In a timeshare arrangement, the owner of a piece of property will rent or lease their property for use in a specified period of time. The person renting the property is called a “timeshare holder”. The timeshare holder purchases rights to use the property during a set time period. The time period for use is usually a certain week of the year, over a specified number of years.
The property usually involves seasonal lodging such as a summer condominium or a winter cabin. Sometimes multiple parties will alternate use of the building, with new persons using the property each week. In essence, they are purchasing slots of time in which they can use the facilities. Thus, the arrangement is called a “timeshare”, because the purchaser is purchasing shares of time much as they would purchase shares of stock.
Canceling a timeshare purchase is not as simple as in other types of transactions. Essentially, you are signing a contract with the property owner. This creates an obligation on your part to adhere to the provisions stated in the written agreement. Timeshare contracts can sometimes last for many years.
Since a timeshare purchase is a contract, you must abide by contract laws. Under contract laws, canceling a contract is known as contract rescission. To rescind or cancel a contract, there are a few important concepts that you should understand:
- “Right of Cancellation”:
- Most timeshare companies understand that timeshare purchases are not nearly as final and permanent as in other transactions, such as buying a home. Therefore, they usually include a right to cancel the timeshare rental in the contract.
- The right of cancellation allows the person to cancel their timeshare rights within a given time frame
- Cancellation or rescission should be communicated in writing in order to be effective
- Most state laws state that the Right of Cancellation typically cannot be waived. It is guaranteed to the timeshare holder if it is included as a provision in the contract
- “Rescission Period”
- The Right of Cancellation can only be exercised within a given timeframe. This is usually 5-15 days after the purchase.
- Usually the final closing of a timeshare sale cannot occur until the Rescission Period has finished
- State laws only provide a minimum number of days for the Rescission Period. For example, in Hawaii it is 7 days, whereas in Florida it is 10 days. Individual contracts may provide for longer rescission periods.
So, if you wish to cancel your timeshare purchase, you generally have a period of 5-15 days after purchase wherein you may legally rescind the contract. After the rescission period has expired, you can no longer cancel your purchase without penalty.
The first and most important step you should take is to review your timeshare contract to determine what the Rescission Period is. Be sure that you are still within the specified period for cancellation. You may not be able to rescind if the rescission period has expired.
Next, you should make copies of all documents related to your timeshare so that you have proofs of purchase. You will need to make a written statement indicating that you wish cancel your timeshare contract. Make copies of your cancellation statement as well.
Timeshare agencies may differ regarding the method of delivery of cancellation statements. Some companies accept hand-delivery, while others specifically accept only delivery via certified mail. The method of delivery is usually contained in the contract itself. You should follow the request method of delivery exactly; otherwise, your cancellation might not be considered to be a valid rescission.
Finally, you do not need to explain yourself of or offer a lengthy explanation of your reasons for cancellation. Timeshare agencies deal with cancellation on a frequent basis, so it should be enough to simply state that you wish to cancel. If you need to speak to a representative, you should speak to the head of the office or a manager, not a sales person. Sales persons will usually attempt to persuade you not to cancel.
Most purchasers of timeshares do not consult with an attorney before making a purchase. However, in the event that there is a dispute over cancellation or any other contract provision, you may wish to speak with an attorney. An experienced contracts or real estate lawyer can determine the laws of your individual state. They will also be able to assist you in the event that a lawsuit arises.