Greenspoon Marder Attorneys Draft First Legislation Regulating Timeshare Exit Companies Passed by the State of North Carolina

News Oct 6, 2021 Orlando, FL

Orlando, Fla. – October 7, 2021 – The great state of North Carolina has become the first state in the nation to pass legislation regulating timeshare exit companies. The groundbreaking timeshare statute stems from the North Carolina Real Estate Commission (NCREC) recognizing the need for regulation of companies claiming to “exit” consumers from their timeshare contracts.

Greenspoon Marder co-managing director Michael Marder, partner Richard Epstein, and senior counsel Corrine Gaxiola, drafted the statute’s language with the NCREC with the main goal of protecting consumers from the previously unregulated harms of nefarious actors in the timeshare exit business. In support of the newly written legislation, the American Resort Development Association worked with NCREC to pinpoint the legal ramifications.

Together with our attorneys, NCREC advocated to update the state’s timeshare statute to include provisions that regulate timeshare transfer (“exit”) activity, identifying that most exit companies charge exorbitant upfront service fees, yet do not provide the advertised safe or legal exit, and merely instruct owners to default on their financial obligations to timeshare developers. Notably, NCREC also discovered that timeshare owners rarely receive the advertised “money-back guarantee” and often suffer adverse financial consequences such as damaged credit and tax liability.

A few key provisions of the legislation include:

Timeshare exit companies may not advise or suggest timeshare owners to cease making payments on their timeshare obligations;
Timeshare exit company contracts must provide timeshare owners with a right of rescission;
Timeshare exit companies cannot charge timeshare owners for a transfer or exit service that amounts to foreclosure or repossession;
Timeshare exit companies are not entitled to a fee for a transfer or exit service if the timeshare owner procures their own transfer or exit;
Written evidence of the transfer or exit must be provided and include the method of transfer or termination, along with legal documents; and
Timeshare exit companies must escrow the fee charged to timeshare owners.

“We are thrilled to have a significant role in this legislation which will expand North Carolina’s timeshare business and generate revenue for the state,” said Mr. Marder. “This successful outcome was a result of hard and creative work from our entire team.”

About Greenspoon Marder

Greenspoon Marder LLP is a full-service law firm with over 225 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has maintained a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.

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Greenspoon Marder Attorneys Draft First Legislation Regulating Timeshare Exit Companies Passed by the State of North Carolina

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