When you work hard, save a good amount of money, and accumulated a lot of vacation days, chances are you’ve been offered a timeshare at some point. Despite timeshares being offered as an investment, a lot of people learn that they are money pits. Unfortunately, by the time vacation owners realize this, legalities get in the way of opting out. Here are expert tips on freeing yourself from timeshares.
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Take Advantage of the Recession Period
The recession period is a brief window where you can back out of the timeshare contract. Note the word “brief” because it’s only a matter of days: 3 – 15, to be exact. Each state has its own time limit for recession periods, so you’ll want to check state law to be sure of yours.
Here are a few other things to keep in mind about recession periods:
- Some states have stringent limits. In Nevada, for example, you have until midnight of the fifth calendar day after signing the contract.
- The recession period usually starts when you buy into the timeshare. However, there can be exceptions. Some recession periods begin when you receive the disclosure or public offering statements (POS).
- The state governs the recession periods that the timeshare is in, not the buyer’s home state. In other words, if you live in California and bought a timeshare in Florida, you should look at the laws surrounding Florida’s recession periods.
Ask For Timeshare Deed-Back
If the recession period has passed, you won’t be able to cancel your contract. However, you might be able to walk away through other means. One such option is a timeshare deed-back.
With a timeshare deed-back, you forfeit your rights to the property. You give the deed back to the resort. You won’t make any money because it’s a surrender of the timeshare, not a sale, but you won’t have to pay anything anymore. It’s a clean break.
Not every resort offers a deed-back program, but if it’s an option, it can allow you to escape the financial black hole of an unwanted timeshare.
Sell It
If you can’t cancel it or give it back, another option for getting rid of your timeshare is finding new owners.
Preparation
The first step of selling your timeshare is paying it off. It might rankle to sink even more money into it, but it’s necessarily evil. If you still have a mortgage on the property, it’s legally considered “encumbered,” which is impossible to unload.
You’ll also want to get ahead of all maintenance fees and HOA fees. No one wants to buy a timeshare that’s burdened with debt.
Once you’re in the clear in terms of financials, it’s time to figure out what your timeshare is worth. Do some research into the local market. Make sure to look at the actual sale prices that timeshares are going for, not just their ambitiously high listed prices in real estate catalogs.
Listing
Are you ready to make your own ambitiously high listing? You can do this on your own or with the help of third-party timeshare listing companies.
If you’re doing it solo, you must familiarize yourself with selling real estate, particularly timeshares. For example, timeshares have “presentations” rather than traditional “showings.”
Double-check their legitimacy through the Better Business Bureau if you’re going with a listing company. Many scammers are out there trying to take advantage of people desperate to unload their timeshares.
Hire an Attorney
You might need the help of a professional if your timeshare troubles have gotten complicated. This is especially true if resort owners or timeshare-selling companies have swindled you. Sometimes, only a lawsuit will get you out of your contract.
Here are a few reasons to consider hiring a timeshare lawyer:
- Misrepresentation from the seller in terms of value, location, or property conditions
- Problems within the public offering statement or disclosure agreement
- Fraudulent or scam-like behavior from the resort
- Multiple contracts with confusing or contradictory terms
Hire a Timeshare Exit Company
If you’re unable or unwilling to hire a lawyer, a timeshare exit company is another option for outside help. These companies know how to negotiate with resorts, find contract loopholes, and wield consumer protection laws for your benefit.
The trick is avoiding the scammers posing as timeshare exit companies. Do not believe anyone who wants you to make large, upfront payments for their services. Don’t believe in any lofty promises or guarantees, either. If their services sound too good to be true, they probably are.
Meanwhile, here are some green flags for reputable timeshare exit companies:
- Positive reviews from previous customers
- In good standing with the BBB or other watchdog organizations
- No requirements to pay upfront
- No promises of abnormally fast results
- Doesn’t encourage unethical or illegal behavior
Ultimately, it’s important to have realistic expectations about getting out of your timeshare.
Don’t Rent It Out
You might be tempted to rent your timeshare to recoup some of your financial losses. However, this is a bad idea for several reasons. What if your renters damage or destroy your property? You’ll have to pay for repairs and do it in double time since the next timeshare owner will be waiting to take their turn.
Additionally, many resorts have rules against renting out timeshares, often with harsh financial penalties.
Don’t Give It Away
When you can’t cancel, sell, rent, or give it back to the resort, you might feel like throwing up your hands and saying, “Okay, I’ll gift it! My daughter would love a beach house in Hawaii!”
But think about it. A timeshare is actually an obligation, so it comes with strings attached. You’ll be giving a “gift” with annual maintenance fees at the very minimum, and studies show that these fees go up yearly.
Don’t Stop Paying
This is the nuclear option for desperate timeshare owners: stopping all payments. It isn’t worth it. Not only will you tank your credit score, but you’ll also be opening yourself up to lawsuits, legal fees, foreclosures, and other nasty and negative consequences.
Source: Ramsey
Featured Photo from Shutterstock
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