When you decide that you are ready to buy a time-share, you should be ''just as diligent in checking out the purchase as you would be in any real-estate purchase," says Bill Sanborn of Florida's Department of Business Regulation. "Where buyers go wrong most of the time is by having little or no idea of what they're signing."
To protect buyers, Florida passed the Time Share Act in 1981. The law requires sellers to provide buyers with a bundle of documents at the time of settlement (usually the day you visit the resort). Included in that bundle should be documents covering the purchase (agreement of sale and escrow agreement), use of the time-share (conditions for ownership, plot and floor
plans, rules and regulations and the exchange system with other resorts) and background of the resort's ownership (articles of incorporation, by-laws, management contract and estimated operating budget).
The law also gives the buyer 10 days to change his or her mind. The problem, Sanborn says, is that buyers fail to use those 10 days to their advantage. "The protection lies in the written documents the purchaser receives. The effectiveness of the act relies on the purchaser's willingness to get legal counsel to check the documents," he says.
Buyers should make sure that they receive all the documents they're supposed to get at settlement, and they should not sign the receipt for the documents if any are missing. Once that receipt is signed, the 10-day protection period starts, Sanborn says.
Even when buyers get the correct documentation, they often fail to look at it within the 10-day period, Sanborn says. Later, when they find a problem, it's too late to cancel the purchase.
As for checking out the soundness of the resort and its management, there's not much the buyer can do short of hiring an accountant to audit the books, Sanborn concedes. And the resorts will not give you anything in writing until you have signed an agreement of sale, so you cannot bring the documents to your lawyer before making a decision.
But, if you are convinced that the time-share is worth your money, you can proceed with the purchase and then take the documents to your lawyer as quickly as possible, knowing you have the 10 days to cancel the transaction, Sanborn says.
Still, you should not let the sales representative pressure you into buying a time-share before you are ready.
One of the biggest pitches is to offer a substantial discount only if you buy a time-share on the spot. Walk away for an hour to think things over, they'll tell you, and you lose the discount, which can amount to a few thousand dollars, plus a waiving of closing costs and other fees.
"The hard sell is a ploy you run into every day on TV," Sanborn says. " 'Hurry up, so you're not left out.'
"But these people have units to sell, and I doubt they'd turn you down the next day if you came back and offered them the same deal," he adds. "They'd be fools to turn you down."
Another part of their pitch is the alluring prospect of exchanging your time-share at their resort for a vacation almost anywhere else in the world. But the exchange program is the time-sharing feature least understood by the buyer, Sanborn says, and that is partly the sales representative's fault.
"That's the sell-the-sizzle routine - forget the details, vacation next year in Vail, Colo.; the Riviera; the Caribbean," Sanborn says. "When you get into the details of the program, there are no guarantees.
"If you want to exchange your time-share, you must understand how the system works. Someone else must want to move (that year) for you to get into that resort," Sanborn says.
He also points out that the quality of resorts varies widely.
"You can't expect to buy the cheapest unit and exchange it for a penthouse. That's the first thing that pops into mind," Sanborn says.
To help you make a decision about buying a time-share, the state has helped develop a list of suggestions. They are:
* Proper ongoing management is necessary. That almost certainly will cost more in fees, but be sure there is professional on-site management - someone to turn to immediately with problems.
* Be certain the resort is a member of the industry's professional society. The National Timesharing Council has become more active in monitoring the industry.
* Ask for references. This list should include lending institutions, chambers of commerce and the local Better Business Bureau. Reluctance to give references should be grounds for suspicion.
* Make sure the promised amenities are either in place when you buy or that money has been reserved to build them. Builder's commitments should be seen in writing.
* Every buyer should make sure that part of any annual fee is being set aside to build a fund for repairs and maintenance. A good rule of thumb is 10 percent of the annual fee.
* Before you buy, make sure you will either get a share of a specified unit or that a "floating system" guarantees you a comparable unit. If you wanted hotel potluck, you wouldn't be buying.
* Ask lots of questions. Every fact, every feature, every benefit should be provided in writing. Do not rely on oral promises.
* Be certain that the resort is affiliated with a reputable, international time-sharing exchange organization. In the event you decide to trade your week for one somewhere else, a network of this kind is essential.