Wednesday, June 29, 2005
In foreign countries, laws regulating timeshare resorts, timeshare sales and other real estate purchases can be very different from US laws.
Recently, I read an article about timeshare owners who were pressured into buying timeshare from timeshare resorts in Mexico. They wanted to buy a timeshare for the sole purpose of renting it out. However, not only did the contract they signed specifically forbid them from renting the property, the rental company that they were referred to did nothing to help them rent this timeshare. Though the terms of this agreement seem self-contradictory, many people each year are, in effect, scammed at timeshare resorts by unethical timeshare salespeople using similar ploys.
Laws pertaining to the regulation of real estate (including timeshares) differ drastically in all parts of the globe, and this can create leverage for dubious timeshare sales agents to exploit. For example, in the UK, the cooling-off period (a period of time during which a timeshare transaction can be cancelled for a full refund after it is completed) is ten days. In Mexico, it is five days. Recognizing this, the US State Department warns potential timeshare buyers not to sign a contract which penalizes the buyer for canceling the timeshare sale within five days.
In addition to carefully reading through any agreements, people who buy timeshare directly from a resort should familiarize themselves with local laws that may affect the terms of sale. For instance, Mexican law prohibits the ownership of property by foreigners within 100 kilometers (about 62 miles) of any border, or within 50 kilometers (about 31 miles) of a coastline. Typically a Mexican bank holds the property in trust, and a trust beneficiary enjoys the rights of ownership. This is why rental timeshares and right-to-use agreements are the predominant ways in which Americans enjoy Mexico timeshares. This is not to say that anyone who wishes to use timeshare in Mexico will undoubtedly undergo a bad experience; rather, it is more accurate to suggest that anyone looking to buy timeshare in a foreign country should pursue as much research as possible before entering into an agreement.
In regard to the article under discussion, I am inclined to wonder if things would have turned out quite differently for the timeshare owners, had they investigated their options in the timeshare resale market. Before they were approached by the resort developer’s sales team, they may have been pleased to find out that they did have the option to buy a resale timeshare directly from a timeshare owner, saving a considerable amount of time, money and hassle in the long run. Local regulations aside, even after they were duped into buying this property, they might have discovered that a reputable online timeshare reseller could have given them a chance to rent this property (like they intended to do from the beginning) or resell the timeshare outright. Sadly, as events unfolded, they became the latest in a long line of timeshare buyers badly treated by the resort industry.
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