Oops, bought a timeshare in Mexico -- can I cancel the contract?

If you're got a bad case of timeshare-buyer's remorse, act quickly to protect your right to rescind.

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Question

My wife and I recently fell for one of those “Spend a free weekend in the Mexico!” timeshare presentation pitches. We went, had a great weekend, listened to the sales pitch (which lasted an unbelievably long time), and at the end, thought we’d better take them up on their discounted offer, since it expired as soon as we walked out the door.

We spent a few more days on our own at the beaches, then flew home. The morning we woke up in our own home, we looked at each other and felt sick. We have children in various parts of the world — we have no time, much less need, for an annual vacation in Mexico. Are we stuck with the consequences of having fallen for the heavy-handed sales pitch, or can we get out of this?

Answer

You’re not the first person to have bought a timeshare without having really intended to. The developers who sell timeshares have found multiple ways to lure people in, like offering prizes or gifts (such as free flights or activities) to bring potential buyers to a “timeshare presentation” then subjecting them to a lengthy sales pitch by timeshare sales agents who are expert at being pushy and hard to refuse. The sales agents are trained to rebuke any objections, and commonly offer special deals that require a purchase before leaving the premises.

Because these tactics are quite effective, a number of people enter these sales presentations with no intention of buying a timeshare, and end up leaving as a new owner. After the rushed and pressured purchase, these same buyers panic, and wonder how to get out of the deal.

State Laws Within the U.S. Give Buyer the Right to Rescind

Most states’ laws protect consumers who purchase a timeshare there and want out of the deal right after. These laws give timeshare buyers the right to cancel (“rescind”) the purchase contract within a specified period of time after signing (sometimes called a “cooling off” period). The time period is typically short, from as few as three days to as many as fifteen days.

The issue for you is that, in most cases, the state within which the timeshare is located is the state law applicable. Since your timeshare is located in another country, it becomes a matter of whether buyers there are provided similar protection under the law of that country.

Because you purchased in Mexico, you might be in luck; timeshare sales agreements in Mexico are subject to a five-day rescission provision. (For more information on your rights in Mexico see Nolo’s article “How to Protect Yourself When Buying a Mexican Timeshare”).

Buyers in an EU country have fourteen days within which to back out. Do some online research or hire an attorney to help find any applicable rescission provisions in your timeshare’s location.

The Right to Cancel Might Be in Your Purchase Agreement

Also check the terms of your purchase agreement. Sometimes the contract will include a rescission provision even if not required by law. These provisions are often buried in the contract, however, and it might take some close examination to discover one.

If you don’t find a cancellation provision in the sales contract, an attorney can help you determine whether your purchase is subject to a right of rescission.

Although you might be tempted to look for help from the agent who sold you the property, this is not the best approach. These agents are highly skilled at convincing you of all the reasons not to cancel, and it’s possible the agent might employ delay tactics until it’s too late.

If your contract is subject to a right of rescission, don’t worry if you made a verbal promise, or agreed to a contract provision, waiving these rights. The right of rescission cannot be waived, regardless of what the contract says, or what a sales agent might have told you to the contrary.

If You Have No Rescission Protection

If you want out of a contract but there is no applicable rescission provision or law, or if the date for rescission has passed, your cancellation options are much more limited. You’ll need to hire an experienced attorney to look at the facts of the sale, and help determine the best course of action.

Follow All Requirements to Cancel

If a provision or law gives you the right to rescind, and you are within the applicable time period, you must carefully follow all procedures required. Cancellation procedures typically require the buyer to provide written notice to the seller postmarked (or otherwise dated) within the applicable “cooling off” time period. The notice usually must include information such as the property description, contract date, the buyer’s contact information, and a request to cancel the contract.

When providing the required notices, send copies of all documentation and keep the originals. Once the seller officially acknowledges and accepts the cancellation, you can hand over any information or original documents requested. Because of the importance of meeting all the legal requirements for a valid rescission, you might wish to contact an experienced attorney for assistance.

Receive Your Money Back

Upon receipt of an effective rescission, the seller must completely refund your purchase money. If you have effectively rescinded your contract, do not agree to pay any “penalty” or other amount requested or demanded by the seller without first obtaining advice from a qualified attorney.

If you have the right to rescind, and follow all the proper procedures, you should be able to walk away from a regretful timeshare purchase with your money back, unencumbered by a property you didn’t want to begin with. And hopefully, next time you’ll think twice before agreeing to accept those tempting freebies!

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