THE HONEST BROKER: TIME-SHARING
BY: DIANE LOTT, BROKER PARADISE FOUND REALTY
Investing in a time share can be alluring for those Americans that take annual vacations and prefer to have the flexibility of going to the same place, or not, every year without the financial commitment of owning a vacation home. A typical timesharing plan divides a vacation home or 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 homes’ or condo’s size (square footage; beds/baths), and/or 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 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.
Sometimes, a buyer regrets having purchased a time share from a developer. When that occurs, there is “cancellation clause” within the contract that allows for the buyer to cancel the contract. The buyer is then able to 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 the letter be sent via registered mail requiring a signature to ensure that there is a paper trail to prove that it was received.
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