Timeshare Rescission Letter Thoughts.
Timeshare interests are lifetime commitments with lifelong obligations.
As long as you have a contract in place for points or weeks with your resort developer and its management company, you will be on the hook a number of financial requirements, including maintenance fees and assessments – which tend to rise, regardless of the rate of inflation, every single year.
What’s more, the timeshare sales process has become notorious as a “hard sell,” complete with multiple sales personnel using various psychologically rigorous tactics to wear down consumers, usually over a period of several hours.
Taken together, these two factors – that is, the intensity of the sales process and the enormity of the inherent financial commitment – can seem remarkably daunting. With this in mind, it certainly seems reasonable to say that a consumer should be offered the chance to cancel this hefty purchase, if they act within a reasonable period of time.
And, indeed, many do. As one recent panelist at an ARDA conference pointed out, many of would-be timeshare consumers choose to opt out of their purchase by taking advantage of a statutory protection known as a rescission period – a window of time, varying on a state-by-state basis from five to ten days, in which the consumer can opt to cancel their transaction, typically by writing a letter to the resort company with which they did business.
According to this researcher’s findings, the rescission rate for timeshares may be as high as 15%. However, there is every reason to believe that, were the situation slightly different, that rate would be even higher, since, according to that same study, “85% of all buyers regret their purchase,” citing reasons including money, fear, confusion, intimidation, and distrust.
So, if consumer satisfaction is so abysmally low, why isn’t the rescission rate even higher than it already is? Much of it comes down to the circumstances that surround this important consumer protection measure, many of which make it difficult to parse exactly when, how, or where to take advantage of the rescission period.
The Rescission Letter
First and foremost, there is the matter that, in order to rescind their timeshare interest purchase, the buyer almost always has to contact the seller in writing. While this may seem like a small quibble, it can actually pose a number of challenges for consumers.
For one thing, consider that many timeshare purchases occur while the buyer is already on a vacation or staying at a resort. While it is certainly not outside of the realm of possibility, it is hardly realistic to expect someone to cut their vacation time short in order to take the time to research how to properly write a rescission letter, much less to find a post office and pay for stamps in an unfamiliar locale where they may not be immediately available.
The public-facing online legal encyclopedia NOLO offers some basic guidance on cancellation letters. They encourage letter writers to include the following information…
- the purchaser’s name as it is written on the contract
- the purchaser’s address, phone number, and email address
- the name of the timeshare company
- the timeshare description, and
- the date the timeshare was purchase
… and to clearly state that “the purpose of the letter is to rescind the contract.”
With all of this being said, it is also common for the necessary address – which is often not the resort address – to only be found by a careful review of the purchase agreement.
The Rescission Window
Even if the letter is written to the letter of the law, it is often made difficult for consumers to get it in the right hands, due to a combination of psychological factors aided and abetted by the sales practices of the resorts themselves.
Consider, for example, the interplay of the Public Offering Statement or Prospectus documents and the rescission period. The rescission period goes on hold if the consumer is not actually given POS documentation; knowing this, the salesperson often has the buyer sign that they have received these forms, even if that’s not the case, thus restricting the rescission period to its narrow window of efficacy.
Even when given the POS and other essential paperwork properly, this packet – which contains vital information for consumers – is typically dense and full of complex legalese, and may even be made literally difficult to open. When we consider, again, that many consumers will be in a vacation mindset when they receive this information, it becomes clear that many will simply toss it all aside until they return home and have the chance to really sit with it, perhaps with a lawyer or trusted real estate professional by their side. By this time, however, it may well be too late to take act on the terms of the rescission.
And, while the rescission procedure language is statutorily required to be in larger point type and located close to the signature block, there is no state law or rule requiring the resort to provide any separate rescission instructions or advice at closing, either oral or written. With this mind, most sales personnel simply ignore or gloss over the finer parts of rescission over the course of their pitch.
But if a consumer is ever told something misleading about their rescission options by a salesperson? In most cases, that salesperson will be protected by what our office calls the “license to lie” clause, which negates all oral representations made prior to and during the presentation, making only the written contract provision representations legally binding on the resort… freeing the salesperson up to say whatever needs to be said in order to get the buyer to close right then and there!
As always, the key words when it comes to timeshare remain caveat emptor, or “buyer beware” – even when it comes to the statutory protections put in place, ostensibly, to support the consumer!
Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.