Timeshare deposits are generally non-refundable. However, there are times when you can get your deposit back or get a timeshare refund. The following article discusses the steps to take if you want to get a refund on your deposit or intend to sell your timeshare for a profit, or use an attorney like The People’s Advocate to get your money back.
A timeshare deposit is a sum of money that you pay upfront to buy a timeshare. Whenever you purchase a timeshare, you get a right to use the timeshare for a certain number of weeks each year, and you also pay the owner a fee each week.
Many timeshare sellers promise to get you your money back when you cancel. But a timeshare deposit is non-refundable. What about those promises?
A timeshare deposit is separate from the timeshare purchase contract. When you buy a timeshare, the contract will list the fees, timeshare points, weeks, and anything else the parties have agreed upon. The deposit is not part of the contract.
So, if you cancel, and the seller promises you a refund of the deposit, the seller must give you a refund, right? Yes, but only if the contract says so. The contract may say that you’re entitled to a refund of your deposit if the seller fails to deliver the timeshare property to you on schedule or at all. If the seller promises a refund just because you don’t want the timeshare, that’s illegal.
And suppose the seller promises a refund because of the timeshare. In that case, the contract will usually include a clause saying the seller can cancel any time before the contract expires. An owner who wants to quit and take back the timeshare deposit must get the seller to agree to cancel before that time.
So, suppose the seller does promise a refund. In that case, the contract probably gives the seller a great deal of discretion in deciding what refund to give you.
So what can you do?
If you signed a contract, and the seller promised a refund. Still, you haven’t received the promised refund, contact an attorney who can advise you about whether the seller is breaking the contract.
If you signed a contract and didn’t receive a promised refund, ask the seller for your money back. The Federal Trade Commission has another page about this.
Some timeshare owners may believe that they have a right to a refund as long as they have purchased their timeshare in good faith. However, the timeshare industry puts this belief to rest and suggests that a timeshare deposit is non-refundable.
Sometimes, people get a timeshare deposit back, and sometimes they don’t. A timeshare is a contract where you buy the right to use someone else’s vacation home for a week or a year. The right of use is spelled out in a document called a deed.
There are two ways to get a deposit back. The first way is to go to court. You sue the seller for fraud, misrepresentation, or breach of contract, and you win. If the seller doesn’t have enough money to pay the judgment, you have to pay it.
The second way is to admit that you made a mistake and agree to give the seller back your deposit.
People sometimes win when they go to court and sometimes lose. People sometimes win when they agree to give a deposit back and sometimes lose.
My point is, there is no guarantee of success. Sometimes, you get your money back, and sometimes you don’t.
So is it ever possible to get a deposit back? Yes. Often. It’s just not immediate.
There are two main categories of deposit. One category is for short-term use, like a week or a month. The second category is for long-term use, like a year.
The deposit for short-term use is called a usage deposit. The deposit for long-term use is called a maintenance deposit.
The deposit for short-term use isn’t hard to get back. You usually get it back if you go to the judge. The deposit for long-term use is more complicated.
Most maintenance deposits are refundable. But there are a few types of maintenance deposits that are never refundable. They are called “right of first refusal” deposits.
A right of first refusal deposit is a deposit that you buy when you buy a timeshare. In theory, maintenance fees could be refunded. But you have to follow the rules carefully. Most “right of first refusal” deposits are refundable. But not all types of maintenance fees. You have to follow a specific procedure.
Conclusion
The timeshare industry suggests that consumers should research whether or not the timeshare they are buying is a viable investment. This industry also suggests that consumers should consider whether they have poor credit and therefore may not obtain a loan should they decide to purchase the timeshare. Consumers can also be wary of the timeshare industry itself, as timeshare companies that suggest consumers can only get their money back if they return the timeshare may not be acting in good faith.
Consumers who have lost their deposit due to a fraudulent timeshare company may have rights. The Federal Trade Commission (FTC), in conjunction with the U.S. Department of Justice, has successfully handled many class-action lawsuits on behalf of those who have lost their deposit. Consumers who have purchased their timeshare in good faith may be entitled to a refund of their deposit.