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IF YOU HAVE A TIMESHARE CONTRACT IN MASSACHUSETTS, NOW MAY BE A GOOD TIME TO CONSIDER GETTING OUT

Posted by David Katz | Apr 30, 2020 | 0 Comments

Given the reality that travel is not going to be an option due to the present global pandemic, you just might want to consider the possibility of "dumping" your timeshare agreement. The reasons for relieving yourself of a timeshare obligation may simply be that you are either not happy with the terms of the contract or that you are simply just not using the timeshare but continue to pay for it. Recently, I had the opportunity to represent a couple who wanted to get out of their timeshare contract. They entered into the agreement because they bought into the representations made by the timeshare company as it pertained to available timeshare opportunities for international travel which ended up not being true. Without going into every detail of the matter, my clients decided that they did not want the timeshare about a year and a half after purchasing it. When they approached the company on their own about canceling the agreement the timeshare company took the position that they were bound by the timeshare contract indefinitely.

My clients pleaded with the company to let them out of their agreement as they had not used any of their purchased points and were not planning on doing so. During the period of negotiation with the timeshare company, they were also getting billed for ongoing fees and costs. After sending a strongly worded demand letter, I ended up resolving the case with the timeshare company without the need for any litigation. I also managed to get my clients a partial return on their initial investment, termination of all ongoing fees and costs, and the cancellation of the underlying timeshare agreement by way of a mutually agreed-upon settlement and release agreement. Not every situation is the same, to be sure, but if you are considering dumping your timeshare contract in Massachusetts you need to be aware of the following:

1. Under Massachusetts law, consumers are afforded several important protections when it comes to timeshare contracts. The first protection is in the form of a public offering statement. A public offering statement is a detailed written explanation provided to a consumer by the timeshare company about timeshare development. A timeshare company or developer must provide a consumer with a copy of this statement before actually transferring the timeshare interest and no later than the date of the sales contract under G.L.c.183B, section 41(a).

2. Once the timeshare interest is transferred, a consumer has the right to cancel (as with the purchase of an automobile) the timeshare agreement within three business days after a consumer receives the public offering statement or signs the contract whichever comes later under G.L.c.183B, section 38. To cancel within the three day right of the cancellation period a consumer is required to hand-deliver a written notice to the seller or his agent. This can be accomplished by actual hand-delivery (service by a constable) or by mailing notice to the timeshare company by registered mail, certified mail return receipt requested, or by overnight mail via next day delivery.

3. Any refunds made after cancellation must be made within seven days after the timeshare company receives notice of the cancellation if you paid by check or cash. If you had tendered a payment by credit card then the timeshare company must reimburse you immediately under G.L.c.183B, section 41(b).

4. As in the case with my clients, in addition to the obligation to pay monthly mortgage payments, timeshare owners are usually responsible for maintenance fees, special assessments, and other expenses. If you fail to pay these assessments (even if you do not use your timeshare) you could face a timeshare foreclosure under G.L.c.183B, section 29B.

5. What if you failed to cancel the contract within the three day period as allowed for under Massachusetts law ask the timeshare company to take back the shares? There are a couple of timeshare resort companies that actually take back any unused shares namely, Wyndham and Diamond. They actually have "take back" departments to handle the load of consumers wanting to dump their timeshares. In most cases, timeshare companies that accept returns may require owners to pay ongoing annual fees for a year or two as a penalty and as a prerequisite to getting out of the obligation. Other options exist such as either selling the shares or renting out the timeshare. 

6. There are several ways to escape from the timeshare agreement. At the outset, in order to extricate yourself from any timeshare agreement, it will depend on three things: The language in the contract, the facts of the specific case, and the company involved. If the timeshare company will not take back the shares and/or you are unwilling to either sell them or rent them out, then you will need to consider seeking relief under the Massachusetts Consumer Protection Act, G.L.c.93A, sections 2,9. These companies would like you to think that they have you over a barrel, so to speak. The exact opposite is true. These contracts are loaded with unconscionable, one-sided language which allows these companies to try to hide behind when dealing with consumer requests to cancel. The motivation is simply to discourage consumers from exiting the contract and to keep them in the fold as a way of continuing to get money from them even in situations where a consumer does not use the timeshare.

While it is true that a timeshare agreement is binding that does not mean that the agreement cannot be canceled. In Massachusetts, contracts can be canceled on several well-recognized grounds such as fraud, mistake, duress, and/or unconscionability. Moreover, even if you unilaterally cancel (without the agreement of the timeshare company), in most instances, your damages will be limited to the amount of money owed at that time (i.e. fees and assessments). In some cases, timeshare agreements have a defined period, above and beyond the three day cancellation period, where either party may terminate the contract by reasonable notice. For those timeshare companies who are reluctant to take back shares from an unhappy client either the threat or reality of litigation may force their hand.

7.  In forcing the hand of a timeshare company some of the things a consumer should keep in mind in attempting to cancel a timeshare obligation under G.L.c.93A will take into consideration, for example, whether the timeshare company misleads the consumer in the following areas: That the timeshare would increase in price and value over time ( most timeshares do not, by the way), that the timeshare interest could be freely exchanged, sold or transferred, that the timeshare was a solid real estate investment and, finally, that the timeshare interest would result in the purchaser-consumer having priority over a non-purchaser-consumer when it came to booking certain properties. As to this last item, every time my client went to try and book a trip at one of the better properties they were told that those properties were unavailable.

When it comes to timeshare contracts, you need to have a law firm that will stand by you and vigorously represent your interests. Do not go it alone. At the Katz Law Group, we have taken on timeshare companies and have achieved successful results for our clients. Please call us at 508-480-8202 for further information. We have extended hours during this crisis from 8 a.m. to 8 p.m.

About the Author

David Katz

Attorney David S.Katz is the founder and managing partner of the Katz Law Group, P.C., located in Marlborough, Massachusetts...

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