Monthly Archives: July 2019

Timeshare owner having a coffee

Timeshare owners and exit companies

A lot of owners continue enjoying their timeshare, that’s why the industry continues to grow. A lot of timeshare sales are not from new buyers; they actually come from existing timeshare owners. This indicates that there are a lot of satisfied timeshare users.

There comes a time though when owners can no longer hold on to their timeshare and have no choice but to give up the lifestyle. Financial circumstances may change, and they can no longer afford to keep their timeshare. Sometimes, children move out of the family home making family vacations few and far between. Declining health may also be a reason to let go of the timeshare. Whatever the reason may be, there are ways to exit timeshare properly.

Timeshare owners usually sell in the secondary market. Selling at a reduced cost is a bitter pill they must swallow because timeshare is an investment that depreciates. Donating the timeshare is also another option. Holding on to it unnecessarily is expensive because even if it’s unused, the maintenance fees and other fees must be paid annually.

There are owners who resort to getting the services of an exit company or relief company to take out from them the headache of selling their timeshare. Before hiring one, here are some pointers worth considering. These are from the study issued by the BBB (Better Business Bureau) of Eastern and Southwest Missouri and Southern Illinois.

In the June 2019 study, it was discovered that more than 400 timeshare owners believe they were scammed by third-party exit companies. The general complaint is they were asked to pony up large upfront fees for services that were not delivered. The upfront fees ranged from $1,000 to more than $30,000.

The timeshare industry has over nine million owners. It generates over 540,000 jobs and $10.8 billion in taxes in the US. As such, it has become a target for unscrupulous companies. Because of this, timeshare companies want to educate the owners on how to exit timeshare safely.

Here are the red flags to watch out for:

  1. Scammers usually call you up or send emails claiming that they have an “interested buyer”.
  2. They claim that they are from the Australian Timeshare and Holiday Ownership Council (ATHOC). Note that ATHOC does not initiate calls, emails or any other type of communication. They only talk to timeshare owners when the latter initiates contact.
  3. They ask for an upfront fee with a promise to modify, cancel or transfer the timeshare’s ownership.
  4. They claim that a sale or transfer is about to be completed provided you wire some money for “tax” or other “requirement” to finalize said sale or transfer.
  5. If their promise sounds too good to be true, chances are it is.

If you have been victimised by these unsavoury companies, you may get help from your state’s Office of Fair Trading or Department of Consumer Affairs.

Stop sign

When a timeshare is not for you

If you are the type who goes on regular vacations who cannot be bothered looking for resorts or hotels, timeshare ownership will do you good. We all know that looking for a vacation destination can be stressful unless you have a travel agent who will do the work for you. You have to review several brochures, compare prices, check the availability and read reviews before you can pick one. If you’re unlucky, you’ll end up with a lousy resort despite the work you have put in.

A timeshare ownership saves you from the stress. You are assured of a top-notch location and your booking is safe. All you have to do is pack your back, leave and enjoy. This is pretty much how the timeshare companies sell you an ownership. If you can afford the prize, who wouldn’t want a stress-free vacation that you can have regularly? Another upside to timeshare ownership is it costs much less than owning a vacation home. You don’t have to worry paying for and attending to the property’s upkeep.

Before you take the plunge and sign the dotted line, here are some considerations to owning a timeshare. Read through them because timeshare may not be for you.

Considerations to Owning a Timeshare

  1. You may get stuck to one company – Some timeshares may keep you to a single resort year after year. This can be tiresome unless the resort keeps on upgrading their facilities or adding attractions. Going to a specific resort every year may be appealing to some though. It saves them from unfavourable surprises when they already know what’s waiting for them.
  2. You may end up not using it – There are some owners who bought their timeshare because they wanted it. They are not regular vacation goers yet. Owning a timeshare might finally push them to take regular breaks. Or, they feel it would be nice to have one should they take a vacation. The reality is, they don’t need a timeshare because going on a holiday is something they don’t consider to be a need.
  3. Timeshares cost a lot – The upfront cost of a timeshare is a considerable amount. On top of it, there are annual fees to be considered.
  4. The value of a timeshare does not go up – You would think that like other real estate investments, the value of a timeshare appreciates. Sadly, they do not. The value of the property may go up, but it doesn’t affect the timeshare owner. They did not buy the property, but the time to use it.
  5. Timeshares are not income generating – Real estate investments allow you to earn income. If you rent out your home, your tenants pay you rent. This does not apply with timeshare.

If owning a timeshare does not benefit you, you do not need to suffer and hold on to it. Keeping it despite non-use is going to cost you more money in the long run because of the annual fees it requires. Do yourself a favour and exit timeshare now. There are ways you can give up your timeshare properly.

Happy mum and her two children

What are the advantages of owning a timeshare?

A timeshare is a property, usually condominium apartments, owned by several people who schedule their use throughout the year. These properties are usually found in desirable tourist destinations. There are cases when timeshare owners “swap” timeshares, so they go to other locations.

It is common to hear complaints about owning a timeshare, but it is advantageous if you are the right market for it. If you are the type who values regular vacations and do not mind going to the same destination, you will surely find owning a timeshare advantageous.

  1. Timeshare provides a much better accommodation than hotels do. Timeshares can be spacious units that have fully-equipped kitchens, dining room, living room and several bedrooms. Some can provide hot tubs, fireplace and entertainment centres. It really feels like being “home” when you’re on vacation. You can even have home-cooked meals every time and this is great if you’re on a certain diet. It’s budget-friendly, too.
  2. There are timeshares that provide amenities like the use of swimming pools, fitness centres, tennis courts and health and beauty services. Some even have tie-ups with offsite recreation or outdoor adventures. Choose a timeshare that is close to the attractions you want to enjoy, and you’ll surely have a fun holiday.
  3. Owning a timeshare can help you save money. You can book future vacation accommodations at today’s cost. You can also share it with families and friends. If you want to generate income, you can rent out your timeshare space. Timeshare owners can choose when and where to travel, the length of their stay and the type of accommodation they want. They belong to a group that can swap their units, thereby explore other destinations.

Admittedly, there are downsides to owning a timeshare. Maintenance fees go up annually whether or not you use the property. They are also very hard to sell. If you’re lucky enough to sell yours, you will most likely take a loss. In the end, losing money in sales can be good because you no longer have to pay the annual fees. There are also rare occasions when the property is poorly managed.  

There might also come a time when you can no longer use your timeshare. Changes in personal circumstances happen. Children grow up and their interests change. They go to college and move out of the family home. Family holiday may no longer be a priority. Declining health can also be a reason why a timeshare owner no longer goes on vacation.

At the end of the day, you have to weigh the pros and cons of keeping your timeshare. If you can still make use of it, it would be wise to keep it. Remember that you can pass it on to future generations. If, on the other hand, keeping the timeshare is no longer practical, you can exit timeshare now or whenever you want. There are proper ways to do it and you can even hire an exit company to help you.

Person signing on paper

How to cancel your timeshare contract

If you have signed a timeshare contract and find yourself changing your mind, you can cancel the said contract if you act immediately. You can exit timeshare, but time is important in the rescission of a contract, so make sure to follow the correct procedure.

When buying a timeshare, what you’re getting is an interest in a piece of real estate, usually a resort condominium. Sellers are known for their hard-sell method. They approach people in public and offer them some freebie, provided they attend a short presentation. The presentation is not short and usually attendees leave the presentation as timeshare owners. They sign the contract without reading the fine print. A lot of them do not know that aside from the purchase price, they have to pay annual fees, taxes and other assessments. After giving it considerable thought, a lot of these buyers change their mind. If they act quickly, they can still exit timeshare.

How to Cancel Your Contract

  1. Cancel within the cancellation period – The contract should have a rescission period. This is the time the buyer can change his mind and rescind the contract. If the contract doesn’t have a rescission period, contact the consumer protection office.   
     
  2. Cancel in writing – Cancel the contract in writing even if you are told that doing so is not required. It is for your protection that everything is in black and white. Make sure the following is clear in your cancellation letter:
    • Your name should be how it appears in the contract.
    • Indicate your complete address, telephone number and email address.
    • Indicate the name of the timeshare company.
    • Write a description of the timeshare. Make sure it is the same with how it was described in the contract.
    • Indicate the date you bought the timeshare.
    • A clear statement that you are rescinding the contract. Example: I am putting in writing my intention to cancel this timeshare contract. This letter is signed and submitted within the rescission period indicated in the said contract
  3. Delivery of the cancellation letter – The contract should have a clear procedure on how to deliver the cancellation letter. They may require that you hand-deliver the letter or have it sent by registered mail. Be sure to follow the instruction clearly and deliver the letter within the rescission period or your cancellation may be invalid.

Post Rescission Period

There may be instances when you might be able to cancel your timeshare contract when the rescission period has lapsed. However, this usually entails a lawsuit against the timeshare company. You will need a real estate attorney for advice and assistance.

Scale

The pros and cons of owning a timeshare

There are people who found themselves suddenly owning a timeshare without knowing what it’s about.

They hear keywords in presentation like “stress-free vacation” in top-notch destinations and immediately get sold to the idea. Considering that a timeshare is expensive, one must weigh the pros and cons of owning one. The seller might be remiss in explaining the product thoroughly, so it would be helpful to the soon-to-be timeshare owner to do his own research.

Pros

  1. It would be nice to own a condominium unit in a high-end vacation spot, but not everybody can afford to buy one. There are timeshares that can allow you to live in the same condominium unit during the time-frame you reserved. You enjoy the same perks even if you don’t own the unit. And, because you don’t own it, you don’t have to worry about the maintenance. You also don’t have to worry about the security when you’re not in the property.
  2. Large families need not feel cramped when they go on vacation. There are spacious two- or three-bedroom condominiums that have multiple bathrooms, living room, dining area and kitchen. Families can enjoy meals together as a whole, without having to reserve several tables when they go out for every meal. Plus, if you’re the type who enjoys cooking for your family, you can continue lording it over the kitchen even during holidays.
  3. Timeshare can be an investment when you sublet your unit to others. You can sell your week of vacation and make a profit if the sublet fee is higher than the monthly fees you pay.
  4. If you enjoy going to the same place every year (pretty much like going to your summer home every year), a timeshare can ensure that you stay at a particular resort during the time-frame you reserve. This saves you from the hassle of looking for a holiday destination.

Cons

  1. There are many costs involved in owning a timeshare. Maintenance fees can go up every year. There are claims that the maintenance fee can go up by 12% annually. There are special assessments and taxes involved, too. Sometimes, there is a mortgage to be considered.
  2. A lot of timeshares carry a lifetime contract that can be hard to get out from. This lifetime contract can be passed on to future generations through the perpetuity clause.
  3. Pretty much like a car, the value of a timeshare goes down as soon as you buy it. The difference is, it’s easier to sell a used car than a timeshare. This is because the supply of timeshare is much greater than the demand for it.

During a timeshare presentation, it can be expected that they highlight the pros of owning a timeshare. Some don’t even bother discussing the cons.

If you already own one and realise that keeping it no longer makes you happy, there are legitimate ways you can leave timeshare. You can either do it on your own or get the services of an exit company.

Disappointed timeshare customer screaming on the phone

Be Aware: Timeshare Exit Scams

Some timeshare buyers experience buyer’s remorse and immediately want to rescind their contract. Others struggle with the financial responsibility and want to give up. Even satisfied timeshare owners sometimes want to exit timeshare for personal reasons like no longer being able to travel.

Cancelling a timeshare purchase is easy if done during the rescission period – the time the buyer is legally allowed to change his mind. When the rescission period has lapsed, there is no easy way to exit timeshare as the industry has yet to provide a dignified exit for timeshare owners. Crooks see this as an opening to take advantage of timeshare owners.

Scams in Timeshare Exit

  1. Scammers promise to sell an owner’s timeshare at a high price in exchange for an upfront fee. They will quote a price that will entice the owner to agree. Who wouldn’t, when they are promised that they can recover their initial investment plus the fees they have paid? Do not believe this. The value of timeshare depreciates the moment they are sold. Timeshares are sold in the secondary market at a bargain, mainly because the supply is greater than the demand. If you are lucky to find a buyer, do not expect to recover your investment.
  2. Scammers promise to find6 a charity that will accept the timeshare. This, again, is not true. Only a few charities, if at all, are willing to take timeshares. While they don’t have to pay for it because it’s donated, they will have to pay maintenance fee and other fees annually. These fees go up on a regular basis and can be expensive depending on the timeshare’s location.

Realities in Exiting Timeshare

  1. The number or people who want to sell timeshares is far greater than those who want to buy them. You will be frustrated if you hope to get your money back. In higher-end properties, like those owned by Marriot, Disney or Hilton, the highest a seller can ask for is 15% of the original price. In older and less popular properties, sellers sometimes offer to continue paying the annual fees for a year or two just to entice someone to buy their timeshare. Maintenance fee is around $900 per year in regular resorts; in high-end ones, it can go over $3,000 per year.
  2. Timeshare developers offer a loan to would-be owners if the latter does not have the cash. If this is the case, the loan must be paid-off first before they can sell or give away their timeshare.

Options in Exiting Timeshare

  1. Ask the resort to take it back – There are big timeshare developers that have formal exit programs that are discretionary – they decide which timeshares they can take back. Most developers do not take back timeshares, but you can always ask. Who knows? They might have changed the rules. In cases where they accept returns, you might be asked to continue paying for annual fees for a year or two while they’re looking for a buyer.
  2. Sell – If you got your timeshare from one of the high-end resorts, you may look for an in-house broker who can help you sell your timeshare. They don’t charge upfront fees but will take a commission from the sale.
  3. Rent it out – Some owners discover they can rent their timeshares to at least help offset annual fees. The sites that list timeshares for sale also have timeshares for rent.
  4. File a bankruptcy – People who stop paying loans are subject to foreclosure. If you can no longer pay your timeshare, your credit score will drastically go down once the developer turns over your account to collection agencies. You may file for bankruptcy and this can stop the collection activity and eventually erase your timeshare debt. Older people may not care if their credit scores go down, but for others, filing a bankruptcy is not a good option.