Timeshare, sometimes marketed as “vacation ownership” or “vacation club,” is a long-term contract that commits you to paying for annual trips to one resort or property (or defined group of properties) offered by the Timeshare company.
To participate, you buy (or finance) a Timeshare contract by paying a substantial upfront fee, and its closing costs. You also agree to pay annual maintenance fees.
In exchange, you are given a right to visit the resort or property each year and occupy defined accommodations there in accordance with the terms of the contract.
Timeshare property types and contracts
Timeshare properties are most commonly offered at popular resorts or condominium buildings situated in desirable Mexican resort towns and cities with the properties close to, or overlooking, the ocean.
Timeshare contracts come in various forms and with different terms, ranging from fixed weeks at a specific property, contracts with floating dates, and some timeshare contracts offer occupancy across a predefined group of properties managed by the Timeshare company.
If the Timeshare contract has legal jurisdiction in Mexico, we recommend that you hire the services a local Notary Public or a lawyer specializing in contract law, to revise the contractual terms before you sign.
Timeshare is NOT property purchase or rental
Timeshare has key differences in relation to property purchase and property rental contracts.
Timeshare is NOT:
- fractional property ownership, whereby the investors in the property own a percentage of the physical asset through a property trust with distribution of shares; or
- legal title or possession—it doesn’t offer legal title or possession of any physical property; or
- a type of long or short term property rental; or
- a vacation rental property of the type you can find using online marketplaces like Airbnb, VRBO, and HomeStay.
Beware of Timeshare-related problems and fraud
We’ve received correspondence from readers who have experienced problems in relation to buying and selling Timeshare in Mexico. Mexican consulates have also published warnings about potential fraud.
We therefore advise potential buyers and sellers to hire the services of a local Notary Public before buying or selling a Timeshare in Mexico.
We recommend you never transfer money in relation to any Timeshare-related transaction to any third party without the intermediation of a Notary Public.
If you’ve just signed a contract and want to cancel within the legal five calendar day cancellation window, we also recommend you hire a local Notary Public to formally file the cancellation notice.
Advantages of Timeshare
These are some benefits that Timeshare sellers typically cite to buyers:
- The concept of having access to a property without the responsibilities of physically owning and managing it. (But note that you’ll need to pay annual service fees in addition to the upfront cost.)
- Timeshare is one way to access a self-catering stay in a ‘turn-key’ property with fully equipped kitchens, bedrooms, bathrooms, living and dining areas, and private balconies—and some properties also offer other amenities on-site like swimming pools and gyms.
- Some Timeshare contracts offer the ability to swap locations or resorts if you want a change from the property or resort your Timeshare contract stipulates—although additional fees might apply to do this.
Disadvantages of Timeshare
Timeshare carries risks and disadvantages which ought to be taken into consideration before committing to a signing contract. These include:
- They are not a property investment: Timeshare does not give you legal title or possession, nor a share of a physical property as fractional ownership does.
- Instead you are buying a right to make use of a resort property (or group of properties) for a defined period as stipulated in the contract and its terms.
- In addition to the upfront cost of the Timeshare you will need to pay closing costs and annual dues (maintenance fees).
- Annual maintenance fees tend to rise every year and you are contractually obliged to pay these, even if you don’t travel to the resort that year.
- Some Timeshare companies sell loans to pay for the initial capital sum, which increases the total cost of the arrangement.
- If you need to pay the upfront sum, financing, and annual fees in a currency other than your home currency, you’ll also pay for the costs involved with foreign currency exchange.
- You can find vacation properties to rent on a range of online marketplaces that offer turn-key properties without any upfront costs and with no strings attached.
- Prices for Timeshare contracts on the second hand market are usually lower than their original cost—keep this in mind if you need or decide to sell.
Timeshare sales seminars in Mexico
Some Timeshare companies offer their potential customers artificially-low priced vacation breaks at popular resorts in exchange for you attending a Timeshare sales seminar during your visit.
Sometimes, instead of a vacation package, they will offer free tickets to popular events, or dinner at a fancy restaurant to people they approach who are already vacationing at the resort in exchange for attending a seminar.
These seminars are staffed by professionally trained sales teams who approach attendees with the sole intention of getting them to commit to and sign a Timeshare contract.
If you decide to attend a Timeshare sales seminar in Mexico, we recommend:
- you take someone with you who is not emotionally or financially involved in the potential purchase; and
- regulate, or best avoid, alcohol intake at the event; and
- tell the sales team you want to refer the contract to your legal counsel (Notary Public) before signing anything.
By signing a Timeshare contract, you are legally committing yourself to the purchase—as well as the related costs and annual fees that accompany it.
Your right to cancel Timeshare purchased in Mexico
Mexican law stipulates that any buyer of a Timeshare contract in Mexico be given five calendar days, a type of “cooling off” period, following signature of a contract, to cancel that Timeshare contract without any penalty or cost.
Some Timeshare companies get buyers to sign a “waiver” at the time of purchase, and if you attempt to cancel within the legally stipulated five-day period, they refer to that waiver, saying you cannot cancel.
However, any such “waiver” is legally invalid: this legal right cannot be waived, and you are able to cancel the contract within five calendar days.
If you want to cancel, contact the Timeshare company and tell them explicitly, verbally and in writing, that you want to cancel. We recommend you hire a local Notary Public to ensure the cancellation notice is properly worded and filed.
Selling your Timeshare
Circumstances can change, and people holding Timeshare contracts sometimes want to sell. When you decide to sell:
- Check the contractual terms of your current arrangement as some contracts cite restrictions about how and where they can be sold.
- Keep in mind that Timeshare contracts on the second hand market usually sell for less than the original cost of the Timeshare contract.
- Although you might sell your Timeshare privately (if the contract allows this), most people find an online brokerage that specializes in the sale of Timeshare contracts on the second hand market.
- Brokers present your listing online to potential buyers and offer legal transfer facilities in exchange for the sales commissions you pay when your Timeshare contract is sold.
- Whatever method you use to sell your Timeshare, you can expect to pay contract exit fees and/or sales commissions to dispose of the contract.
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