The timeshare world can be complicated due to the amount of rules, regulations, and the ever-evolving direction that vacation clubs are heading. “Right-to-Use” timeshares act differently than a deeded timeshare ownership. Among one of the biggest differences that separate the two is the length of time that each can be used. Continue reading for an in-depth look at right-to-use timeshares, their rules and how you can protect yourself before signing on the dotted line.
What Does ‘Right-To-Use’ Mean For Me?
The glossary definition of Right-to-Use or RTU ownerships state that they are ownerships that feature an expiration date. Vacation Clubs who offer right-to-use ownerships will allow the owner to use the unit for a designated number of years before the use rights are transferred back to the developer. The number of years are based on the stipulations set in the contract. Owners may sell, donate or bequeath the ownership contract to another party, however, the expiration date will remain the same for the new owner. Although the owners of the right-to-use contract have use rights, the developer still owns the property.
Because right-to-use has a limit on the number of years, it can be a good way to test out owning a timeshare. Your right-to-use contract will give you the same access to your vacation club as a deeded property without the life-long ownership. Although you will have limited protection from increased dues and developer default, the initial investment is still much smaller than the purchase of a deeded ownership. Also, if you are unhappy and want to get out of the contract; owners are still able to gift or sell their ownership at any point. If you want to invest in a deeded timeshare ownership because you have enjoyed the timeshare lifestyle, you may keep the account for the term of the contract.
Certain countries have very specific rules about foreign real estate ownership, so right-to-use timeshares may be the only way to build, run and ‘sell’ timeshares. One such country is Mexico. Owners will still deal with home owners associations with right-to-use contracts, who typically settle dues, special projects for the property and influence management of the property.
In today’s timeshare industry, these drawbacks are not as scary as they may seem but we also would like our readers to be as well informed as possible. Most timeshare clubs who offer right-to-use contracts also sell deeded ownerships. So, either way, there will most likely be an HOA in charge of your resort as well as managing the resort’s dues and special projects. Disney is one of the most popular vacation clubs, and they continue to only offer right-to-use contracts. Sometimes, as with the case of Disney timeshares, buying a right-to-use contract is required to own at the specific property you desire.
Right-to-use contracts are not as commonplace in today’s timeshare industry, however, that does not mean that they are not available or worth looking into. For more information, click here. This page will give you an indepth look at the basics of timeshares. Section B1 will further elaborate on deeded and right-to-use. If you would like to speak to an agent for more information, we have a knowledgeable staff available to answer your questions.