Timeshare accommodation sales

20 Aug 2021 Ref-No#: 3339

A person sells accommodation.
Assalaamu Alaykum w.w.

Can you please give me the ruling on the following.
If someone bought accommodation as in timeshare etc and wants to cancel, can a 50% cancelation fee be charged?
If yes, if we are able to resell the accommodation, can we then state that a full refund will be given?
Bear in mind once the payment was made a certificate in that persons name for the accommodation is already issued. Technically I dont own that weeks accommodation now as it belongs to the buyer

Can I have these conditions as policy
1) Once a booking is paid for and confirmed with a certificate, no refunds will be made .
2) Should client decide to cancel , I will assist client to resell but no guarantee. I will also pass it onto other agents. The client can also pass it into his/ her contacts to source a buyer.
3) If successful in reselling the unit and there is a shortfall, the client will be responsible for the shortfall.
4) if unsold the client will carry the cost for the unit .
Jazakallahukhaira

Answer

Wa’alaykum as Salam wa rahmatullahi wa Barakatuhu,

A cancellation fee can only be charged if it involves some work or labour. If there is nothing in exchange of the fee, it will not be permissible to withhold any funds.

Similarly, it is permissible to charge for actual costs incurred. For example, if there is a cost for again changing the name on the certificate, then the exact cost of that could be for the customer’s account. It is not permissibly to take anything more.

You could offer to buy back the timeshare certificate for 50% of the value. As you said, it belongs to the buyer, and he has the right to sell it back to you; at any price that both of you agree to. This is no more a cancellation fee; rather, it is a new transaction. Hence, it is permissible.

If he does sell it back to you, you then become the owner of the certificate again. You may now sell it at any price that you deem correct.

Yes, it will be correct to stipulate these four conditions.