What Is a Right to Use Timeshare?

When shopping for a vacation property, you might encounter a few timeshare options. After all, despite its many flaws, the timeshare industry offers some popular types of vacation ownership —one being a right-to-use timeshare. To learn more about this particular option, you've come to the right place. Below, we'll discuss what right-to-use timeshares are, how they work, and the pros and cons of owning one.

Basic Overview of Timeshares

Timeshares are vacation properties under fractional ownership agreements. With most timeshares, you buy the right to use a specific unit for a specific week each year. One shared property can have up to fifty-two owners. And since you own a fraction of the property, you pay a fraction of the cost.

Find out more about how timeshares work here.

Types of Timeshare Ownership

Not all timeshare ownership agreements are the same. You can own or lease a timeshare. Each has different benefits and privileges. These two ownerships are known as deeded timeshares and right-to-use timeshares.

What's a Deeded Timeshare?

Deeded timeshares are similar to traditional real estate ownership. You own a percentage of the property with a deeded timeshare agreement. Upon purchasing, you should receive a title deed detailing your ownership interest. Deeded ownership is often written in perpetuity, meaning you own it indefinitely unless resold or willed to someone else. Those rights fall under deeded timeshare agreements. 

What's a Right to Use Timeshare?

Non-deeded, or right to use (RTU), timeshares work differently. Rather than owning property, you lease a timeshare for a set time like you would personal property. Therefore, you don't "own" the timeshare but instead, have the "right to use" it until the agreement’s expiration date. With RTU timeshares, owners don’t receive a title deed and have restrictions on some ownership rights, such as being able to sell or rent.

How Do Right to Use Timeshares Work

Right-to-use timeshares differ from deeded timeshares and often are not considered real estate. When you purchase an RTU timeshare, you agree to retain the ownership for a set period before transferring it back to property developers. These timeshare lease agreements last anywhere between 20 and 100 years. 

Once your leased agreement reaches its expiration date, you no longer have the right to use the property. However, it also means you are no longer responsible for further expenses. With deeded timeshares, owners can often end up in poor financial situations because extra expenses (such as timeshare maintenance fees, assessment costs, and taxes) are perpetual. With RTU timeshares, having a designated time can prevent more debt. 

Pros and Cons of an RTU Timeshare

As with any vacation ownership, there will be advantages and disadvantages. Below are a few features for RTU timeshares that make them stand out in both regards:

Pros

• Lower purchase price: Since an RTU timeshare isn’t a perpetual agreement, it will be listed at a lower price than a deeded timeshare. However, this is determined by each resort location.
• A more flexible timeshare option: Compared to a fixed week or floating week system with deeded ownership, an RTU timeshare is points-based and has more flexibility. With points, owners can choose from various locations and dates for each visit.
• No lifetime commitments: With a predetermined end date, RTU timeshare owners know when they can stop paying maintenance fees. A guaranteed exit strategy like this is beneficial for timeshares as they’re notorious for being difficult to get rid of.

Cons

• A temporary home resort: While RTU timeshare agreements typically last over ten years, they won't go on forever. Once it expires, you no longer have an ownership stake in the property. If you seek a vacation home as an investment, look elsewhere.
• Restrictions on ownership rights: RTU timeshare owners may not have the same rights as deeded ownership. That could mean not having the ability to sell, rent, or will the timeshare to another estate as you possess it temporarily. 
• Often found in international resort locations: Many timeshare resorts offer RTU agreements, but they're often located where U.S. citizens cannot purchase deeded timeshare properties.

Cancel Timeshare With Wesley Financial Group, LLC*

Alas, the biggest downside to timeshares is they seldom become worthwhile. If you purchased a timeshare that did not turn out as expected or felt pressured, Wesley Financial Group, LLC ("WFG") might be able to help! Check out what their past clients have to say and to learn more about their timeshare termination services, schedule a free consultation today.  

Wesley Financial Group, LLC, and its affiliates, successors, or assigns are not lawyers or a law firm and do not engage in the practice of law or provide legal advice or legal representation. All information, software, services, and comments provided on this site are for informational and self-help purposes only and not intended to substitute for professional advice, legal or otherwise.