Is purchasing a timeshare really a sunny prospect?
16 April 2019
A great deal of holidaymakers aspire to own their own home in the sun in the form of a timeshare. Timeshares work by allowing each ‘investor’ to purchase a certain period of time throughout the year to spend in the holiday home or villa.
Many prospective timeshare buyers are coerced into investing by attending sales pitches whilst on holiday. With horror stories of pressure selling, extortionate maintenance contracts and re-selling scams True Solicitors LLP investigates: Is purchasing a timeshare ever really worth it?
Advantages of purchasing a Timeshare
Advantages to purchasing a timeshare, include:
- Affordability: Purchasing a timeshare is an affordable way to spend your holidays in an apartment or villa that you would be otherwise too expensive to purchase in full.
- Guaranteed holiday destination: If you like going on holiday to the same resort each year a Timeshare provides you with the guarantee of accommodation in your desired destination.
- Rent out to others: Some timeshares permit you to be able to rent out your block of time to others, if you can’t use it.
Disadvantages of purchasing a Timeshare
The downsides of purchasing a timeshare, include:
- Costly maintenance contracts: Timeshares include costly annual maintenance fees, which cover the upkeep of the property i.e. cleaning, gardening and any necessary building work. Maintenance contracts usually start off low in price but can substantially increase in cost each year. Annual maintenance fees must also be paid in full before you will be permitted to sell your timeshare.
- Depreciation in value: There is a substantial resale market for timeshares, meaning that you can often purchase one for less than half the price of the original value. Timeshares are often sold at a marked up price to cover the cost of impressive sales presentations, prize giveaways and incentives.
- Pressure selling: Timeshares are often sold to buyers whilst they are on holiday, in a relaxed state of mind, when they may not be thinking logically. Potential buyers are often lured into sales presentations with the promise of free alcohol, gifts and free dinners in upmarket restaurants. There are many cases when buyers feel that they are faced with aggressive sales techniques, resulting in them feeling like they have been bullied into signing up to buy something that they didn’t want or need.
- No income generated: You cannot generate annual income from your timeshare, as unlike owning a holiday home outright, you are not able to rent it out for the remainder of the year when you are not staying there.
- Re-selling scams: There are many re-selling companies operating who will promise to list and re-sell your timeshare for an upfront fee. Once clients pay the upfront costs they often never hear from the re-seller again.
It is important to not think of purchasing a timeshare as a financial investment, but instead as an investment in how you want to spend your quality time. If you suspect that you were sold your timeshare based on the false promises of significant financial returns which haven’t materialised, you may be able to make a claim for financial mis-selling. Signs to look out for if you believe that you were mis-sold your timeshare include:
- You were promised that the timeshare property would increase in value over time.
- You have tried to exit the agreement but were told you need to enter a new timeshare agreement to do this.
- You paid for the timeshare, or paid a deposit for the timeshare, using a method of finance (finance agreement or credit card) within the last six years.
If you believe that you have been mis-sold a timeshare you may be eligible to pursue a claim against the finance providers who lent you the funds to make the purchase. TRUE Solicitors financial mis-selling solicitors may be able to help you to get out of your timeshare agreement or to cancel your on-going maintenance contract.