FAQ: Is a Timeshare Considered Real Estate?

Is a timeshare considered real estate: client talking to a real estate agent

Though the term gets thrown around a lot, “timeshare” can be challenging to understand. Unlike the legal concept of real estate/real property, which has existed for centuries, the timeshare is a fairly new phenomenon. According to historical accounts, it only came into being in the 1960s, when European resort owners were selling customers the ability to have vacation homes in the Alps.


Since then, the industry has grown and become more complex, but the question of whether a timeshare is a real estate interest has remained. And indeed, the answer largely depends on where you purchase a timeshare and whether your timeshare has a physical location. 


In different U.S. states and foreign countries, local law usually determines the answer to the question, “Is a timeshare considered real estate?”


What’s more, those laws also determine who can sell you a timeshare. In many cases, the person putting pressure on you in a timeshare presentation isn’t a licensed real estate agent. That’s usually bad for you.


If a timeshare is considered real estate by local law, then the person selling it to you generally has to be a licensed real estate agent or broker. While those people have legal duties and ethical obligations they are expected to follow, take caution. These duties are often not upheld or enforced within the timeshare industry, so don’t let the license lull you into a sense of security. But if a timeshare isn’t real estate, the seller might have a lesser license or even none at all!


This article will take a look at the types of timeshares in different places, whether they are considered real estate, and what that means for timeshare sales licensing requirements. We’ll also take a look at how those laws affect you as the consumer. Finally, if you need to get out of a bad situation, we’ll talk about how Centerstone Group can help you exit your timeshare contract.


Is a Timeshare Considered Real Estate? Look at Your Timeshare Contract First

Is a timeshare considered real estate: entrepreneur signing a contract

The first answer to the question, “Is a timeshare considered real estate?” lies in the contract for your particular timeshare. The term “timeshare” refers to many different kinds of vacation ownership, so you need to read the contract carefully. Even if the timeshare purchase price is right, it’s critical to know exactly what you’re buying.


1. Fixed-Week Timeshares

Older and more traditional timeshare agreements have used a fixed-week ownership approach to fractional ownership. Most Hilton Grand Vacations contracts use this structure. These are physical timeshares that are sliced up into 52 timeshare units – one for each week of the year. If you buy week 52 of a particular condominium, then you have the right to that condominium on the last week of any given year. 


Fixed-week timeshare increments are generally considered real estate interests and come with real property deeds. Keep in mind that deeded ownership usually comes with property taxes as well. They are also relatively rare in the modern timeshare industry, though.


2. Floating-Week Timeshares

Similar to fixed-week timeshares are floating-week timeshares. A floating week means that you have purchased a week’s stay at a particular resort, but you have to separately reserve that week to determine when it will be. Because these are often tied to a particular property, they are more likely to be considered real estate, but they are less defined than a fixed-week unit.


3. Right-to-Use Timeshares

Modern timeshare developers like Marriott and Diamond Resorts are more likely to sell non-deeded timeshares in the form of “vacation clubs” or other point systems. These types of systems are often referred to as “right-to-use” timeshares. Here, your contract is for a certain number of points that you can use to reserve time and units at various properties worldwide. 


Because these systems are not as tied to physical real property as other kinds of timeshares, they are less likely to be considered real estate than fixed- or floating-week timeshares. This affects not only what you get out of the contract, but whether and how timeshare developers can foreclose on your timeshare to make you pay their ever-increasing fees.


Is a Timeshare Considered Real Estate in the State Where You Purchase, and How Might That Affect You?

U.S and the California flag at the California State Capitol

Next, you need to consider the effect of local law in the state or country where you purchased your timeshare. While most people are not surprised that the timeshare laws of a foreign country like Mexico may be different from what they are used to, they don’t always consider that property laws also change from state to state within the U.S.


Nowhere is this more apparent than in salesperson licensure laws. For example, in California, the Department of Real Estate regulates both right-to-use and deeded timeshares. California also requires anyone selling timeshares to be working under a  real estate broker’s license. This is important because licensed real estate professionals have legal and ethical duties to protect buyers — even if they are often not enforced.


Some other states, like timeshare-property-heavy Florida and Nevada, require licenses but don’t make every person selling timeshares become a broker. (Nevada has a lesser license for timeshare sellers.) Because these licenses are not as comprehensive as a broker’s license, the legal protection they offer a buyer can be much less. 


(Note, however, that in Florida the person selling you the timeshare can be working under someone who has a broker’s license. Legal enforcement of these measures, though, is spotty at best, so there are no real legal resolutions.)


And then, there are states like Missouri, which considers timeshares “merchandise” and does not require a special timeshare license or a real estate license. Without the oversight of a real estate board or similar licensing body, that means that anyone can sell a timeshare in these states. Convicted felons and other bad actors thus flock to these under-regulated states instead of other places where they would be barred from getting a sales or real estate license.


License requirements are vital. Though no one can legally lie to you when selling a timeshare, real estate brokers are fiduciaries, meaning that they have a special duty to look out for your best interests and make sure that you are not being taken advantage of. Without that legal requirement in the form of a license, it is much easier for unscrupulous timeshare companies to stick you with an unfair and unaffordable timeshare contract.


While it is certainly better to be in a state that requires licenses, the sad truth is that many states often don’t do a great job of stopping unethical practices by timeshare salespeople. Because there is so much confusion as to what any given timeshare product is, regulators can miss bad behavior that they might otherwise catch with more traditional real estate sales.


Also, timeshare salespeople are known to “push the envelope” a bit more in terms of what they can get away with in their high-pressure sales presentations. For these reasons, even the most well-intentioned and vigilant states have trouble effectively protecting the public from unscrupulous timeshare sellers.


Centerstone Group Can Help — No Matter Where You Bought Your Timeshare

Senior couple and a woman looking at a document

Timeshare developers count on laws and contracts being so confusing that they intimidate owners into simply going along with paying ever-increasing annual maintenance fees, resort fees, and special assessments. They don’t want to make it easy to exit, and complex real estate laws, even well-meaning ones, can make the problem worse.


Centerstone Group was founded to give consumers legal, ethical options to exit their timeshares. Unlike timeshare resale companies (which are usually scams) or other exit companies founded and operated by people with little or no experience, Centerstone Group’s professionals have decades of experience in the timeshare industry.


We also have a wide variety of options we can tailor to fit your needs. Whether you need a recent timeshare contract canceled or an older unit deeded back to a resort, we can find the right solution for you. 


In the likely event that a timeshare company refuses to cooperate, we can use our proprietary pressure campaign or even help you with getting an attorney’s assistance with obtaining a legal rescission or other type of judgment. (We can even get you a discount on legal fees.)


But don’t take our word for it. We are an accredited company with an A+ rating from the Better Business Bureau, and we have dozens of reviews from satisfied customers who can show you what we’ve accomplished.


Know What You’ve Gotten Into and How to Get Out

Unless you’re a lawyer or someone with a lot of experience in the industry, it’s nearly impossible to completely understand all of the legal effects of signing a timeshare contract — let alone whether what you’re buying is even “real estate” as most people understand the term. 


Many timeshare owners find out too late that they didn’t get what they bargained for. When you pay for a vacation home only to get a handful of points or the ability to “reserve” a studio apartment that never seems to be available, it can make you feel like you’ve been cheated.


That’s where we can help. When you come to us, we can look at the totality of your situation and find the best solution for your timeshare exit. Contact us today for a free consultation and case evaluation.


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