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Wednesday, July 7, 2010

Smartly Knowing the Evolving Legal Approaches on Timeshares

As timeshares have become popular when it comes to vacationing, a number of models for handling the legal relationship with such properties have emerged. This is important especially for the owners to avoid future conflicts regarding their timeshare units. When an owner also wants to get out of his timeshare by selling it, he must know the legal agreements with such property in order to have a successful deal. The three most common types of conveyance are the deeded interests, right to use, and leasehold agreements.

With a deeded interest method of conveyance, the purchaser receives a title for the real property that is being purchased from the timeshare developer. The unit owner, in effect, buys the right to use that unit in perpetuity. Like any bought object, it is the owner’s rights to use it in perpetuity. He can sell it on and pocket the proceeds and leave it to others as part of the estate, when the owner dies. In effect, the resort developer just sells the ownership of various time periods for each unit.

Under the right-to-use type of conveyance, it is not associated with deeding of the underlying real property to the purchaser. Instead, the individual is given contractual rights to use the timeshare facilities for a specified period of time. Usually, this would involve the interval purchased, say one week, but for time periods limited in the agreement, say 25 years.

Lastly, a leasehold agreement is similar to a right-to-use contract in that the purchaser holds a leasehold interest or other interest of less than a full ownership interest. This means that the purchaser has the right to inhabit such vacation property for a specified period of time, and at the termination of the lease, the property reverts to the timeshare developer. Usually, the time period concerned is shorter than with a right-to-use agreement.

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