The state of Florida signed into law a new bill designed to help protect consumers in the selling and buying of timeshare interests in the secondary market. The law will be effective on July 1.
The Timeshare Resale Accountability Act will help promote a healthy secondary market for the sale of timeshares, according to DBRS analysts in a report released today.
The rating agency said that around 25% of all timeshare resorts within the country are located in Florida.
The Florida legislation requires greater transparency and, among other things, timeshare resale companies to disclose all terms and conditions of their business relationship with a consumer.
The law requires resale firms to offer the right of rescission for consumers, which would allow the consumer to cancel a contract for resale services. Also, the law allows for penalties to be imposed on companies which continue to utilize deceptive practices.
The law addresses concerns related to regulation of the resale of timeshare interests by non-developer owners. It also provides the industry the forum for an open debate about the issue and the means to develop a product that identified what type of activity should be permitted and how it should be regulated.
"A single law is seen as a measure to help avoid relying on unrelated and disparate laws which could lead to uncertain and uneven enforcement," analysts said in the report.
The single law also calls for a state agency to be responsible for the cost and the effort necessary to prosecute bad activities. "A single law, specific to the timeshare industry, will help guarantee that the law is consistently regulated and more easily enforced," the report said.
Similar legislation is currently being pursued in Colorado and other U.S. states will likely work towards adopting similar consumer protections, said analysts.