It’s no secret that the timeshare industry has been plagued by deceptive and unscrupulous sales practices over the years. Many countries, including the United States, have enacted legislation to prevent certain sorts of oral representations during the purchase of a timeshare to safeguard consumers. However, there is one built-in contractual loophole that some timeshare salespeople often exploit: the so-called salesman’s “license to lie” clause. Let’s look at Timeshare: Oral Representations and find out what is behind this issue.
What Is The License To Lie Clause?
It’s a provision in a timeshare contract that shields real estate agents who make oral omissions or misrepresentations during a sales presentation. As long as the timeshare “sellers” agent statements are not contained in the written contract, those statements or omissions may often not be relied upon by the purchaser. In other words, salespeople have almost limitless freedom to say or not say anything they want during the sales presentation as long as it is not written down.
Timeshare tours are basically a timed event, usually 120 minutes or less. After the potential buyer is given a general overview of the timeshare product, they are often then subjected to a high-pressure sales presentation during that time.
A page out of a timeshare sales training manual was cited in a major case against a developer in Australia (5/17/22), it said…
“Once your client is on the Sales Deck, they come to the grim realization that this is a sales environment and what is going through their mind is ‘How can we get out of here?’, and, if you give them the chance, they will. DO NOT GIVE THEM THE CHANCE! Do everything you can do to amuse, interest, excite, relax, humor, flatter and if necessary, cajole your clients into staying.”
Purchasers Should Not Rely Upon Oral Representations
Salespeople in the timeshare business are well-trained to employ a variety of sales strategies and “tools” during a presentation to close the deal. They understand where most buyer objections are, which is when oral misrepresentations or omissions may happen.
Unveiling Timeshare Presentation Pitfalls
The non-reliance clause can also be particularly troublesome because it gives some salespeople a free pass to omit information that a consumer might otherwise need to make an informed decision about whether or not to purchase a timeshare.
Any inducements or verbal incentives offered to the buyer would not be recorded in the contract and would almost certainly go unnoticed until after the buyer had already signed it…
Some key things that are often left out or misrepresented in a timeshare presentation include:
– The true cost of total ownership, can be much higher than what’s advertised
– The difficulty of booking a reservation over seasonal periods.
– The difficulty of reselling a timeshare in the secondary market.
– The fact that many timeshare resorts are mixed-use and available to the public.
While some of these oral representations may not be material to your decision to purchase a timeshare, others could be. Agents only have a certain amount of time to make their sales pitch and get their deal closed. As a result, some timeshare agents will resort to telling half-truths or leaving out important information in order to get the potential buyer to sign on the dotted line and hit their sales quota or volume per guest (VPG).
How To Protect Yourself From Deceptive Practices
If you’re thinking of purchasing a timeshare, be aware of the risk of oral representations and omissions. The “Today Only” sale scenario puts a lot of pressure on potential buyers to make an immediate decision to purchase. Be wary of any salesperson who tries to downplay the significance of reading a timeshare contract’s terms.
Hold off on signing anything that might bind you to purchase until you have had time to read and understand the contract. If possible, consult with an attorney or financial advisor before signing anything. Following this approach will help you avoid regretting your decision to purchase later on. A good rule of thumb is to never make any major financial decisions on the spot – especially when it comes to timeshares.
If you have any questions or concerns about what you’ve been told during a timeshare presentation, we recommend that you consult with an attorney experienced in timeshare law. They can help you understand your rights and options under your contract, and advise you on the best course of action.
This article is for informational purposes only and does not constitute legal advice. Please consult with an attorney for specific guidance. Follow Finn Law Group on Twitter.