The Timeshare Act provides a buyer with the unequivocal right to cancel their purchase contract in two circumstances. That’s right, in a typical timeshare purchase in Tennessee, the buyer can change her mind, as long as she is aware of the deadlines to do so. As I discussed in a prior blog post, Tenn. Code Ann. §66-32-112 requires a timeshare developer to provide a timeshare purchaser with a Public Offering Statement (this requirement does not apply to certain transactions, such as a private sale between a timeshare owner and a subsequent purchaser). The Public Offering Statement must, among other things, contain “a statement a statement that within ten (10) days from the date of the signing of the contract made by the purchaser, where the purchaser shall have made an on-site inspection of the time-share project prior to the signing of the contract of purchase, and where the purchaser has not made an on-site inspection of the time-share project prior to the signing of the contract of purchase fifteen (15) days from the date of signing of the contract, the purchaser may cancel any contract for the purchase of a time-share interval from developer.”
The rules of the Tennessee Real Estate Commission require that this same language be placed conspicuously above the signature line on the purchase contract. So, every purchaser should be told in two distinct places that they have the right to cancel within ten, or fifteen, days, depending upon whether they have “made an on-site inspection.”
Tenn. Code Ann. §66-32-114 contains the corresponding provision that the purchaser may, in fact, cancel the contract. Specifically, the contract “is voidable” within the ten or fifteen day time period, and all payments must be refunded within thirty days, provided that the purchaser gives timely and proper notice of cancellation, as set forth in the statute.
Significantly, however, Ten. Code Ann. §66-32-114 also provides a second right of cancellation to the purchaser. Specifically, “the contract is voidable by the purchaser until the purchaser has received the public offering statement.”
These provisions are important, but they also beg other questions—when has a purchaser received a proper, up-to-date, Public Offering Statement? What is an on-site inspection? How should the cancellation be communicated to the developer? The Timeshare Act answers some, but not all, of these questions. The take-away is that a purchaser should know her rights and seek counsel if she has any questions.
John O. Belcher is a founding member of Belcher Sykes Harrington, PLLC and routinely represents consumers in timeshare fraud cases. The information above is just a general summary and does not constitute legal advice. If you would like to discuss your particular timeshare transaction, don’t hesitate to contact Belcher Sykes Harrington, PLLC.
