Making the best buy of a timeshare unit

Making the best buy of a timeshare unit

JAKARTA (JP): Tips on how to purchase and select the right
timeshare unit:

* Make sure that the parties you will be tied up with in any
timeshare purchase agreement are legally registered as a local
company or PT and located in Indonesia. Be careful with any
agreement using foreign laws as you would have difficulty in
claiming your rights at a later stage.

* Has the construction of the resort you would buy been
completed and has the resort yet started to operate? Where is it
located? Check land status, building permit and operational
license. Is there any leasing agreement or joint-venture
agreement between the owner of the land and buildings and the
timeshare management company?

* Make sure what rights of occupancy and privilege you will
get from the resort club (unit type, season, maximum occupancy,
type of week purchased, and length of right of occupancy),
quality of facilities that the resort has and the units it has at
the time of purchase.

* Is there a cooling-off period applied during which you may
cancel the purchase agreement unconditionally? And will the down-
payment you have made be refunded after deduction from the cost
of administration? How much are administration costs? A minimum
of seven working days cooling-off period applies in the developed
countries.

* What level of interest charge applies for late payment of
the installments or the annual maintenance fee? And what are the
consequences for you if you can no longer afford to pay the rest
of the installments? Will the resort club be willing to buy back
your unit?

* When will you be able to start using your right of
occupancy? When will you be registered as a member of the
exchange company and able to use its exchange facilities?

* If you have paid in full all the purchase fees, including
your 10 percent value added tax, will you also be charged
accommodation tax as well as electricity, water and gas fees when
you take a vacation at the exchanged resort?

* When you have fully paid the purchase price and want to sell
to another party, what are the procedures and would the resort
club buy it back if there is no term of "second-hand unit"
existing in this matter?

* If the vacation exchange system is new to you, you would be
better off confirming its details directly with the specified
vacation exchange firm running that system before you make any
commitment with the seller. This is to prevent you from being
misled by information from the seller.

* Be careful with exchange companies or resort clubs who do
not provide membership services in Indonesia, or those who move
from place to place. Be extra careful especially if you must talk
and ask about anything only on the phone, because matters would
not be handled quickly, correctly and clearly.

* The last and most important thing is that there should be a
third party appointed as a guarantor for your right of occupancy,
if the resort construction is not completed yet, or not as
written in the agreement; if there is a management dispute at the
resort; or if the quality of facilities and services given by the
resort and the unit are not as good as at the time of purchase.

As in the case of the guaranteed cover of any financial loss
from an insurance company or a letter of credit issued by a bank,
a guarantee from a Trustee Company or an Escrow Agent is needed
by a timeshare buyer.

If there is a guarantee, when the resort club breaches the
agreement, you can easily claim your rights to get your money
back without waiting for a court order. But if the Trustee
Company is not yet a local entity such as a PT and not located in
Indonesia, then you will also be in trouble since there will be
foreign laws involved.

For your information, the only legal instrument for
timesharing is that issued in June 1996 is the ministerial decree
of the Ministry of Tourism, Post and Telecommunication,
KM.57/PW.102/ MPPT/1996.

And up to the present, the technical guidance that should
follow that ministerial decree has not been issued. This
unfortunate state of affairs is used by those involved in
timeshare businesses to make profits in their own way, which
could lead to deceitful business practices. Being a member of the
Indonesian Timeshare Association is not a guarantee that the
timeshare company you deal with can be trusted more or provide
better services and protection to consumers. (Olivia Sitompul)