It might sound too good to be true. You are about to buy a timeshare but you are concerned about the cost. The timeshare agent says not to worry, that if you don’t use all of your points, you can rent or sell them to help earn money and offset the cost. Has the agent just violated the Tennessee Timeshare Act?
The Tennessee legislature, in its wisdom, addressed just this sort of fact pattern. Specifically, the Tennessee Timeshare Act, at Tenn. Code Ann. §66-32-132(1) provides that “no advertising for the offer or sale of time-share intervals shall…contain any representation as to the availability of a resale program or rental program offered by or on behalf of the developer or its affiliate unless the resale program and/or the rental program has been made a part of the offering and submitted to the commission…” (emphasis added).
Since the Timeshare Act defines advertising to include verbal statements, this provision is essentially a ban on statements regarding rental or resale if the timeshare developer has not taken very specific steps to make the rental/resale program part of its offering with the State of Tennessee.
Furthermore, the Tennessee Timeshare Act goes further, stating, at Tenn. Code Ann. §66-32-132(3) that “no advertising for the offer or sale of time-share intervals shall…contain any statement concerning the investment merit or profit potential of the time-share interval unless the commission has determined from evidence submitted on behalf of the developer that the representation is neither false nor misleading…” (emphasis added).
So, not only can the timeshare sales agent not tell you that there is a rental/resale option, the agent also cannot tell you that the timeshare will make money, serve as an investment, appreciate, etc., unless very specific conditions have been met.
Finally, Tenn. Code Ann. §66-32-132(9) provides that “no advertising for the offer or sale of time-share intervals shall…misrepresent the nature or extent of any services incident to the time-share project…” (emphasis added). And, Tenn. Code Ann. §66-32-132(11) provides that “no advertising for the offer or sale of time-share intervals shall…make any misleading or deceptive representation with respect to the contents of the time-share program, the purchase contract, the purchaser’s rights, privileges, benefits or obligations under the purchase contract or this part…” (emphasis added).
When read together, these four subsections of the Tennessee Timeshare Act provide tremendous protection to consumers in Tennessee. If a timeshare sales agent says anything about rental, resale, investment merit, or profit potential in order to convince you to buy a timeshare, there is a very good chance that he should not have done so (depending upon whether the conditions in the Timeshare Act have been met).
When you are buying a timeshare, you are buying a perpetual interest. Sometimes timeshares are hard to get rid of. That makes it all the more important to know exactly what you are getting, a fact recognized by the legislature when it enacted the protections in the Tennessee Timeshare Act.
If you, or someone you know, has been told that they can sell or rent their timeshare/timeshare points, or if they have been told that they might make money or generate profit from their timeshare/timeshare points, it is important that they talk with a lawyer to determine if those statements were permissible or not.
At Belcher Sykes Harrington, PLLC, our lawyers are familiar with the laws governing the sale of timeshares in Tennessee. If you have questions about a representation that was made to you in the sale of a timeshare, our lawyers can help you to understand your rights.
