What background knowledge is needed for this Practice Of Real Estate question?

The Tennessee Timeshare Act, codified at Tenn. Code Ann. § 66-32-101 et seq., was enacted as part of a broader national movement in the 1980s and 1990s to regulate the timeshare industry following widespread reports of high-pressure sales tactics and consumer fraud at resort destinations. Tennessee, as home to major tourist destinations like the Smoky Mountains and Nashville, had a compelling interest in establishing clear rules for the large volume of out-of-state buyers who purchased timeshares within its borders. The five-day rescission period was calibrated to balance consumer protection with the legitimate business interests of Tennessee-based resort developers.

What is a good way to remember the answer to this Practice Of Real Estate question?

Use the phrase 'WHERE you sign is WHERE the law lives.' Picture yourself physically standing in Tennessee, pen in hand, signing a contract — the ground beneath your feet determines the law above your head. No matter where you drove from or where you are going, the law of the soil where ink meets paper is the law that governs. This visual anchor — feet on Tennessee ground, Tennessee law overhead — will immediately eliminate any answer that ties the law to the buyer's home state.

What exam tip applies to this Practice Of Real Estate question?

When you see a timeshare question involving an out-of-state buyer in Tennessee, immediately identify the two key facts the question is testing: (1) where was the contract executed, and (2) is the project TREC-registered? If both answers point to Tennessee, Tennessee law governs — full stop. Do not be distracted by sympathetic language about the buyer being an out-of-state consumer; the exam is testing whether you know that territorial jurisdiction, not domicile, controls timeshare transactions under the Tennessee Timeshare Act.

How does this Practice Of Real Estate concept apply in real world practice?

Imagine a couple from Atlanta, Georgia, who visit Pigeon Forge for a long weekend and attend a timeshare presentation at a TREC-registered resort. Excited by the offer, they sign a purchase contract on Saturday afternoon. When they return home to Georgia on Monday, they have second thoughts and want to cancel. Under Tennessee's five-day rescission period, they must submit their written cancellation notice within five days of signing — not ten days as Georgia law would provide — because the contract was executed at a Tennessee-registered project and Tennessee law governs the transaction.

Practice Of Real EstateState SpecificHARD

A Tennessee timeshare developer registered with TREC sells a timeshare interest to a buyer from Georgia who signs the contract at the Tennessee resort. The Georgia buyer argues that because she is an out-of-state resident, Georgia's timeshare rescission law — which provides a ten-day rescission period — should apply to her purchase. The resort insists that Tennessee's five-day period governs. Under Tennessee law, which statement is most accurate?

Correct Answer

D) Tennessee's five-day rescission period applies because the contract was executed in Tennessee at a TREC-registered timeshare project, and Tennessee law governs transactions occurring within its borders

Under the Tennessee Timeshare Act, Tenn. Code Ann. § 66-32-101 et seq., the Act governs timeshare interests sold in Tennessee, including sales made at Tennessee-registered timeshare projects to out-of-state buyers. Because the contract was executed in Tennessee at a TREC-registered project, Tennessee law — including the five-day rescission period — applies to the transaction. The buyer's state of residence does not determine which state's timeshare law governs the sale.

Answer Options

Neither state's period applies; the federal timeshare rescission law preempts state law and provides a uniform three-day rescission period for all timeshare purchases

Georgia's ten-day rescission period applies because the buyer is a Georgia resident and consumer protection laws follow the buyer's domicile

The buyer may choose to apply whichever state's rescission period is more favorable to her, since both states have legitimate interests in the transaction

Tennessee's five-day rescission period applies because the contract was executed in Tennessee at a TREC-registered timeshare project, and Tennessee law governs transactions occurring within its borders

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