New jersey real estate timeshare act

At one time, the convenience of owning a timeshare, or “home away from home,” may have been appealing. But maybe your family has grown or matured, the destinations no longer provide activities suited to your needs or it just doesn’t fit with your current lifestyle. Or perhaps the mortgage, taxes and maintenance fees are a burden.

Unfortunately, when the time comes to sell a timeshare for any reason, the experience may spoil any fond vacation memories. Too many consumers who own timeshares face difficulty or outright fraud when trying to resell them.

But it is important to note that the sale and marketing of timeshares, prepaid accommodations which may be pegged to one location or at multiple destinations for periods of time that are less than a full year, are regulated in New Jersey.

Reselling a timeshare plan can often be a long, frustrating and potentially expensive proposition. A glut of timeshares for sale has created a very soft market replete with opportunistic scam artists claiming to provide a highly motivated buyer in exchange for upfront fees.

Touting offers to sell, advertise or list timeshares, scammers often contact consumers who have already listed their timeshares through online or print venues. Some may claim to have an eager buyer. Scammers frequently seek payment in exchange for a promised sale.

While some timeshare agents provide a legitimate service, fraudulent advertisers abound. Timeshare consumers looking to sell their plans should keep these tips in mind:

Whenever possible, try to deal with a licensed real estate broker preferably with an agency that charges a fee after the sale. Some states such as Florida prohibit real estate licensees from taking an upfront fee, others such as Texas do not. New Jersey allows upfront fees on a limited basis. Get all terms, costs and conditions in writing from any timeshare agent and confirm license status and complaint history with the Real Estate Commission in the state where the firm is located BEFORE signing a contract or committing any funds.

Beware of solicitations from Marketing Cooperatives or Internet Advertising Specialists. Scammers claiming to be exempt from real estate laws will ask timeshare sellers for an upfront fee, usually from $500 to $1,000. Some may list timeshares on venues in a vast sea of competition that generates no serious buyers. Others take fees and provide nothing.

Look out for the interested buyer who demands fees in advance. An offer to purchase a timeshare predicated on providing fees to cover various closing costs is a red flag warning against the transaction. The buyer should be paying the consumer who owns the timeshare, not the other way around. Legitimate seller’s costs should be deducted from the proceeds of the sale. Tread cautiously, get everything in writing, and have an attorney review all documents before committing. Resist pressure for a quick closing.

Verify that all interested entities are who they claim to be. Scammers will often offer sellers a way to get out of their debt and contract obligations, but it’s FOR A FEE. Scammers will claim to represent the resort or the mortgage holder, misrepresent themselves as a government agency, or a trade group. Often times this leads sellers to purchase more of a time share at an inflated price. If a seller receives this kind of phone call, they should contact the resort and mortgage holder to verify whether the offer is legitimate. It is best to thoroughly review all contacts, preferably with an attorney.

Creative scammers work relentlessly to defraud unsuspecting timeshare sellers. Timeshare owners need to remember some basic common sense principles.

• NEVER give a credit card number to a telemarketer or someone who sends you a solicitation. The New Jersey Real Estate Commission has limited jurisdiction over resale telemarketers located in other states (even less outside the country.) Once a consumer pays a fee, even if the transaction is a violation of the law, there is no guarantee that the money can be recovered.

• Don’t fall for high pressure presentations that try to create a sense of urgency. Promises of a time sensitive price or a buyer who must close immediately are often deceptions intent on garnering a fraudulent payment.

• Request copies of all contracts, advertising, brochures, etc., in writing, in advance. Do not do business with anyone who avoids signed contracts. Review everything carefully and investigate the agent’s complaint history with the New Jersey Real Estate Commission or a similar regulator in the state where the firm is located.

Timeshare selling checklist

• Be realistic when establishing a price. A timeshare should never be looked upon as an appreciating real estate asset. Do not expect a profit or to recover initial costs. Factors in determining the value of a timeshare are the location and condition of the resort, the time of year owned, the exchange options available and yearly maintenance fees. The true value of a timeshare is its worth to a potential buyer as a vacation experience.
  

• Research all regulatory or contractual restrictions on a timeshare resale. Some states require very specific disclosures in all resale contracts. Check with local authorities and an attorney before listing a timeshare.
  

• Review timeshare listing options. Many real estate brokers will not list a timeshare. Many sellers succeed in using ads in a local newspaper or timeshare publications, or by listing their timeshare on an internet web site such as e-Bay. Some local or regional timeshare groups, resort associations and developers also provide a resale service.

The New Jersey Real Estate Commission (REC) in the Department of Banking and Insurance regulates the sale and marketing of timeshares located in New Jersey as well as out of state timeshares that are offered in New Jersey. Licensed real estate brokers operating in New Jersey are also regulated.

Any consumer with concerns about a timeshare developer or resale listing offer should contact:

The New Jersey Real Estate Commission
Bureau of Subdivided Land Sales
PO Box 329
Trenton, NJ 08625

609-292-7272