Timeshare, Holiday Clubs and Fractional Ownership
Timeshare is concept that has been around for many decades. The principle is quite simple – instead of buying a whole property abroad you simply buy a share in that property and use it during your allotted time whilst other people use the property for the rest of the year. The advantages of Timeshare are quite obvious;
Since Timeshare was invented it has developed and another advantage has been added on – that you can swap (exchange) your time at that resort for a different resort and therefore don’t even need to go back to the same resort if you don’t want to.
Timeshare is therefore a good product for some people but is not right for everybody even if the quality of many resorts is actually quite high. The problems with Timeshare are;
If you have just signed up for a Timeshare purchase and have either changed your mind or have realised that what you have signed up for isn’t what you were lead to believe it is you can cancel but you have very strict time limits to do so. The European Directive relating to timeshare and timeshare related products gives you an automatic Cooling Off period of 14 days during which time you can cancel for any reason.
Even if you are outside the Cooling Off period it may be possible to get you out of your Timeshare purchase by other means but it is vital that you contact as soon as possible as otherwise some of your options may be lost.
If you have owned your timeshare for many years and are now finding that it is difficult or impossible to sell and you are fed up with the high level of maintenance fees then this situation is more difficult. At the moment we are not aware of any real solution to this. There are various companies who offer services that claim to get you out of long term ownership. Often these companies themselves are simply a front for a scam whereby they take money up front from you and then do not do what they promise to do. Sometimes those companies will simply sell you something else under the pretext that this gets you out of your timeshare. You will often end up still owning your Timeshare and also be stuck with a new product as well.
If you have recently purchased timeshare and wish to get out of it please contact us as soon as possible. Do not communicate with the Timeshare company directly as you are likely to make the situation worse – every word in communications needs to be thought about carefully and unless you know what you are doing you can inadvertently worsen your position or even make it impossible to cancel without realising that you have done so.
In order to establish whether we are able to assist you we would need to go through the documentation that you have. We offer a FREE Initial Assessment of your documentation to establish whether there are grounds to cancel and therefore whether it is worth proceeding.
If it is worth proceeding then we would charge £500 plus 7% IGIC (Impuesto General Indirecto Canario - the equivalent of VAT in Tenerife), making a total of £535.00 for Spanish timeshare and £700 plus 7%IGIC (making £749) for Portuguese Timeshare.
There are many scams associated with the disposal of Timeshare. The way that these scams tend to work is that they rely on your willingness to dispose of your Timeshare. You may even be scared into a solution because you are told that your children will inherit the problem. In your desperation you are likely to believe anything that you are told which looks like it will help you out of your current situation. You may have just bought a timeshare and somebody will offer to help you get out of it. You may have owned a timeshare for many years and may be looking to get rid of it and somebody may offer to help you do so. You may be told that there is an action group taking legal action against the timeshare company or the exchange organisation.
If you are in contact with an organisation that claims to be able to help you with your timeshare problem you should be very wary. There are certain things that should ring alarm bells to you. If one or more of the following apply then walk away:
If the company contacted you ask yourself how they knew about you. Generally they have got your details because you are on what is affectionately known as the “suckers list”, which is a list of people who have been caught by a Timeshare scam in the past. Never deal with a company that contacts you rather than the other way around.
How can they find a buyer for your property if they don’t even know whether your timeshare is still for available? Unless you have advertised the timeshare for sale no buyer will offer to buy it and certainly won’t pay a deposit for it.
If the price you are being offered for your timeshare is higher than you would normally expect then you should be very wary. Essentially most Timeshares have no value at the moment and many people are struggling to give them away let alone sell them. Because Timeshares are overpriced in the first place it is highly unlikely that you will sell it for even a fraction of the value you bought it for let alone a profit.
You could be offered some further weeks to convert your purchase into Fractional Ownership. You could be offered a Holiday Club or another product. If this happens then the likelihood is that all the company is interested in is selling you another product. In many cases you won’t actually get out of your original timeshare. In most cases you will end up with a worse situation and greater yearly fees to pay.
You could be told that this is for a number of reasons such as taxes, land registry fees, Notary fees or some other reason. The majority of Timeshare scams work by getting you to pay something up front – typically something like £500 - £1,500. Then when the company doesn’t do anything they have already made some money from you. The company won’t stop there though – they will continue to ask for further sums of money for new reasons – advertising, administration fees and so on. Do not pay any money up front unless you are absolutely satisfied that the company is legitimate. If you are going to pay then make sure that this is done with a Credit Card so that you get the benefit of the protection that this brings. You should not need to pay any money up front to sell a Timeshare and in the vast majority of cases there is no need to pay any taxes or land registry fees to do so. A legitimate company selling your timeshare should be satisfied with taking their commission from the sale proceeds rather than taking money up front.
You may hear things such as “….you MUST sign up today or the price goes up…..” or “….we can only offer this to you today and tomorrow will be too late.” Beware of tactics putting pressure on you to do something that day. This is the salesman trying to “close” you and get his hands on your money. Legitimate companies will never do this.
A large percentage of clients that we speak to didn’t understand the full ins and outs of what they were signing up to. Often the salesman has deliberately confused the client so that they can persuade them to do something. If you don’t fully understand why something is happening or don’t have a proper explanation that makes sense when you ask a question then the chances are that there may be something more sinister behind what is happening than you initially believe.
As Timeshare legislation evolved to afford greater protection to the public the rogues in the industry developed new products with the specific intention of getting around the legislation. Holiday Clubs are often an example of that. The way that Holiday Clubs work is that you are buying the right to cheap holidays and flights for the next so many years. Effectively you are paying for access to discounted holidays. You don’t own any property like Timeshare. Often you find that the cheap holidays and flights that you were offered either don’t materialise, are very limited or were not as cheap as you were lead to believe. Sometimes the Holiday Club doesn’t actually exist and the scheme will close down completely taking your money with it.
In order to avoid becoming a victim of Holiday Clubs take the same precautions as you would do with Timeshare but also think very carefully about what you are buying and do you your research before committing by checking how much you can buy similar holidays and flights on the internet or the high street.
There has been a lot of talk about Fractional Ownership in the last few years. Timeshare companies have started to tell clients that they should “upgrade” to Fractional Ownership. Sellers of whole properties which aren’t selling have started to sell Fractional Ownership as a way of getting rid of their property. So what is Fractional Ownership?
Fractional Ownership is a very similar concept to Timeshare and is where you own a fraction (share) of the property. Indeed Timeshare is a type of Fractional Ownership but not all Fractional Ownership is Timeshare. Even many people selling Fractional Ownership do not understand the differences and similarities between Timeshare and Fractional Ownership and often say that the difference is that with Fractional you own a share in the property and Timeshare you only have a right to use the property for a certain number of years. That may be the case but isn’t the only way that either fractional Ownership or Timeshare can be set up. Many Fractional Ownership schemes are set up where the property is registered in the name of a company and you buy shares in the company which entitle you to use the property during certain periods of time.
Both Fractional Ownership and Timeshare can be set up in several ways. You may own a percentage of the property and have your name registered directly in the Land Registry. Alternatively you may have the property registered in the name of a company or trust and you are issued with shares in that company or certificates to use the property.
If you currently own Timeshare and you have been told that you can get out of this by “upgrading” to Fractional Ownership be very careful – this is normally simply a way of selling you a couple more weeks at the same resort. You will simply end up in the same position but with more weeks and more maintenance charges to pay.
12th November 2013
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16th May 2013