The Tennessee Timeshare Act of 1981 provides several important protections to purchasers of timeshares in Tennessee. Today’s blog entry concerns one of the most important of those protections—the right to rescind. If you have ever bought a house, piece of land, or other real property, it may be that you had a real estate agent and ample time to prepare your offer and review your contract. While a timeshare is an interest in real property, according to §66-32-103(a) of the Timeshare Act, the circumstances of a timeshare purchase might not always mirror this experience. For example, a timeshare might be bought while the buyer is on vacation. The buyer might not see the contract until the closing. The buyer might not be represented by a real estate agent. However, the Timeshare Act addresses these possibilities by providing a buyer the unequivocal right to rescind the contract. That’s right, in a typical timeshare purchase in Tennessee, the buyer can change her mind, as long as she is aware of the deadlines to do so.
Tenn. Code Ann. §66-32-112 requires a timeshare developer to provide a timeshare purchaser with a public offering statement (this requirement does not apply to certain transactions, such as a private sale between a timeshare owner and a subsequent purchaser). The public offering statement must, among other things, contain a statement a statement that within ten (10) days from the date of the signing of the contract made by the purchaser, where the purchaser shall have made an on-site inspection of the time-share project prior to the signing of the contract of purchase, and where the purchaser has not made an on-site inspection of the time-share project prior to the signing of the contract of purchase fifteen (15) days from the date of signing of the contract, the purchaser may cancel the contract for the purchase of a time-share interval from developer.
The rules of the Tennessee Real Estate Commission require that this same language be placed conspicuously above the signature line on the purchase contract. Tenn. Code Ann. §66-32-114 provides the corresponding provision that the purchaser may, in fact, rescind the contract within 10 or 15 days, depending upon whether or not an inspection of the premises has been made. Significantly, however, Ten. Code Ann. §66-32-114 also provides a second right of rescission to the purchaser. Specifically, “the contract is voidable by the purchaser until the purchaser has received the public offering statement.”
These provisions are important, but they also beg other questions—when has a purchaser received a proper, up-to-date public offering statement? What is an on-site inspection? How should the rescission be communicated to the developer? The Timeshare Act answers some, but not all, of these questions. The take-away is that a purchaser should know her rights.
These are but a few of the statutory provisions relevant to timeshare purchasers. Many other aspects of a timeshare sale are similarly regulated.
If you have any questions about a timeshare purchase, fraud in a timeshare sale, required disclosures, or rescission, feel free to contact me at the number below.
And now, the disclaimer. This blog is informational, and is not intended to provide legal advice. Every case is unique and requires individualized analysis. If you require legal counsel, make sure to seek the advice of a licensed attorney.