What happens to the deposit during the cancellation period?

During the cancellation period in a timeshare transaction, the deposit is held by an independent escrow company. This arrangement is designed to ensure that the buyer's funds are protected while they evaluate the terms of the timeshare agreement. An independent escrow company acts as a neutral third party, which helps to foster trust in the transaction by safeguarding the deposit until the cancellation period expires. If the buyer decides to go through with the purchase, the funds are then released to the developer. If the buyer chooses to cancel within the allowed timeframe, the escrow company will return the deposit to the buyer. Holding the deposit in escrow mitigates any potential conflicts of interest, as neither the seller nor the buyer has direct access to the funds during this critical evaluation period.