Timeshare transfers in Mexico have become more common in recent years, and unfortunately several forms of scams have been used to victimize timeshare owners. This article lists some important considerations to take into account when receiving an alleged offer to purchase a timeshare interest.
For purposes of Mexico’s Federal Consumer Protection Law (“LFPC”), a timeshare service consists of making available to a person or group of persons the use, enjoyment and other rights agreed on a property or part of such, in a variable unit within a specific class, for previously agreed periods of time, upon payment of some amount, without involving a transfer of real property ownership. However, it is important to note that obtaining a capital gain for said right acquired by the user of the service is difficult to occur, since it can be understood as an advance payment or financing of a lodging right.
One of the major considerations to review is the agreement with the timeshare service provider, since it establishes the mechanisms to be followed for the assignment of rights of said agreement, which, most likely establishes that any assignment of rights may not occur without the consent of the service provider. If you do not have a copy of the timeshare agreement, it is easy to gain access to it because the LFPC and Official Mexican Standard NOM-029-SE-2021, “Commercial practices-Informative requirements for the provision of timeshare services” (“Prácticas comerciales-Requisitos informativos para la prestación del servicio de tiempo compartido”) require timeshare service providers to record the agreement before the Public Registry of Adhesion Contracts of the Federal Consumer Attorney's Office. This recording must include the documents for which they sell said timeshare services to users.
If planning to consider an offer of purchase for a timeshare agreement, it is important to consider taking the following actions:
1. First, one should question the authenticity of the offer received by the timeshare owner, as usually these unsolicited offers are disguised as agents who claim to have clients ready to buy your timeshare, and the vast majority of these timeshare purchase offers are scams.
2. Second, one should perform an exhaustive search of the offeror for the interest.
3. Next, the timeshare owner should contact the timeshare services provider using the contact details contained in the timeshare agreement and confirm the necessary procedure for assigning the timeshare rights. One should also confirm if there is any fee for the transfer of timeshare rights under the agreement, which should be paid and performed directly with the timeshare provider and not with third parties or escrow agents.
4. Finally, one should never deposit funds in escrow for alleged taxes and/or fees for the sale of the timeshare interest. Usually this request is made with the excuse of expediting the process with the promise of reimbursement at the time of closing. These types of requests in the vast majority of cases have no basis in fact and further demonstrate the intent to commit a fraud or scam on the timeshare holder.
5. Contact an attorney if you have any suspicions about the procedure that is being proposed and/or if you think you have a serious buyer.