TIMESHARE RED FLAGS FOR BUYERS


by jorge conde, Attorney at Law 

and Gabriel Dixon, Esq.


What is a Timeshare? Timeshare also known as “Vacation Ownership” is basically where you buy the right to spend a certain period of time (typically a week or more) at a specific hotel resort in exchange for an initial buy-in amount plus an annual maintenance fee.

The sale of timeshare in Mexico is well regulated as the Federal Consumer Law requires for specific provisions to be included in all timeshare agreements which protect the consumer. To ensure the above, all timeshare providers must register their timeshare agreement before the Federal Consumer Agency (PROFECO) and prove that they can provide said services. When buying a timeshare ALWAYS LOOK FOR THE REGISTRATION NUMBER ON THE TIMESHARE CONTRACT.  

Despite the efforts to regulate the timeshare industry, there are many unregulated “timeshare providers” operating in Los Cabos, looking to make a quick buck by defrauding their clients. Here are 5 red flags to watch out for before purchasing a timeshare.

Timeshare Contracts without registration. – By law, all timeshare agreements MUST be registered before the Federal Consumer Agency. Before signing your timeshare agreement look for the registration number on the contract. If there´s no registration number on the contract, be careful as you are dealing with an unregulated provider who may not be able to perform its obligations in the future or even worse, might be trying to scam you. To verify that your provider is registered visit:  https://burocomercial.profeco.gob.mx

Sales Outside the Resort. - All timeshare sales and presentations need to within the Resort. If someone is trying to sell you a timeshare outside of the actual resort, it´s probably a scam or an unregulated timeshare provider, watch out!

Presale Contracts. – When purchasing a timeshare in presale, make sure to ask the sales person to provide you with a copy of the title of the property where the timeshare resort will be built as well as a letter from the title holder indicating that the property will be used to build said timeshare. Many unregulated timeshare providers offer pre-sales contracts at a discount price indicating that the resort will be built within 18 months and never perform. Again, look for the registration number from PROFECO.

Buy-Back Programs and Special Promotions. – Many timeshare providers, whether regulated or unregulated offer buyback, exchange or walkaway assurance programs for an additional dollar amount. This is a sales technique used to make customer feel like purchasing their timeshare is an investment which down the road they can get out of and make some money while at it. Beware of any timeshare provider offering these kinds of programs from other companies as they are usually shell companies (with no assets). Have all your additional agreements in writing and signed by the sales representative.  

Cancelling your timeshare - Remember that by law, you are entitled to cancel the timeshare agreement and ask for your money back within 5 business days after signing the purchase contract. To cancel the timeshare and get your money back, deliver a termination notice letter to the timeshare provider requesting reimbursements of any amounts paid (have them sign receipt thereof). Some providers can make it difficult and usually try to convince you to keep the timeshare (in an aggressive way) or tell you that penalties will apply. If this is your case, make sure that you send the termination notice letter within said 5 business days to the timeshare provider at the address provided in the timeshare agreement through the Mexican Postal Service. For legal purposes, the letter is deemed delivered to the provider on the date it is deposited in the mail. The timeshare provider should reimburse any charge on your credit card within the following 15 days. Make sure to keep a notice of receipt in case of any future claims.

It is always advisable to review the comments of other members or previous buyers online. Use your better judgment and trust your instinct before buying a timeshare. If you have any questions or comment do not hesitate to contact us.

Jorge M. Conde, Attorney at Law. jcb@condeatlaw.com Conde & Asociados, Attorneys at Law. www.condeatlaw.com. Cel. (624) 355-7803. Gabriel Dixon, Attorney at Law. gabriel@loscaboslawgroup.com Los Cabos Law Group. www.loscaboslawgroup.com Cel. (624) 174-8786

Editor’s Note: A Timeshare is not ownership and no deed is given upon a purchase of a timeshare. Not all Los Cabos or La Paz enthusiasts are in a position to buy a property outright perhaps due to time or money constraints. In addition to timeshares, be aware that there are properties that offer fractional ownership with registered deeds in the public registry at a fraction of the cost of full ownership. These too will have specified dates that your ownership allows you to use the property.  For more information on this option, contact your local MLS BCS realtor.