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Timeshare Contract Insights and Warnings

Timeshare contract insights and warnings

Insights into timeshare contract termsTimeshare Contract Insights and Warnings

Understanding Timeshare Contracts

Timeshare contracts serve as formal agreements between consumers and timeshare providers, facilitating shared use of vacation properties. These contracts detail how multiple parties can use a property for allotted times each year. While they provide a framework for accessing vacation destinations, these agreements often contain complex legal terms and significant obligations. It’s crucial for consumers to thoroughly review and understand the nuances of these contracts. Close scrutiny of the fine print is essential to ensure awareness of all responsibilities and to avoid unforeseen legal and financial challenges associated with timeshare ownership.

Guidance on protecting consumersGuidance from DATCP on Timeshare Contracts

The Wisconsin Division of Consumer Protection, led by Director Michael Domke, stresses the need for vigilance when dealing with timeshare contracts.

Particularly, Domke highlights concerns with modern timeshare agreements that propose access to a variety of properties, not just a single location.

This apparent flexibility, as Domke explained in a WHBL interview, could be misleading due to potential hidden costs, such as the unavailability of preferred properties or extra charges. “They make the pitch that you have a catalog of other properties that you can stay at, which can seem very inviting and enticing,” Domke remarked. “But they may not be available, or you may have to pay an additional fee.” He emphasizes the critical importance of carefully examining the fine print in these contracts and advises against hurried decisions or succumbing to pressure to pay before fully understanding the contract’s details.

Contracts with fine printThe Financial Commitments of Owning a Timeshare

When you own a timeshare, the financial responsibilities extend far beyond the initial cost of purchase. These obligations are ongoing and multifaceted, requiring continuous attention and planning. Key among these are maintenance fees, which are regularly incurred expenses essential for the upkeep of the property. These fees typically cover a range of services including cleaning, utilities, and general maintenance of the shared property.

It’s important to note that these fees are not static; they are subject to increases influenced by factors like inflation and rising operational costs, which can significantly inflate the overall financial burden over time.

In addition to maintenance fees, timeshare owners may also face special assessments. These are fees levied for specific purposes, often unforeseen or extraordinary in nature, such as major renovations or urgent repairs due to emergencies. Unlike regular maintenance fees, special assessments can be unpredictable both in timing and amount, potentially imposing a substantial financial strain on the owners.

It’s important for timeshare owners to be fully aware of and prepared for these expenses. Neglecting these financial commitments can have serious repercussions. For instance, failure to pay maintenance fees or special assessments can lead to legal actions against the timeshare owner. In severe cases, this could escalate to foreclosure on the timeshare, resulting in the loss of the property and additional legal complications. Therefore, understanding and planning for these ongoing financial obligations is vital for maintaining a timeshare and avoiding detrimental legal and financial consequences.

contracts in timeshare resaleContractual Challenges in Reselling Timeshares

Reselling a timeshare reveals a complex array of contractual limitations and access restrictions, which can significantly hinder the process. These challenges primarily stem from the specific terms laid out in the timeshare agreement, which often include clauses that limit the rights of resale buyers and impose various restrictions on the seller.

A common contractual obstacle in timeshare resales is the ‘first right of refusal.’ This clause gives the timeshare developer or management company the option to repurchase the property before it can be sold to an external buyer. This process can delay the resale by weeks or even months, as the owner must wait for the company’s decision before proceeding with other potential buyers.

Transfer fees are another significant contractual barrier. These fees, charged for changing the ownership of the timeshare, can be costly and are required regardless of the selling price. Such fees can discourage potential buyers or diminish the seller’s net proceeds.

Additionally, some timeshare contracts have commission clauses that obligate the seller to pay a portion of the commission to the timeshare company or it’s internal broker. This commission can reduce the financial return from the sale and complicate the negotiation process.

Beyond financial and procedural restrictions, a critical challenge in reselling timeshares is the potential loss of certain owner beneficiary rights. Many timeshare developers reclassify resold units in their systems, which can result in access restrictions for the new owners. For instance, certain amenities, booking privileges, or points systems available to the original owners may not be transferable to resale buyers. This limitation can significantly reduce the attractiveness of the timeshare on the secondary market.

Sellers are often unaware of these access restrictions, leading to unexpected complications during the resale process. It’s important for sellers to thoroughly understand the terms of their timeshare contract, including any potential access restrictions for resale buyers. This understanding is vital to set realistic expectations and to transparently communicate with potential buyers about what they are purchasing.

Consumer Protection and Purchasing Tips

DATCP’s Consumer Protection Fact Sheet offers valuable advice and warnings for those considering timeshare purchases. It highlights the risks associated with viewing timeshare purchases as investments and the difficulties in reselling them. The fact sheet also warns against engaging with timeshare resale companies, as some owners have reported significant financial losses without finding a buyer​​​​.

In conclusion, while timeshares can offer enticing vacation opportunities, they come with various legal and financial complexities. State agencies like DATCP play a vital role in providing guidance and enforcing consumer protection laws, helping consumers navigate the intricate and often challenging world of timeshare contracts. For further details and advice on this topic, you can read the full article from WHBL here: DATCP says Read the Fine Print Before Signing Timeshare Contract.

This article is for information purposes only and is not intended as legal advice. It is always recommended to consult with a reputable timeshare attorney before signing any legal documents, including timeshare contracts. With proper understanding and careful consideration, consumers can make informed decisions about timeshares and avoid potential pitfalls.


Led by timeshare attorneys J. Andrew Meyer and Michael D. Finn with over 75 years of combined legal experience. The Finn Law Group is a consumer protection firm that specializes in Timeshare Law. For a free consultation, contact The Finn Law Group at 855-346-6529 or visit our website for more information.

Looking for even more information on timeshare ownership? Check out our Twitter page for articles on common timeshare issues, tips for buyers and sellers, and updates on the latest developments in timeshare laws. Thank you for reading!

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