Timeshare contract is a type of ownership that gives you a specific amount of time each year to spend at a particular property. Timeshare properties are usually located in popular vacation destinations, such as beaches, ski resorts, or cities. In exchange for your timeshare, you typically pay an annual maintenance fee that varies from one brand to another. A timeshare can last up to 99 years. This article discusses some important things to consider before purchasing a timeshare.
Many unscrupulous salespersons use high pressure tactics to persuade consumers to purchase a timeshare. They may not give consumers sufficient time to review the contracts before, during, or after the sales presentation. This often leads to an impulsive decision and the imposition of a lifetime financial burden.
Timeshare companies often refuse to release consumers from their onerous financial obligations. They will often use threats of legal action and pass the debt on to collections agencies to get the money they are owed from consumers who don’t pay their yearly fees. This is a serious problem for people who are trying to sell their timeshares or get out of their contracts.
Most states lack disclosure rules that would put consumers on notice that they are entering into a lifetime commitment to pay a fixed, undetermined amount of money that will increase over time. This is in direct contrast to other long-term financial commitments such as mortgages or auto loans, which are subject to the federal Truth in Lending Act. Some timeshare companies rely on this lack of transparency to conduct their business.
The ability to exit a timeshare contract is a major issue for consumers who are struggling to keep up with their yearly maintenance fees. These fees can increase dramatically over the course of the contract. Luckily, some states allow consumers to cancel or rescind their timeshare contracts. This is an important right for consumers and should be incorporated into all contracts. In the US, this cooling-off period varies from state to state, but generally lasts up to 15 days. In Hawaii, it is seven days.
The problems that consumers face when they enter into timeshare contracts and other holiday-related contracts necessitate the need for dedicated consolidated legislation. The provisions in the Consumer Protection Act (CPA) are not sufficiently robust and should be amended to provide a higher level of protection for these consumers. A minimum withdrawal period of ten to fourteen days would be sufficient as it will penalise traders who fail to comply with the law. Ideally, the CPA should also cover long-term holiday products, exchange contracts and resale contracts. This will allow for a more holistic approach to the issue of consumer protection and a more effective industry response.