What does this mean to the British Consumer?
Right of First Refusal can sometime be incorporated into a USA timeshare contract, if gives the developer a right and/or an option to buy your timeshare from you and after you have agreed the sale price with another. They are permitted by way of contract to look at the price you are selling for and pay you the same regardless of wishes.
Therefore any seller and prospective third party buyer must give the developer the opportunity to refuse the purchase of the ownership on the open market by purchasing the ownership directly from the owner.
How It Works?
Prior to the completion of any USA timeshare sale, the seller is compelled to send the developer the purchase agreement for its reconsideration. The developer then has 30 days to review the agreement and make a decision, i.e are they going to refuse the sale and buy it themselves or permit the sale.
From the developers point of view it protects the re sale value, however it take out of the process a valuable bidder. This practice would be unfair in the UK by its very nature as it gives an advantage to the developer which is not enjoyed by the other bidders.
Typically, a developer/resort will buy back an ownership if the sale price is too low.
That said, the consumer does not know the maximum sale price the developer will pay. It is therefore prudent and cost effective to check out with a good re seller what the resorts have accepted (as a fair price) in the past and try and get you bidder to bid as close to that price as possible. You can of course use a blind bidder to achieve your goal.
What does this all mean for the British Timeshare Consumer?
Process for Seller
As a seller, you will be waiting up to 30 days to see if the developer chooses to buy back your timeshare. If they do, you’ll still be paid according to your original timeshare contract, but it will be from the developer directly. Rather than being paid from an escrow account!
Process for Buyer
If you’re a buyer, you’re on the other end of that 30 day waiting period as well. As if the developer does buy back the sellers timeshare, you’ll have to start over with a new purchase. If you’re working with a USA reselling company, you won’t lose any money and you’ll be refunded your deposit in full.
Using a good Broker
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk