David William Jordan

Attorney & Counselor at Law

What to Look for When Buying a Timeshare


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Many timeshare programs are highly regarded, but problems occasionally occur.  You should consider the risks as well as the benefits before signing a contract or purchasing the timeshare.

Practical Factors To Consider:

  1. Whether you will be able to use a timeshare facility regularly.  For example, are your vacation plans sometimes subject to last minute changes, or do they vary in length and season from year to year?

  2. Check to see if the properties have flexible use plans that you may consider.

  3. If you are evaluating a timeshare plan with units in several locations, also consider whether the club has sufficient units at the sites you prefer to give you the opportunity to use them.

Investment Potential

Question any investment claims made by the seller.  The future value of a timeshare depends on many factors and resale of a timeshare is often difficult.  You may face competition from the firm that sold you the timeshare or from local real estate brokers who may not want to include the timeshare unit in their listings.  Closing costs, broker commissions, and financing charges also should be considered as part of your investment costs.

Total Costs

The total cost of your timeshare includes mortgage payments and expenses, such as travel costs and annual maintenance fees.  The maintenance fees may rise at rates that equal or exceed inflation.  Annual maintenance and exchange fees can add $300 to $500 to the purchase price.  You may want to ask if limits exist on maintenance increases at the project.  To help evaluate the purchase, compare your total timeshare costs with rental costs for similar accommodations and amenities for the same time and in the same location.

Document Review

Do not act on impulse or under pressure.  Review all documents or have someone familiar with timesharing review them before you make a purchase.  Find out if the contract provides a "cooling-off" period during which you can cancel the contract and get a refund.  The majority of states, including New Hampshire, require such a cooling-off period.  If there is no cooling-off period, be sure you understand all aspects of the purchase and review all materials before you sign.

Oral Promises

Be sure everything the salesperson promised orally is written into the contract.  Be especially cautious and question any verbal claims that contradict the contract.

Exchange Programs

Remember that exchange programs, which offer the opportunity to arrange trades with other resort units in different locations, usually cannot be guaranteed.  There also may be some limits on exchange opportunities.  You may need to request the use of another facility far in advance.  Or, even at additional cost, you may not be able to "trade up" to a larger, better unit at a popular time of the year in an exotic location.  When you trade your vacation unit for another, expect one of approximately the same value.

Gift Giveaways

Many sellers offer gifts to potential buyers who will listen to a timeshare sales presentation.  Consider the value of these "gifts" and "prizes."  If the only reason you are going to a sales presentation is to receive a gift, then be aware that common promotional giveaways include gems with little or no value as jewels; "gold" ingots, with minimal gold content and worth no more than a few dollars; or "vacation awards," which do not cover major costs such as travel and food.  It may be to your advantage to attend a sales presentation only if your are interested in the program.

Unfinished Facilities

If you are considering buying a timeshare on property where the facilities have not been completed, get a written commitment from the sellers that the facilities will be finished as promised.  One way to protect your financial investment during this waiting period is to require that a certain amount of your money be held in escrow.  This may provide some protection for your funds if the developer defaults.

Default Protection

Find out what your rights are if the builder or management company has financial problems or in some way defaults.  See if your contract includes two clauses concerning "non-disturbance" and "non-performance."  A non-disturbance provision should ensure that you will continue to have the use of your timeshare unit in the event of default and subsequent third party claims against the developer or management firm.  A non-performance protection clause should allow you to keep all your ownership rights, even if a third party, such as a bank, is required to buy out your contract.  An attorney can provide you with more information about these provisions.

State Protection

New Hampshire regulates the sale of timeshare units through the office of the Attorney General.  Any condominium that contains more than ten units must be registered with the Consumer Protection and Antitrust Bureau of the Office of the Attorney General unless the condominium will not be used for residential purposes in any way.

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