It is easy to get sucked into buying a timeshare. Buyers get seduced by guaranteed vacation spots, resort amenities — more beautiful than most hotels — and cost savings.
According to RDA, the American Resort Development Association, the cost of a one-week timeshare, partial ownership in a vacation property, is nearly $21,000, and average annual timeshare maintenance fees are $880.
Buying a timeshare, unfortunately, is ripe with peril. Despite your best intentions, work responsibilities or declining health might prevent you from using your timeshare.
Family budgets get walloped by maintenance fees, often running from $800 to $1,500 each year. And just obtaining reservations and exchanging slots to visit another property often frustrates.
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I don’t like timeshares as investments. Unlike most mutual funds and treasuries, for example, timeshares don’t possess liquidity, increase in value or generate much income. A glut of new timeshares hitting the market makes it almost impossible to sell old timeshares at a profit.
Here are some strategies to extricate yourself from an unwanted timeshare:
Why is it so hard to get rid of a timeshare, anyway?
"There is just no market for them," said Brandon Reed, CEO and founder of Timeshare Exit Team, a company that assists unhappy timeshare owners.
It is usually a waste of time listing your unit on one of the listing services where you pay a few hundred dollars to register your timeshare. There's almost no likelihood of success.
Many eBay sellers want out of their maintenance fees and are more than willing to trade for free. Careful, though.
“Someone bought a timeshare for $1 on eBay, and then received a $3,000 assessment due to hurricane damage," Reed said.
Give it back
Ask your timeshare company if you can deed your unwanted timeshare back to them. This practice, known as a "deed-back," transfers the property title back to the management company, and, if you are lucky, releases you from future financial liability.
The deed-back process is painful, and you will probably have to wear down the timeshare organization to get results. If the developer is still selling timeshares, you might be able to persuade the developer to sell your timeshare again.
Hire a timeshare attorney
Shrewd lawyering may allow you to terminate or escape from a bad contract. Attorneys will play hardball with the developer to obtain a letter of release. Timeshare outs might be coercion or relying on false and misleading statements.
Here, the use of an attorney may spook the timeshare company. The company fears hiring pricey lawyers to defend itself from a lawsuit if you threaten litigation. It’s cheaper for the company to let you out of the timeshare than paying their attorney $400 an hour.
You may be able to terminate or cancel your contract due to fraud and deceptive sales practices. Timeshares can be ended when bought in compelling presentations, and you erroneously relied on assurances such as:
- Timeshares appreciate in value.
- Timeshare interest was easily exchanged, transferred or sold.
- Timeshares are good investments.
- Timeshare purchasers receive preferences, when it comes to booking stays, over non-timeshare owners.
- Sell or rent your timeshare whenever you want.
- We purchase timeshares whenever you want to sell.
Use a cancellation company
Whether you inherited a timeshare or bought one during a high-pressure sales presentation, Reed says there are strategies to rid yourself of an unwanted or costly timeshare.
Fees vary by complexity, but for about $4,000, you may be extricated from a timeshare in six to nine months, although it can take longer.
Timeshare companies facing litigation or potential litigation often release owners from their timeshares. The companies don’t do this willingly, but it happens all the time. Just filing action may motivate a timeshare company to free you from your contract.
Consider donating your old timeshare to charity. Not all charities accept deeded-timeshares, though, but the IRS might allow you to write off $5,000 or more as a charitable deduction on your taxes. You might need to get an appraisal for your timeshare, however.
Accepting charities usually only take timeshares without mortgages these days.