Be aware of the dif­fer­ent types of time­share and the as­so­ci­ated costs

Weekend Argus (Saturday Edition) - - FINANCE -

“Shared vacation prod­ucts” are avail­able to you in sev­eral dif­fer­ent for­mats, Melanie Hatji­gian­nakis, the pub­lic re­la­tions of­fi­cer for the Vacation Own­er­ship As­so­ci­a­tion of South­ern Africa, says. The dif­fer­ent for­mats are:

Tra­di­tional fixed week or con­ven­tional time­share week. This type of own­er­ship grants you the use of a des­ig­nated unit at a spe­cific re­sort for a spe­cific week of the year (low, mid or high sea­son) each year in per­pe­tu­ity, un­less the prod­uct has a time limit at­tached, such as 15 or 20 years.

Flexi-week. Un­like fixed-week own­er­ship, your us­age is sub­ject to your re­serv­ing your week, ei­ther in a spec­i­fied sea­son or at any time of the year.

Points sys­tem. Points are used as a “cur­rency” to cal­cu­late the value of your time­share own­er­ship, based on the sea­son, the size of the unit and where the re­sort is lo­cated. For ex­am­ple, it may cost you 3 000 points for a mid-sea­son week in a four-sleeper unit at a re­sort on the East­ern Cape coast, but it may cost you 4 000 points for the unit in the high sea­son.

COSTS AND RISKS

The dan­ger with any points scheme is that the com­pany will not hold suf­fi­cient cap­i­tal to pay for your fu­ture hol­i­days or will not own suf­fi­cient units in time­share de­vel­op­ments.

Some points schemes, such as the Hol­land Moore­house time­share scheme that col­lapsed some years ago, left mem­bers with noth­ing to show for their money.

If you have signed up for an “ex­change mem­ber­ship”, there is a monthly mem­ber­ship fee that al­lows you to bank your points and ex­change them for use at other re­sorts, in­clud­ing in­ter­na­tional ones, for which there is also a book­ing fee.

The cost of points may vary be­tween schemes, so you should com­pare dif­fer­ent schemes be­fore you com­mit to one. Also, with the points sys­tem you may pay more for main­te­nance costs than some­one on a con­ven­tional time­share scheme.

In all schemes you are also li­able for an an­nual levy.

Some time­share com­pa­nies are reg­is­tered credit providers that will grant you a loan if you qual­ify for one.

The loan agree­ment will in­clude an ini­ti­a­tion fee, monthly ad­min­is­tra­tion fees and in­ter­est charges.

The loan agree­ment will fall un­der the Na­tional Credit Act, and any com­plaints re­lated to the loan can be sub­mit­ted to the Na­tional Credit Reg­u­la­tor (NCR).

Con­tact the NCR on 011 554 2600 or 0860 627 627, fax 011 805 4835 or email com­plaints@ncr.org.za

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