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Brace yourself for headaches when selling a timeshare

December 7, 2018

Q: I own a two-week timeshare that I want to sell. What is the best way to do this? There are lots of scammers out there who I am hesitant to do business with.

A: Selling a timeshare can be extremely difficult.

If you do a search of timeshares for sale at your resort, you will likely find there are many others already for sale. (I looked online at the resort you mentioned in your question, the name of which is not printed here, and there are many for sale, some at near give-away prices.)

You can try running your own advertisement in a local paper where the timeshare is, or you can list it for sale online. You can also find a company online that sells the interests, but as you say, be careful who you hire. Get references and read reviews before you move forward.

You should also contact the company itself to see what options it might suggest. For instance, it might allow you to surrender the timeshare to the company with no further obligations on your part. This is what is called a “deedback” in the industry. But don’t be surprised if the company charges you a fee for this privilege, if it’s even allowed.

Q: Please explain why some contractors want you to sign an agreement to do work and say you can cancel only within a three-day limit if you decide to not go forward with the work? What if you change your mind after the three-day period?

A: Under Texas law, if a contractor is hired to do repairs or renovations to your homestead, and that contractor wants to be able to collect from you by forcing you to sell the home if you fail to pay, then there are several requirements that must be met.

One of the requirements is that the written contract must give you the right to cancel without penalty or charge within three days of signing. (However, if the work is needed to protect your health or safety, for instance your house might have flooded, then there is no three-day cancellation period.)

If you change your mind after the three days have passed, you will need to read the contract to see what happens as a result of your breach.

Q: We are a small homeowners association operating as a 501(c)(4) nonprofit corporation. If we invest in certificates of deposit or other financial instruments, will we be required to pay income tax on those earnings?

A: No, you will not. Nonprofits pay income tax only on unrelated business taxable income, which is generally income earned from a trade or business unrelated to its usual activities.

The information in this column is intended to provide a general understanding of the law, not legal advice. Readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances.

Ronald Lipman of the Houston law firm Lipman & Associates is board-certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to stateyourcase@lipmanpc.com.

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