2009-10-02 / Columnists

Notes On Consumer Affairs

By Assemblywoman Audrey Pheffer

Have you ever dreamed of owning a home, condominium, or other vacation property in a serene mountain village or sun-soaked resort town? While full ownership of such properties may be out of reach for many, timeshare arrangements, in which ownership costs are shared among a group of buyers, can make owning a piece of paradise affordable. If you are considering a timeshare, it is important that you fully understand the nature of the commitment, review the terms and conditions of any offering closely before signing, and resist any pressure to make a quick decision.

Timeshare arrangements are generally defined as any arrangement involving shared ownership of a vacation property in which each of the purchasers is allotted a specified period each year to occupy the unit. Owners pay an initial sum to purchase the timeshare, which may be paid upfront or as part of a payment plan, and periodic maintenance fees. Timeshare ownership can provide numerous benefits, but these arrangements may be costly and involve a potentially lifetime commitment that can pose unique risks.

When considering the cost of a timeshare, be sure to factor in maintenance fees, which often increase over the life of the contract, and any closing costs, broker commissions, and finance charges. It is a good idea to compare these costs with the cost of renting a similar property in the same area with similar facilities for the same time period. Experts recommend that you consider a timeshare as a vacation destination, not as an investment. Due to the multitude of offerings available, some owners find that timeshares are difficult to sell, and those owners that do manage to sell may find that resale values are less than the purchase price. Also, the continued operation and maintenance of a timeshare is dependent on the sponsoring company staying in business and attracting enough owners to keep the arrangement functioning.

Timeshare offerings are governed under New York law and regulations promulgated and enforced by the Attorney General. Any timeshare solicitation mailed to a consumer's New York address or made to a consumer in New York is subject to these regulations. Companies that offer timeshares to New York consumers and transact business in New York are required to file an offering plan with the Attorney General that must be made available to potential buyers. The offering plan must contain pertinent information about the timeshare, such as the identity of the sellers, the condition of the property, and any risks or limitations that could impact a potential buyer's decision. Be sure to review any offering plan carefully and ask the seller any and all questions you may have. In order to provide consumers with adequate time to review their purchasing decisions, those who sign a contract for a timeshare arrangement with a New York offering plan on file are provided a seven day cooling-off period during which they may cancel the contract.

New York's timeshare rules and regulations also protect consumers from deceptive marketing and high-pressure sales tactics. Some timeshare companies use solicitations intended to create the impression that the recipient has won a prize. In order to collect the prize, recipients are almost always required to attend a timeshare tour or sales presentation. In some instances it may be possible to receive the promised prize, but only after enduring lengthy and often aggressive sales presentations, and many prizes, such as free travel, come with unreasonable restrictions and blackout dates that severely limit the value of the prize. To protect consumers, the law requires that timeshare solicitations featuring prize promotions contain a full description of the exact prize won, any terms and conditions associated with its redemption, and a statement regarding whether the recipient must submit to a sales presentation in order to claim the prize. The rules also provide that any solicitation or in-person marketing effort offering a free or low-cost tour that includes a timeshare sales presentation must disclose such fact to the recipient. For more helpful timeshare tips, visit the Attorney General's website on the topic at: . For additional information, you may want to visit the Federal Trade Commission's website on timeshares at: .

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