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Question: “Now in the initial agreement it says you can rescind the transaction with no penalties during the 7 days but I did agree to pay a 10% penalty if I cancelled. I understood it as the 10% penalty would be applied if I cancelled after the 7 day rescission period but now I am worried that I may have somehow waived my right (not of rescission but of waiving the penalty).”
Answer: No, there can be no penalty for rescinding the contract. The right to rescind is granted by California law, and any waiver of your rights is void:
11238. (a) The purchase contract entered into by any person who has
made an offer to purchase a time-share interest or interests, any
incidental benefit, made on the same day or within seven calendar
days after the person attended a sales presentation for a time-share
interest, or any right under an exchange program, made on the same
day or within seven calendar days after the person attended a sales
presentation for a time-share interest, shall be voidable by the
purchaser, without penalty, within seven calendar days, or a longer
period as provided in the contract, after the receipt of the public
report or the execution of the purchase contract, whichever is later.
(7) Immediately prior to the space reserved in the contract for
the signature of the purchaser, the developer shall disclose, in
conspicuous type, substantially the following notice of cancellation:
You may cancel this contract without any penalty or obligation
within seven calendar days of receipt of the public report or after
the date you sign this contract, whichever date is later. If you
decide to cancel this contract, you must notify the developer in
writing of your intent to cancel. Your notice of cancellation shall
be effective upon the date sent and shall be sent to (name of
developer) at (address of developer). Your notice of cancellation may
also be sent by facsimile to (facsimile number of the developer) or
by hand-delivery. Any attempt to obtain a waiver of your cancellation
right is void and of no effect.
So, even if the contract states that there is a 10% cancellation fee, it has no legal effect, and is void.
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