Timeshare Rescission Explained
A timeshare rescission is the act of voiding a timeshare contract. With this legal mechanism, you can rescind your timeshare contract and unwind the transaction. Rescission is an important tool for any consumer who purchased a timeshare. It allows you to cancel your timeshare—or at least get some of your money back.
But you should never delay. Timeshare rescission varies by state within the United States. In many states, they give you a short time period, sometimes as small as three days; but in other states, they give you as many as seven days. In some states, it even goes up to 10 days. Keep in mind that some states will give you more time if you live outside of the state. Often , these states know that people from out of state are targeted by certain timeshare companies. So they will give you additional time to rescind in order to protect you.
It is absolutely key that you act within the legal rescission timeframe in your state, as this is required to protect your rights. When you read a timeshare agreement, you do not have more than 72 hours to cancel, right? You have more than three days. If you have more than three days, that is considered deceptive and unfair for the state attorney general, since you are not having time to cancel and it is not clear to the consumer that you have that time to cancel. You only have until midnight of the last day of your three day rescission time frame or until midnight of the seventh day for rescissions that are seven days. So do not delay or waste any time. The longer you wait, the more difficult it becomes to unwind the timeshare.
Your Right to Rescind a Timeshare Contract
Consumer Legal Rights to Rescind Timeshare Contracts
Individuals who choose to legally cancel (rescind) their contract for a timeshare purchase are protected by specific laws. The length of the rescission period depends on the state where the purchase took place and whether that locality has laws that protect parties who rescind a timeshare contract. The Federal Trade Commission (FTC), the Bureau of Consumer Protection and the Consumer Financial Protection Bureau (CFPB) have worked to protect consumers from unfair and deceptive sales practices in the industry. Most states also have laws to safeguard buyers by guaranteeing a right of cancellation. For example, in New Jersey, the Department of Banking and Insurance (DOBI) enforces the Consumer Fraud Act which gives buyers a recision period of seven days. People buying timeshares in Colorado have five days to cancel their contract. Cancelling a contract within this time frame must be done according to the specific terms of the agreement.
Elements of a Rescission Letter
In addition to a buyer’s signature and date, a rescission letter should include the following buyer information:
The Buyer’s Name and Address
The Contract Number in Key Contingencies of Your Timeshare Contract
The General Location and Unit No.
Speak the Truth – The Truth in Lending Act
The Cancellation Period
The Consideration
The Text of the Georgia Timeshare Rescission
The Date of Discovery
The Irrevocable Rights
Make Your Intent To Rescind Clear
Have Your Signature and Date
Your rescission letter does not need to be lengthy, it simply needs to include enough information so the timeshare provider knows exactly why the letter was sent—but should not contain any false information. In fact, if you input false information or lie about anything in your rescission letter, it could potentially be used against you in the event the timeshare provider attempts to take legal action against you to keep you bound to your contract.
How to Write a Rescission Letter in 9 Steps
When a timeshare company fails to comply with the timeshare rescission laws, timeshare owners should take steps to protect their rights. Here are steps you can take to write an effective rescission letter:
- Clearly identify you and other parties to the timeshare agreement.
- Identify which timeshare or product you are rescinding. It is best to identify this by using the "legal" name, not an abbreviated name such as a d/b/a name. For example, "ABC Holdings Group, LLC Managed Property at 123 Anywhere St., City, State, Zip" as opposed to "ABC Managed Property d/b/a Anywhere Resort" or something similar.
- Identify all documents forming the timeshare agreement, by name and date, such as the "Membership Agreement," "Management Agreement," "Occupancy License," etc. Any names for documents such as "contract," "paperwork," "agreement," etc. are too generic to be helpful and may cause confusion.
- Clearly state that you intend to rescind the timeshare agreement and demand a full refund or return of any money paid.
- Include a statement that all amounts paid with the exception of earnest money are due and returnable to the rescinding purchaser(s).
- Include the latest financial information showing the amount to be refunded; e.g. "All amounts including initial deposit and subsequent payments shall be returned."
- Include a statement that all paperwork must be returned as well.
- Your rescission letter should be sent prior to the deadline set by applicable law.
- Always send your rescission letter via certified mail, return receipt requested.
- Timeshare companies must accept rescission letters by letter; not phone calls, faxes, e-mails, etc. Make sure you send your rescission letter by certified mail.
Sample Rescission Letter
[Your Name]
[Your Address]
[City, State ZIP Code]
[Date]
[Resort Name]
[Resort Address]
[City, State ZIP Code]
Your Contract Number: ______________________________
Your Resort Reservation Numbers: ______________________________
Subject: Rescission of Timeshare Contract Made at the [XXXXX] Sales Presentation on [DATE]
I am writing regarding the Executive Premier Membership Contract I signed with your company on [Date]. I wish to inform your company that my spouse and I are rescinding and canceling the above-mentioned contract in accordance with the written terms of the contract, and the laws pertaining to contracts made following an in-person timeshare sales presentation as specified in [NAME OF STATE] Code Section _____(TIMESHARE/CAMP/TIME SHARE) .
It is agreed that my spouse and I have been advised by the management of your company that we received a copy of the above-mentioned contract at the time of its execution here at [NAME OF RESORT] on [DATE].
We have not used the services provided with our contract ([PACII, etc.]).
As specified by the terms of the above-mentioned contract, please cancel our account, and refund our [CLOSING AGENT, ESCROW AGENT OR RESORT?] for the amount paid. A prompt response will be appreciated and will avoid further action.
Where to Send Your Rescission Letter
Methods of Delivery
The recommended way to send your timeshare rescission letter to a resort company is through certified mail. While some timeshare companies may be open to receiving a rescission letter via e-mail, doing so may not be in your best interest as only certain means of delivery creates a presumption that the letter was delivered. When mailing the information via certified mail, it creates a presumption that a letter was received as long as you send it to the address that the timeshare company has provided for receipt of the rescission letter.
Some states and some specific timeshare contracts require that the rescission letter be sent via regular certified mail, return receipt requested.
If you are working with a timeshare exit company, or firm, they may have a specific method they prefer.
If you do not get a signature confirming receipt of your rescission letter, you should reach out to the timeshare company to confirm receipt, and inform them that your letter needs to be sent via certified mail. You should keep a record of your communications.
Keep copies of all correspondence, along with proof of delivery. In most cases, this information may be needed if legal action has to be initiated against the company.
What to Do If the Timeshare Company Responds
Managing Potential Replies or Resistance From Timeshare Companies
Soon enough, many of you may receive correspondence from your timeshare company in response to your rescission letter. The purpose of this section is to aid you in dealing with that communication and inform you of important considerations.
If you receive any kind of correspondence from a timeshare company’s representatives to your rescission letter, save all communication for the record. Write down the deed number and the name and phone number of the person with whom you spoke. Also make sure to keep a copy of the timeshare company’s letter or email. Your attorney will need this information to determine where the case stands.
Be sure not to give legal advice to a timeshare company unless you are working as an attorney on behalf of another person. A lot of times, people will want to help others out when legal issues arise. How many times have you been asked for help on legal matters? My guess is that more likely than not you will be asked for legal advice some time or another in your life . Giving legal advice when not licensed to do so makes you vulnerable to being cited for practicing law without a license, even if the advice given is appropriate for the circumstances. If asked, advise others to secure their own attorney and to seek guidance from them.
Another important point is being aware of your role. You do not represent yourself as a lawyer, but rather you are one who has some knowledge about how timeshares work and want to help others who are in unfortunate situations involving timeshare fraud or deception.
Not infrequently, attorneys will advise clients that the timeshare company will not honor the rescission as requested. While some timeshare companies have been known to ignore rescission requests, others have a habit of suggesting that rescission was invalid because it was not within the designated time. As stated before, if the rescission period exceeds the proscribed time period, this can be a basis for suggesting that the rescission is not valid. Be sure to consult with your attorney on this point.