For those of us who enjoy travelling and spending time in other—often warmer—places, but who also are not able to get away for extended periods of time, purchasing a timeshare may seem like the perfect solution. However, many people may not be aware of the potential complications associated with purchasing and/or selling a timeshare located outside of Canada.
Our firm frequently receives calls from clients asking for advice on foreign timeshares, and there are some common themes that arise from these inquiries. The most common request we get usually goes something like this:
"I previously purchased a timeshare in [somewhere outside of Canada] and I want to get out of the contract. Can you help me with this?"
This blog post attempts to (a) highlight some points for people to consider before deciding to purchase a timeshare in another country, and (b) provide information on some solutions when people find themselves in similar situations.
Considerations re: Foreign Timeshares
The following list outlines some aspects of the timeshare ownership process to provide some high-level information for those who are not familiar with the typical practice:
1) Obtaining a Legal Opinion: The first, and possibly most significant, issue that arises when people come to a Canadian lawyer for advice on foreign timeshares is that lawyers in Canada are not permitted to provide advice on the law in other jurisdictions. For example, we cannot provide legal advice on Mexican law—to obtain such legal advice, a lawyer licensed in Mexico would need to provide the legal opinion. Therefore, a lawyer in the jurisdiction where the timeshare is located (or the jurisdiction under which the contract is governed, which is often different) will need to be retained in order to obtain legal advice on a foreign timeshare.
2) Retaining a Lawyer in Another Jurisdiction: Unfortunately, it can be difficult to know which law firms in other countries will be able to best assist you, assuming you are not familiar with the area. Even if you are able to locate a lawyer in another jurisdiction who can assist, he or she may request a sizeable retainer fee up front to ensure the legal bills are paid, given that you reside in another jurisdiction. It can also be more difficult to communicate with a lawyer in a foreign jurisdiction when the mode of communication is solely over email and across different time zones.
3) Communication with Various Parties: When you purchase or sell a foreign timeshare, you will likely need to communicate with more than just your lawyer in the other jurisdiction. For example, you may also be required to communicate with the owner(s) of the timeshare, sales agencies, insurance agencies, escrow agencies, government agencies (where, for example, countries have laws regarding the selling of real estate to non-citizens), opposing counsel, and/or other involved parties. Such a task can seem increasingly daunting the more parties that are involved. A lawyer representing you in the foreign jurisdiction may be able to assist with some or most of this communication, but it is nevertheless important to ensure that all relevant parties are dealt with appropriately.
4) Purchasing Your Timeshare: Often people decide to purchase timeshares rather than choosing to stay at resorts because they believe they will save money in the long run. However, it can be difficult to know whether you really are getting a deal when you purchase a timeshare if you are not familiar with the process. Just as with any product sold on commission, timeshares can be overpriced due to the sales commission inherent in the charge. That's not to say that all timeshares are overpriced—you will just want to ensure you do your research ahead of time.
5) Selling Your Timeshare: Although it may have been a good idea at the time to purchase a timeshare, there may come a time where you wish to terminate your contract early and sell it. Unfortunately, whether you will be successful in selling your timeshare and/or terminating the contract early will depend on the documentation you signed when you purchased the timeshare. There are often clauses included in such contracts that either do not allow for early termination of a contract, or if they do allow for such termination, there will be a hefty penalty to pay.
Although these points may not necessarily result in issues for everyone, they may make the process more complicated than initially anticipated for some.
The Good News
If you are considering purchasing a timeshare in a foreign jurisdiction, hopefully this blog post has provided you with some information to consider that will help you reach your decision.
If you have already purchased a foreign timeshare and you have decided you would like to get out of the contract, all hope is not lost. Although we cannot provide legal advice on the law in foreign jurisdictions, McKercher LLP is a member of the organization known as Lawyers Associated Worldwide (LAW). Using LAW's network of over 4000 lawyers in more than 50 countries across the world, we can usually connect you with a lawyer in the relevant jurisdiction for your legal issue so that you can get the answers and assistance you need.
If you own a timeshare located in Canada, many of these issues will not apply to you as we will likely be able to provide you with legal advice regarding your timeshare or refer you to a lawyer in the relevant province or territory.
Should you find yourself with questions regarding timeshares, foreign or otherwise, please contact one of our lawyers for assistance, whether it is for our advice or a referral.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.