Proposed update to consumer protection law in Ontario - timeshare exit section!

[TUGBrian]

I admit I am not fluent in the application of Canadian laws and this appears to only really impact Ontario vs all of Canada? but I like that its even being proposed! would like to shake the hand of whatever politician is spearheading this particular initiative!

Ontario Newsroom

news.ontario.ca

Ontario Newsroom

news.ontario.ca

Providing An Exit for Timeshares

Consumers can find themselves and their families locked indefinitely into timeshare arrangements. The proposed new legislation would provide consumers with the right to exit a timeshare contract, if they so choose, after 25 years have passed. This would apply to new and existing timeshare contracts. It also would provide a similar exit option for others (e.g., the owner’s heirs) upon a timeshare owner’s death and would limit the costs that a consumer may be charged for exercising an exit option, with details to be determined in regulations.

 

[sponger76]

I admit I am not fluent in the application of Canadian laws and this appears to only really impact Ontario vs all of Canada? but I like that its even being proposed! would like to shake the hand of whatever politician is spearheading this particular initiative!

Ontario Newsroom

news.ontario.ca

Ontario Newsroom

news.ontario.ca

Sweet. I would even propose making it after 15 or even 10 years rather than 25. I know, give an inch, take a mile...

It obviously doesn't apply to me, but I do have a lot of questions. Would a resale owner be eligible, and if so, would it be from the original retail purchase date or the date of the resale? Would the date be reset at all if the owner makes a new purchase, such as upgrading their contract in some way?

 

[LannyPC]

Those are definitely some good questions. But this takes us back to that age-old argument, should resorts, TS companies, HOAs, and/or developers be forced to take back owners' unwanted TSs? If that proposed law in ON is enacted, who would be forced to assume ownership of the unwanted TSs?

Like we tell many new ones who come on here inquiring about various exit/cancel/relief companies, these companies cannot magically make your TS and its accompanying contract disappear. Someone has to assume ownership of it.

 

[TUGBrian]

while im not a fan of it actually being a law.... thats more because I feel that it shouldnt HAVE to be.

all resorts should provide at least SOME some sort of owner exit option especially if its paid off.

 

[dioxide45]

while im not a fan of it actually being a law.... thats more because I feel that it shouldnt HAVE to be.

all resorts should provide at least SOME some sort of owner exit option especially if its paid off.

I think that would be fine for the big developers, but what about the small independents. Sure they could take a week back with payment of 3-4 years of fees which may give them time to find another buyer, but they would then need to setup a resale operation. They may be better to work with a local real estate agent to help them resell weeks. The main problem is that in certain locations (especially like Ontario) that are highly seasonal, a timeshare in low season can only be sold in a high pressure setting using drops.

The reality is that many of these resorts aren't viable without those people also paying maintenance fees and most resorts should close down for those low seasons to save on costs. What do you do about people that own those weeks? Perhaps swap them out for a better week in a season where the resort will be open? Possible. Shutting down only saves on certain costs, there are still things that need to be maintained as well as a small security staff. Then you have winterizing costs and costs to get started again. The savings may only be marginal.

I think what some resorts need to do is consider folding the timeshare system and require a lot less of a vote of owners to do so. If 30% of your resort owners want out, that really isn't a good situation. People only keep paying because they think they have to. If those 30% all decided to stop, the resort would have to shut down or significantly increase costs for everyone that keeps paying.

 

[TUGBrian]

The alternative of no options other than default for an owner in the situation where they either dont (or worse) cant even visit the resort anymore is even worse IMO, as it completely washes the hands of the resort itself as a partner in the deal leaving everything in the lap of the owner to deal with.

if you got 20+ years of happy ownership out of me and what i own now not only has no resale value but you wont even take it back.... "I" am not the problem.

 

[bizaro86]

I think that's a great law, but agree with dioxide that it'll make very seasonal locations impossible to continue. I think it needs to be combined with a law that says something along the lines of: "after 25 years the owners have to vote to continue or not, and whichever gets the most total votes is what happens. If owners vote to discontinue, the property is sold at auction with proceeds divided"

 

[moonstone]

If that proposed law in ON is enacted, who would be forced to assume ownership of the unwanted TSs?

The reality is that many of these resorts aren't viable without those people also paying maintenance fees and most resorts should close down for those low seasons to save on costs. What do you do about people that own those weeks? Perhaps swap them out for a better week in a season where the resort will be open? Possible. Shutting down only saves on certain costs, there are still things that need to be maintained as well as a small security staff. Then you have winterizing costs and costs to get started again. The savings may only be marginal.

This is what happened years ago with Ontario's Horseshoe Resort (Carriage Ridge & Carriage Ridge) near us. When it began lots of people bought summer weeks in hopes of trading to a winter week there or a prime week elsewhere which was pitched in the sales presentations. The resort had very minimal activities for non-ski season and folks staying there in the off season had to drive 30 minutes to Barrie, Orillia or Collingwood, or even farther to Muskoka, for something to do. People got fed up of paying maintenance fees and not being able to trade for anything acceptable (to them) so they quit paying maintenance fees. As maintenance fee income dropped the resort made more cutbacks in maintenance, cleaning and other areas and the fees for the remaining owners started rising. It was a never ending cycle after increased maintenance fees caused even more folks to bail. It took a long time for the loyal few remaining owners to get the resort to put the place up for sale and release them from their ownership. In the end it did sell I'm not sure that the few owners ever did get anything. Now most of the 2 resorts are a condo complex where units can be purchased outright and many units are being rented by the company who owns it, as an Airbnb or similar to hotel stay bookings. Of course now there is a lot of things to do there in the summertime as the ski resort was purchased first by Skyline in 2007 who then sold to Freed in 2021, along with many other of Skyline's properties in Collingwood and the Muskoka area, and are continuing to promote it as a 4 season destination just as Skyline started to do.


~Diane

 

[moonstone]

I found the article in the Toronto Star newspaper here; https://www.thestar.com/news/canada...cle_7a3c46f7-dade-5a6b-b3fd-aa25f2b29d7b.html which may be behind a paywall for some.
Here is the article copied & pasted if it is;

"TORONTO - Ontario plans to give people a new way to exit timeshare agreements, make it easier to get out of a gym membership, and prohibit businesses from making false claims about prize offers, under new legislation.

Public and Business Service Delivery Minister Todd McCarthy introduced a new consumer protection bill Monday, saying the laws haven't been comprehensively updated since 2005, and in that time practices have changed a lot, including the use of apps and increasing online shopping.
McCarthy says most people know someone who has dealt with an unscrupulous business, in the home renovations, appliance installation, and timeshare industries, and the rules need to be simpler, clearer and "reflective of a dynamic and increasingly digital-first marketplace."

The legislation would allow owners to exit a timeshare contract after 25 years, if they want – no mandatory exit right currently exists – and would also set new rules for long-term leases for heating, ventilation and air conditioning appliances, setting limits on termination costs if a consumer wants to end the contract early.

It would also ban businesses from using language in contracts to deter consumers from publishing negative reviews, prohibit businesses from "creating unnecessary barriers" when people try to cancel a subscription or membership, such as for a gym, and give consumers the right to three times the amount of a refund owed by a business if they're forced to take that company to court to get their money back.
The maximum fines for a person or business convicted under the Consumer Protect Act are $50,000 and $250,000, respectively, and the new legislation would double those amounts."


Now let's just hope it gets passed!

~Diane

 

[dioxide45]

The alternative of no options other than default for an owner in the situation where they either dont (or worse) cant even visit the resort anymore is even worse IMO, as it completely washes the hands of the resort itself as a partner in the deal leaving everything in the lap of the owner to deal with.

I suppose the alternative is the owner gets to wash their hands and leave everything to the HOA to deal with. There is something about the fear of default that keeps people paying. There are certainly things that need to change for resorts that are in their sunset years. Sunsetting a timeshare resort also costs money. What solutions does a resort have for HOA owned weeks? Sure they might be able to rent them or might be able to sell them. Chances of that are slim, especially for low season weeks. I don't think there is a perfect solution. The HOA are owners and consumers too. We shouldn't look to just protect those that want out while ignoring those that want to remain.

 

[dioxide45]

The legislation would allow owners to exit a timeshare contract after 25 years, if they want – no mandatory exit right currently exists – and would also set new rules for long-term leases for heating, ventilation and air conditioning appliances, setting limits on termination costs if a consumer wants to end the contract early.

The problem is that many politicians propose, and even pass laws, when they don't fully understand the mechanics of how it would work. You know, those unintended consequences. Gym memberships at least have a company or business behind them and no one else is going to have to foot the bill if they cancel. Personally I have never had an issue cancelling a gym membership. Just read the contract. Just like you don't walk into a timeshare sales office to rescind, don't think you can cancel your gym membership by telling the girl at the checkin counter that you want to cancel. Sending a letter via Canada Post really isn't an unnecessary barrier to cancelling their membership.

Back to timeshares, especially independent ones where the developer and sales team is long gone. Exactly how do you cancel that? You own deeded real estate. Perhaps the Province of Ontario is willing to take it over and pay the annual fees?

 

[TUGBrian]

I suppose the alternative is the owner gets to wash their hands and leave everything to the HOA to deal with.

after decades of ownership, and the inability to sell or give back...yea...id say that is now 100% the associations mess to deal with.

they can either do it willingly, or thru default/foreclosure. either way its going back so not having any viable solution to deal with it is also their problem.

 

[dioxide45]

after decades of ownership, and the inability to sell or give back...yea...id say that is now 100% the associations mess to deal with.

But the association are other owners, why is it their problem that someone can no longer use the week? Those other owners have probably also used it for 20 years or more. We also don't know that all of those that no longer use it stop paying. Many continue to pay for fear what a default or foreclosure could do to them. The association isn't some magical entity that can right all wrongs. They are simply a collective of all the other owners at the resort. Seems like you are wanting to punish the other owners because some owners simply want out?

 

[TUGBrian]

your argument isnt wrong!

However the association IS responsible for maintaining the value of the resort (and as a byproduct the ownership), and while I agree they dont have a magic wand....doing nothing and expecting things to change isnt a terribly helpful solution.

its certainly not black and white but this is also not a new situation, yet one that has been building for years if not decades! Resorts have been happy to continue to use the fear of default/foreclosure to maintain dues paying owners because it is both the path of least resistance and requires no real effort to maintain.

If the overwhelming number of owners are happy and wish to continue to own, is nothing stopping them from doing so (other than the increase in cost). Happy owners are happy because they find value in the cost of their ownership, once that cost exceeds their perceived value they wont want to own anymore either (just like the owners who already wish to exit but have no viable option to do so other than defaulting). Forcing them to subsidize the happy owners forever is as equally unfair as letting anyone give their ownership back whenever they want to.

the answer is somewhere in the middle, however I dont see much if any effort by the industry as a whole to get there. in fact it appears to have taken a step or two backwards if anything else.

 

[Ken555]

while im not a fan of it actually being a law.... thats more because I feel that it shouldnt HAVE to be.

all resorts should provide at least SOME some sort of owner exit option especially if its paid off.

When an industry fails to act for a long time, what else should government do? Just continue to ignore the problem? Obviously, that’s what the majority of jurisdictions are doing now… and some could argue that’s been to the benefit of the timeshare companies (of course, they lobby government to keep their hands off). It’s nice to see Ontario tackle this issue and I’m curious how it ultimately turns out.


Sent from my iPad using Tapatalk

 

[pedro47]

while im not a fan of it actually being a law.... thats more because I feel that it shouldnt HAVE to be.

all resorts should provide at least SOME some sort of owner exit option especially if its paid off.

I agree with TUGBrian, all timeshare resorts should provide at SOME sort of owner exit option especially if the timeshare is paid off Or the Owners are over the age of Seventy (70) years old….IMHO.

 

[Fido Chuckwagon]

I suppose the alternative is the owner gets to wash their hands and leave everything to the HOA to deal with. There is something about the fear of default that keeps people paying. There are certainly things that need to change for resorts that are in their sunset years. Sunsetting a timeshare resort also costs money. What solutions does a resort have for HOA owned weeks? Sure they might be able to rent them or might be able to sell them. Chances of that are slim, especially for low season weeks. I don't think there is a perfect solution. The HOA are owners and consumers too. We shouldn't look to just protect those that want out while ignoring those that want to remain.

I don’t know, I’m less sympathetic to “those that want to remain” and the HOA in general. If the resort is being managed in such a way that resale is completely worthless and cannot be given away, then the whole resort deserves to fail in my opinion. Otherwise you just have people who bought worthless weeks subsidizing those that get to actually use the resort when it’s high season.

 

[dioxide45]

I don’t know, I’m less sympathetic to “those that want to remain” and the HOA in general. If the resort is being managed in such a way that resale is completely worthless and cannot be given away, then the whole resort deserves to fail in my opinion. Otherwise you just have people who bought worthless weeks subsidizing those that get to actually use the resort when it’s high season.

This is probably 90% of most timeshares, certainly independent off season weeks. It isn't necessarily the HOA management that is the problem. It is a problem with how the weeks were marketed and sold originally by a developer in a high pressure sales presentation. Now as for low season owners subsidizing high season owners, I do agree. This is a problem with where low season weeks pay the same MF as high season. Points systems have leveled that out, but that doesn't apply to a lot of smaller independents unless someone like Capital Vacations comes in and takes over.

 

[dioxide45]

When an industry fails to act for a long time, what else should government do? Just continue to ignore the problem? Obviously, that’s what the majority of jurisdictions are doing now… and some could argue that’s been to the benefit of the timeshare companies (of course, they lobby government to keep their hands off). It’s nice to see Ontario tackle this issue and I’m curious how it ultimately turns out.


Sent from my iPad using Tapatalk

I am not sure I would consider small independent HOAs "the industry". They probably have very little, if any, lobbying power in government. Now for the big developers with resorts or trusts in active sales, I do think they should all have a formal deedback program. Preferably for free or limited in the amount they can charge. $1000 - $3000 that some of them charge is ridiculous.

 

[TheHolleys87]

In addition to all the concerns raised above, I wonder about the law’s application to “existing timeshare contracts.” Would this legislation apply to timeshares located in Ontario only, or in all of Canada? Would it extend to timeshares located outside of Canada? Can legislation change the terms of a contract years after it was signed willingly by all parties?

If it passes, will it affect new sales to residents of Ontario (“Sorry, we can’t/won’t sell to you because we don’t want to abide by the laws of your province”)? I know residents of some Canadian provinces have to be physically at WDW to buy DVC directly from Disney because DVC isn’t licensed to sell in that province.

 

[dioxide45]

In addition to all the concerns raised above, I wonder about the law’s application to “existing timeshare contracts.” Would this legislation apply to timeshares located in Ontario only, or in all of Canada? Would it extend to timeshares located outside of Canada? Can legislation change the terms of a contract years after it was signed willingly by all parties?

If it passes, will it affect new sales to residents of Ontario (“Sorry, we can’t/won’t sell to you because we don’t want to abide by the laws of your province”)? I know residents of some Canadian provinces have to be physically at WDW to buy DVC directly from Disney because DVC isn’t licensed to sell in that province.

I don't see how they could force their will on entities located outside Canada, probably not even outside Ontario.

 

[Bunk]

Here is the link to the proposed law:

https://www.ola.org/sites/default/files/node-files/bill/document/pdf/2023/2023-10/b142_e.pdf

Here are the paragraphs in the law relating to timeshares:

Timeshare contracts

56 (1) This section and the regulations made for the purposes of this section apply in respect of a timeshare contract and any


related agreement entered into before, on or after the day this section comes into force, including a contract or related agreement


entered into before the day the Better for Consumers, Better for Businesses Act, 2023 received Royal Assent.


Modification, extinguishment of rights


(2) For clarity, if this section and the regulations made for the purposes of this section apply to a timeshare contract and any


related agreement that was entered into before the day this section comes into force, including a contract or related agreement


entered into before the day the Better for Consumers, Better for Businesses Act, 2023 received Royal Assent, this section and


those regulations may have the effect of modifying or extinguishing any right, obligation or interest acquired or accrued under


the contract or related agreement.


Termination by consumer


(3) A consumer may terminate a timeshare contract on or after the 25-year anniversary of entering into the contract by,


(a) giving notice of the termination to the supplier or to such other person as may be prescribed;


(b) paying the termination fee determined in accordance with the regulations, if applicable, to the supplier or to such other


person as may be prescribed; and


(c) satisfying such other requirements as may be prescribed.


Death of party to timeshare contract


(4) The regulations may provide rules that apply in the event that a consumer who is a party to a timeshare contract dies,


including providing for a right to terminate the contract.



The law is not limited to timeshares in Ontario. This definition is found in Section 1:


“timeshare contract” means a consumer contract by which a consumer,


(a) acquires the right to use property as part of a plan that provides for the use of the property to circulate periodically among


persons participating in the plan, whether or not the property is located in Ontario, or


(b) is provided with access to discounts or benefits for the future provision of transportation, accommodation or other goods


or services related to travel; (“contrat de propriété en temps partagé”)

and also it is intended to protect all Ontario residents, even if timeshare is located outside of Ontario

Application


2 Subject to such exceptions as may be prescribed, this Act applies in respect of all consumer transactions if the consumer or


the person engaging in the transaction with the consumer is located in Ontario when the transaction takes place.

 

[sponger76]

Application


2 Subject to such exceptions as may be prescribed, this Act applies in respect of all consumer transactions if the consumer or

the person engaging in the transaction with the consumer is located in Ontario when the transaction takes place.

This could be interpreted that if the person is an Ontario resident but is in, say, Florida on a visit when they make the purchase and the resort/company is also not in Ontario, they are not covered by the law.

 

[dioxide45]

This could be interpreted that if the person is an Ontario resident but is in, say, Florida on a visit when they make the purchase and the resort/company is not in Ontario, they are not covered by the law.

That is my take as well. It would only cover telesales of timeshares outside Ontario or timeshares in Ontario. What about resale transactions?

 

[easyrider]

A problem for some regarding timeshare ownership has been the exit. Many do not plan an exit other than just walking away. That is how it's been since the beginning of the timeshare industry. Changing the rules won't stop most owners from walking away, imo. It seems like political pandering to me. A big nothing burger for all but a few owners.

Bill