How to get out of timeshare contracts

Are you desperate to cancel a timeshare contract? Here’s how — you just write a letter saying: “I don’t consider myself bound by your illegal, invalid contract, goodbye.”

It really is that simple, Cape Town lawyer Trudie Broekmann says. Her firm has sent about 450 such letters on behalf of clients to a broad spectrum of “vacation ownership” companies, saying their contracts are void as they contravene sections of the National Credit Act (NCA), Property Time-Sharing Control Act, Consumer Protection Act (CPA), or all three.

“The letters have the effect of termination, but getting refunds of all monies paid in respect of the illegal contracts is a bigger challenge,” she says.

To that end, Broekmann intends to apply for summons in the Pretoria high court next month on behalf of 400 clients, as a test case.

It was hoped that the public inquiry held by the National

Consumer Commission (NCC) in 2018 would end in a “get-outof-jail-free” decree by the NCC, but it was not to be.

Despite describing how “disturbing and sad” it was to see pensioners “sob and plead for help”, commissioner Ebrahim Mohamed did not announce pensioners’ timeshare contracts were null and void. Instead he said: “Because of the urgency related to existing consumer complaints, in the short term, I have instructed my team to immediately begin engagements with the Consumer Goods and Services Ombud to assess the extent to which industry is willing in the meanwhile to allow consumers to exit contracts without penalty — in particular, the nefarious in-perpetuity contracts. I hereby call on and encourage individual clubs to resolve club specific complaints without any further delay.”

I asked Consumer Goods and Services Ombudsman Magauta

Mphahlele how accommodating the industry had been about this. “The majority of timeshare suppliers adopted a cancellation policy,” she said.

So much for the commissioner’s “no penalty” recommendation! About 67% of cases taken up by the ombud’s offer have been in favour of the complainant, it, excessive. in 13% Thats ’of cases assistance was provided and 9% were partially upheld.

Broekmann confirmed the clubs “invariably” start by asking for R220 per point as cancellation fee, which is, as she put

when she points out to the company that their contracts are null and void by virtue of the fact that they are either legally invalid or the club has breached the contract, or both, and therefore the member doesn’t have to pay.

Teneshe Arendse of Kuils River recently wrote to me about her five-year, unsuccessful battle to cancel her membership with African Club Innovations.

She signed up with ACI in 2012, at a cost of R12,000 for 60 points, which she paid off at R800 a month, plus an annual management fee of R4,900, which grew to R9,200. She gave notice of cancellation in September 2014 and by 2017 the club was demanding more than R20,000 in arrears. She was offered a “one-off offer” of R4,100 to bring the account up to date, which she paid. “But I can’t afford this contract and don’t want it,” she told me.

I e-mailed ACI, pointing out that while the CPA’s “fixed-term contract” section does indeed make provision for the charging of a “reasonable” cancellation penalty, the company could not rely on that because their contracts don’t have a fixed term. “Is ACI willing to allow Ms Arendse to cancel without penalty? If not, why not?” I asked.

When my deadline had passed with no response, I asked Broekmann to take on the case pro bono. Happily, she agreed. She informed ACI the contract breached both the NCA and CPA on several counts. The company then bypassed Broekmann and tried to get a R7,200 cancellation fee from Arendse.

“If ACI tries to deduct money from Arendse by debit order, the bank will reverse the debit order each time, on presentation of the cancellation letter,” Broekmann said.

That was one very expensive domestic self-catering holiday.

Broekmann says those wanting to cancel timeshare contracts don’t need an attorney.

“If you’re with Holiday Club, Quality Vacation Club, Flexiclub, Dream Vacations, ACI, Lifestyle Vacation Club and a few others, there is no legal contract binding you.

“So write to them and say that the contract is invalid and therefore you do not consider yourself bound by it,” she said.

“Then reverse all recent debit orders, cancel any stop orders and don’t pay the annual fee.

“You may get a lawyer’s letter threatening legal action and blacklisting, but of my 500 timeshare clients, only two or three have been blacklisted — and an attorney can get that blacklisting reversed for a modest fee. It is extremely unlikely they will sue you. If it comes before a judge, they would find that the contract is invalid.”

So go on, timeshare jailbirds, as Broekmann says: “Embolden yourselves!”

I don’t consider myself bound by your illegal, invalid contract, goodbye