Some Important Considerations About Your Timeshare Contract

Some Important Considerations About Your Timeshare Contract

When faced with a timeshare obligation that has become financially burdensome or somehow unusable, plenty of consumers first turn to the resale market or to a questionable redemption company, not realizing that the process of getting out of a timeshare is, more often than not, a legal one. In most cases, getting out from under a timeshare interest isn’t about selling or cancelling the timeshare itself, but in cancelling your binding timeshare contracts.

One reason that many consumers don’t realize this because of the nature of the timeshare contract itself – as well as the way in which that important paperwork is presented to the consumer at the time of closing.

In many ways, though, the actual meat of the timeshare contract isn’t what puts consumers at a disadvantage when it comes time to sign. In most respects, these contracts are more or less vanilla, and are largely written in such a way that they are, ultimately, forgettable, and not really worthy of note. Instead, in a lot of ways it’s everything around the material substance of the contract that creates problems for consumers. What do we mean?

Well, in the first place, it’s important to remember just how much pressure is exerted on the consumer over the course of a timeshare sales presentation, which can be an hours-long affair complete with numerous salespeople saying whatever needs to be said in order to get the would-be buyer to sign on the dotted line right then and there.

As our own Michael Finn has noted before, that amount of psychological pressure can take a toll, even on the most skeptical or weathered consumer; in fact, he’s compared the relentless “psychological tricks of the trade” to “‘dripping water’ torture (although, indeed, an acknowledged milder version).”

The verbal sales tactics employed by salespeople are designed to wear down a consumer and break down their defenses, making them more amenable to closing a deal on what Michael has called “the mac daddy of all impulse buys.” So when a consumer is handed their paperwork, they’re more likely to sign away – out of both a desire to see the process concluded, and out of trust for what they’ve been told by their sales representatives over the course of the day (more on that shortly).

Much of what needs to be initialed and acknowledged at signing are disclaimers; in our experience, these are often laid out in such a way that they put the consumer at a distinct psychological disadvantage once again. For one thing, there’s the very way that these disclaimers are typically laid out – perhaps 30 items to a page, complete with multiple clauses and requiring initialing on a sentence-by-sentence basis. This is a lot for anyone to scour over closely, and the developers know this; that is why these disclaimers are often written in such a way that the simplest items are presented at the top. The signer, more willing and able to be eagle-eyed early on, is likely to make it through six or seven simple clauses that act as a sort of anesthetizing force. From there, it becomes harder to absorb information the more you read, leading to people just initialing rapidly all the way down the document, unaware of what they’re agreeing to.

In this way, the resort developers are able to sneak in language that stacks the deck against the consumer, including a common piece of language that our office calls the “salesman’s license to lie” clause, which, when executed by the buyers, negates all oral representations made prior to and during the presentation, making only the written contract provision representations legally binding on the resort. It’s hard to overstate the importance of this clause, which essentially allows sales representatives to say anything and everything it takes to make close, even if they know what they’re saying to be untrue.

This leads to a scenario in which a consumer is signing for a product on paper that may be completely different from what he or she was told they were buying – and yet only the ironclad language of the contract can be used in a court of law, thanks to this contractual clause. In this way, sales associates can fall back on a bag of common verbal sales tactics and out-and-out falsehoods that don’t in any way reflect the product being sold on paper – including giving out misleading information on maintenance fees, glazing over or completely omitting the rules of rescission, and even indicating that a “points-based” timeshare is somehow a real estate purchase that will appreciate as an investment.

Another aspect of the process that puts consumers at a disadvantage? Often, buyers are initialing away the acknowledgement of the receipt of certain documents – such as state-imposed disclosures or public offering statements – before they’ve actually been granted that information. The rescission period goes on hold, you see, if the consumer is not actually given the documentation; but if you acknowledge via initials or signature that you did receive it, this gives the developers a leg up on ensuring that the rescission period works in their favor every time. (And this is to say nothing of the fact that, when given the POS or other disclosure information, the packet is often massively long and even made difficult to open, making it unlikely for any normal person to ever fully read or understand its contents – an issue that Michael dives into in some depth here.)

So while timeshare contracts may include some problematic stipulations, they are hardly outside the norm or beyond the pale when it comes to legal documents. Instead, the bigger issue is the way in which the industry ruthlessly and relentlessly stacks the deck against the consumer, allowing them to more easily be led astray by the tried-and-true tactics of its salespeople, who are commission-based and completely motivated to make the deal at any cost – knowing that there’s often not a thing you can do about it.

Led by Attorney Michael D. Finn with 45 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. 


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