Be aware of the different types of timeshare and the associated costs
“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 email@example.com