Resales have become a growing industry in the marketing of shared vacation ownership products, but there are certain factors that are unique to the sale of these products.
Do not necessarily expect to receive the same amount that you originally paid for your vacation ownership product, especially if you have owned for less than 5 years and the interest is not in a well-known resort location. Many factors affect the price including season, location, unit size and age.
- Contact your developer and/or resort management company
Check with your developer if they are still selling, or find out if the resort management company offers a resales programme or are affiliated with a broker to handle resales. If so, ask for the statistics on past resales.
- Verify that the resales agent is an accredited VOASA member
All member companies of VOASA agree to adhere to the VOASA Code of Ethics.
- Check with other owners at your resort
Those who own the weeks before or after you may wish to purchase more time.
- Check for local resale brokers
Check the property sections of the local newspapers for local brokers who handle resales.
- Verify that all commissions and profits are disclosed
In terms of the Code of Conduct issued by the Estate Agents Board, and in terms of common law, an agent must always disclose to the client or principle the full commission amount or profit. On the resale of shared vacation ownership products, the commission (or profit) must be stated upfront.
- Ensure the resale of your shared vacation product is documented
There is a fallacy that the resale of a shared vacation ownership product need not be documented. In fact, many sales occur by the seller simply signing a share transfer form. The resale of a product, legally speaking, is no different from the sale in the first instance. The Timeshare Act specifies that the sale (and resale) of products must be in writing. Furthermore, if the shared vacation ownership product relates to a share block company then the Share Blocks Control Act also stipulates that the agreement must be in writing.
In addition, the sale must also comply with the disclosure provisions of the Timeshare Act and in the case of a share block company, the Share Block Act. With sectional title transfer, it goes without saying that the agreement must be in writing as sectional title is immovable property.
The documentation has 3 parts:
- The sale itself, which must record what is being sold, the price and any other terms that may apply to the sale.
- The Usage Agreement, which must be ceded or assigned to the new purchaser.
- The Disclosure Provisions.
- Determine what the listing fee will be
Resale companies often offer vacation owners the option of placing their details on a “list” for a nominal fee. The resale agents then utilize the information to publicise and/or arrange rentals and/or market the product to the best of their abilities. Bear in mind that placing your details on this “list” does not guarantee that your vacation ownership product will be sold.
- Remember that VAT is charged on commission
If the resales agent quotes you a price on commission, it is inclusive of VAT. For example, you can request that the commission be broken up to state that the commission is R100, VAT of R14 and a total of R114. However, if you are quoted R100 then the agent may not add on VAT afterwards. The VAT is then payable by the agent.
- Notify your resort
If you sell, make sure to notify both your resort and exchange company in writing.
- Right of use during the sale
Never give up the right to use the shared vacation accommodations while selling.