Selling timeshares without a real estate license is a crime in New Mexico, but that doesn’t stop out-of-state scammers from preying on unsuspecting timeshare owners, according to a September 17, 2020 warning from the Criminal Investigation Division of the FBI and the Office of Investor Education and Advocacy of the Securities and Exchange Commission.
“Scammers have a variety of methods to advertise their timeshare programs as legitimate. For example, some scammers design compelling websites that can mimic the websites of real US companies, but that contain false information, such as incorrect names for company representatives, ”according to the SEC.
Unlicensed attorneys claiming to represent full-service property management, real estate or securities brokerage and escrow companies that list and sell timeshares solicit upfront fees from timeshares owners who wish to list their fractional property for sale. The problem is, timeshares never go on sale and the fees are gone forever.
“We have received a wave of inquiries from consumers who have been contacted by a company that identifies itself as R-5 Realty. R-5 Realty is not licensed by the real estate board, ”said Mike Unthank, superintendent of the New Mexico Department of Regulation and Licensing. “Timeshare fraud is a serious crime, which can cost consumers thousands of dollars. “
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Representatives of these bogus companies falsely identify themselves to consumers using the names and license numbers of genuine New Mexico real estate companies, without the knowledge of company officials. They use a fictitious Albuquerque address and ask owners to send the initial registration fee to escrow companies located outside of the state or country.
The Federal Trade Commission strongly suggests that you go into skeptical mode when a company offers to sell your timeshare and take the following steps:
- Do not accept anything over the phone or online until you have had a chance to consult with the dealer. Contact the New Mexico Attorney General at 844-255-9210 and ask if any complaints have been filed.
- Ask the seller for all the information in writing.
- Ask if the reseller’s agents are licensed to sell real estate where your timeshare is located. If so, check with the New Mexico Real Estate Board at 800-801-7505.
- Only deal with licensed real estate brokers and agents, and ask for referrals from satisfied clients.
- Ask how the dealer will advertise and promote the timeshare unit. Will you receive progress reports? How many times?
- Ask about the fees and the schedule. It is best to do business with a reseller who takes their fees after the timeshare has been sold. If you need to pay a fee up front, find out about refunds. Get reimbursement policies and promises in writing.
- Don’t assume you’ll get back the purchase price of your timeshare, especially if you’ve owned it for less than five years and the location is less well known.
The New Mexico law governing timeshares can be found in Statutes 47-11-1 through 47-11-13.
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Timeshares are big business. According to the American Resort Development Association’s State of the Vacation Timeshare Industry: United States Study 2020 Edition, there were 1,582 timeshare resorts in the United States in 2019, representing approximately 206,380 units. Sales volume in the United States reached $ 10.5 billion, with rental revenues reaching $ 2.5 billion. A total of 5,300 resorts operate globally, of which about 20 to 30 are currently operating in New Mexico, according to the RLD.
Meet at the fence.
Gary Sandler is a full-time real estate agent and president of Gary Sandler Inc., real estate agents in Las Cruces. He loves answering questions and being reached at 575-642-2292 or [email protected]