Dos and Don’ts of Exiting a Timeshare Group
Signing up for a timeshare is a popular alternative to owning a holiday home. Many families have taken a shared property in a resort by paying an annual fee for the house. This contractual obligation is between you and other members who wish to use that home with you. But if you’ve asked yourself, “should I exit my timeshare group?” we’ve compiled a few dos and don’ts for getting out of the deal.
Steps to take
Consider the following tips for exiting a timeshare:
Check the rescission period
This time frame is a short open window after signing a contract. At this time, you can reconsider your commitment and exit the timeshare without any due process and charges. The average time of a rescission period is a week. Review your documents properly to understand when this window ends, so you can exit the timeshare in an orderly manner. Some rescission periods start when putting up the fee, while others start when you receive a disclosure statement.
Issue a cancellation letter
This option works well if your contract is still within the rescission period. But just sending a letter will not suffice; the proprietor must acknowledge receiving this document. Some resorts may also try to dissuade you from exiting the timeshare by adding obstacles to the process. For example, you may be charged a cancellation penalty or fee that is usually not legally binding. Make sure you use a postal service like the USPS, so the resort signs a receipt as proof of acknowledgment.
Speak to the resort
If the rescission period for your timeshare is already up, but you still want to exit the contract, approaching the resort with an offer is a viable option. Before you do so, ensure there is a timeshare deed-back mentioned in the contracts. This legal method is helpful when it comes to selling your timeshare back to the resort and getting out of the deal. Having this option in your contract before signing is something you need to make sure of before signing. However, this step will sometimes involve a few rounds of negotiations with the resort sales manager, so be prepared to offer some incentive on the table.
Consider selling the timeshare
Another strategy to exit your timeshare is to sell it off, provided the loan on the property has been fully paid for. The timeshare is categorized as “encumbered” if the loan is not paid off, thus prohibiting you from selling to anyone else. Once you are sure that your timeshare is available for sale in the market, you can evaluate its value and find the right buyer. You can either speak to a real estate agent or check the value through online listings. Unless the property’s value is exceptionally high, you should be able to sell without hassle. Many people under contract resort to this option when they need to save money while exiting the timeshare.
Consult a timeshare exit company
If the abovementioned tips aren’t helpful for getting out of your timeshare, it’s time to hire a third party. The biggest benefit of hiring a timeshare exit company is that all the paperwork, negotiations, and back and forth are handled for you. These companies have a team of experts in matters of exiting a timeshare contract and know exactly how to deal with the nitty-gritty of the situation. Do keep in mind that the entire process of getting out of the deal can take 12 to 18 months and can cost anywhere between $5000 and $6000, if not more. The price you need to pay the exit company depends on factors like the number of contracts in the ownership, the stipulated timeline, and the number of members involved. Resorts usually tie in new contracts every time additional services are asked for, or if any new changes are required. But in the long run, you’re better off spending this money to exit the timeshare rather than paying exorbitant fees that keep increasing every year.
Steps to avoid
Here are a few steps your need to be careful about when exiting a timeshare:
Stopping payments
While this option seems like an easy step to take, it’s too big a hassle to deal with. Defaulting on the annual payments will result in the pileup of unpaid dues. The resort may hire collection agencies to harass you with incessant phone calls until you pay the amount that is owed. If that doesn’t work, you may even be issued a subpoena and further legal action, which also involves court visits, legal fees, and all the headaches of paperwork. To avoid this issue, you can look at one of the many timeshare exit strategies mentioned above.
Transferring the deed
You can try to give away your timeshare to friends or family who might be interested, but the exorbitant fees won’t be everyone’s cup of tea. Some family or friends might even accept this “gift” but ask you to continue paying the expenses while they vacation in expensive resorts. So unless you’re fine with covering the costs, this is an option to avoid and be wary of.
Renting out
If you’re not giving your timeshare to family or friends, you may think of renting it out to anyone interested. You can find potential “tenants” online, but the problem is that most of them cannot be trusted by a mere verbal agreement. Moreover, quite a few resorts do not allow this kind of arrangement. They only let the timeshare owner use the services of the contract. But if the resort agrees to this deal and the renter causes any harm to the property, the repair cost is humongous and frankly just not worth it.
