What should you watch out for if you find yourself in a timeshare sales presentation?
Timeshares have evolved since their initial appearance long ago as vehicles for real estate ownership. Initially, timeshares were often very straightforward – i.e., an owner might own a particular week (say, the first week of April), in a particular building. The owner could then use that week every year. Nowadays, it is more likely that a timeshare owner will own points that can be redeemed to book stays at a variety of resorts around the country or around the world. While that might sound better in some ways, by being less transparent, this new form of ownership can also lend itself to abuse, with owners being unable to book the dates they want at the resorts they want.
Because of the confusing nature of timeshare plans and programs, customers can be susceptible to fraud if they have the misfortune to encounter unscrupulous sales agents who might be motivated by a commission-based compensation system to create, rather than eliminate, confusion.
This blog post is not about whether you should attend a timeshare sales presentation or not. That’s a different question for another day. This blog post is about things to watch for if you do, for whatever reason, find yourself in a timeshare sales meeting.
- Remember that you always have the right to leave. It’s a free country. If you want to leave, get up and leave. Don’t worry about appearing rude, or feeling like you have to explain yourself. Just walk out. If you are at the presentation because you were promised a particular gift or inducement (e.g., free tickets or free dinner if you attend a presentation), and you have met the terms of the initial offer (e.g., if you were asked to attend a sixty minute presentation and it’s been more than sixty minutes), then you are entitled to the gift or inducement. Many people sit through hours of a sales pitch that they don’t want to hear because they either feel that it would be rude to leave, or they believe that they have to wait it out to receive the gift they were promised. That’s not the case.
- Beware of instant credit. Many people who would be reluctant to open their wallet and pay thousands of dollars for a timeshare find that during a transaction they opened a line of credit or took out a loan or opened a new credit card and then made a substantial payment, all without realizing what they have done. The availability of instant credit makes it all the more important to take the time and understand exactly what it is that you are signing. Just because you aren’t taking cash out of your wallet doesn’t mean that you aren’t signing a document authorizing a payment.
- Don’t be persuaded by gifts or inducements. Tennessee law prohibits the use of gifts to induce someone to purchase a timeshare unless very specific disclosures are provided. If you are being promised anything of value in addition to the timeshare interest itself, you should be receiving disclosures about that thing of value. Remember, a timeshare is a perpetual ownership. Will that benefit or thing of value still be around in two or five or ten years? What is that benefit or thing of value actually worth?
- Beware of electronic signatures. Touching a computer or tablet screen, or clicking a mouse, doesn’t have the same formality as signing your name to a contract with a pen. But it can have the same legal effect. If you are asked to sign a document electronically, ask for time to read it. Better yet, ask for a paper copy.
- Beware of promises regarding rental, resale, investment merit, or profit potential. If a sales agent is telling you that your timeshare can make you money through rental or resale, or that it will appreciate in value, or that it will otherwise be a good investment, there is a good chance that he or she should not be making those representations. The Tennessee Timeshare Act forbids those types of representations unless very specific conditions have been met by the timeshare developer.
- Remember that you are entitled to receive a public offering statement with various mandatory disclosures. While these documents are often quite long, they can help you to determine exactly what it is you are buying.
- Remember that you have a right to rescind or cancel any timeshare contract that you enter in the State of Tennessee. However, this right ends after either 10 or 15 days (depending upon whether you have made an inspection or not). This cancellation right should be spelled out directly above the signature blocks on the timeshare sales contract. So if you sign a contract, it’s a good idea to have your family lawyer review it within the rescission/cancellation period.
Some people enjoy their timeshares. Other people feel that they were misled when they purchased their timeshares. Remember that the purchase of a timeshare involves many of the same complexities as the purchase of a home or other piece of real property, yet it is typically done on a much faster timeline, often without the purchaser having the benefit of a real estate agent, inspection, or closing attorney. For these reasons, even in the best of circumstances it can be confusing. If fraud is involved, it can be very difficult to tell what is true and what is not.
Our law firm represents individuals who have been the victims of fraud in the sale of timeshares. If you believe you were misled in a timeshare transaction, our attorneys can help you to understand, and protect, your rights. The information above is general in nature and is not meant as specific legal advice. If you have any questions about your timeshare purchase, it is important to speak to a lawyer.
