Timeshares Defined

Timeshare Estate: conveys an interest in real property, either perpetual or for a term of years, coupled with a right to use accommodations. Because you legally own the property, you can sell, gift, or will the property to heirs. It also means you are responsible for property taxes and ongoing maintenance fees.

Timeshare License: gives the right to use accommodations but without an underlying property interest. You do not own any real estate, and you do not receive a deed. Because you don't own the property, it is harder to sell the right to use the property, and all rights expire at the end of the contract. 

The Department of Real Estate (DRE) administers and enforces the laws governing the sale of subdivided lots and common interest developments, including condominiums and planned developments. It also enforces laws governing the sale of time-share interests. Time-share interests are subject to regulation under the Vacation Ownership and Time-share Act of 2004 (California Business & Professions Code Sections 11210 through 11288).

Under the Act, a timeshare license is legally categorized as a "personal property time-share plan" (or a "time-share use"), whereas a deeded timeshare is a "real property time-share plan" (a "time-share estate").

Davis-Stirling Act

Applicable Provisions. Some, but not all, provisions of the Davis-Stirling Act apply to timeshare estates. Provisions that may apply, include Sections 4090, 4177, 4178, 4215, 4220, 4230, 4260 to 4275, inclusive, 4500 to 4510, inclusive, 4625 to 4650, inclusive, 4775 to 4790, inclusive, 4900 to 4950, inclusive, 5500 to 5560, inclusive, and 5975 of the Civil Code. (Bus. & Prof. Code § 11211.7(a))

Multisite Plan. To the extent that a single site time-share plan or component site of a multisite time-share plan located in the state is structured as a condominium or other common interest development, and there is any inconsistency between the applicable provisions of this chapter and the Davis-Stirling Common Interest Development Act, the applicable provisions of this chapter shall control. (Bus. & Prof. Code § 11211.7(b)(1))

Mixed-Use Project. To the extent that a time-share plan is part of a mixed-use project where the time-share plan comprises a portion of a condominium or other common interest development, the applicable provisions of this chapter shall apply to that portion of the project uniquely comprising the time-share plan, and the Davis-Stirling Common Interest Development Act shall apply to the project as a whole. (Bus. & Prof. Code § 11211.7(b)(2))

Because a timeshare license is a contractual right to use a property, the Davis-Stirling Act generally does not apply.

Timeshare Taxes

California Tax Code. The California Revenue & Tax Code defines timeshare associations as follows:

The term "timeshare association" means any organization (other than a condominium management association) organized and operated to provide for the acquisition, construction, management, maintenance, and care of association property if any member thereof holds a timeshare right to use, or a timeshare ownership interest in, real property constituting association property. (Rev. & Tax Code § 23701t)

Federal Tax Code. The Internal Revenue Code defines timeshare associations as follows:

The term "timeshare association'' means any organization (other than a condominium management association) meeting the requirement of subparagraph (A) of paragraph (1) if any member thereof holds a timeshare right to use, or a timeshare ownership interest in, real property constituting association property. (Internal Rev. Code § 528)

Recommendation: If you are unsure whether your timeshare project falls under the Davis-Stirling Act, consult legal counsel.

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