With the weak state of the economy, many people understandably would like to sell the condos they purchased when times were good. But the Federal Trade Commission (FTC) urges consumers to exercise caution when using any of the many timeshare resellers.
So far this year, two states have taken action against timeshare resellers. In Vermont, Attorney General William Sorrell reached a settlement with Timeshare Relief, Inc., in which the company agreed to pay $140,000 for violations of state consumer laws.
In March, Florida Attorney General Bill McCollum unveiled continuing investigations into at least 17 timeshare companies and their affiliates throughout the state for deceptive trade practices.
"Florida's consumers are trying to make prudent financial decisions," the attorney general said at the time, "but many timeshare resale companies are blatantly scamming people by promising sales or refunds and failing to provide services even after taking hefty up-front fees."
Complaints
ConsumerAffairs.com has received a sizable number of complaints about the practices of timeshare sellers from consumers across the nation.
"I called TimeShare Only in March of 2007 to sell my timeshare in Florida and they promised they would be able to sell it or rent it. They charge me 600 dollars for my two bedroom loft and I have never heard anything else from that company unless I call about it," Sheila, of Richmond, Va., told ConsumerAffars.com.
In warning timeshare owners to be careful when trying to sell their
property, the FTC offered this advice:
• Even if the salesperson claims the local market is "hot," or his office is overwhelmed with buyer requests, don't agree to anything on the phone or online before checking out the reseller. Contact the Better Business Bureau, state Attorney General and local consumer protection agencies in the state where the reseller is located. Ask if any complaints are on file.
• Ask for all information in writing.
• Ask if the reseller's agents are licensed to sell real estate where the timeshare is located. If so, verify it with the state real estate commission. Deal only with licensed real estate brokers and agents, and ask for references from satisfied clients.
• Ask how the reseller will advertise and promote the timeshare unit. Will progress reports be issued? How often?
• Ask about fees and timing. It's better if the reseller takes its fee after the timeshare is sold. If a fee must be paid in advance, ask about refunds. Get refund policies and promises in writing.
• Don't count on recouping the purchase price of a timeshare, especially if you've owned it for less than five years and the location is not well known.
• To get an idea of the value of a timeshare, consider using a timeshare appraisal service. Check with the state where the service is located to make sure the appraiser's license is current.
• Before signing the contract, make sure it specifies the services the reseller will perform, the costs the seller is responsible for and when they must be paid, whether the seller can rent or sell the timeshare at the same time the reseller is trying to sell it, the length or term of the contract to sell the timeshare, and who is responsible for documenting and closing the sale.
• Don't sign the contract if the deal isn't what you expected or wanted. Negotiate changes or find another reseller.
• Check with the resort to determine restriction, limits, or fees that could affect resale or ownership transfer.
• Have available the name, address, and phone number of the resort, the deed and the contract or membership agreement, the financing agreement if money is still owed, information to identify your interest or membership, the exchange company affiliation, the amount and due date of the maintenance fee, and the amount of any real estate taxes that are billed separately.
