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.
Spanish for Lawyer
This means weeks that have been accumulated in previous years can be used in the current year
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
‘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.
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 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).
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’.
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.
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.
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 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.
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.
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.
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.
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.
Spanish for ‘Deed of Title’. (See Deeding for more detail).
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.
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.
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.
This is a fixed time week that you use every year in a specific unit in the same resort.
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.
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.
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.
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.
Another way of saying ‘timeshare’
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.
The Spanish Tax Office
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.
Spanish for VAT
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.
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.
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.
A type of accommodation that has two separate access points. It can be locked off to turn it into two independent units.
Annual fees you must pay to cover the upkeep and day to day costs of the resort. These may rise yearly.
The Developer usually controls the management company and they are contracted in to manage the grounds and upkeep of the resort.
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).
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
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.
Spanish for ‘Wealth Tax’
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 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)
Similar to Points Clubs. This is a system for owning shares or bonds in a company that owns timeshare properties.
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.
An agreement with the Developer to pay outstanding debts to the finance company if the consumer defaults on their payments
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.
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.
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.
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.
A European Parliament order to all nation states within the EU to implement Timeshare laws
The allocated period where you are allowed to use your unit
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.
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).
The ‘extra’ week that comes up every seven years or so. Founders or developers often reserve the rights to this 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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