to faraway locations, go cruising or enjoy vacation options of their choice.
It’s All in the Timing
Fixed week timeshares can be attractive if showing up at the same time and unit year after year appeals. Floating weeks let owners book a unit and week, if they’re available, during a defined time. If that’s too confining, rotating weeks allow the dates to be moved around (within limits). Points or vacation clubs offer the most freedom, but present a legal quandary if demand constantly exceeds capacity.
Banking Time and Space
Exchanging weeks with another resort owner can take the boredom out of making the trek to the same vacation spot every year. Units for exchange or rent can be listed on timeshare websites, through the resort that owns them or using an exchange company, like well-known Resort Condominiums International (RCI).
Buying Timeshares On the Downswing
Buyers beware. Like a car, Moneysense warns the value of a brand new timeshare declines by half almost as soon as its sold. Resale units are generally better value for the investment. Lawyer’s fees and resort transfer costs add another $500 to $1,000 to the unit price. Then there are those annual maintenance fees, upwards of $300 to $2,000 per unit. As any condo owner knows, special assessments can come out of nowhere.
Purchasing Timeshares at Auction
Experienced owners recommend buying at auction to carve thousands off the price. Redweek.com, Ebay or MyResortNetwork.com are popular auction sites. Only buy timeshares you will actually use, another benefit of staying local, Moneysense advises. In-demand weeks, like Easter or summer vacation, are optimum for rentals or resales.
Saving Money When You Buy
But hey, if you’re into saving money, why not get a unit that’s not on the waterfront, is in an area polluted with timeshares (like Las Vegas) or during the off season. You may not make much from rentals, but it could be a good way to get your feet wet. Remember to include the cost of buying the unit, legal fees, resort transfer fees, annual maintenance, joining exchange companies and spacebanking fees in your calculations before you decide if investing in a timeshare is the right choice for you.
Legal Advice Before You Close a Time Share Deal
Close the deal on your time share purchase with confidence with advice from Axess Law Ontario real estate lawyers. Online video call appointments are available day or evening, 7 days a week, anywhere in Ontario. Dial toll-free to 1-877-552-9377 or 647-479-0118 in Toronto or use our online booking form. You can talk to a licensed real estate lawyer in person at our Toronto, Scarborough, Vaughan, Etobicoke, Ottawa, Mississauga Winston Churchill or Mississauga Heartland law offices.
Click here to learn more about Axess Law’s real estate law services.
Photo by Juan Fernando Yeckle|Pixabay.