Introduction to canceling your timeshare purchase.
You bought a timeshare but you want to cancel it or back out of it. The first rule of thumb is act very fast, as early as possible. Check whether you qualify for the rescission period, which is the amount of time you have to cancel the purchase. The rescission period depends on each state law, but it usually consists of only a few days after the purchase.
Most states, and to a certain extent some foreign countries, have laws regarding the rescission period: they usually give timeshare buyers between three and fifteen days to cancel (rescind) the agreement. Take for example Colorado. Colorado timeshare law states that a purchaser has up to five days to cancel a timeshare contract. (Colo. Rev. Stat. § 6-1-703). Whereas in Nevada the buyer has the right to cancel a timeshare contract of sale up until the midnight of the fifth calendar day following the date the contract was executed (Nev. Rev. Stat. § 119A.410).
By law, the state requires that all contracts clearly include the purchaser’s option to rescind the agreement. This agreement is usually nonwaivable, which means the seller will not demand you to give up this right.
Canceling your timeshare contract during the rescission period.
Because words are but wind, it is always recommendable to hand your cancellation in writing. Even if oral contracts are legally binding in your state, it is very difficult to prove the terms of an oral contract, thus it is a good idea to prepare and send a timeshare letter of cancellation to the vendor.
The letter of cancellation should include the following points:
- the timeshare description (use the outline from the timeshare paperwork),
- the purchaser’s name as it is written on the contract,
- the name of the timeshare company,
- the current date,
- the date the timeshare was purchased,
- the purchaser’s address, phone number, and email address and
- a clear statement that the purchaser is cancelling the contract.
Even though it is not essential to include the reasons for cancelling the timeshare contract, the most important message that should be included in this letter is the necessity to rescind the contract. A simple statement such as “I am contacting you within the rescission period to cancel this timeshare contract” is suffice.
Have in mind that state law might ask to provide some specific information. In such case, you would have to include it in your cancellation notice. Also, statutes change, so checking them is always a good idea.
Providing a cancellation notice.
Read the contract to see if there are any clauses on how to deliver a cancellation notice. If there isn’t, it is best to deliver the cancellation out by state law. Some timeshare companies accept delivery of the cancellation notice via registered or certified mail, while others only accept hand-delivered cancellation notices. The important thing is to make sure that the letter is received within the applicable rescission period to avoid any void penalties or demerits.
Cancelling a foreign timeshare.
As mentioned before, you are binding by the foreign country’s laws to be able to cancel and deliver the timeshare cancellation notice. The first thing is to research how many days, if any, are within the rescission period. Then follow the protocol of the cancellation notice as per that country’s law.
The best thing to do before buying a timeshare in a foreign location is to receive counseling from a local attorney. This professional will advise you on what to expect from a timeshare contract rescission.
What to do when the rescission period on your timeshare contract has expired.
When the rescission period has expired, the best way to unload your timeshare is by selling it to an interested buyer. Still, it is important to review state laws, because under limited circumstances, you might be eligible to get out of a timeshare contract after the rescission period has expired.
For example, in Arkansas, the buyer has up to five days or up until the public offering statement, to cancel a timeshare contract. (Ark. Code Ann. § 18-14-409). Still, the buyer of the timeshare may file a lawsuit in court within four years to rescind the contract if there is a question about the validity of the timeshare contract or accuracy of the public offering statement (Ark. Code Ann. § 18-14-403).
Keep this in mind when buying a timeshare deal.
The most important thing to keep in mind when buying a timeshare deal is understanding all of your rights. Lets say you sign a timeshare contract while on vacation, the rescission period could very well expire before you arrive home. To avoid oversights like this one, be sure to read and understand all the terms of the timeshare contract at the time of signing it.
Like mentioned above, most timeshare laws require the seller to include information in the contract about how long you have to cancel the deal, as well as procedures for delivering a cancellation letter. But if the timeshare sellers are not well-intended, they might end up burying these details in the paperwork or the instructions might be complicated. To avoid this, you should be familiar with timeshare laws before you sign the contract.
To play it safe, talk to a consumer protection attorney or timeshare attorney before signing a timeshare contract, especially if the timeshare is purchased abroad where laws and rules might be different.