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Timeshares Timeshares

Many consumers like the idea of owning a vacation timeshare, giving them the opportunity to enjoy a prepaid vacation at a favorite location each year and/or trade with another owner at another location.  But because they have been so popular and so many are for sale at any given time, timeshares usually should be viewed as a way to enjoy a particular destination, rather than as a money-making  investment.

Consumers should research their options carefully during the buying phase paying attention to:

  • Different types of ownership rights available with different plans that can affect your ability to use the unit when you want.
  • The track record of the seller, developer, and management  company.
  • What obligations exist for buyer?  Is there a rescission period?
  • Are there any restrictions or fees upon your resale of a timeshare? 

The Federal Trade Commission (FTC) provides information explaining different types of timeshares and some things to consider before buying one. The American Resort Development Association also provides helpful hints about the buying process. Sellers must disclose buyers’ obligations and rules. The buyer usually has a “rescission” period of 5 to 10 days in which you can cancel the purchases, but the exact time depends on the State as well as company policy. The buyer also has the right for his or her money to be held in escrow until the sale is final.

Selling a timeshare is similar to selling other property but you need to double check with the resort about any restrictions or fees that could affect your sale. You may want to check with your developer, management company, or homeowners association to see if they offer their own resale or transfer program or are affiliated with a licensed broker who handles resales. The FTC warns of dishonest timeshare resale companies who take fees upfront and provide no results. If you want to work with a different  reseller, make sure he or she is licensed by the Real Estate Commission in the state where the reseller is located.  Also, search for complaints with the  state Attorneys General and local consumer protection agencies in the state where the reseller is located.  Finally, according to USA Today, there may be ways of negotiating your timeshare back to selling company.

A number of scams exist in the resale process. The American Resort Development Association describes specific resale deceptive practices, along with others involving maintenance fees.