Arizona Legislature Decides Not to Eliminate Timeshare Contract Perpetuity


State lawmakers in Arizona recently got together to discuss the opt-out capabilities for new timeshare owners. Republican, Shawna Bolick of Phoenix was hoping for the language of HB 2639 to include a rescission (cancellation) period of 14 days. This post purchase cool off allows the buyer to decide if they want to keep the property or not; after they’ve physically visited the resort themselves.

Amanda Rusing of the Attorney General’s Office testified on the importance of giving people a chance to experience what they bought — or what they thought they bought. She went on to say people think they’re “buying the opportunity to use a beach-front villa and what they end up with is a condo where, if you hang your head out the window on a sunny day, you can kind of see the ocean.’’ While Amanda brought up some great points, State legislature decided on a 10 day rescission period in Arizona instead.

What’s important about this decision is that most timeshare purchases are perpetual (lifetime) agreements. Once the cancellation window passes, it’s nearly impossible for owners to get rid of a timeshare. “At some point, these are adults that come to a meeting of the minds and want to sign a contract,” said Republican Senator Michelle Ugenti-Rita, who chairs the Senate Commerce Committee. Most agreed that if buyers are serious about the purchase, then they’ll immediately give it a second look when they get home. If they’re not, then the timeshare company isn’t necessarily to blame. Republican, Travis Grantham, who chairs the House Regulatory Affairs Committee, even mentioned having an attorney review the contracts of major purchases.

Why Rescission Periods Don’t Matter to AZ Lawmakers

While giving consumers more time to finalize their decision would have put a dent in buyer’s remorse, timeshare companies (and lawmakers with skin in the game) know the hard sale is the foundation of their business. The impulse buy is what drives the timeshare industry. With that being said, lawmakers shifted their attention to the real problem behind it all: timeshare sales tactics. The issue lies in timeshare developer’s strategy to lure prospects into presentations and aggressively pressure them to buy right then and there. Senator Ugenti-Rita brought up the simple fact that, “buyers have some responsibility to know exactly what they’re signing.” Sales teams do need to make sure prospects aren’t being led on.

She went on to say the legislation does include some additional requirements regarding timeshare contract disclosure. While she doesn’t believe an extended rescission period will fix the problem, she believes a consumer “empowered with information” can make better decisions. The only way to do this is to educate consumers and make sure full disclosure is a priority during sales presentations. According to her, the protections the State can provide are limited. While she does have a point, things didn’t add up when they decided to do away with one of the few provisions that benefitted users.

Propositions to Eliminate Timeshare Contracts Were Shut Down

Another proposition that was denied was the right to eliminate timeshare contract perpetuity after 10 years; IF the mortgage was paid in full and there were no past due penalties or fees. While resorts have long advertised the “possibility” of cancellation by qualification, it’s rare because they can always disqualify your request. Over the years, timeshare companies have gotten very clever and their termination options are extremely misleading. Resorts and certain legislature made sure this element of HB 2639 wasn’t even a consideration. It makes sense because the money is made in their ability to sell paying customers more things.

The original version of HB 2639 also asked to disclose the estimated annual (and lifetime) assessments fees as well as other costs; such as taxes, maintenance fees and utilities. The attempt was to provide buyers with clarity on the totality of the investment so they could avoid the unexpected. This portion was removed. Grantham’s reasoning was that, “It was too difficult for any timeshare developer to forecast what the fees may be.” Additional protection for sellers was also nixed during the house committee.

The Connection Between Lawmakers and the Timeshare Industry.

In the end, a lot of public light was shed on the concern behind timeshare ownership. Rusing also told Arizona lawmakers that owners become so desperate that they try to sell the property for pennies just to eliminate timeshare obligations. But nobody wants them. She believes this sense of hopelessness has established a market flooded with scam artists that claim they can cancel timeshare contracts. The attorney general went on to point out the undeniable connection between politicians and resorts. It’s pretty obvious that timeshares are the pockets of legislature.

Because of this, consumers aren’t really protected. Their exposure to scams drastically increase once they’ve signed a timeshare contract. Although we believe timeshare ownership will be considered an epidemic at some point, there’s only so much we can do. As Arizonan lawmakers continue to figure out the best way to overcome timeshare regret, all we can do is spread awareness. If interested buyers are more informed, the probability of them making a good decision is a lot higher.


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