Joel Smiler’s timeshare exit was not typical. But it worked.
He owned a week at a resort in Cancún with a stunning view of the Gulf of Mexico. But one day, the property doubled its maintenance fees. Suddenly, the fractional ownership looked about half as appealing to him.
“I took a look at the contract,” says Smiler, a retired veterinarian. “It said if I didn’t pay the fee for two years, the timeshare would revert to the company.”
That made an exit easy: He stopped paying his bills.
“I figure I had gotten my money’s worth already,” he said.
Timeshare exits are a hot topic again. The trends started during the pandemic, when many owners couldn’t afford to make their payments. With travel starting up but economic uncertainty ahead, many Americans are again rethinking their timeshare commitments. But unlike Smiler, they’re finding that getting out is much harder than they thought it would be.
“You can’t sell many timeshares even for $1 on eBay,” says Brandon Barron, a spokesman for Linx Legal, a timeshare exit company.
Americans are looking for a post-pandemic timeshare exit
As the pandemic winds down, many travelers are taking a hard look at their vacation portfolio. Some have found that at a time of increased economic uncertainty, there’s no room for a timeshare.
But timeshares make it exceedingly difficult to sell by peppering their contracts with incomprehensible clauses. The fine print stipulates a right of refusal, right of survivorship and, of course, a perpetuity clause. Plus, there’s a glut of timeshares, meaning there are few buyers. I explain these in my guide to buying and selling timeshares.
So how do you get rid of your timeshare after the pandemic? Experts say now more than ever that it’s a matter of navigating a minefield of dense contracts and scammy timeshare exit companies — and knowing your rights.
Should you really sell your timeshare now?
Jason Gamel, CEO of the American Resort Development Association (ARDA), a trade association for the timeshare industry, says you should think twice before selling.
“It is probably one of the best times to keep and maintain a timeshare property,” he says. “While hotel rates typically increase over time – sometimes sharply, as we are seeing today – the purchase of a timeshare can insulate owners from the economic pressures that come from fluctuating rental rates.”
Unless, of course, your timeshare raises its maintenance fees.
If you’ve decided to unload your fractional ownership, you’ll need to do a little homework and heed a few expert warnings before heading for the exit.
Before I get to that, I wanted to offer a few personal insights into the timeshare industry. Timeshares are the most aggressively marketed travel product in the world. The industry wants to sell you timeshares that you keep until you die. So it doesn’t want you to sell — ever. Often, timeshare developers will pursue their goal relentlessly and unapologetically, and at your expense.
Beware of timeshare exit scams
If timeshare developers are ethically challenged, then so are timeshare exit companies. Lisa Ann Schreier, a timeshare activist who runs the site The Timeshare Crusader, says the industry is a minefield of exit scams.
“There are many scammy self-proclaimed exit companies out there,” she says. “Many of these companies are staffed by former timeshare salespeople who know which of your emotional buttons to push.”
Schreier says a vast majority of timeshare exit companies are not legitimate.
One of the biggest scams to date happened in Washington. Last September, the state’s attorney general, Bob Ferguson, announced a $2.61 million fine against Reed Hein & Associates. According to Ferguson, the company deceptively advertised a 100 percent money-back guarantee.
“In reality, many customers struggled to obtain refunds, and are still denied refunds even after the company failed to deliver for years,” he said.
Pro selling advice for your timeshare
You have a few options if you want to sell your timeshare now. They range from conventional to unorthodox. All are known to work — sometimes.
You should go into the sales process with realistic expectations, says Rene Miranda, a former timeshare sales executive.
“If you want to get rid of your timeshare contract you may have to be willing to lose some of your initial investment,” she warns.
Try the front door first
Almost all major timeshare developers have some form of exit or take-back program. You can find them through ARDA-sponsored Responsibleexit.com. They include Marriott Vacations Worldwide, Wyndham Destinations and Hilton Grand Vacations, to name a few. These are simply ways to surrender your timeshare. But generally, you won’t get any money back.
“Some developers may purchase the timeshare back from the owner, assist them in reselling their timeshare or provide the owner with an option to transfer their timeshare back to the developer,” says ARDA’s Gamel.
Invoke a hardship clause
There are advertised programs to help you unload your timeshare. But there are also unadvertised programs. Experts say you should inquire about those, too.
“Most major brands have unpublicized programs to help owners with hardships,” says Gary Prado, vice president of business development at RedWeek, a timeshare rental site. “Some have outright surrender programs where owners are allowed to walk away from their timeshare after paying an upfront fee.”
Talk to the right person
Even if you contact your timeshare company and ask to be let out of your contract, the answer might still be no. If it is, you’re probably not talking to the right person.
“To exit your timeshare, you have to talk to the right people,” says Bill Glaser, an entrepreneur with experience in the timeshare industry. “If you speak to the person responsible for the deed-back program and explain your circumstances, you can negotiate a release from the timeshare.
The timeshare industry won’t like this advice, but it sometimes works. If all else fails, you might be able to walk away from your contract. The developer might report your default to a credit bureau, but probably not. Smiler, the retired vet, didn’t get his credit dinged when he stopped paying his bills. You won’t get any money for your timeshare, but you also won’t have to pay those pesky maintenance fees.
Thinking of hiring a timeshare exit company? Ask these questions first
If you want to work with a timeshare exit company, you have to do your homework. ARDA’s Gamel says you should ask these questions:
- How long will it take to transfer my timeshare, and do I still need to pay my maintenance fees or loan payment while I wait?
- If the company guarantees it will exit me from my timeshare and fails to do so, how do I get my money back from the timeshare exit company?
- How do you protect my money if you go out of business, since multiple timeshare exit companies have gone out of business in the last two years?
If someone pitches you on a timeshare exit, never ever pay upfront for the service. And always take time to think about the offer and review the contract carefully before agreeing to do business with a timeshare exit company.
How a timeshare exit really works
Getting out of a timeshare is usually messy and complicated.
Consider what happened to Steven Sultanoff, a college professor from Los Angeles, who recently tried to unload a deeded timeshare unit in Palm Springs, Calif. He’d tried to sell it for many years without success. Instead, he rented it out but could only recover a small portion of his annual dues.
“Last year, I attended a timeshare exit meeting from a company that charges to get owners out of their timeshare,” he says. “It’s a costly process.”
It was too expensive for him. So he contacted his timeshare company and explained that his annual dues were a challenge. Was there an option for getting out?
It turns out there was.
“I had to pay $475 for the privilege of returning the timeshare — and, of course, losing my investment in the timeshare,” he says.
But he cautions others against invoking the hardship clause.
“If you are going to use the pandemic as a partial reason for exiting your timeshare, then be sure to be prepared to answer any questions posed by the timeshare company,” he warns. A representative may ask personal questions about your health or request proof that you don’t have the resources to pay the maintenance fees. They may not just take your word for it.
Now get out — and stay out
No matter how much the timeshare industry changes, some things remain constant.
“The misrepresentations and outright lies of timeshare salespeople remain,” says Barron, the Linx Legal spokesman.
Another thing that is a given: Many resort developers are ruthless. They’ll try to sell you more timeshare points when you ask for an exit. When you complain, they’ll send you cease-and-desist letters. When you can’t pay your bills, they’ll send you to a collection agency.
So when you get out — and eventually you will — you have to promise that you won’t buy another timeshare again. Ever.
That’s the one thing almost every former timeshare owner has in common. They’ve sworn off owning another timeshare. The timeshare industry probably won’t like that advice. I’m sure I’ll get my cease-and-desist letter any day now.