If you or a client have ever visited Orlando, Daytona, Cancun, Cozumel, or many other popular tourist destinations, you may have been offered free tickets, meals, cruises, or even cash in exchange for taking a tour or listening to a timeshare presentation. The person soliciting you likely didn’t mention “timeshare,” but instead tried to lure you in with a free ATV tour or other hook. Even locally, in St. Pete, timeshare companies have booths at craft fairs, the grilled cheese festival, and other events trying to reach every potential buyer possible. While some people will sit through the presentation, collect their freebie, and proceed with their day, others will end up purchasing a timeshare. For those who purchase, they may ultimately suffer buyer’s remorse. A timeshare is a lifelong commitment and many owners find themselves, for one reason or another, wanting to be free of the commitment. Unlike a car, home or other large purchase, your ability to sell your timeshare is greatly limited due to the lack of a decent resale market for timeshares. Timeshares are frequently sold on eBay for as little as $1.00. Considering the average price of a timeshare is $20,000, selling it for $1.00 is not much of a return on the often promised “investment.”
Many timeshare purchasers feel that they were misled in some way during the course of their timeshare purchase. If that is the case with your client, there are Florida Statutes that protect timeshare owners. Florida Statutes Chapter 721, “The Timeshare Act,” is covers all aspect of timeshare sales, purchases, ownership, and operation. Section 721.11 offers protection to owners by prohibiting timeshare sales representatives from:
•Misrepresenting a fact or creating a false or misleading impression regarding the timeshare plan or promotion thereof;
• Making a prediction of specific or immediate increases in the price or value of a timeshare;
• Representing that the purchase of a timeshare is a good investment;
• Representing that a timeshare will increase in value like other forms of real estate;
• Allowing the presentation to go significantly longer than scheduled;
• Representing that there is a deal that was only available that day and time, when in fact it was not;
• Failing to provide cancellation rights or disclosures;
• Implying that a facility is available for the exclusive use of the purchasers when it will actually be shared by others or the general public;
• Misrepresenting the availability of a resale or rental program or resale or rental opportunity;
• Misrepresenting the nature or extent of any incidental benefit; and
• Misrepresenting the size, nature, qualities or characteristics of the offered accommodations or facilities.
There has been an increasing amount of litigation in Florida regarding timeshare transactions. Some of the claims that owners have made against timeshare developers include:
• Violations of the Timeshare Act;
• Fraud in the inducement of a contract;
• Negligent Misrepresentations;
• Negligent Supervision;
• Breach of Fiduciary Duty; and
• Debt collection issues relating to the ownership of the timeshare;
As attorneys, you may encounter clients with timeshares who are looking to unload in the context of a divorce or probate. It seems that no one is fighting to keep the timeshare in a divorce. If you, or a client, are looking to divest yourself of a timeshare, there are options available to you:
Rescission- If your client is within the rescission period, they have an automatic right to rescind. However, it is not often that an owner decides to rescind the transaction in this short amount of time, especially given that they are typically on vacation when they make their purchase.
Violation of the Timeshare Act- If your client believes the resort violated a provision in Florida Statute 721, the resort may be willing to work with you on a release from the ownership.
Litigation- Litigation is always an option if you or your client has a cause of action and the matter cannot be resolved prior to filing a lawsuit.
Resale- As I mentioned, the resale market is not promising, but your client may be able to sell their timeshare, especially if they simply want to be rid of it and are not concerned with what purchase price can be obtained.
Cease payments- If a client simply stops paying for a timeshare, most resorts will ultimately foreclose on their interest, which can be damaging to their credit. However, it is still an option if a client simply wants to be done with the timeshare and is not concerned with their credit.
Assistance- There are lawyers and other companies, some reputable and trustworthy and some not, that can help timeshare owners who want to divest themselves of ownership. In some instances, timeshare owners’ associations or developers are willing to accept the timeshare property at no charge or for a nominal fee. You should proceed cautiously in this regard because there are many unscrupulous companies out there who will take thousands of dollars and ultimately offer no assistance in transferring the timeshare interest back to the resort.
The best bet is to fully research your options before purchasing any timeshare, vacation club membership, or any similar vacation related product.