Dear Real Estate Adviser,
I bought a time share. Boy, did I learn the hard way about that. First off, I tried to cancel the purchase within three days but no one called back until the fourth day, and they said they couldn't help. They also told me I could take my bloated 17 percent loan to the bank and get a lower rate. It was then I found out no bank will take on time-share loans! What can I do? They start taking the money out of my account in mid-September.
-- Dinah S.
Yeesh. The stall-and-deception tactics employed by some of these time-share companies are reminiscent of those used by slick real estate salesman Ricky Roma in the play/movie "Glengarry Glen Ross." Worse, actually.
As you suspected, your time-share firm was likely waiting until your right-of-rescission -- or cooling-off period -- had expired to get back with you. Those rescission periods, by the way, vary state by state and range from three business days up to 15 days in Alaska, with only Sundays and federal holidays not considered business days. Your state apparently has a three-day rescission period.
Spelled out in your time-share contract, in microprint, no doubt, should have been the process for rescission that these firms are legally required to provide to you. But if it said you must send a certified letter to the company and you sent an overnight letter, email or made some phone calls instead, then too bad, they'll say. You didn't follow the procedure. Sure, you tried to contact them in good faith and they tried to not contact you back, until it was too late, that is. But they have that signed contract.
Like so many other folks, you probably bought your unit in a high-pressure sales environment where there may have been distortions or out-and-out gross misrepresentation of the facts. Hence, you may have been a victim of negligent disclosure, hard-sell intimidation or other illegal industry sales tactics. You could try to file an action with the local division of the state attorney general's office. But you might first want to speak with a real estate attorney because that bank draft is slated to start debiting you in a few weeks. The fact that you are not paying anything on this time share right now might help you stop the process with your bank, but don't count on it.
At least one website, CancelMyTimeShare.org, says it will evaluate your case if you bought a time share in the past 10 years and believe you've been lied to and/or coerced into the purchase. Another site, ProfessionalTimeShareServices.com, says it is a consumer activist for time-share owners and will provide you a free consultation.
Sadly, you are right about banks not wanting to touch time shares. If a borrower were to default on a time-share loan, there is nothing to repossess. The resort owns the building or unit, and the borrower only has a deeded interest in the resort. So they avoid this particularly volatile product.
Good luck seeking remedy. And don't give up out of frustration. However, should you ever desire a time share in the future, I suggest you buy one on the resale market, where there will be tons of inventory at far cheaper prices.
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