Dubai’s initiative to regulate the timeshare property market will go a long way in boosting investor confidence in that segment of the property market while giving a shot in the arm for the country’s tourism sector.
A timeshare is a shared ownership model of vacation real estate in which multiple purchasers own allotments of usage, typically in one-week increments, in the same property.
The timeshare model can be applied to many different types of properties, such as vacation resorts, condominiums, villas, and apartments.
While the concept is hugely popular in world’s leading tourism markets on both shared deed ownership basis and shared lease ownership basis.
The move to implement a clear and broad-based regulation of the sector is a bold initiative to protect all stakeholders in the industry
Under the shared deeded ownership, each owner is granted a percentage of the real property itself, correlating to the amount of time purchased. The owner receives a deed for his or her percentage of the unit, specifying when the owner can use the property. Whereas if the timeshare is structured as a shared leased ownership, the developer retains deeded title to the property, and each owner holds a leased interest in the property.
While most such offers are seemingly simple and give investors options for less expensive vacations, proliferation of unscrupulous elements and fly-by-night operators have maligned the name of the industry around the world.
In many parts of the world the timeshare regulations have been evolving over the past few decades. The regulations in Europe were created in 1994 and there have been numerous amendments over the years. The Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (the ‘Timeshare Regulations’) which came into force in February 2011 and applies across the UK too is broadly in conformity with the European regulations.
Over the years, several timeshare concepts, both domestic and foreign have been sold in the UAE. While there has been an urgent need for rules that are clear and simple, to protect consumers against unwanted timeshare contracts, the regulation will pave the way for realising the full potential of timeshare industry.
The move to implement a clear and broad-based regulation of the sector is a bold initiative to protect all stakeholders in the industry. With the new law, Dubai has sent out a clear signal to both investors and property owners that investor rights are paramount while creating opportunities for that segment of the property market to tap into the huge prospects of tourism industry in the UAE.