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TJ, Esq.
TJ, Esq., Attorney
Category: Real Estate Law
Satisfied Customers: 13029
Experience:  JD, MBA
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I just purchased a timeshare (California) and have 7 days to

Resolved Question:

I just purchased a timeshare (California) and have 7 days to rescind the transaction. I have been contemplating this because I think there were some deceptive sales tactics going on. 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).
Submitted: 9 years ago.
Category: Real Estate Law
Expert:  TJ, Esq. replied 9 years ago.

Hello and thank you for allowing me the opportunity to assist you.

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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