Buying a Timeshare in a Foreign Country

Buying a timeshare in Mexico, Canada, or another foreign country? Here's what you need to know to protect yourself.

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If you are thinking of purchasing a timeshare outside of the United States, there are many different issues you should consider. For starters, you should realize that while many U.S. states have laws that strictly regulate timeshares, if you purchase a timeshare in a foreign country, those laws do not apply to you. Instead, you'll be subject to the laws of the country where the timeshare is located.

Read on to learn more about purchasing a foreign timeshare, certain restrictions that some countries impose on foreigners purchasing timeshares, and issues to consider if you are thinking of buying or reselling a timeshare outside of the United States.

(Learn more about timeshares in our Buying or Selling a Timeshare topic area.)

Forms of Foreign Timeshare Ownership

When you purchase a timeshare, whether in the United States or abroad, the most common forms of ownership are:

  • deeded -- with a deeded timeshare, title to your portion of the property is conveyed to you (just like with a residential home purchase) and you own the interest, and
  • right to use -- a right-to-use timeshare is more like a lease agreement.

Some Countries Restrict Ownership

Many foreign countries do not allow (or if they do allow it, they restrict) ownership of deeded property within the country by non-residents. If this is the case, foreign purchasers may only acquire a right-to-use timeshare rather than a deeded timeshare.

In Mexico, for example, timeshares are typically of the right-to-use variety because foreigners are not allowed to hold direct title within approximately 30 miles of the coast and 60 miles of international borders. So, if you want to purchase an ocean-front timeshare in Mexico, a right-to-use ownership might be your only option. (There is a measure currently pending in the Mexican legislature to change this law and allow foreigners to directly buy property along the coast and the nation's border so long as it is for residential use. If the law passes, this could make buying a timeshare in Mexico a whole different ballgame as deeded timeshares could increasingly become available to foreigners.)

Ultimately, it is important to know what you are and are not allowed to own in the country where the timeshare is located.

Right to Cancel

If you enter into a timeshare contract and then have buyer’s remorse, each country and most timeshare purchase contracts generally contain a time period during which you may unilaterally cancel the contract and receive all proceeds back. Your purchase documents should indicate the length of the rescission period and should describe the procedures you need to follow to rescind the sale.

Usually you’ll only have a few days to back out of the deal so be sure you read your contract carefully. You may also want to speak to a local attorney who can advise you about the rescission period in that particular country.

(Learn more about cancelling a timeshare purchase, see Nolo’s article Timeshare Cancellations: Can I Cancel a Timeshare Purchase?)

Other Issues to Consider

If you’re thinking of purchasing a timeshare in a foreign country, you should also consider the following legal issues and find out the answers to the following questions:

  • Regulations involved. Does the government regulate the timeshare industry? (For example, do timeshare projects need to be registered? If so, is the timeshare you are considering purchasing part of a registered resort?)
  • Consumer protection laws. Does the country where you are thinking of purchasing a timeshare have any consumer-protection laws? (If you get scammed while purchasing a timeshare outside of the United States, U.S. law will not protect you. Instead, you'll be subject to the laws of the country where the timeshare is located.) If there are consumer protection laws, what are your rights as a timeshare buyer under those laws? Are there any protections if you get scammed in a timeshare deal?
  • Language. Are the purchase contract, declaration, and other important disclosures written in your first language or will they be written in a language you do not understand? You may need to hire a local attorney to assist you in interpreting and understanding the legal documents.
  • Payment options. Does the timeshare resort accept payments in U.S. currency? If you have to pay in a foreign currency, there will most likely be currency-exchange fees, as well as fluctuations in exchange rates, which can increase your costs significantly.
  • Taxes. What taxes will you have to pay? Are foreigners taxed differently than citizens of the country where the timeshare is located?

Reselling Your Overseas Timeshare

If you have already purchased a timeshare outside of the U.S. and are thinking of selling it, you’ll have to comply with the legal requirements in that country that pertain to such transactions, which may be different from those in the U.S. For example, the contract may need to be in that country’s official language, even if you found a buyer who is fluent in English.

If you list your timeshare with a resort-based resale program or an independent broker who specializes in international timeshare resales, the reseller should know what to do and can help you through the transaction. However, it’s important to learn about how to avoid becoming the victim of a timeshare resale scam.

Scams and schemes are common in the timeshare industry, especially when it comes to selling a timeshare abroad, and you’ll want to carefully investigate any resale company before moving forward with the deal. (To learn more about the type of scams that you may encounter when you’re trying to sell a timeshare, see Timeshare Resale Scams.)

Hiring an Attorney

The issues mentioned in this article represent just a few of the concerns that arise when it comes to purchasing (or reselling) a timeshare in a foreign country. There are, of course, others.

If you are thinking about purchasing a timeshare in a foreign country or need to resell a timeshare that you purchased overseas, it is recommended that you contact an attorney familiar with the laws that govern timeshares in that particular country.

by: , Contributing Editor

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