The Texas Timeshare Act

The Texas timeshare laws can be found in Texas Property Code Section 12.221, also known as the Texas Timeshare Act. A timeshare gives the owner the right to occupy a specific real property for less than a year.

A timeshare property is an arrangement that people with an ownership interest use for temporary occupancy of a property. A timeshare plan is the plan that awards that person the right to use such accommodations.

A Texas timeshare is created through a timeshare instrument. This can be a master deed, master lease or other instrument used to create a timeshare plan. The timeshare period is the period within which the purchaser of a timeshare interest has exclusive possession, occupancy or use of the accommodation.

A timeshare plan can be a deed, arrangement, scheme, sale, lease, license or membership agreement. It can also be a right-to-use agreement by which the purchaser receives an ownership right in the property. A timeshare plan excludes an exchange program.

The purchaser obtains the ownership right in exchange for consideration, usually money. A timeshare involves an ownership right for less than a year in a given year, but not necessarily in consecutive years.

The term “timeshare property” can mean one or more accommodations and related amenities subject to the same timeshare instrument. For example, a timeshare property could be one room in a single resort, or it could be three rooms at three resorts, plus pools and spas associated with these three resorts.

A person can get rid of a timeshare in Texas by conveying their interest in the property by selling or giving the interest to another individual or a group of individuals. A person who does not want to sell their timeshare to another person can sometimes sell it back to the developer. They may use an agent, such as a broker, to sell a timeshare to another party.

The cost of a timeshare per year depends on the length of the timeshare agreement and the properties the arrangement allows the person to use. The cost of a timeshare can start in the hundreds of dollars and range into the thousands, and some timeshare arrangements cost over $60,000.

A timeshare arrangement can involve additional fees and assessments, depending on the terms of the timeshare plan.

The Texas Real Estate Commission (TREC), a state entity, regulates the sale of timeshare interests in Texas. Before a person may sell or offer to sell a timeshare interest in Texas, they are required to register their timeshare plan by filing an application to register a timeshare plan.

A timeshare plan that allows a buyer to stay at some properties in Texas may be registered in another state. The other state may have similar or stricter requirements than Texas. If the timeshare plan is registered elsewhere, the holder of the interest still has to file an application with TREC.

They should file an application for abbreviated registration of a timeshare plan. A person can file an application for presale authorization of a timeshare plan if they have already filed an administratively complete application to register a timeshare plan or application for abbreviated registration of a timeshare plan.

The term “administratively complete” means all contractual administrative actions have been accomplished, all releases have been executed, and the purchaser has made the final payment.

A party needs a separate application for each timeshare plan and must pay the appropriate filing fee for each application. Fees can be calculated through a form on TREC’s website.

When a person who wants to sell a timeshare has completed the application to register the timeshare plan; the application for abbreviated registration of a timeshare plan; and/or the application for pre-sale authorization for a timeshare plan, they should print a hard copy of the application. The person should then create an account with ARELLO Timeshare Registry. They will use the ARELLO account to submit their application.

The person should then send the hard copy of their completed application along with the fee for the application to TREC at: Texas Real Estate Commission, P.O. Box 12188, Austin, TX 78711-2188.

After TREC receives the application and required fees, it reviews the application and will let the person requesting to sell the timeshare know in writing whether it has approved the sale. TREC will respond with the answer “as soon as reasonably possible” if it has registered the timeshare plan or if it needs additional information.

If a sales agent is an employee of the owner of the timeshare developer, the employee does not have to be licensed. Otherwise, the sales agent for a timeshare needs to be licensed in Texas as either a broker or a sales agent.

A broker has a higher level of education in the field of real estate than does a sales agent. A timeshare sales agent acts as an agent on behalf of a broker and their clients and must be sponsored by a licensed broker to buy or sell a property in the state.

A timeshare interest usually carries annual fees, called maintenance fees, homeowners' association (HOA) fees or dues. The fees cover a number of costs, including property insurance, management and taxes.

The annual fees also cover landscaping, maintenance, improvements of rooms, common areas, amenities and grounds. Fees usually range in the thousands of dollars and can go up due to inflation. A person with a timeshare interest is required to pay their fees in order to retain the timeshare.

A person who purchases a timeshare interest and wants to give up their interest can cancel their purchase contract as long as they provide the appropriate timeshare cancellation notice to the developer before the sixth day after they signed the contract.

They should look at the contract or timeshare disclosure statement they received during the contract signing meeting. That statement should contain instructions on how to proceed with cancellation.

TREC law firms can offer general advice about how the Texas Real Estate License Act is interpreted and applies to real-life situations. They can also offer advice about the applicability and interpretation of TREC rules.

They cannot, with few exceptions, give advice pertaining to specific matters or transactions, other laws or civil matters. For example, a TREC attorney may not be able to explain how a timeshare interest would be divided in a divorce.

A person can hire a Texas real estate attorney who specializes in timeshare regimes to assist them with understanding a concern or represent them in civil court.