Tag Archives: timesharing today

Marty Kandel

Understanding your right to cancel. Timing is everything!

By Marty Kandel for TimeSharing Today

Rescission or cancellation of a timeshare contract is a statutory right in almost every state, but the state where you purchase your timeshare interest is generally the law that applies. The amount of time you must cancel or rescind your contract varies from 3 to 15 days, and averages 7 days for purposes of this brief article.

The right to cancel is, in some ways, a legislative way of protecting timeshare buyers from themselves, (as well as the developer).  The provision is a tacit acknowledgment that consumers have endured a moderate to high pressure, one on one sales presentation, for a significant period.  The statutory cancellation right also recognizes that there is a great deal of information to absorb during a sales presentation, that the verbal assurances of the salesperson does not always”match” the language in the purchase agreement and public offering statement (POS), and that the consumer does not have an opportunity to review any agreement in a meaningful way until after the agreement is signed, the deposit money is paid over, and the new purchasers have left the sales office.

Often, timeshares are purchased while on vacation, when potential purchasers are relaxed, carefree, and in some cases, unprepared for the 90-minute presentation in exchange for show tickets or a tasty meal. If the timeshare is purchased at the front end of a vacation, the rescission clock is running and may run out by the time the new owner gets home.  At that point, you can no longer cancel!

Remember, a new purchaser has a legal right to cancel their contract within the statutory time. This right cannot be waived and a consumer need only follow the directions as to how to cancel found in the purchase agreement. Consumers are usually entitled to 100% of any money paid, but you may have to return the POS and owner’s kit or risk paying a fee for them. Generally, a cancellation should be short, to the point, and need not state a specific reason for wanting to cancel. Buyer’s remorse is not uncommon.

If being mailed, it is wise to send your letter and sales kit by certified or registered mail and be postmarked prior to the last day of the rescission period.  If a purchaser is hand-delivering the cancellation notice back and materials back in the sales center, get a signed receipt and try to steer away from long discussions with your salesperson, whose job it is to talk you back into the deal.  Generally, if your instinct is to cancel, follow through.  You can always go back at any other time and in most cases, get at least as good a deal as you received in the first place.

Finally, it is common that solicitors from one timeshare company will prey upon new owners of another. The second company will help you cancel your timeshare if only you purchase the better product from the second company.  Well, let the games begin!

Marty Kandel is a Principal and General Counsel of Timeshare Advisory and Resolutions Services, LLC. He can be contacted at: martykandel@tarserv.com

Send comments about this article to: staff@tstoday.com Subject: Rescission

 

Trolling for Votes and Control

Several developers have adopted deed back programs whereby owners at selected resorts are able to turn back their deeds, sometimes at a cost to the owner. Those developers are also aggressively acquiring defaulted timeshares that are being sold at auction or that can be found online at distress sale prices. The economic motives for this are clear. It is more cost-effective to convert existing timeshare properties to a developer’s points/vacation club than it is to build new projects.

Another developer strategy is to acquire enough voting rights to displace the bona fide owner-board members with developer-controlled board members. Board control empowers the developer to manage maintenance fees, special assessments and management costs.  They then end up with revenues gained through management fees and inventory to feed their vacation clubs.

The prime targets for these activities are legacy resorts and legacy owners. Other targets are the board members who have served to protect the interests of those legacy owners. We have seen developers in court battles with boards of directors and recently, TimeSharing Today has learned that two board presidents at different developer-controlled resorts have been ousted by the new “puppet” boards of the developers. Those board members do not have access to the owners lists to inform them about what is taking place.

Developers argue that the legacy resorts they target need higher maintenance fees to ensure adequate reserves for needed upgrade the resorts to bring them up to the standards of their vacation clubs; new owners get the quality amenities and services that are consistent throughout their properties. This argument, in certain situations, can be valid.

The questions for legacy owners are they:

  1. Informed about what is going?
  2. Getting hit with surprise special assessments and maintenance fees?
  3. Being coerced to convert to a Points/Vacation Club during sales presentations?

To comment, send an email to: staff@tstoday.com Subject: Developer Control

Aging timeshare owners and industry dynamics – A TimeSharing Today commentary

Are you among those timeshare owners who have enjoyed many wonderful years of vacations ownership, but have now reached the point where it’s time to move on? Many owners are no longer able to travel or are living off fixed retirement income and cannot afford the expense of ownership. Some TimeSharing Today members have reported that their kids have taken over their timeshares; others have said that their kids don’t want anything to do with owning a timeshare. Some owners have said that they were successful at turning over their deeds to their resort; others advised that their resort won’t take back units. Some have said that they have successfully sold their timeshares through various sources; others have said that they can’t give theirs away for free. There are owners who have decided to suffer the consequences and not pay their ongoing obligations; others have said that they continue to pay the maintenance fees but do not use their timeshares. Some say that their resort has an onsite resale program; others say their resort doesn’t do anything about resales.

TimeSharing Today has long reported that a lack of a viable exit strategy for aging timeshare owners has created a feeding ground for scams and fraudulent transfers. Howard Nusbaum, CEO and President of the American Resort  Development Association (ARDA), said in a interview on TimeSharing Today Radio (listen to it at www.tstodayjoin.com TST Broadcasting), that he is committed to helping find an “elegant” path for owners to get out of their long term obligations. Nusbaum said that a growing number of major brand  developers are implementing various forms of deedback programs. Those reclaimed timeshares can be converted to the resorts’ points programs, and those programs are having increased appeal to new and younger buyers. Nusbaum refers to a “cultural shift” away from resort specific ownership to flexible destination vacation choices that are available through vacation club memberships. He points out that younger buyers (millenials) are gravitating towards vacation club programs and when they reach a point at which they have families, timesharing still offers they greatest value compared to other choices such as hotels that have invested in expanding a variety of suite brands.

Email your comments to: staff@tstoday.com  Subject: Industry dynamics

 

Couple Sues Gold Key Over Virginia Beach Timeshare Deal

Read the March 11, 2016 The Virginan-Pilot article “Couple claims bait and switch, sues Gold Key to get out of Virginia Beach timeshare deal” by Kimberly Pierceall at http://pilotonline.com/business/consumer/couple-claims-bait-and-switch-sues-gold-key-to-get/article_019cb544-d105-5352-8751-fbd1dc83a5a8.html

Mainstream Media Show Split Personality

The March 2016 Consumer Reports includes an article entitled, “Timeshares Come of Age.” The sub-headline states, “These vacation ownership arrangements are attracting younger, more educated, more affluent buyers, thanks to consumer-friendly changes in the industry.”

The 4-page article points to the “rocky reputation” the industry was marked by in the mid-1970’s because of consumers being lured to attend multi-hour, high-pressure sales presentations, by the offer of enticing gifts.  It goes on to report that industry insiders say that “the industry has become much more consumer-friendly and transparent, and that is largely because of the entrance of major hospitality brands into the industry. Consumers can now avoid the in-person sales pitch by going online to research timeshare properties and even contact sales reps by phone and chat sessions.”

Consumer Reports covers a lot of ground on the trend away from fixed weeks and that consumers should not consider a timeshare purchase as a real estate investment. Randy Conrads, Co-Founder of RedWeek.com, is quoted as saying that. “It’s a lifestyle investment, not a financial one.”

The demographics of new buyers,  the economics of ownership and the challenges of selling a timeshare are discussed and the article points to timeshares that are being offered for sale at $1 on many popular resale website. It concludes with mention that owners who “really want out” can turn to companies who charge thousands of dollars to help negotiate the owners’ termination of their obligations.

Now, comes along a January 22, 2016 article written by reporter Gretchen Morgenson of The New York Times with a headline that reads, “The Timeshare Hard Sell Comes Roaring Back.”  Morgenson’s account is focused on Developer Diamond Resorts’ sales presentation and indicates the high-pressure sales tactics may still be alive and well. One owner said that an offer of a $100 gift card was made, but she ended up enduring a 5-hour of Diamond representative pressuring he to give up two of her timeshares deed  for a $30,000 purchase of Diamond’s ownership points. The owner who declined the offer, was handed documents and the end of the presentation, one of which was a copy of a voided charge on her credit card for $4840.00 for which the owner had not given approval.

Jeff Weir, a Diamond owner and Chief Correspondent for RedWeek and contributor to TimeSharing Today, is quoted as saying, “In my experience, Diamond is much more ambitious, aggressive and downright nasty in their sales presentations compared to Marriott and Westin.” He went on to say that Diamond just has an amazing reputation of being tough on people.”

The article does include comments from David F. Palmer, Diamond’s chief executive indicating that Diamond does try to bring fun to its customer interactions, both before an initial sale and once a member buys in.  “Our lifetime subscription model creates a series of systems where you can track that engagement and make sure you are constantly providing a series of experiences that exeed their expectations over many,many years,” he said.

Morgenson interviewed another owner, Walter Hunter. Hunter is a member of the homeowners’ association board at Daytona Beach Regency, a Diamond Resort in Florida. He said that he was pleased with Diamond as the management company. He acknowledged maintenance fees have significantly increased under Diamond, but said, “We are convinced that they are doing a good job.”

The extensive article contains a great deal of relevant information and can be found HERE.

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