Timeshare Jargon Buster

The legal terms that are used when discussing timeshares can be incredibly confusing to the untrained eye, particularly when dealing with foreign contracts. So, we wanted to ‘bust’ some of the jargon to help you understand what all those terms you might want to know actually mean. We’ve put together an A-Z list of some of the most commonly used timeshare terminology.  

Abogado

Spanish for Lawyer

Accrued time

This means weeks that have been accumulated in previous years can be used in the current year

Affiliated

If you are part of an exchange contract, your exchange company will have an agreement with affiliated resorts. Simply put, this means resorts you can stay in as part of your agreement.

Appartado (de Correos)

PO Box in Spanish

Banking

‘Banks’ are where exchange companies place ‘weeks of timeshare’ to allow their members to exchange their timeshares. You may also hear banking referred to as ‘space banking’ or ‘block banking’. If you hear the term ‘Bulk banking’ this means that resorts may place a large number of weeks into the bank so that members are enabled to bargain for their timeshare exchange.

Biennial

In timeshare terms, this means the use of a fixed week on alternate years. Members may be known as odd or even year members to show that they can use their timeshare week every other year rather than yearly.

Blue Week

Blue week is to do with low demand timeshare weeks. Essentially, low season weeks are classified as ‘blue weeks’ in RCI’s exchange programme.

Bonus Week or Bonus Time

Occasionally, timeshare resorts will ‘gift’ a bonus week to members as either a thank you or a gesture of good will. Or, if a member requests additional weeks but they are unavailable bonus time may be given as an alternative (sometimes a small fee is charged).

‘Buy/Sell’

This is a term to be wary of as it usually indicates a timeshare scam or fraud. The way it works is that the buyer is promised their existing timeshare property will be sold against the cost of a new purchase but often this is not the case.

Club/ Trust System

All members of timeshare belong to a club. Any facilities at the resort and their accommodation units are held by trustees who hold a license to a ‘Right to Use’.

Class Action

This is where a group of individuals may come together to make a lawsuit claim. This is not actually allowed in European courts and so is only an applicable term in the US.

Code of Conduct

The codes of conduct generally exists to protect consumers and sellers from any wrongdoing and can increase confidence in products and services. The code of conducts’ regulations were drawn up by a consumer body which states that trading standards must be followed by both buyers and sellers.  

Cold Line

This is a slang or colloquial term which refers to the sales teams within the timeshare industries that make sales to consumers outside of the resort. For example, people who may approach you with no connection trying to offer products and services. This is actually used less frequently than in the past.

Constitution

This is a set of legal documents which outlines the relationships between all those involved in the timeshare resort. This means: owners, developers, management companies and trustees. The constitution is basically all the rules by which the resort is actually run.

Cooling off period / Grace period

Consumers are given a legal amount of time to change their mind following a purchase. In this time they can change their minds and reconsider their purchase and can legally decide to cancel. There can be no obligation to pay any fees in the cooling off period. The amount of time can differ between resorts, anywhere from 3 – 15 days but a typical grace period may be around 14 days. (It is important to check your individual contract).

Deeded

Deeded timeshares are not legal in the UK and instead we have the club/ trust system. In Spain they follow a deeded system called the Escritura system. This type of system refers to the outright ownership of a timeshare week that can often be registered at the central Land Registry.

Destination Club

The most similar premise to a destination club would be a holiday club. This type of club basically promises you access to timeshare accommodation, however, it does not offer certainty over your rights of access.  

Developer

The developer constructs timeshare facilities and accommodation and earns profits from initial sales of units to members. They are a company that actually owns the freehold where the timeshare resort stands.

Developer’s Price

This is an estimated price put together by resale companies to refer to the full timeshare unit retail price. It is usually used to highlight or illustrate savings that could be made by buying with them.

 

End-user finance

This is an unsecured loan arranged by the selling agent. This loan may be in partnership from a third party finance company and will be granted to a consumer so that they can purchase a timeshare.

Escritura

Spanish for ‘Deed of Title’. (See Deeding for more detail).

Escrow Account

Third parties such as solicitors or accountants hold money and assets until an agreement is settled. For example, an Ownership Certificate or the Seller’s Certificate may be held in the escrow account until both parties have agreed to release money and finalise a deal.

Exchange company

This is a company which will arrange for you to actually exchange your timeshare with an affiliated resort. They charge fees for their services that are usually separate to the fees in your initial contract. The main companies who deal in exchange are II and RCI.

Exit Programme

You can occasionally buy your way out of a contract. It can be a very expensive route to take but it is actually readily available and many timeshare resorts will allow this. A better option would be to get in touch with a professional timeshare lawyer who can help you leave your contract legally and much more cost efficiently.

Factorial or Factoring Fee

This is a Scottish term that means the profit markup of the Management company.

Fixed Time

This is a fixed time week that you use every year in a specific unit in the same resort.

Floating time

These types of timeshare are actually already illegal in some parts of the world and are coming under close legal scrutiny worldwide. Basically, a floating week means a member is given an unspecified week in a unit in a resort. A member is forced to book far in advance to try and secure a date, location and unit they are happy with and members are in competition with each other to secure a holiday they actually want. If they are unsuccessful they are simply allocated any week and any resort each year.

Fly-By

This can actually be a very enticing deal if you are strong-willed and clear minded. A resort may offer to pay some or all of your holiday experience if you agree to attend a sales presentation and tour of the resort. Bear in mind it is usually a very long presentation and the sales pitch can be very full on, but if you know you won’t be pressured then it is a good deal. You are under no legal obligation to make a purchase, and, if you did you always have the cooling off period to cancel your contract.

Fractional Ownership

This is a halfway house between fully owning a property and owning a timeshare week. Essentially a group of members, maybe around six, will purchase a unit and then decide between themselves how to split and share the weeks each year.  

Green Weeks

Like RCI have blue weeks for weeks in low demand, Interval International (another large timeshare company) name their low season or low demand weeks as Green weeks.

Group ownership

Another way of saying ‘timeshare’

Guest Certificate

If you have a timeshare and wish for a family member or friend to be allowed to use your week you can be issued with a nominated guest certificate which allows them access to your timeshare.

Hacienda

The Spanish Tax Office

Holiday Club

Similar to a destination club. The purchase of a week or multiple weeks’ holiday in accommodation.

Internal personal contacts

When you already own a timeshare you may be approached by these contacts who are just sales staff with the job of selling you additional products or units.

IVA

Spanish for VAT

Leisure Charge

If there are shared leisure facilities at your timeshare resort you may be charged an additional fee to your maintenance fee to allow you use of these services.

Levy

A charge to members of a timeshare points club to pay for administration costs. It is in addition to other fees relating to your contract. It may also be a one-off charge asked from you for unexpected or major costs to the resort.

Like for Like

If you are in an exchange programme, mostly you are promised the accommodation you will be given will be ‘like for like’ meaning similar quality and size to the one you are exchanging.

Linked agreement

These agreements exist as a method of getting around the laws relating to deposits. A linked agreement may breach the law and you would be advised to gain legal guidance before agreeing to what the salesperson says.

Lock Off

A type of accommodation that has two separate access points. It can be locked off to turn it into two independent units.

Maintenance Fees

Annual fees you must pay to cover the upkeep and day to day costs of the resort. These may rise yearly.

Management Company

The Developer usually controls the management company and they are contracted in to manage the grounds and upkeep of the resort.

Marketing Company

These people are responsible for the sales and marketing of the resort at other resorts and through other platforms such as online. (There may be internal marketing done at the resort seperate from the company).

Occupancy Size

This is essentially the number of people allowed to use the unit. It may be two different numbers, one number indicating the maximum number of people when additional beds are provided and another number to show how many people it is intended for.

Off-premises Contact (OPC)

This is a person that has the job of getting people who are not actually staying at the resort to come to the sales presentation.

OTE or RDO (Resort development organisation)

The trade body for timeshare

Owners Club

All owners of timeshare at a resort belong to this club.

Ownership Certificate (or holiday/ timeshare certificate)

A document that confirms your right to use the property.

Patrimonio

Spanish for ‘Wealth Tax’

Perpetuity

A timeshare that is in ‘perpetuity’ has no endpoint. This is actually illegal now as timeshares cannot exceed 50 years. The word itself actually means ‘forever’.

Plus Valia Tax

Spanish for Capital Gains Tax

Points Clubs

Points that you hold which entitle you to use time in different resorts. Many cases of points clubs are now deemed illegal.

Private residence / vacation clubs

An upmarket version of fractional ownership (See above)

Property bonds

Similar to Points Clubs. This is a system for owning shares or bonds in a company that owns timeshare properties.

Qualified Prospect

This describes the target audience of timeshare or the general demographic of person who is most likely to buy a timeshare agreement. It takes into consideration factors such as marital status, age, financial income etc.

Recourse Agreement

An agreement with the Developer to pay outstanding debts to the finance company if the consumer defaults on their payments

Red Week

This means high season/ highly desirable weeks. If you own a ‘red week’ you can usually exchange for any week you like throughout the year.

Repossession

If a consumer refuses to pay fees then the club can remove your rights to access the resort. Your rights/ ownership will be sold to cover outstanding costs.

Resale brokers/ agents or resellers

These people make money by charging commission on the sale of timeshare properties. They may directly buy timeshare weeks from existing owners and resell them or facilitate sales between buyers and sellers.

RDO (Resort development organisation)

As above, the trade body. (Formally called the OTE).

Right to use

The legal term which means you have a right to access your timeshare as granted by the trustees.

Sales Inspection visit (SIV)

Similar to a fly-by, potential customers are allowed to stay at a resort for a few days at a very low price. You must attend a sales presentation as party of the deal.

Season

Weeks in a year are divided into different segments by Exchange Companies. Think of the red, blue and green weeks outlined above. Each segment represents different levels of trading power and value based on how popular the season is.

Sinking Fund

This is the slice of your maintenance fee that goes towards furniture, fittings and the larger parts of the resort in good condition over the course of your membership.

SPIFF (Special incentive bonus for future sales)

It gives a salesperson an incentive to make a sale through a commission.

Timeshare directive

A European Parliament order to all nation states within the EU to implement Timeshare laws

Timeshare Interval

The allocated period where you are allowed to use your unit

Trading power

The Trading Power of a timeshare week refers to its value. So, for example, if you are on a red week or high demand week and have a large property in a popular resort you will have the highest trading power in an exchange for weeks.

Warm Line

The attempt of salespeople to sell timeshares to visitors at a particular resort (not like cold line where they approach people outside of the resort).

Week 53

The ‘extra’ week that comes up every seven years or so. Founders or developers often reserve the rights to this week.

White week

Unlike blue & green which is low season and red which is high season, white weeks are somewhere in the middle in terms of popularity and demand.

We hope this Jargon buster will be useful to you when trying to understand the terms that are used when talking about timeshare. If you’ve come across a term that we haven’t covered here, please let us know. We can help you to understand what it means and add it to our list.

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