What is timeshare? - All about Timeshare - A1 Real Estate
Table of contents
- What contract for timeshare?
- What are the advantages and disadvantages of timeshare?
- What are the professional’s obligations?
- What are the differences between timeshare and fractional ownership?
- Fractional ownership vs timeshare
- What should be in the contract?
- Can we terminate the timesharing agreement?
These are most often tourist residences.
Timeshare allows you to:
- benefit from a right of use of immovable property over a given period
- benefit from an apartment or house (furnished) a few weeks a year for holidays in France or abroad
The property is held by an SCI (real estate company of attribution) and the decision-making is done as in a classic company, in general meeting, with the possibility of being represented by other partners.
What contract for timeshare?
Timeshare consists of buying shares in a civil company, a timeshare property allocation company, acquisition giving the right to use a dwelling for a period determined in its statutes.
In fact, it is actually shares of the company organizing the timeshare that are acquired, not walls.
Timeshare is defined by the European directive, as the purchase of a "right of part-time use of a property" for a period of more than 3 years.
Law No. 2014-366 of 24 March 2014, for access to housing and renovated urban planning, expanded the list of just reasons provided for in Article 19-1 of the Act of 6 January 1986, cited above.
From now on, the partner can ask the judge to authorize his withdrawal, in particular when he is a beneficiary of the minimum social benefits, receives a remuneration lower than the minimum interprofessional growth wage, or can no longer enjoy the lot that has been allocated to him because of the closure or inaccessibility of the station or real estate complex concerned.
What are the advantages and disadvantages of timeshare?
- Guarantee of annual holidays at the same time of the year
- Enjoy the complete facilities of the major resorts
- Less initial investment than for a fractional property.
- Possibility of exchange with other properties and countries
- Rental possibilities
However, this real estate trend has disadvantages :
- The charges associated with a luxurious second home are high.
- It is very difficult to sell your shares to get out of the system, indeed the potential buyers are not very numerous.
- Added to this is the constraint of planning... It is sometimes difficult to choose your weeks from one year to the next!
- No equity participation in the property
- Shorter stays
- No personalization of the accommodation
- No capital valuation
- The developer remains the owner of the entire property
- More wear and tear
- Pas personal attachment to a dwelling that is used by several people
- The value of timeshare depreciates over time and maintenance costs increase.
- The timeshare sector has a tarnished reputation that has been difficult to get rid of and which still generates negative reactions today due to the presence of unscrupulous operators over the years.
- Time usage rights expire after a specified period of time.
- It is often difficult to resell them.
Note: It is possible to rent the property if you do not wish to enjoy it during its time of enjoyment. It is also possible to change your week against that of others and possibly on another destination.
Be careful, however, you remain responsible for the maintenance of the property during the stay of your tenants.
What are the obligations of the professional?
- He must also inform the consumer about the right of withdrawal he enjoys. (14 days)
- He is liable for a pre-contractual information obligation.
Membership of such a company entails obligations for the member: he must respond to calls for funds, that is to say participate in the expenses generated by the maintenance of the building.
In the absence of payment, the member may lose his right to use the housing, or even see his social rights sold at auction (Article L212-3 of the Construction and Housing Code).
What is the difference between timeshare and fractional ownership?
The two are often referred to as "shared ownership" and share similar characteristics.
The most important distinguishing factor is the number of owners per house or apartment.
Most timeshares involve up to 52 owners per unit, and most others involve 26. This implies short stays and more wear and tear. Indeed, most timeshare owners visit their property very little, often one week a year. Which means there is little emotional connection between the owners and the property. This lack of connection sometimes results in a lack of care.
On the other hand, most fractions involve 2 to 12 owners, which means they stay there longer. Ownership shares are larger and esteem is greater, investment and participation are greater, as is the maintenance and operation of the property.
In general, fractions involve larger apartments and houses, more amenities and better finishes. Better quality construction and finishes, often coupled with more resources for maintenance and management, and fewer users, keeps the property in good working order.
Fractional ownership properties are usually controlled by an association of fractionals. Operational responsibility is delegated to a manager or management company, but owners retain the right to replace management if it is not performing well.
On the other hand, most timeshares are permanently controlled by a hotel promoter or operator (remember that timeshares are held by professionals and not individuals) and buyers have often considered themselves as regular customers coming on holiday.
Fractional ownership vs Timeshare
- Holding a share of the real estate asset and 4 to 5 weeks of use per year.
- Possibility to own the property for as long as you want to keep it.
- Sharing of maintenance costs and annual operating costs.
- Quality properties can expect capital appreciation over time.
- Personal belongings displayed and safely stored.
- Properties often have private pools, gardens, and private dining opportunities.
- Has only a set period of time each year
- Expiry of the right of use after a specified number of years
- Maintenance costs billed by management monthly or annually, with an increase each year are fixed.
- No capital appreciation, only depreciation.
- No personalization of the property.
- Shared equipment
What elements must be included in the contract?
Law No. 86-18 of 6 January 1986 on timeshare property allocation companies further defines these elements.
- The identity and domicile of the professional making the sale (or its company name), its legal form and the address of its registered office, if it is a company.
- The precise description of the property and its geographical location.
- The legal nature of the right granted to the consumer.
- The precise period during which this right is exercised.
- A description of the facilities, equipment and services provided.
- The main price charged to benefit from this right and the list of ancillary costs.
- Information relating to the termination of the contract.
- The duration of the right of withdrawal and the terms of this waiver
Can I terminate the timesharing contract?
This is one of the first risks of this process.
In addition, the law lays down certain conditions for obtaining, by means of a court decision, authorization to withdraw from the company. To do this, you must be in one of the following situations:
- be a beneficiary of social minima, such as the active solidarity income (RSA)
- have incomes below the minimum interprofessional growth wage (Smic)
- be unable to access the property in enjoyment with regard to the closure or inaccessibility of the residence.
- Allows you to benefit from a right of enjoyment of a property over a given period (apartment or furnished house)
- The property is held by an SCI
- Consists of buying shares in a civil society
- The acquisition of this right of use is the subject of a contract, regulated by Article L121-63 of the Consumer Code.
- This system has advantages as well as disadvantages
- Membership in such a company entails obligations for the member
- It is not easy to terminate this type of contract
- In addition, the law lays down certain conditions for obtaining, by means of a court decision, authorization to withdraw from the company.
- Fractional ownership has some similarities
You want to
to sell in Paris or its surroundings ?
Posted on 09/11/2022 by
Andy LECUYER
