Timeshare HOAs: What You Need to Know
3 min read
Since the timeshare industry started in the 1970s, many a consumer has filed a timeshare lawsuit against their resort. That’s no surprise since unfair and illegal sales practices are common in the industry. The latest timeshare lawsuit, filed by Lieff Cabraser on behalf of owners against Westgate Resorts, Ltd. is a perfect example of the many tactics used by companies to take advantage of consumers. According to the suit, Westgate hid disclosures from consumers, misrepresented material facts, and failed to provide reasonable use to owners, all in violation of Tennessee Timeshare Law. Unfortunately, these tactics are all too familiar.
Tennessee, like many states, requires timeshare companies to provide consumers with important disclosures during the closing process. In Tennessee, sellers must provide a Public Offering Statement and information about the rescission period. In many cases, the agents hid these disclosures from the consumer in a secret pocket. This secret pocket sounds like something out of James Bond, but unlike Bond’s fictional gadgets, this one is very real, according to the suit.
Westgate’s secret pocket is part of a folio provided to agents to give to consumers during closing. The black faux-leather folio with the Westgate logo has many visible pockets and zips shut to contain the documents. However, the folio also contains a concealed pocket that the consumer can’t reasonably find. Agents routinely put the Public Offering Statement and rescission information in this hidden pocket. So, they could say they gave the documents to the consumer even though the consumer had no idea they had received them. It goes without saying that such hidden pockets are deceptive and unethical.
The Tennessee Timeshare Act requires agents to tell consumers what they are buying. Westgate allegedly employed creative tactics to keep the truth from consumers. First, they had specialty model units they used for prospective buyer tours, indicating these were the units the consumer would be buying. These units were premium units with high-end floorplans and finishes. Too bad these units were not available for owners to stay in.
Further, according to the suit, “Westgate sales agents give purchasers the impression that they are purchasing the right to use a specific unit at the Resort. In actuality, they are participating in Westgate’s ‘Floating Use Plan,’ which gives owners the right to use a certain type of unit, subject to availability. And units are rarely, if ever, available to ‘owners,’ as advertised or expected.” Imagine thinking you were getting a unit when in fact, you were just paying money year after year for the right to reserve a unit. Some contracts went so far as to list a unit on the documents. Of course, in the fine print, the consumers signed away their right to that unit.
So, not only did Westgate allegedly hide key disclosures and material facts of the unit, but they also failed to provide owners with reasonable access to any unit. Even if the unit isn’t quite what you wanted, when you purchase a timeshare, at a minimum, you expect to be able to use it. Unfortunately for the plaintiffs in the Westgate suit, they say they could not reasonably use their timeshare. And of course, they had to continue to pay their maintenance fees even without access.
Owner after owner reports being unable to book a unit, even when they called as early as possible. When they were unable to book, Westgate encouraged them to spend more money to upgrade to another unit to avoid this problem. Unfortunately, even when consumers spent more money, they still couldn’t book. Part of the reason they had difficulty booking, the suit alleges, is that Westgate oversold the resort. There were tens of thousands of owners at the single 1,004-unit resort. Worse still, the resort set some of those units aside as rentals, making it even harder to make a reservation. If true, this could be a deliberate attempt to limit access and increase profits.
Have you been a victim of the scams alleged in this timeshare lawsuit? We help people like you exit timeshares all the time. Contact us for a free, no obligation consultation. We promise: no secret pockets.
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