Buying a timeshare involves procuring the right to spend a specified period of time in a property, such as a studio apartment or villa within a holiday resort, on an annual basis. In most cases, this property will be overseas.
Timeshares have experienced something of a mixed reputation in recent years. Many thousands of people enjoy an annual holiday abroad in a timeshare property, with the benefit of knowing in advance that their annual vacation has already been catered for. However, others have experienced a variety of different problems. In addition, some of the methods which are used to encourage people to take up a timeshare can sometimes leave much to be desired.
One of the key things to be aware of is that many of the more unscrupulous timeshare companies employ hard line selling techniques. Whilst on holiday, people are often invited to formal presentations, where they are subjected to a significant amount of pressure to make a purchase. If you are relaxed and on holiday, it may be easy to be swayed by lovely weather and effective sales patter. Sometimes they are offered a free gift or entry into a prize draw as an incentive for attending the presentation.
It is therefore essential that when considering whether to buy a timeshare, you study any agreement carefully to make sure that you understand exactly what it entails, and where necessary you should consult a legal professional for advice. Avoid buying into a property which has not yet been built, or is incomplete, and try to make sure that there is an owners' association affiliated to the resort.
As a general rule, you should avoid buying on the spur of the moment or under pressure from a salesperson. You are potentially investing a significant sum of money, and your decision to buy should be a considered one. Should you decide to go ahead following a presentation, make a note of what you are told at the time, in the event that you should encounter any problems at a later stage. You should also consider what would happen if you should wish to terminate the agreement at any point in the future. If in any doubt about the terms of the agreement you are signing, you should take legal advice.
Your timeshare agreement may take one of the following formats:
Fixed week agreement
This means that you own the right to spend a specific week (or another specified period of time) in the accommodation. This time is fixed and so cannot be changed. This option may suit those people who specifically wish to visit the same destination and resort each year.
Under this system, you have the right to stay in the property for any chosen week (or other time period) within a specified seasonal band. However, the disadvantage is that your holiday time will have to be booked separately every year, so there is a risk that the week you require may not be available in any one year.
Many timeshare operators make use of an exchange system, whereby you can swap destinations with another timeshare owner and visit their property in an alternative resort or a different country. The degree of trading power you have will depend on how your property is rated, which is governed by such factors as the quality of the resort, the time slot allocated to you, and the size of your property. You may also be able to extend the length of your exchange holiday, for a fee.
You should bear in mind that there may be additional costs involved in owning a timeshare. When signing up to an agreement, you will normally be asked to pay a one-off fee, and an annual fee thereafter to cover the costs of managing and maintaining the property (regardless of whether or not you stay at the property in any given year). You may also have to pay for using an exchange system. Make sure you are aware of all of the costs involved before you sign any agreement.
There are a number of methods by which you can purchase a timeshare, including: buying from a professional reseller; via an owners' club; via a management company or a contracted agent; from a developer; or direct from the owner. However, it is important to take care when making any such purchase, and you are advised to study the terms of the agreement carefully, and where necessary seek assistance from a legal professional.
If you change your mind
Many people find that having agreed to purchase a timeshare, they later wish to cancel the agreement. This may be because they were subjected to high pressure sales techniques at the time of purchase, or because they decide that having studied the details of the agreement, it does not suit their requirements.
Within the European Union, there is legislation in place which aims to protect consumers. In the UK, specific legislation covers agreements which are signed in the UK, or governed by UK law, and it includes the following measures:
- You have a statutory right to cancel a timeshare agreement within a certain specified period of time
- A deposit is not required during this cooling off period
- The timeshare company must inform the consumer of their right to cancel
The watchword, however, is caution. Even if you should sign an agreement in an EU country, you may find that you do not have the same rights as you would be entitled to in the UK. In addition, certain timeshare agreements may not be covered by the legislation. As a general rule, keep copies of all documentation exchanged between yourself and the seller, and make sure that you use recorded delivery when sending a notice of cancellation.
Many people have also had problems when the time comes to sell their timeshare. It should be noted that if you wish to cancel an agreement after the cooling off period has expired, the seller may be able to take you to court and you could end up paying ongoing management fees, even though you no longer want the timeshare. Liabilities can also continue after death, which may cause a problem when trying to dispose of a timeshare belonging to someone who has died. If you believe the product was misrepresented when it was sold to you, you may be able to obtain assistance from Trading Standards. If you made the purchase by credit card, the credit company may also be able to help you reclaim your money.
Timeshares can be sold through an owners' club or management company, an independent reseller, or direct by the buyer. However, you should ensure that your sale price is realistic, and do not pay any money upfront to any agents who are selling the property on your behalf, especially as resale fraud is a significant problem. Should you wish to cancel or sell on a timeshare agreement, you are advised to contact an experienced legal professional for advice.
For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.