While most timeshare offers are legitimate, it’s likely your perception of them is somewhat negative. Scams and unethical (and in some cases illegal) tactics employed by timeshare brokers have tainted their reputation. But are they really that bad? This article helps you answer this question for yourself.
What Is a Timeshare?
A Timeshare (often referred to as vacation ownership) is a property with a divided form of ownership. Typically, these properties are holiday homes, shared with multiple parties. The Timeshare provides each owner a specified period of time to use the same property for their holidays.
How Do They Work?
There are two types of timeshare schemes. Specific time-period schemes and Points-based schemes. Specific time-period schemes allow the investor to use a specific property for an allocated time, such as one week a year. Alternatively, Points-based schemes require you to buy points to redeem at different resorts or holiday accommodation properties, or for other travel services.
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Are They a Good Investment?
Since there are so many timeshares on the market, they are often not a good investment and most will depreciate in value after purchase. However, timeshares do have some benefits. Particularly if you go on holiday to the same place, at the same time of year, every year. In these situations, a timeshare could be a great way to own the property you love at the fraction of the full cost. Timeshares also provide the safety of knowing what your holiday will be like, avoiding the hassle of researching and reserving different properties. However, this comes at the cost of your flexibility.
What You Need to Know
Buyers of timeshares have the right to a 7-day cooling-off period. This extends to 14 days if the operator is not a member of the Australian Timeshare and Holiday Ownership Council (ATHOC). So if you change your mind, you must write to the operator before the end of the relevant period. If you do decide to cancel your timeshare, be aware that operators are known to be hard to contact during this period. If you successfully cancel in time, the Timeshare company must pay back any money you have already paid.
How Do You Purchase a Timeshare?
Timeshares are often bought after a lengthy sales seminar. You may have been offered a gift or reward to attend the seminar. During these seminars, sellers may implement high-pressure selling techniques. One common technique is offering you a one time ‘special’ deal only available at the seminar.
The up-front costs of timeshares can be quite high. Even if you don’t use the property one year, you will be required to pay an annual maintenance fee. Your Product Disclosure Statement will outline all of your payments.
Final Thoughts
Timeshares are not for everyone, deciding whether one would work well for you is an individual decision. However, understanding what timeshare schemes are, your rights, and how they work, should assist you in making your decision.
If you have entered into one and are unable to resolve a dispute directly with the Timeshare company, you can file a complaint to the Australian Financial Complaints Authority (AFCA). The AFCA provides free assistance in resolving complaints with timeshare companies. If you are still unsure speak with one of our expert Property Lawyers today.
