Nevada Timeshare License Practice Exam

Which words are prohibited in timeshare sales contracts?

1. Vacation Ownership

2. Business Investment

3. Real Estate Property

4. Financial Venture

The correct answer is: Business Investment

In the context of timeshare sales contracts, the use of the term "Business Investment" is prohibited because it can create a misleading impression about the nature of timeshare ownership. Timeshare constitutes a form of vacation ownership, which allows individuals to use property for recreational purposes rather than serving as a business investment with the potential for profit. Promoting timeshares as an investment can mislead consumers into thinking they will receive financial returns or appreciate in value like traditional real estate investments. Instead, timeshares primarily serve the purpose of providing shared access to vacation accommodations, emphasizing leisure rather than financial gain. By prohibiting terms that imply an investment quality, regulations aim to protect consumers from misconceptions about the financial implications of purchasing a timeshare. The other terms, like "Vacation Ownership,” “Real Estate Property,” and “Financial Venture,” carry meanings that appropriately describe the essence of timeshare agreements or are neutral enough to not imply an investment approach, allowing their use within contracts.