Remember when you bought the house where you and your family live? If your experience was like that of most people, your attorney sat down across from you at a long table. Although he was no more than two feet away, he could barely see your face above the towering stack of paperwork that separated the two of you.

He probably walked you step by step through the signing process, explaining in ways that seemed plausible at the time — but that you cannot recall to this day — what every single sheet of paper represented before you put your name at the bottom in ink. “This one is for your mortgage.” “Sign here for the state disclosure form.” “Here, you are giving up the right to ever again name a dog after your favorite television character…”

The paperwork went on and on, with you signing away at every turn — content in, or at least somewhat calmed by, the notion that your attorney was there to protect you and knew what he was doing. If anything was amiss, you figured, your attorney would either catch it on the spot or straighten it out immediately afterward. Either way, you could focus on things like hiring moving vans and packing boxes instead of on things like legal clauses and state regulations.

Unfortunately, this is not usually the case with timeshare contracts. Nine times out of ten, you will find yourself purchasing a timeshare unit at the end of a sales presentation — with nobody present except you and the salesman. You will, in effect, have to work as your own attorney, ensuring that every single word is correct in the paperwork before you sign it.

Now, of course, the odds are that the law is not your chosen profession. And you certainly aren't going to call Harvard and take a few classes before you head off to sit through a timeshare sales presentation. So, how can you best protect yourself? The easiest way is to start by learning a few basics about timeshare contracts as they exist not just with the developer of your choice, but throughout the entire industry.

They're Nonnegotiable

First on the list: They rarely are open to changes. A timeshare salesman who will let you negotiate the major points of your contract is like a shooting star. Be sure you see it as it crosses your horizon, because the odds are that you are experiencing a once-in-a-lifetime moment.

Truth be told, contracts are written by timeshare developers for the protection of timeshare developers. If they were meant to protect you, then you would be the one writing them. And because the developer's goal is to make his sales as ironclad as possible, he usually pays a team of attorneys quite handsomely to make his timeshare sales contracts as negotiation-proof as possible.

While demand for new timeshare units is not exactly staggering, it is good enough that the developers have no incentive to waive or change any of the clauses that they have paid so much money to have written into their contracts in the first place. You can ask for — and sometimes get — a change made in a minor clause, but the big stuff that you are likely to be most concerned about is probably not open for discussion. Don't waste your time even thinking about it; focus on the things that you can control, which you will learn about later in this chapter.

They Vary from Developer to Developer

The fact that everyone from Hyatt to Hilton to Starwood has their own kind of contract frustrates even the most savvy, long-term timeshare buyers. This is not an industry where the phrase “you've seen one, you've seen 'em all” even begins to apply. You can be the happy owner of Disney and Marriott timeshares, then sit down at a Club Intrawest sales presentation and not understand half the clauses in the contract that the salesman gives you.

Even more frustrating is the fact that very rarely will any developer send you a copy of their contract in the mail so that you can review it. Often, the only way to see a company's contracts is to sit through their sales presentation — or even agree to buy a unit.

They Vary from Exchange Company to Exchange Company

Your timeshare unit contract is probably not the only one that you will be signing on the day that you buy into a resort. You also will be asked to sign an exchange company contract.

As you learned in Chapter 1, there are many different exchange companies out there. And just as with the myriad developers in the timeshare universe, every one of the exchange companies has its own set of contracts, as well. This means yet more clauses to consider, and even more terminology to weed through as you ensure that you are getting what you were promised during the sales pitch.

They Vary from Association to Association

You may not be asked to sign a homeowners' association contract on the same day that you purchase your timeshare unit, but usually, it will be mentioned in your contract as being an incorporated addendum — meaning that you are agreeing to follow whatever it says, even if it is not put on the table before you that day.

The problem, of course, is that homeowners' association rules and regulations vary from resort to resort, just as they do from complex to complex when in the world of primary residence condominiums. And again, for you, that means ever more clauses that you will have to decipher to ensure that you are getting everything that you think you are getting.

They Vary from State to State

Because the timeshare industry is largely regulated on the state level, as opposed to the federal level, many of the contracts differ substantially from state to state. Some states, such as Florida, have far more substantial timeshare laws than other states, such as New Jersey — where fewer timeshare resorts exist.

There are also major differences in rescission periods that are required from state to state, and it will be up to you to ensure that you understand the laws as they exist wherever you are buying a unit. You will learn more about that later in this chapter.

You Rarely Will Get the Whole Package

If, at the time of your sales presentation, a timeshare developer were to give you every single piece of paper that relates to the contractual obligations between you and him, you and your exchange company, you and your homeowners' association, and you and the state, he would be handing you a stack of paperwork about a hundred pages tall. Talk about a way to get potential clients to walk out the door!

For this reason, developers typically ask you to sign a document that is maybe ten or so pages long — but that includes clauses that incorporate other documents into the contract itself, such as exchange company and homeowners' association agreements.

Often, if you ask for these additional documents, the salesman will have them, but they will be difficult for you to comb through in the short amount of time that you are likely to have that day. This is where your rescission period becomes important, because it allows you a few days to look through everything — once you know that you have to ask for it in order to actually read it.

Your Single Most Important Question

You could drive yourself insane trying to remember all the legalese and timeshare jargon that may or may not show up in the contract you are asked to sign. Nobody is expecting you to be a lawyer, even though it may feel that way when you are searching through documents that you will not always understand 100 percent.

The best thing that you can do to make smart decisions at a sales presentation is not to bone up on the specifics of contractual law, but to take detailed notes about everything that the salesman says will be included in your timeshare unit purchase. Then, when it comes time to sign on the dotted line, go item-by-item down your list and ask the salesman that single most important question: “Would you please show me where it says that in the contract?

”Salesmen in all industries are notorious for making promises that they later “forget” when the promised item turns out not to be in the written contract. Timeshare salespeople are no different: Make sure that you ask the salesman to point out — in the written contract itself — every single thing that he has promised you verbally.

In some cases, the salesman will say, “Oh, that's not in this contract with the developer, but you will see it in the contract that comes with your homeowners' association membership after we finish our purchasing process here.” Your reply to this kind of a brush-off statement should always be: “That's fine, but then I am going to need you to show me a copy of that document, so that I can see where it says that in the contract.

”Never, ever, ever take a timeshare salesman's verbal promise that you will be entitled to something that he cannot show you in writing. If he says something is itemized elsewhere, demand to have a copy — and even get him to date and initial it, if you can. This goes for everything, even details that you might otherwise think are too small to be worth considering.

Sweat the Small Stuff

One of the biggest mistakes that you can make when going over your timeshare contract is failing to sweat the small stuff. Your job is, quite simply, to know what you are buying and to make sure that it is spelled out in writing. You cannot count on the salesperson to get even the most basic information correct. His job is to get you to sign the paper, not to ensure that it contains everything to which you think you are entitled. Remember: It is your responsibility to check all the little details for accuracy — on every single line of the contract — before you sign it.

This applies to mathematics, as well. You would be a fool to trust a salesman's math, what with the way he probably has been throwing numbers around the room throughout his presentation.

TRAVEL TIP

Never assume that details of any magnitude can be left out of a written contract. If you are buying a two-bedroom, two-bathroom unit, make sure that's exactly what the contract states. If it simply reads “two-bedroom unit,” the developer could stick you with one, or even no, bathrooms and be perfectly within his legal rights.

Bring a calculator with you to the sales presentation, or ask to borrow the salesman's so that you can double-check his figures after he writes them into your contract. You may be shocked to discover an error that could have cost you an extra $5,000 or $10,000!

Following is a list of “small” details that you should be sure to check before signing anything. If there are other specifics that you know you want to have in your timeshare unit, add them to this list before going into the sales presentation — and double-check them all against the contract item by item to make sure that what the salesman says is actually down on paper.

• Timeshare unit price

• Length of mortgage term

• Mortgage interest rate

• Number of points you are buying (in a points-based system)

• The word “fixed” or “floating” in a weeks-based system

• Fixed week number and/or calendar dates (if you are buying a fixed week)

• Resort name and location

• Timeshare unit square footage

• Number of bedrooms and bathrooms

• Existence of patios, decks, fireplaces, etc.

• Oceanfront or garden view

• Annual maintenance fees

• Annual property taxes (if not included in maintenance fees)

• Exchange company regulations and fees

• Homeowners' association regulations and fees

• Your rights as an owner, including renting your timeshare, bringing pets on your vacations, reserving fixed or floating weeks during certain annual dates, and using a different exchange company if you so choose

• Penalties for mortgage default, nonpayment of maintenance fees, nonpayment of special assessments, and the like

Again, this list is a good starting point for anyone seeking to buy any kind of timeshare. Your job as a consumer is to tailor the list to your own specific needs. If a salesman says there will be three televisions in your unit, for instance, make sure that is stated outright in the contract. If you are buying a unit at a ski lodge and the salesman says you will get free lift tickets during your first year, make sure it is written down.

The handful of moments just before you sign your contract is the time when you will have the most power as a consumer. Be sure you wield that power to your greatest advantage.

Addendums and Other Documents

As you learned earlier in this chapter, timeshare salespeople like to keep the paperwork they give you to a minimum. They believe, perhaps rightly so, that bombarding you with stacks and stacks of documents will make you far less likely to sign a deal — so they put only what they absolutely have to down in front of you for signing. Usually, the documents number around ten pages total.

In reality, the number of rules and regulations that you are agreeing to abide by is likely more in the one-hundred-page range. The way salespeople get around this is to have your contract refer to other documents, stating that they are addendums or “incorporated herein.” That's a perfectly normal thing in terms of a sales tactic, but it behooves you to ask for copies of everything up front. Never, ever agree to sign a contract that incorporates addendums without a chance to review those addendums with your own two eyes.

FAST FACT

You can find references to addendums that are incorporated into your timeshare contract by looking for words like codicil, appendix, extension, rider, adjunct, attachment, postscript, option, accessory, auxiliary, and supplement. If you see one of these words in your contract, the odds are that they are part of a clause that refers to additional paperwork that you have yet to be shown.

What might be in those other papers? Things like a developer's Right of First Refusal, which means that if you decide to sell your timeshare unit, you have to sell it back to him, instead of on the open market, if he so chooses. You also might see clauses about pets, noise restrictions, barbecue restrictions that apply to balconies and terraces, and other things that will affect the way you are able to use your unit.

If you are buying a timeshare on the Gulf Coast, in Florida, or in the Carolinas, you also might pay special attention to any Acts of Nature clauses. Hurricanes have been especially destructive in recent years, and you will want to know your rights and responsibilities should your resort get leveled by wind or rain from a Category Five storm.

Terrorism clauses are also likely to be part of contract addendums. It is of course impossible to say how likely or unlikely a terrorist attack is in any part of the United States, but you should be aware of your rights and responsibilities should your resort end up being damaged by suicide bombers or other weapons.

E-QUESTION

How has hurricane damage affected the timeshare industry in recent years?

In 2004, the four hurricanes named Charley, Frances, Ivan, and Jeanne reportedly affected more than one-quarter of the timeshares in America. At least thirty of those resorts, most in Florida, could not reopen until 2005 — just in time for hurricanes Katrina, Rita, and Wilma to devastate them, and additional resorts, all over again.

• Your Timeshare Contract
• Differences from State to State