There are many timeshare terms that can seem confusing for people who are not in the business—especially those who have just bought, or are about to buy, a timeshare. In the timeshare industry, the cooling-off/rescission period refers to the time that new buyers have to actually cancel their timeshare contract agreement directly with the resort where they have bought the timeshare membership. The cooling-off period and the rescission period are interchangeable terms, so they have the same meaning.
Why do you need the rescission period?
The rescission period is a set time after you have signed your timeshare contract. This allows you to make rational decisions once you are out of the salesroom and able to read your contract carefully. You are given a few days to go over the timeshare contract thoroughly in order to understand the terms and conditions. Most people are very happy with their timeshare purchases and never need to think about the rescission period; however, knowing that you have a buffer of time when you first buy a timeshare can help people make decisions.
Cooling-Off/Rescission Period is Protection for Consumers and Sellers
The cooling-off/rescission period was set in place to protect buyers from making rash decisions that they might later regret. It also protects timeshare companies from timeshare cancellations after having paid commissions to sellers and spent money on preparing membership details.
As with any kind of sale, most timeshare sales agents get consumers excited about having the opportunity to purchase a vacation property at one of the top resorts in the world. Consumers get a tour of the resort and hear a presentation. Sales agents expect that potential buyers will sign a contract the same day they agree to purchase the timeshare. All of this can happen quite quickly, since the sale depends on keeping buyers interested and excited. Sometimes, consumers do not think clearly about their financial situations when signing their contracts; therefore, the cooling-off/rescission period gives them a chance to change their minds before their memberships become irreversible.
In practice, only a small number of consumers change their minds and wish to cancel when purchasing timeshare. These people are protected by the cooling-off/rescission period.
How much time do you have for cancellation?
Just like any high street store, which offers refunds within a certain period of time, timeshare sales offer a the cooling-off/rescission period in case customers want to change their minds about the purchase. The length of time you have to cancel your timeshare legally within the cooling-off/rescission period is dependent on a number of factors, including the country where you purchased your timeshare and the policies of your timeshare company. As a general rule of thumb, the cooling off/rescission period for timeshare is fewer than two business weeks and can be much shorter for some countries. You should check directly with your timeshare company.
Cooling-Off/Rescission Period Rights
As a consumer, you have rights set by the country where you purchase your timeshare. You should know up front that the cooling-off/rescission period is the only time when you have the ability to cancel your timeshare contract. Beware that any company that tells you otherwise or offers to help you cancel your timeshare is likely to be a scam.
If you cancel your timeshare during the cooling-off/rescission period and meet all the criteria required, any money that you have paid will be returned. Also, if you have a loan that is linked with the timeshare contract, you will also have to cancel the loan agreement during the cooling-off/rescission period. You should note that timeshare cancellation must be performed in writing, so make sure you speak to your timeshare company to find out the correct format for cancellation.