One of the major problems of buying and owning timeshare in the United States is the fact that virtually every individual state has their own laws. Some states offer greater protection via legislation than others so it’s imperative to do your homework if you are considering buying.
We have pointed out in the past that Florida is undoubtedly the timeshare capital of the USA or maybe the world for that matter but other states are equally busy selling timeshare. The purpose of this article is to point out that just because a rule applies in Florida, it may not exist in California. Some states take consumer protection seriously whilst others don’t. For example, North Dakota has no legal cancellation rights; however the timeshare contract may contain such a clause.
Obviously it would take volumes to review every state law so we thought we would take a look at two popular timeshare states being Arizona and Florida.
Arizona timeshare law.
Arizona ranks as the fifth most popular state for timeshare owners in the USA. Currently there are 62 resorts spread throughout the state with some of the big players like Diamond, Sheraton, Hyatt and Marriott having a presence.
Acting upon the hundreds of complaints from Arizona timeshare owners have motivated some state lawmakers, with support from Arizona Attorney General Mark Brnovich, to push a bill to increase timeshare transparency and allow consumers more time to back out.
The House Bill numbered 2639 was presented on the 22nd May 2019 and passed unanimously in the House but ran into opposition in the Senate. Whilst the Senate agreed the bill for the most part they objected to the following terms:
- One business day to consider an offer before signing.
- A clear, written estimate of total costs over five, 10, 20 and 30 years.
Unfortunately for the bill to pass these clauses were removed. Although these clauses weaken the overall protection, a good amount of protection is still offered. The main points are as below:
- An estimate of the total costs in the first year.
- An estimate of the total maintenance fees in the first year as well as the total maintenance fees charged over the past three years, if available.
- Consumers may face maintenance fees, taxes and other assessments every year.
- Timeshares are not investments.
- Promises made in the sales presentation aren’t binding. Only the contract is.
- Consumers have 10 days to cancel a contract.
- Consumers can complain to the Arizona Attorney General’s Office.
The bill does contain other points of interest and may be viewed here. Unfortunately, the inability of a time allowance to read and understand the purchase contract does water down the overall effect of this legislation.
Representatives from the timeshare industry had warned the original version of the bill could inhibit the growth of a tourism sector that provides more than 4,000 jobs in Arizona.
The American Resort Development Association (ARDA) supports strong consumer protections and reasonable regulation,” spokesman Peter Roth said. However, the previous version of the bill was “problematic for both consumers and industry.” Really?
The Attorney General’s Office said timeshare purchases are complex and long-term contracts, often with fees that can leap unexpectedly from one year to the next.
“Industry representatives may have their own ideas of what reform looks like, but our office will always side with consumers and will advocate for more transparency, more disclosure, and enough time for consumers to decide whether purchasing a timeshare is a financial obligation that is right for them,” Brnovich said in a statement.
The revised bill will still need final approval of both the full House and the Senate.
Arizona law also allows for audio recordings to be made without permission so it is perfectly legal to record your timeshare presentation, good to check the verbal promises match the contract. If you are enticed into a presentation with the promise of a free gift, the law says that you are free to leave after 2 hours and must be given your gift.
The Arizona Attorney General’s Office has also litigated against individual timeshare companies. In late 2016, Arizona reached a settlement with Diamond Resort. That settlement included $650,000 for consumer restitution, but even more importantly, it allowed consumers who had been misled by Diamond Resorts a chance to get out of their timeshare contracts. Hundreds of Arizona consumers applied for relief under this provision and were able to relinquish their timeshares, collectively saving an estimated $25 million in future timeshare fees.
Arizona’s longest serving news website, AZ Central (part of USA Today Group) has produced a short video on timeshare sales protection, makes interesting viewing! See below:
Florida – Timeshare capital of the world
It has been recognised that more timeshare is sold in the state of Florida than anywhere else in the USA, in fact probably in the world. Not surprising then that Wyndham, Diamond, Blue Green, Hilton, Hyatt and Disney have either their head offices or large corporate offices in the state. At last count, Florida had over 290 timeshare resorts. Florida takes state law relating to timeshare very seriously, perhaps more so than other states. Unfortunately there is little legal protection after a purchase has taken place.
Office of the Attorney General
The current incumbent of the position of Attorney General for the state of Florida is Ashley Moody who took up the position in January 2019. The Attorney General’s office has a website myfloridalegal.com here may be found information on timeshare, although not particularly comprehensive, solid advice is certainly given relating to the sales process, see below:
“Be wary of the hard sales pitch.
When it comes to purchasing a new timeshare, the salesman may try to give you the impression that the papers have to be signed that same day. Remember that you always have the right to leave the sales office and come back later. If you attend a timeshare sales presentation, leave the room if the sales pitch becomes too aggressive or if you feel pressured by the salesperson.
Read your contract to determine what cancellation rights you have after you have signed the papers. Make sure you understand exactly what you are signing, and consider having an attorney look over the contract before you sign it. Before buying a timeshare, you should consider whether you will want to return to the same vacation spot each year. Remember that once you buy it, you may not be able to sell it due to a crowded resale market.
Be wary of too-good-to-be-true claims when it comes to resales.
The company’s salespeople are likely to claim that the market in the area where your resort is located is “hot” and that they are being overwhelmed with buyer requests for your resort. In some cases, the salespeople may even tell you that they have a buyer “waiting in the wings” who wants to buy your timeshare. Be very sceptical of these types of claims.”
Good advice but not enough. Reality is that the timeshare industry in Florida employs thousands of people and is worth millions in tax revenue so even the Attorney Generals office has to tread lightly. One refreshing facet is that at least they have in place a structured complaints procedure:
File a complaint.
If you are defrauded by a timeshare seller or reseller, file a complaint with the Attorney General’s Office online at www.myfloridalegal.com or by phone toll-free at 1-866-9-NO-SCAM. Additionally, you may contact the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, Bureau of Timeshares online at www.myfloridalicense.com/dbpr/lsc/timeshare.html or by phone at (850) 488-1122.
You may also file a complaint with the Florida Department of Agriculture and Consumer Services, which acts as the State’s consumer complaint clearinghouse, at www.floridaconsumerhelp.com.
Our thoughts
It’s good to see that some states have timeshare in mind and are taking, albeit, small steps to protect the consumer; we fear it doesn’t go far enough. Timeshare ownership is a long term commitment with an expectation that ongoing costs will rise every year. A timeshare purchase should never be viewed as a financial investment. At best an ownership contract should be viewed as investments into future holidays but upon sale, if this is possible, never expect to receive more than a fraction of the purchase price paid at outset.
Like most state timeshare law, Arizona and Florida offer advice before buying a timeshare but do little to assist existing owners who, for whatever reason, are experiencing health, financial or other issues and need to exit their ownership. As stated earlier, different states, different laws, do your homework before committing. Timeshare in the USA is easy to get into but can be extremely difficult to get out of, think very carefully before signing on the dotted line.
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