The Rescission Period [And What to Do if It Passes]

Got timeshare-buyer’s remorse? Then this is for you! Signing a timeshare contract is exciting in the moment. And for many buyers, that excitement never wanes. If you know what you’re getting into and you love to travel every year, vacation ownership can be a great value. Unfortunately for others, once they’ve had time to process exactly what it is they’ve signed up for (e.g. ongoing annual maintenance fees, mortgage payments, committing to yearly travel, etc.), the weight of their decision starts to sink in. This is why a rescission period exists. Otherwise known as a cooling off period, a rescission period is a law designed to give regretful buyers a chance to cancel their contract without penalty. However, the window within which a buyer can rescind their purchase is short, and many buyers don’t become aware of the rescission period until it’s too late. Whether you’re thinking about exercising your own rescission, or it’s already passed and you’re looking for another way out of your ownership, we’ve got you covered.

Understanding the Legal Right to Rescind

State laws mandate that timeshare developers must provide buyers with resources they can use in the event they want to rescind their purchase. This includes things like required disclosures and statutory disclosure documents, as well as detailed instructions on how to exercise rescission. The rescission period begins after the buyer signs the final closing documents and other paperwork related to their purchase.

Depending on the state, the rescission period may last anywhere from three to fifteen days. In some states, the rescission period includes all calendar days, including federal holidays and weekends. In others, it only includes business days. Either way, the buyer must send written notice, known as a rescission notice, before midnight of the final day. The safest way to do this is to send the notice by certified mail and keep the receipt.

During the rescission window, the buyer can rescind for any reason without explanation. If carried out properly, the transaction becomes void, and the developer must issue a full refund.

Why Buyers Often Miss the Rescission Period Deadline

Despite the rights we just mentioned, many buyers simply miss the rescission deadline. Here are some of the most common causes:

• Confusion about calendar days vs business days
• Travel time from vacation destination to home
• Delayed delivery of paperwork
• Misunderstanding when the rescission date starts
• Assuming the contract can be cancelled by phone, email, or verbal request

Once the rescission window closes, the agreement is fully enforceable.

How a Timeshare Rescission Period Differs From a Mortgage Right of Rescission

People often assume a timeshare right of rescission works the same as a mortgage right of rescission for a permanent residence. While the protections serve similar purposes, there are some key differences you should be aware of.

Under the federal Truth in Lending Act (TILA), certain loan agreements — such as home equity loans or refinance loans for home purchases — give borrowers three business days to rescind the loan on their primary residence. The lender must provide the buyer with a Truth in Lending disclosure (or TILA disclosure) as well as two copies of a written notice explaining their cancellation rights.

A mortgage rescission must be exercised by midnight of the third business day to cancel. During this window, the lender cannot legally finalize the mortgage contract. If the lender fails to provide the lending disclosure or other loan documents, however, the right of rescission window can widen from the three-day period up to three years.

The right of rescission for mortgages and other residential loans is protected by federal law. Timeshare rescission laws, and rescission laws for most types of vacation properties, are governed by state law.

What Happens After the Rescission Period Window Closes

Once the rescission window closes, the buyer remains responsible for the contract, including all financial obligations stipulated therein. Failure to comply with these obligations can do great harm to the buyer’s credit.

At this stage, owners may start to seek legal advice on ways to litigate their timeshare contract. Unfortunately, this often leads to confusing, misleading, or even downright criminal offers online. Red flags include any resale company or law firm that:

• Demands large upfront fees
• Makes guarantees (such as guaranteed buyers, a guaranteed closing price, or fast turnaround times)
• Claims that there are loopholes that allow them to cancel your contract
• Advises you to stop paying your maintenance fees
• Advises you to ignore communications from your resort
• Calls you out of the blue

That said, there are legitimate options for owners looking to get out of their contracts. One such option is a resale brokerage.

How a Resale Brokerage Helps

In reality, most dissatisfied timeshare buyers don’t want to litigate their timeshare contract; they simply want to transfer their ownership. That’s where a resale brokerage comes in. A legitimate resale brokerage (like Fidelity Real Estate) can help owners transfer their ownership safely and legally by representing them on the resale market. With a resale brokerage, the developer’s contract remains valid, but the owner’s ongoing obligations transfer to a new owner.

Want to learn more? Watch our video to learn how to sell a timeshare with no upfront fees!

How Fidelity Real Estate Can Help You if Your Rescission Period Window Has Closed

Fidelity Real Estate is a fully licensed real estate brokerage specializing in timeshare resale. Our licensed brokers and agents can:

Making an Informed Decision

The goal of rescission law is to offer a path forward for buyers who, in the excitement of signing a timeshare contract, failed to comprehend exactly what they were signing up for. If that sounds like you, don’t wait to act. Review your contract now to see if you’re still within your rescission window, and submit your written cancellation immediately.

Has your rescission deadline passed? Fidelity Real Estate can help. As a full-service, fully licensed brokerage, we can provide a legitimate way to offload your ownership, assisting you every step of the way. And as a dedicated member of ARDA, with over 25 years of experience and an A+ rating from the Better Business Bureau, we’re a name you can trust.

Fill out the form below to get started on your journey to maintenance fee freedom. Have questions? Call or email us today to speak with one of our friendly licensed agents!