Your legal rights: Get the facts before buying a timeshare

While purchasing a timeshare may sound good, there can be a host of headaches and problems with timeshare ownership, including higher-than-anticipated costs and difficulties reselling it.

Timeshares typically come in two forms: deeded and right-to-use. With a deeded timeshare, you own part of the property—often for a specific time each year—and depending on the contract, you may buy it for a definite number of years, for life, or until you sell it. With a right-to-use timeshare, you acquire the right to use a property from a developer, but you don’t actually “own” the property.

Common problems

Fees. Besides the upfront cost of a timeshare, you may be responsible for yearly maintenance fees, special assessments, property taxes, and/or utility expenses, regardless of whether you use the property. If you don’t pay the fees, you may face foreclosure.

Scheduling vacation time. You may not always get the dates you want. The best times often fill up quickly, and you may be stuck with an undesirable time at your resort.

Foreign countries have different laws. When you purchase a timeshare that is outside of the United States, you are not protected by United States laws. Foreign countries’ consumer protection laws are not always as robust as those in the United States. If you buy a timeshare outside of Minnesota, the laws of that state or country will apply.

Difficult to sell. Timeshares are notoriously hard to sell. Lots of timeshares are on the market, and consumers often have to sell their timeshares at a loss. Sometimes it may take years to unload a timeshare.

Timeshare scams. The market is filled with scammers who say they can sell your timeshare for a good price. They usually ask for money upfront and then never sell your timeshare.

Things to consider

Timeshares are not investments. Don’t view purchasing a timeshare as an investment. Timeshares usually go down in value after you buy them. Additionally, you may want to calculate the cost of renting similar accommodations each year. Renting is often cheaper and doesn’t lock you into a long-term contract.

Borrowing money. Since they depreciate in value quickly, banks usually won’t lend you money to buy a timeshare. Developers will often arrange financing, but often at high interest rates.

High-pressure sales. Don’t be swayed by high-pressure sales tactics. Talk to a lawyer or real estate professional before signing anything. Always ask about your right to cancel a contract.

How to file a complaint

Minnesota law gives the Minnesota Department of Commerce authority to regulate the sale and marketing of subdivided land (including timeshares) in Minnesota. In general, sellers of subdivided land must register the land interest and obtain a real estate broker or salesperson license from the Department before making any offers or sales in the state. If you think a timeshare seller is engaging in deceptive or unfair business practices, file a complaint with the Department and the Federal Trade Commission, a federal consumer protection agency.

Reach the office of Minnesota Attorney General Lori Swanson at 

(651) 296-3353 or 1-800-657-3787.