ARDA, the trade association representing the timeshare industry, has teamed up with Lisa Ann Schreier, a/k/a The Timeshare Crusader, to put together this list of important information about exiting a timeshare contract.
Education is key
As an owner, you need to know how to use your timeshare, the costs associated with your timeshare, and your options if you ever decide that ownership no longer meets your vacation needs.
“The closing/verification process is designed to answer your questions away from a potentially commissioned salesperson,” says Lisa. “Take advantage of that process. Don’t be rushed.
Having answers at the onset of owning may save you resources later.”
If you decide a timeshare is no longer a fit with your lifestyle, then educating yourself on the safe and often free ways to exit is another important step in the education process. “ResponsibleExit.com is a safe and trusted resource that will help with any questions you may have,” says Jason Gamel, President and CEO of American Resort Development Association (ARDA).
The developers on ResponsibleExit.com have support teams trained to help owners understand their options. “By contacting your developer, they can review your account and let you know your best options based upon your individual needs,” says Gamel.
There’s a world of difference between a timeshare that’s paid in full and one with a loan balance.
No Loan balance and current on your maintenance fees
Many timeshare developers offer low-cost or even free exit options to those owners who don’t have a loan balance and are current on their maintenance fees. And often, you don’t even need a reason other than you no longer want to be an owner. The key is calling the developer first, as they might not be able to work with you (for legal reasons) if you have engaged a third party to help.
Loan balance and/or delinquent maintenance fees
In this situation, cancelling your contract becomes a lot more complicated. Not only because you have an outstanding loan, but it is also more difficult if you owe money to the association. The only way to modify your loan or receive any other financial relief is to work directly with your timeshare developer. “No developer or lender is going to cancel a contract just because you suddenly decided you don’t want the timeshare or can’t afford it. Also, claiming, without written proof, that you were promised your maintenance fees would never go up, or that your timeshare would increase in value, are not legitimate reasons either. This is yet another reason why education is vitally important”, says Lisa, The Timeshare Crusader. It’s also worth noting that many scam companies claim they can get you a refund. In a word…not likely.
The truth about self-proclaimed exit companies and exit attorneys.. they’re not the same
For years, companies have come and gone that have promised quick and easy exit options for timeshare owners. Whether it was having a “buyer ready on the other line” to buy your timeshare, or companies who now claim that they can cancel your timeshare contract, companies will do anything to get you to pay for something you may be able to do yourself. If you’re an owner, chances are you’ve already been contacted by one or more of these companies.
“While these companies are quick to use the words “fast, easy and/or simple” and seem to offer a money-back guarantee if they don’t do what they promise, the reality is not quite as rosy,” cautions Lisa.
Here are a few things to keep in mind:
- Timeshare ownership is governed by the legal documents that create the timeshare plan as well as legally binding contracts. These non-lawyer exit companies cannot offer legal assistance if they aren’t lawyers themselves. If they claim to be working with lawyers, it is good to check the Better Business Bureau (BBB) and any complaints against those companies to see if that is the case.
- It’s simple for any company to offer a money-back guarantee. It’s an entirely different matter to get an exit company to pay up when they don’t live up to their obligations. Going back to the importance of education, check BBB ratings, and talk to other owners. What happens if the company goes out of business? How will they protect your money? Will they put it in an escrow account where they can’t touch it until they deliver on their promises?
- Read the fine print in the contract. If all the company can do on your behalf is obtain a foreclosure, is this considered a “win?” And what about your credit? Are you prepared to take a hit on your credit score that will last 5, 7, or more years? Understand how the foreclosure process works and know the difference between a maintenance fee foreclosure and a loan foreclosure. Each one may have a different impact on your credit.
- So, should you consult an attorney? Maybe. “Understand that hiring a timeshare savvy attorney is almost always a better option than dealing with a self-proclaimed exit company, all depending on what you are trying to accomplish,” warns Lisa.
- “If you find an attorney willing to take on your case based on one of the concerns outlined in the previous section, they might be more interested in their fee than providing you the solution you are looking for,” says Lisa. “Hiring a reputable attorney will help you to not only determine if you have a valid legal claim against your developer but also give you legal counsel at all stages of your case and establish a valid attorney/client relationship.”
To summarize, ARDA and The Timeshare Crusader offer this information:
- Understand what you’re purchasing and your exit options before purchasing.
- Realize that if you’re looking to sell your timeshare, its value isn’t based on how much you paid for it; instead, it is its value in having prepaid vacations and time with your family and friends.
- Avoid any company or individual wanting to charge you large up-front fees for exit services that won’t be completed for years.
- Always check with your developer first or ResponsibleExit.com before you sign anything with a third-party company.
- If a company offers a “money-back guarantee,” make sure to ask how your money would be protected if they go out of business or they don’t perform their services as promised.
- Check reviews readily available online but not on the company’s own website, as these can be easily fabricated.
- Finally, talk to other owners, your developer, and your exchange company, as you may discover new ways to use your timeshare.