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Purchasing Timeshares Under Construction = Risky Business

Purchasing Timeshares Under Construction = Risky Business
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Timeshares have a bad reputation for not fulfilling their promises. Why would anyone trust their hard earn money on a project that has big chances of not being completed? Learn how to keep traveling in your own terms and not with the promise that, perhaps, in that piece of land one day a timeshare will be built.

When taking a vacation, timeshare owners want the newest and most luxurious accommodation that they can afford with their hard-earned money. The timeshare scam salespeople are aware of this fact and use it to their advantage in order to increase their sales. Many timeshare resorts have developed the practice of selling pre-construction timeshare contracts which offer the best in luxury accommodations. They claim that the timeshare weeks are sold at a lower price as incentive for the timeshare owners to purchase and invest in their new project. Unfortunately, timeshares and construction in Mexico are very volatile, and as such, many timeshare owners have become stuck with a 25 or30 year contract, and no building is ever built. The timeshare owners are left with all of the responsibilities and none of the benefits of using the resort.

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The strategy

In most cases, the timeshare company builds a lavish show suite on a partially prepared construction site. The timeshare resort will sometimes build one tower out of many or invest in some machinery or equipment to give the illusion that the work has already begun on the construction of the project. During the timeshare presentation, the client is taken on a tour of the site and shown the beautiful show suite and architectural model of what the site will look like upon completion. The salespeople typically claim that the resort will be finished in approximately one year’s time, so that the client will be able to use it for the first year of their timeshare contract. In many cases, the timeshare resort is not built at the end of the year-long period. After the year is over, the client will contact the resort to try to book, and they will be given excuses as to why the project was stalled and they cannot use the timeshare.

The timeshare scam salespeople often placate their clients by giving free memberships to exchange companies so that the client can use their week at a different resort; however, many clients find that their exchange power is very limited and they are accommodated in a far lower quality hotel than what they were promised. After more time, most clients start to complain that their contract has been breached because the timeshare resort is not built. Unfortunately, most timeshare resorts that take part in this scam just avoid all further communication with the clients by blocking their calls and not responding to their emails. Many resorts are making millions of US dollars per month on fraudulent pre-construction sales. Their sales offices remain open, while their customer service for existing clients is virtually non-existent.

Timeshare Oversell

Even if they project does end up getting built, the timeshare resorts frequently oversell their occupancy during the pre-construction phase, particularly if they are working on a floating week or points system. For example, if the timeshare resort has 100 rooms, they should be able to sell 5200 weeks based on the number of weeks in a year. However, if a timeshare resort sells 10 timeshare weeks per day for 2 years, they would have sold 7300 weeks without even opening the front doors. In this scenario, timeshare owners would not be able to book 2100 timeshare weeks that they had already pre-paid. With pre-construction sales, the timeshare resorts typically sell far more weeks than they have available to clients, and when the clients go to book their time, they find that they have to book over a year in advance if they want to secure a space for their vacation.

You may ask why clients have to keep paying on the contract if the business is not fulfilling their duties by completing the construction. This can happen because the contract may be services by another resort or an exchange program that can offer the service while the project is being built. The clients are often responsible for the debt because the contracts are sold to external collections agencies that take charge of collecting the fees and can affect the clients credit rating in the US and in Canada. These fraudulent timeshare companies are very adept at ensuring that they get paid in full for their timeshare contracts that are practically worthless.

Do your homework

To avoid getting taken advantage of by a timeshare scam, it is important that you take your time when considering a purchase of this magnitude. Do not purchase without doing research on the company and its developers. Check to see if the developers have completed any other projects, and what their reputation is like for customer service. Ask to speak with some of their timeshare owners so that you can get a sense of the real experience you may have with the timeshare.

If you have purchased a pre-construction Timeshare contract and are concerned that the property has not been built, contact us today for a free consultation with one our associates. They will advise you about up-to-date information about the timeshare resort, and let you know if there are possibilities to cancel your contract and recover your money.

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20 Comments
  • pattroniJune 30, 2014, 2:32 pm

    I wouldn't buy a timeshare, not even for a buck!! Timeshares are a purchase and not a financial or real estate investment, even if it's a resale. You'll have to pay all the annual fees and could get into a big debt.

  • AnaJune 24, 2014, 2:32 pm

    When a person purchases a timeshare and realises that they don't really want it, the first question they ask is "How do I cancel my timeshare contract?" If you make the realization that you don't want the timeshare you just bought quickly enough, you can cancel your timeshare with a simple timeshare contract cancellation letter.

  • billJune 9, 2014, 12:00 pm

    the problem with timeshares is that they want you to keep paying forever, and have collections people who lie about the rights and responsibilities.

    if timeshares hires collections agents, they should be branded as just as disreputable as the collections agents.

    If they want to have supporters, they need a clear plan for those who no longer want the week.

  • billJune 9, 2014, 12:00 pm

    the problem with timeshares is that they want you to keep paying forever, and have collections people who lie about the rights and responsibilities.

    if timeshares hires collections agents, they should be branded as just as disreputable as the collections agents.

    If they want to have supporters, they need a clear plan for those who no longer want the week.

  • I Want To Be A CloneApril 30, 2014, 10:23 am

    Can't believe people still throw away their money on time-shares.

  • Woody47April 7, 2014, 12:03 pm

    Timeshares are and have been a big ripoff ..Neighbors , friends, coworkers all regret they bought them ..Try reselling them ..You're lucky to get 10C on the dollar.
    You can't give them away ..Tell you you can transfer " points" to another location Sure right ...NYC & New orleans have a year & half waiting list ..Fees : yearly fees go up year after year after year...They never tell you about the exorbitant fees they tack on every year ..Don't buy one--- not even at 1/2 price ..Don't do it ..Everyone I know who bought one regretted it big time .Includes my wife ..

  • Woody47April 7, 2014, 12:02 pm

    Timeshares are and have been a big ripoff ..Neighbors , friends, coworkers all regret they bought them ..Try reselling them ..You're lucky to get 10C on the dollar.
    You can't give them away ..Tell you you can transfer " points" to another location Sure right ...NYC & New orleans have a year & half waiting list ..Fees : yearly fees go up year after year after year...They never tell you about the exorbitant fees they tack on every year ..Don't buy one--- not even at 1/2 price ..Don't do it ..Everyone I know who bought one regretted it big time .Includes my wife ..

  • KarlaMarzo 21, 2014, 3:11 pm

    es algo muy comun, muchisimos resorts hacen esto e inventan miles de excusas para que al final el cliente se quede sin poder usar sus semanas

  • SofíaMarzo 18, 2014, 12:45 pm

    te obligan a liquidar cuando ellos no te ofrecen absolutamente nada de vuelta

  • AmandaAugust 21, 2013, 11:40 am

    I was in Cabo San Lucas on 1/15/06 and was talked into purchasing a timeshare at Hacienda Encantada Resort which in under construction. I was convinced to sigh “Liquidated Damages Clause” meaning the deposit of $700 is not refundable. I was varified the cancellation today after 3 weeks battle, but not refunded.
    Thanks for your information. I will keep working until I get refunded.
    Any suggestions are welcome.

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