Timeshares: The Bottom Feeders of the Hospitality Industry

Blog Post Provided by Aaronson Law Group:

Aaronson Law Group - Timeshare Recession and Cancellation

When timeshares originated, the legal structure defining one’s interest in the resort was to first create a standard condominium. This entails ownership of the inner walls of a given unit and their interior confines. The owner thereof then shares an “undivided” interest in the common elements of facility, including all of the amenities. This ownership is ‘undivided’ in the sense that every owner has complete access to all.
The timeshare concept took this legal structure a step further: One’s ownership of a given unit is an undivided interest to access it during a given time annually. Because this interest was deeded, it was characterized a real property – real estate. This has a number of implications, including the necessity of recording the deed(s) in the public property records for the county where located.
This created a kind of accountability that was intended, at least in part, to keep people honest in transacting sales. A records check would reveal whether or not a buyer would receive a clear title. But this was a real problem for the unscrupulous timeshare developer. He had to quit selling units in the same resort, and start building new ones. Or was there another option?


In one of the great strategic and marketing coups of all time, the developer had an epiphany: The ‘points’ system of ownership. This concept allows the developer to sell ‘points’ of accessibility – the more points purchased the more access one has to the resort or resorts bought into. Now the developer is free to overbook the resort with impunity, selling interests in the same units time after time after time. And voila, he can tout the concept as ‘vacation’ ownership in a network of resorts, each one more exotic, more opulent than the previous. This was not merely a week-long stay in the same old place.
Of course what good for the developer isn’t necessarily good for the owner, especially one who’s been effectively divested of his deeded interest. And even the buyer of ‘points’ is ultimately a loser, as the value of his points are diluted with each subsequent sale, and the next one, and the next, all of them in the same, finite number of units and existing accommodations. And so the number of points that got you to Maui last season won’t even get you to Hackensack the next. Heck, you’ll be lucky to get to the backyard outhouse season after.
Call us to discuss your timeshare concerns free of charge. We can discuss the possibility of timeshare cancellation, and other legal options.

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