What you should know before buying timeshare

by Trudie Broekmann and Lauren Lewis, Consumer Attorneys at Trudie Broekmann Attorneys

Our firm has been hit by a tsunami of hundreds of South African consumers who want us to cancel their timeshare.  During the course of these cancellations, and in the process of preparing for court to claim back the consumers’ money spent over the years, we have learnt a lot about timeshare.

We therefore recommend you consider the following before signing up for any kind of timeshare:

  • The marketing is very persuasive, but it often doesn’t tell you the whole story.
  • If you land up at a presentation after “winning a holiday to Mauritius” and you realise that it is actually a sales pitch for timeshare, decide upfront that you won’t sign on the dotted line there and then – even if a discount is offered to you for signing immediately. If it’s such a good deal, it will still seem a good deal to you tomorrow. Tell the marketing agent you need to “sleep on it” and discuss it with your partner / children etc.  Stick to this decision whatever the agent tells you. *See our blog on “Playing the Broken Record” for tips on how to do this.
  • Do your research! Type the name of the timeshare company into Google and include the word “reviews.” Check the re-sale value of the points you plan on buying by seeing whether any of those points are for sale on gumtree.co.za or www.capeescape.co.za (an industry approved timeshare re-sales agent). You may find that the points you intend buying for R40 000 are being offered for free on www.gumtree.co.za to anyone who will take over the annual levy – or for a fraction of purchase price you paid on www.capeescape.co.za. If a particular resort is the reason you would like the timeshare – check their rates against the annual levy amount.  We’ve found that booking with the resort directly is usually cheaper.
  • If you are the beneficiary of a deceased estate and one of the items you are set to inherit is timeshare, think carefully before signing the cession agreement. It may not be an asset you are taking on, but rather a liability. The obligation to pay substantial levies annually, may well exceed the amount you would pay if you just booked directly at the resort. If you don’t sign the cession to revive the agreement, in terms of the law, it lapses on the death of the original member.
  • You may never get a booking. About half our clients have had timeshare for many years, but despite many attempts to book, have never succeeded in booking for a holiday they could use.  Remember, school holidays and long weekend are snapped up first, many of the clubs seem to have far too little accommodation available for the needs to their members and booking platforms are often set up to discourage you from being able to book.
  • It is never advisable to buy timeshare in a trust. Most trusts last for a long time. If you buy it in your own name at least your surviving spouse and children are released from the contract when you die. Within a trust, you would be burdening your descendants and beneficiaries with the obligation to pay annual levies for timeshare in which they may have no interest for many years to come.
  • Timeshare contracts generally bind the member until he or she dies, so when you decide whether to sign or not, you need to think far into the future – what if you emigrate one day? What if you retire and can no longer afford the levies? What if the levies increase dramatically over the years? What if you lose your job? What if the resorts on offer via the timeshare are reduced so that you are no longer interested in any of them? What if your children leave home and you don’t want to stay in a resort, but rather visit the grandchildren at their home?
  • Our clients who are dissatisfied with their timeshare generally purchased timeshare points. Those who purchased shares in a shareblock company (which has its own set of problems) or who purchased a week in a particular resort have far fewer complaints.

The National Consumer Commission released a report on the timeshare industry in 2018, which analysed 1200 consumers’ complaints out of approximately 4000 complaints received by the Commission about the timeshare industry.  The report is very critical of the industry and recommends an overhaul of the laws that govern timeshare.  It may be worth waiting for that to happen before you take the plunge.

Perhaps you have already signed up for timeshare and now you’d like to get out of the contract.  In that case, please feel free to contact us for advice and our fee structure.  We’ve got plenty of videos with consumer information on timeshare on our website: www.broekmann.co.za/blog and our YouTube channel: https://www.youtube.com/channel/UC1mPGnvOJJEsqzlzONgVaWw.

Trudie Broekmann Attorneys

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