Timeshares – A Modern Investment In Vacation Property
What is a Timeshare? A timeshare is one way to vacation and invest in real estate. It is the process whereby a proprietor, usually of a residential unit or resort condominium unit (timeshare accommodations), enters into an agreement with a purchaser to acquire from the proprietor a particular period of time (typically not less than three days but no more than six months) to occupy his/her property.
Timeshares are targeted at foreigners who may wish to have an interest in a vacation property in Jamaica, without the headache and expense that comes with ordinary ownership. Such foreigners will purchase timeshares because it allows flexibility over when, where and how they vacation and it facilitates long term savings on vacations. Purchasers of timeshare accommodations tend to vacation for a week or more at a time in groups of two or more. They often become repeat visitors and contribute significantly to our local tourism industry and economy.
The Timeshare Vacations Act, 2014 -Requirements for entering into Timeshare Contracts The Timeshare industry is heavily regulated in most countries. In Jamaica, this industry is now regulated by the Timeshare Vacations Act ("the Act"). The Act seeks to provide guidance for potential owners of timeshare accommodations as well as purchasers of same. It also outlines the operational requirements and formalities for timeshare contracts.
Under the Act an individual or company interested in offering timeshare contracts must apply and obtain a licence from the Real Estate Board, which shall perform the functions of the Timeshare Registrar. The Timeshare Registrar is responsible for determining all applications for such licences, monitoring compliance with the provisions of the Act and providing the necessary regulatory guidance. All applications must be accompanied by a prescribed licence fee which is granted for a duration of one year from the date of its issue.
Before a licensed individual or company can promote or offer timeshare contracts they must also register what is called a Timeshare Plan in accordance with the provisions set out in the Act. An application for registration of a Timeshare Plan must contain certain particulars including: the description of the accommodations, facilities and services to be offered; the floor plan of the timeshare accommodations; particulars of the proprietor; evidence of the licence as mentioned above; evidence of financial requirements prescribed by the Act; a copy of the timeshare contract; and evidence that the relevant property taxes have been paid. Once the Timeshare Registrar is satisfied with all the information contained in the application, the Timeshare Registrar will issue a registration certificate.
Before executing a timeshare contract the proprietor must also give the purchaser all the relevant information relating to the timeshare contract, such as : the particulars of the proprietor; a description of the nature of the timeshare accommodation; the term and conditions which will be binding on the purchaser and a detailed statement setting out all consideration and charges to be paid by the purchaser. A proprietor who fails to provide the necessary information as outlined in the Act commits an offence. It must also be noted that the proprietor must provide the purchaser with a copy of the executed timeshare contract no later than 30 days after execution. Failure to provide same will render the timeshare contract unenforceable against the purchaser.
The timeshare contract takes effect after the proprietor submits to the Registrar of Titles the duplicate certificate of title of the time share accommodation along with the registration certificate. Upon receiving these documents the Registrar of Titles will make an endorsement on the title indicating that the property is the subject of a Timeshare Plan registered under the Act. The Timeshare Registrar, after receiving the duplicate certificate of title with the endorsement, the registration certificate, the executed timeshare contract with the purchaser, together with the prescribed fee will issue a deed in the name of the purchaser.
A purchaser in whose name a deed to any timeshare is issued is entitled to exercise his/her rights as a purchaser in accordance with the timeshare contract, may assign and transfer those rights and obligations by an assignment or transfer of deeds or even create a mortgage, charge or security interest arising under the timeshare contract. The law requires the strict compliance with the Act and failure to comply with its provisions may constitute an offence punishable by fine or imprisonment. If you wish to invest it is recommended that you engage the services of an attorney-at-law before entering into a timeshare contract.