THE HONEST BROKER : TIME-SHARE PERILS
BY: Diane Lott/Broker
Investing in a time share has an allure for those Americans who take annual vacations but prefer to have the flexibility of going to the same place, or not, every year without the financial commitment of purchasing a vacation or secondary home. A typical timesharing plan divides a vacation condominium into 52 weeks or “shares”. Buyers may purchase one or more weeks of ownership of a condominium at a specific location. The price of that week depends upon the time of the year, the property’s amenities, the apartment or condominium’s size (square footage; beds/baths), and the location within the building.
There are laws that govern the sale of time shares, for instance, the Florida Real Estate Time-Share Act. This Act applies to all time-sharing plans within Florida and those that are sold outside of the state but marketed within the state of Florida. It also regulates the re-sale of time-shares.
The developer of the time-share property must disclose pertinent facts about the property to each potential buyer within its contract. It must establish the time-share’s duration, the amount the buyer owes, the form of ownership, and the ten-day cancellation period. Time share ownership consists of one of two types: interval or “right-to-use”. Interval ownership allows the buyer to receive a recordable deed and gives the buyer the right to sell or rent the property.
Right-to-use time sharing is temporary, lasting from 40-99 years. After that, the property converts back to the developer. One of the main drawbacks for time-share ownership is that there are no controls or restraints to fee increases made by the management company. The owner is locked into paying the increases no matter how inflated they become. Another negative point is that prime locations and “weeks” are rarely available, or they may need to be booked well in advance.
BUYER REMORSE
When a buyer regrets having purchased a time share from a developer, there is “cancellation clause” within the contract that allows for the buyer to cancel the contract. The buyer can cancel without penalty within the initial 10 days of the contract by notifying the developer in writing of the intent to cancel. The notice of cancellation will be effective on the date it is sent to the developer at the developer’s address. I highly recommend that it be sent via registered mail requiring a signature to ensure that there is a paper trail.
Stay well ….
Diane
Diane Lott, Broker
Owner: Paradise Found Realty
Paradise Found Realty, Inc. of Palm City
website: www.ParadiseFoundRealtyFl.com
Email: diane@paradisefoundrealtyfl.com
Phone: 954-294-5060
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