The purchase of a timeshare is often a rushed and un-thought-out transaction. The sales presentations are designed to both confuse and wear down potential owners with their length and various promises. After you have signed the purchase agreement owners often feel they have no options and that they – and their children – are stuck with the timeshare forever. Fortunately, this is not always the case. Here are 10 things that Timeshare companies don’t want owners to know.
- Cancellation Time Period - Every state has a mandatory time period where owners can cancel their purchase for any reason. The time period is usually short, on average 5 to 10 days. The purchase agreement is required to list the number of days for the state that the purchase is completed in. Unfortunately, most owners do not realize that they want to rescind the agreement within this time period. This could be because they are still on a vacation, or that they have not yet realized that the timeshare won’t function as they thought that it would.
- Weeks vs. Points - Timeshares have been deemed real property making them the same as a home or apartment. The owner should receive a deed, which will be recorded. However, this only applies to timeshares that deal in weeks. If the timeshare is dolled out in points as a vacation club then the owner will likely not receive a deed. Instead, the Timeshare Company will give the owner a certificate for the number of points purchased. The owner should know that, unlike weeks, the points work much the same as credit card rewards. You will need a certain number of points to be able to stay at the property. Additionally, the more points you have the more you are bumped up in line to be able to stay. Oftentimes owners find that they don’t have enough points to stay where they want to or when they want to. The Timeshare Company is of course eager to sell you additional points to allow you to stay.
- Effect on the Owner’s Estate - Timeshares are sold in fee simple with the covenants running with the land. This legal description means that the timeshare, including the fees associated with it, will be passed on to the owners’ heirs. Owners’ children are saddled with the high maintenance fees that may be associated with the timeshare as well as any remaining mortgage payments. Often timeshare owners are advanced in years and purchase the timeshares in locations where their children may not want to vacation. It is important to realize that the decision to purchase the timeshare is not something that will only affect the purchasers.
- Oral Statements or Promises - A common complaint from owners is that the salesperson made oral statements about the property that did not end up being true or in the purchase agreement. Timeshare companies protect themselves from this misrepresentation claim by having a paragraph in the purchase agreement, which says that the agreement is the only binding representation made. This means that any oral statements made by the salesperson to get the owner to sign have no binding effect. Unfortunately, most people only skim lengthy contracts. Even if the purchase agreement requires an owner initial next to this paragraph, the owner typically will not comb through the rest of the agreement to ensure that all statements are accurately reflected in the agreement. Often the purchase agreement is signed after sitting through a lengthy presentation. All the owner wants to do is enjoy the vacation they have been pulled away from.
- Maintenance Fees - The initial cost of a Timeshare may be relatively low compared to the amount that an owner is required to pay. This is because of maintenance fees. These fees are in addition to the purchase price. While the fees are usually a small amount when first purchased, they begin to rise in the following years. In some cases, these fees become higher than the initial purchase price. There is nothing that restrains the Timeshare Company from exponentially raising the maintenance fees. In fact, the high cost of these fees is one of the most common complaints owners have.
- Credit Cards - Timeshare Companies often times offer a credit card application to potential owners. The salespeople will tell the potential owners they can put the purchase price on to the credit card or transfer the purchase amount from another card to the new. The salespeople will often act as though they are working with the credit companies or have a connection that will help the owners get a better rate. This is not the case. Owners can get the exact same credit card and offer on their own without the help of the timeshare salesperson.
- Waivers - Recent purchase agreements have contained an additional document that owners are required to sign. The document is a waiver that allows the Timeshare Company to either text, email, and call the owners with an automated and or recorded message. The waiver may specifically spell out that the document waives the owners’ claims under the TCPA (Telephone Communications Protection Act). This law protects people from being harassed by telemarketing or spam. The law states that the business must have prior written consent to contact people through text messages or using recorded or automated messages. The Timeshare companies are trying to get around this law by forcing the owners to sign the waiver with their purchase agreement. However, the waiver is ineffective. The waiver doesn’t provide authorization for each phone number, instead they usually just state that the Timeshare can contact you. Courts have held these types ineffective for lack of specificity. Also, the courts have said that a company may not require that people sign the waiver to do business with them. Because these waivers are not valid, owners have claims against the Timeshare Company if they have text messaged them or used automated or recorded phone calls to contact them.
- Document Production Fee - Another addition to the Purchase Agreement that is common is a document production fee. This fee is usually contained in the closing costs. The fee is described as being for the production of the documents related to the sale of the timeshare. The cost varies but is normally a few hundred dollars. Owners are not usually aware that this fee is a violation of state law. Since timeshares are deemed to be real property only an attorney may charge a fee for the creation of documents related to the sale of the timeshare. This violation carries with it damages that vary from state to state.
- Resale and Exchange - The ability to resell a timeshare is almost nonexistent. Timeshares can be found on resale websites for mere dollars when the owners originally bought them for tens of thousands. The resell market for timeshares is something that the Timeshare Companies do not want owners to know about. Salespeople will oftentimes bring up the idea of an exchange program. This is a different option than resale. Many times the exchange program will not be able to replace the owner’s timeshare with their desired property without the owners paying more money. Owners are oftentimes led to believe that they will be able to either resell their timeshare for the money they bought it for or in the alternative to exchange it for other timeshares hassle-free. Unfortunately, that is almost never the case and the owners are left with a property that is essentially worthless on the open market.
- Statutes of Limitations - Owners of timeshares have a number of options to get justice against the Timeshare Company’s practices, however, these options are limited by statute. Each state has a statute that sets the time limit that an owner can file a claim against the Timeshare Company for their practices. The time limit varies depending on what practice the owner want to litigate over. It is important that the owners act quickly as some statutes limit the time to 5 years or earlier.
Owners often feel that they are alone in their troubles with the Timeshare Companies. That they cannot believe they were suckered into the decision and that they are now stuck. By keeping these 10 things in mind, owners can build a path out of their timeshare hole back towards their freedom. If you feel you have been treated unjustly by your Timeshare Company, please contact our offices and we will help answer any questions you may have to build your own path.