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Timeshare Developer Law

The following are general guidelines and should not be relied upon without consulting a timeshare attorney about your unique situation. Please see disclaimer.

When purchasing a timeshare directly from the resort, it is important that you understand your rights as a buyer under timeshare developer laws. Most of these rules and regulations are sanctioned by the state in which the sale occurs. For example, if you were to purchase your timeshare from a developer in Florida, the developer must comply with Florida timeshare laws.

The timeshare developer legislation varies from state to state but most will include the topics listed below. For more information about your state’s developer laws please visit our timeshare law page for links to timeshare laws explained by state. If you are considering buying a timeshare, please consult a timeshare attorney to view your timeshare contract and options before you sign to protect your rights. If you’ve already signed, do not delay to contact a timeshare attorney. You may have only 3 to 10 days to make a modification or rescission.

Timeshare Developers and False Advertising

Whether it is under state statutes or real estate laws, advertising is one of the most heavily regulated of all timeshare developer laws. In order to protect consumers, most states implement strict laws against false and misleading advertising for timeshare sales and require that you sign a list of disclaimers. Developers shall not misrepresent any characteristics of the resort, or the time share contracts in any form. For timeshare developer laws, advertising typically includes but is not limited to: brochures, cards, giveaways, radio spots, T.V. ads, and letters.

Sales presentations are also a large part of advertising for developers. Every piece of advertising used in these presentations (including power point presentations and speeches) are governed under these developer-related timeshare laws. Timeshare lawyers suggest keeping all of the advertising materials provided to you by the developer in addition to your timeshare contract. These tools may assist an attorney if you ever have a dispute to file with the developer. Be wary of verbal promises not included in the documents.

Are Timeshares an Investment?

In the past, timeshares sold by the developer were viewed as an “investment”, as something that would increase in value over time. Now, however, the value in a timeshare is the right to use the membership or week, not the expected value of reselling it. Under most timeshare developer laws, most resorts are forbidden from predicting an increase in the value or price of a timeshare. Some states even regulate that the developer may not advertise the resort as an investment in any manner.

Registration under Timeshare Developer Laws

Timeshare developer laws typically have very strict registration guidelines. This may include everything from building permits, to the right to solicit sales within the state. For example, the timeshare laws in Illinois declare that any person who wishes to sell, offer, or solicit persons to buy timeshares through a resort must be registered as a developer with the State Department. They must next also register any timeshare plans, timeshare salespeople, managing entities, and advertisements. Many timeshare developer laws also require the resort to register a public offering statement. This will be including in the contract or as a bundle of documents to each purchaser. This statement will include general contact information, a description of the timeshare plan, accommodations to be built, financial information, the right of rescission, and more. Many states do not consider a timeshare contract to be executed until the purchaser has received this offering statement.

Timeshare Developer Laws and Gifts

Under most timeshare developer laws, the resort may use gifts to entice consumers to attend their resort or presentation, but under strict guidelines. For example, under Virginia’s timeshare law, if a gift is offered to a consumer in exchange for attending a presentation, the gift must be rendered to the potential buyer on the day of the presentation whether they purchase or not. Under these laws, timeshare developers must also disclose the retail value, odds to win, and any conditions to claim the gift before the presentation. The timeshare developer must also clearly define that this gift is presented for the purpose of soliciting sales.

Right of Rescission for Timeshare Contracts

All timeshare developers must provide purchasers with a rescission or “cooling off” period after executing a timeshare contract. This time period will vary by state. For instance, Florida timeshare law offers a ten day period to cancel a timeshare contract while Connecticut only offers three days. Typically, this right of rescission will be disclosed in the offering statement and/or contract. Most states also define that this right to cancel a timeshare contract may not be waived by either party. Under most timeshare developer laws the seller is also required to keep all funds paid by the purchaser in a bank or escrow account until this period has expired.

Unreasonable Contracts

Some timeshare laws give courts the right to deem a timeshare contract unreasonable or unconscionable. Timeshare law in Massachusetts is one state that follows these practices. Under this timeshare law, developers may find their contracts unenforceable if the court finds the contract or any clause within the timeshare contract to be unconscionable. The court also reserves the right to enforce the contract without the offending clause if it is deemed unreasonable or unlawful.

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