At great personal sacrifice, I recently offered myself up to a company that had invited me for a complimentary meal to learn how people could safely cancel or exit their timeshares. But when I told them who I was, I was turned away.
Granted, I don’t own a timeshare. Never have. But I wanted to be able to impart the valuable information from this function to my readers. Still, the lady on the other end of the line would have none of it. Apparently, this outfit didn’t want me to steal its thunder.
But I soon learned there wasn’t a whole lot of lightning in that bottle, anyway. This timeshare exit company is registered as a nonprofit in Missouri, but the Better Business Bureau has been unable to verify that claim. (All nonprofits are required to register with the Internal Revenue Service.)
I also discovered that the Missouri attorney general has obtained a default judgment against the company and its owner. This supposed nonprofit is the subject of no less than 84 complaints about everything from repeated, unwanted calls to failing to provide the promised help in vacating a timeshare – even after accepting thousands of dollars in payments.
And therein lies the rub: There are numerous charlatans out there who will promise to buy your timeshare or help you sell it. There is little substance to most of their assurances, at least not until they get their hands on your money. Then, they’ll hound you to death for more.
First Things First
This is not to say timeshares aren’t worthwhile. They are a great, often less-expensive way to vacation. And not necessarily just in one location: Most timeshare communities offer numerous exchange opportunities with others around the world.
Many timeshare owners seem to love them. According to a recent poll of 1,600 owners for the American Resort Developers Association (ARDA), 87 percent rated their overall ownership experience as excellent, very good or good.
Just the same, there are good reasons to get out of a timeshare. Perhaps you’re getting on in years and can no longer travel, or the pandemic has forced you to stay put. Maybe the annual maintenance fees are too burdensome. Or maybe you just don’t use it and want out.
Whatever the reason, the correct first step is to contact your timeshare company. If the property is still in active sales, it will tell you your options. You may not recoup any money, but ARDA CEO Jason Gamel said it’s fairly easy for the company to put your slot back into its inventory. Some will do so for free; others might charge an administrative fee.
If the property is sold out, contact the management company to discuss your alternatives. If it doesn’t have a resale program, perhaps it can recommend a trusted resale company, some of which are listed on the ARDA-sponsored responsibleexit.com. The management might even be able to match you with a satisfied owner who wants to purchase more weeks.
Another possibility: Gift or deed your timeshare to a family member or friend. Almost every timeshare company allows buyers to do so.
If you want to drop your timeshare because of the pandemic, but would otherwise hang on to it, know that many companies have hardship programs that allow owners to defer their payments – sometimes for months. You may even be able to defer your maintenance fees. (Note that you might have to be current, with no outstanding charges, to qualify.)
“It’s up to the owners’ association,” said Gamel.
Beware of Cold Calls
The ARDA executive said there are “a number” of legit resale companies that offer their services for a flat fee or a percentage of the selling price. But beware of any company soliciting your business without hearing from you first.
Always make sure the company you choose is licensed in the state where your home property is located. Check out the company with the Better Business Bureau and your state regulator. Also, connect with the Timeshare Users Group, a nearly 30-year-old family-run organization offering unbiased information and advice.
Always require a written contract with detailed terms and a specific description of the services being provided. Beware, though, of a large pile of documents when signing an exit agreement.
“Scammers can use this tactic to confuse consumers” by making the process seem legitimate, or by discouraging them from reading the contract, said Caitlin Maxwell, executive director of the Tennessee Real Estate Commission.
Pay only after the promised services are performed and confirmed. It’s OK to pay a reasonable fee in advance, as long as you’ve confirmed the company is legit. But otherwise, never pay a dime in advance. If the company tells you to stop paying your mortgage or homeowners’ association fees, run – don’t walk – to the nearest exit.
Finally, if you believe you were lied to during the original sales process, file complaints with the attorney general in your home state and in the state where the business is headquartered. Also file with the BBB and your local law enforcement agency. If they receive enough allegations, they may act.
Last year, for example, timeshare company Welk Resorts agreed to pay up to $5.5 million to settle a suit filed by the San Diego County District Attorney’s Office. The suit alleged that false promises were made during sales presentations.
According to news reports, the investigation was prompted when the DA’s office received “hundreds of complaints.”
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at firstname.lastname@example.org.