When it comes to timeshares, there are a lot of terms that you need to familiarize yourself with to fully understand how they work. One of the first steps to take when buying a timeshare is figuring out what type of ownership is right for you. Right To Use timeshares, known as RTU, are just one of the options for timeshare contracts. To learn more about what Right To Use contracts are and how RTU timeshares work, continue reading.
What Are Right To Use Timeshares?
RTU timeshares are non-deeded timeshare contracts and give you the “right to use” a unit for a set amount of time. This means that, unlike a deeded timeshare contract, you do not actually “own” the property. The amount of years each timeshare contract lasts depends on the resort and brand. When you purchase an RTU timeshare, you know exactly when the agreement expires. You are immediately aware of when you will no longer be under contract for that property.
Having an expiration date may give the owner a sense of relief. They can relax knowing that they aren’t bound to a contract for life. They will not have the burden of being responsible for maintenance fees or other costs forever. Unfortunately, some people on deeded timeshare contracts get into some financial trouble. This could simply be because they cannot afford to pay their fees for that long of a timeframe. RTU timeshares give owners a guaranteed endpoint.
How Do RTU Timeshares Work?
Unlike a deeded timeshare contract, which is like traditional real estate ownership, RTU timeshares are purchased for a set period of time. Owners are responsible for a deeded timeshare for life or until they sell it. The expiration date for an RTU timeshare is in the original contract. After that date, you are no longer legally responsible for that timeshare. The number of years of use for RTU timeshares is generally between 25 and 75 years. However, that number depends on resort location and brand.
With an RTU timeshare, you can still sell the property or pass it along to your family. However, the contract term will still be the same as the originally designated length. For example, if you were to sign a 30-year RTU contract in 2021 but sold it in 2031, the new owner will only have 20 years of use. The contract length does not renew when it is resold, it will always remain the same. This may cause a bit of an issue when selling an RTU contract. For example, if you want to sell an RTU timeshare with only 7 years left, the new owners would only get to enjoy it for 7 years. This short of a contract might not pique a buyer’s interest.
Right to use timeshare contracts are often found in international destinations. This is because owners can’t legally “own” a deed there if they are U.S. citizens. In fact, all timeshares in Mexico for example are RTU unless you are a Mexican citizen.
Benefits of RTU Timeshares
People enjoy RTU timeshare contracts for a few reasons. Firstly, they know exactly when the end date of their contract is when they sign. That means that there is a guaranteed way out of their timeshare, which is a more difficult situation to navigate with deeded contracts. This also means that owners know when they will stop paying maintenance fees, unlike deeded owners who are responsible for fees even when they are no longer able to use their timeshare.
Deeded timeshare contracts may be in one family for generations. While this could be seen as a lovely family heirloom, timeshares owned in perpetuity often cause strife for those it is passed down to. Since RTU timeshares have a concrete end date, you don’t have to worry about your ownership being a burden on your loved ones.
Are Disney Vacation Club Timeshares Right To Use?
Disney Vacation Club timeshare contracts have an expiration date, but does that mean that they are RTU? Contrary to how it sounds, DVC timeshare contracts aren’t right to use! DVC contracts are leasehold, which is similar to RTU but not the same. The major difference between leasehold and right to use contracts is that the property is actually “owned” for the length of the contract with a leasehold. This means that similarly to homeowner’s association fees, DVC owners pay annual dues that go towards the resort’s operating costs and real estate taxes.
DVC members own their timeshare until their home resort’s expiration date, which they agreed to when buying their contract. Sometimes DVC will extend a resort’s expiration date and may offer current owners the option to extend their ownership. This is the only time way that a DVC contract’s expiration date will change. If you buy a DVC timeshare on the resale market, you are agreeing to the original expiration date of the contract.
Timeshares For Sale
If you’re ready to take the first steps towards vacation ownership, we’re here to help. Browse our marketplace of available timeshare resale listings now! You can browse for specific brands and locations or by price. When you find a listing that you love, make an offer! Fidelity is a licensed brokerage with a team of expert real estate agents. To assist you in buying a timeshare, contact us at [email protected] today to get started!!