The Texas Timeshare Act is legislation passed by the government of Texas to regulate the creation and sale of timeshare interests in development properties. A timeshare interest grants exclusive rights to a property for a specified period of time each year. For example, for a single apartment in an apartment block, a developer may sell 26 timeshare interests, each relating to a separate two-week period of the year. The act contains provisions relating to the creation of timeshares, contract cancellation and the use of escrow accounts.
If you create a timeshare plan using property that is located entirely or partially in the state of Texas, you have to record the document declaring the timeshare plan, known as a timeshare instrument, in Texas. The timeshare instrument must contain the legal description of the property and a ground plan that shows the location of each property you include in your timeshare plan. The plan should also include details of any amenities, such as sports facilities and swimming pools, that will be available for timeshare owners to use. After you have registered your timeshare plan, each timeshare interest in property included in the timeshare plan may be bought and sold independently of all the other timeshare interests. If you buy a timeshare interest in a property that gives you exclusive use of the property during the month of July each year, you do not share this interest with owners of timeshare interests relating to other time periods.
When you buy a timeshare interest in a property, the act allows a cooling off period, and you can cancel the contract at any time during this cooling off period. If you want to cancel a contract, you must do so before the sixth day following the date when you signed and received a copy of the contract, or after you received the timeshare disclosure document, whichever came later. The disclosure statement must include details of the timeshare plan, the name and address of the developer and a description of the amenities and property, including the number of timeshare interests in the property. If a developer includes a clause in your purchase contract saying that you have waived your rights to cancel the contract within six days, you can declare the contract void as the law states that you are not allowed to waive your rights to cancel the contract.
A developer or escrow agent must place your money in an escrow account or a federally insured depository trust account when you sign a contract to purchase a timeshare interest. Your deposit money, or the full amount of the purchase, if you have paid the full amount, must remain in the escrow or trust account until the six-day contract waiver period expires. When an escrow agent manages the funds, the escrow agent owes a duty of care to you as a purchaser, rather than the developer. If you exercise your right to cancel the contract, the escrow agent pays the funds held in escrow back to you.
Exchange Program Liability
An exchange company may offer to exchange your timeshare interest for an interest in another property or for an interest in a different time in the same property. An exchange company may provide written or audio-visual materials outlining its services to a developer and the developer may issue these materials to you. The developer is not liable for anything contained in the exchange company's materials, unless the developer knows or has reason to know that all or part of that content is false or inaccurate.
Escrow Agent Duties
An escrow is a legal arrangement that ensures parties comply with their contract without any disagreements. The three parties of an escrow...