Timeshares may seem like an outdated option in the travel industry, but it’s safe to say that these resorts aren’t going anywhere. According to the American Resort Development Association, the timeshare industry alone is worth a whopping $8.1 billion.
Timeshares are often marketed as a way to secure dedicated resort accommodations for your annual vacations, but owners should be aware of the ongoing financial obligations. Annual maintenance fees are recurring costs that can persist until the agreement is legally concluded or transferred, and you may also have to pay other fees or even an outstanding loan balance, which can complicate the cancellation process.
Given that number, it should come as no surprise that cancelling a timeshare will occasionally become a problem. Of course, with the industry’s high-pressure sales tactics, this situation arises more often than you’d think! Misrepresentation or undue pressure during the sales process can be valid reasons for cancellation even after the rescission period has passed.
Unfortunately, getting out from under a timeshare contract can be tricky, as resorts don’t make it easy to understand your options. It’s crucial to review your original contract and purchase documents before pursuing cancellation. You should also consult a lawyer or timeshare attorney to assess your circumstances, understand your legal rights, and verify the best approach for your situation. If you’re wondering about cancelling your timeshare, here are a few things to keep in mind.
Understanding Timeshare Contracts
Before you can successfully cancel a timeshare, it’s essential to understand exactly what you’ve signed up for. A timeshare contract is a legally binding agreement between you and the timeshare company, outlining your rights, responsibilities, and the costs associated with timeshare ownership. These contracts often contain complex language and fine print, making it challenging for timeshare owners to fully grasp their obligations—especially when it comes to maintenance fees, annual fees, and the terms for cancellation.
One of the most important sections of your timeshare contract is the rescission period. This is the window of time—typically ranging from 3 to 15 calendar days, depending on state law—when you can cancel your agreement without penalty. If you’re considering cancellation, it’s crucial to act quickly and provide written notice within this period. Missing this deadline can make pursuing cancellation much more complicated and costly.
Maintenance fees are another key aspect of timeshare ownership. These annual fees can add up to thousands of dollars over time and are often subject to increases. Your contract should clearly state how these fees are calculated and what they cover. Be sure to review this section carefully, as ongoing maintenance fees can become a significant financial burden, especially if you’re no longer using the property.
When exploring your exit strategy, be aware of any upfront fees associated with the cancellation process. Some exit companies may require large payments before providing any services, which can be a red flag for scams. Always research any company you’re considering by checking their reputation with the Better Business Bureau and the American Resort Development Association. These organizations can help you identify trustworthy businesses and avoid common pitfalls in the timeshare industry.
If you’re struggling to interpret your contract or unsure about the best way to proceed, consulting a timeshare attorney can be invaluable. These legal professionals specialize in timeshare law and can help you navigate the exit process, whether that involves a deed back program, resale, or formal cancellation. They can also advise you on the potential impact on your credit report and help you avoid mistakes that could lead to foreclosure or ongoing financial obligations.
Common pitfalls to avoid include failing to provide written notice, missing the rescission period, and paying upfront fees to questionable exit companies. Be wary of companies that promise a quick and easy exit—if it sounds too good to be true, it probably is. Instead, focus on working with reputable professionals who can guide you through the process and help you achieve financial relief.
Ultimately, understanding your timeshare contract is the first step toward a successful cancellation. By reviewing your agreement, knowing your rights, and seeking expert advice, you can avoid costly mistakes and find the best path out of your timeshare ownership.
Cancellation Is Difficult By Design
After they’ve done the hard work of pressuring you into buying, timeshare companies will do everything they can to make it hard to get out of your contract. High-pressure sales tactics and misrepresentation during the sales process are common, and if you experienced undue pressure or misleading information during this process, these can be valid reasons for cancelling a timeshare contract even after the rescission period has passed.
This starts from the very beginning. Timeshare companies are infamous for encouraging buyers to make payments with a credit card, which allows the company to receive money right away. Some will even prompt buyers to take out a new credit card to make payments. If you stop paying your timeshare fees or other financial obligations, you risk serious consequences such as credit damage, collection actions, or even foreclosure, but some owners consider stopping payments as a last resort.
Worse, many companies are happy to work with collection agencies the second you fall behind on your payments.
Buyers hoping to rescind their purchase often find themselves drowning in paperwork. Worse, confusing stipulations in the initial contract make it hard to know your rights. Missing a single detail, for example, can render a cancellation letter invalid and require you to continue making payments. If the rescission period has passed, you may still be able to cancel the contract if you can prove valid reasons such as misrepresentation or undue pressure during the sales process.
Your Cancellation Timeline Varies
When you’re seeking a timeshare removal, it’s important to know that your options will change depending on where you are in your timeline.
Most states provide a “cooling-off period” after purchasing a timeshare, typically lasting between 3 and 15 days, during which buyers can cancel the contract without penalty. This cooling-off period begins after you sign the timeshare contract, so it is crucial to carefully review the terms at the time of purchasing. For example, in Florida, buyers have 10 days from the date they receive the signed purchase documents to cancel their timeshare and receive a refund. During this period, you can get out of your timeshare with much less hassle than you could outside of it.
In the state of Texas, for example, your rights are protected under the Texas Property Code. Chapter 221 of this code is also called the “Texas Timeshare Act.” It allows buyers a six-day window in which to cancel their timeshare purchase.
After this window has closed, removing a timeshare becomes much more difficult, as we’ll discuss below.
There Are Several Ways to Cancel
Depending on your timeshare’s policy, you may have a few options to help you get rid of it. Again, this also depends on how much time has passed since you signed your contract.
Cancellation Letter
This is by far the easiest method of cancelling your timeshare. During your rescission period, you must send a timeshare cancellation letter as written notice to the timeshare company stating that you want to rescind the contract. Sending this letter within the rescission period is the legally required method to cancel the agreement and avoid ongoing obligations. If you cancel early during the rescission period, generally there will be no penalty, though you may lose a small administrative fee.
You’ll need to make sure to include specific facts according to the company’s requirements. Some companies also require letter delivery via certified mail, so be sure to read the fine print of your contract.
Use the Developer’s Exit Program
In some cases, the timeshare company may have its own exit program. These programs vary greatly, so you’ll need to reach out to the timeshare developer to learn the specifics. Owners should contact the developer to inquire about deed-back programs or voluntary surrender options, which may be available if the loan is fully paid off and maintenance fees are current. Once a deal is made with the developer, specific legal procedures must be followed to complete the exit. In our experience customers are not successful trying this route.
Some developers provide resale assistance, which lets you get out of your contract via timeshare resale for a fee. However, the timeshare resale market is often challenging, with many sellers recovering less than 10% of their original purchase price due to low demand and a crowded market. Others may offer a “deed-back” program, meaning you’ll give the deed and interest back to the owner. This won’t return your investment, but it can help you avoid making future payments on your timeshare.
However, it’s worth noting that most developers will only offer the exit program to owners who are in good financial standing. If you’ve fallen behind on payments, don’t expect to take advantage of this option. And if you do qualify, prepare to be overwhelmed with documents, requests, paperwork, etc.
Work With a Timeshare Exit Company
Timeshare exit companies specialize in helping people get rid of their timeshares. However, the vast majority of timeshare exit companies that claim they can get you out of your timeshare are scammers, often taking upfront payments without delivering results. Many of these companies use high-pressure sales tactics and promise quick and easy solutions that are often misleading or false. Consumers are often preyed upon by exit companies during the timeshare sales process, especially when they are in a vulnerable state and may not fully understand the terms of their contracts. As industry experts, legitimate exit companies know how to navigate the legal intricacies of a timeshare contract to find a safe way out.
These companies can be a great resource when the methods above have failed. If needed, they can often connect you with timeshare lawyers who can help with lawsuits against the developer as well.
Don’t Default or Resell
There are a few other options for getting out of your timeshare, and popular advice may tell you they’re worth trying. However, we don’t recommend them, as they can further complicate your situation.
First, you should never just stop making payments on your timeshare. This can open you up to a host of unwanted consequences, including foreclosure and a damaged credit score. It can even open you up to the threat of a lawsuit from the timeshare company.
We also recommend against selling or renting out your timeshare on your own. Depending on the developer, this may violate your contract. Even if your contract does allow it, the value of your timeshare depends on the resale market, which can be fickle. Most timeshares have limited resale value, and the timeshare resale process can be challenging. Upfront payments made during the purchase are often not fully recovered when you sell, and it may take time to find a buyer.
Worst of all, you’ll often be on the hook for making payments if the buyer or renter stops for any reason. As long as the contract remains in your name, the timeshare company will hunt you down for any lapse in payments.
The bottom line is that the only guaranteed way to get out of a timeshare is to end the contract. Cancellation of a timeshare contract legally terminates the agreement and eliminates future financial obligations, while resale transfers ownership and ongoing costs to a new buyer. Choosing to cancel may provide immediate financial relief and legal protection, while opting for resale may require you to continue paying fees until a buyer is found. This can be done with the help of timeshare title transfer services
Get Help With Cancelling a Timeshare
Cancelling a timeshare can be difficult, and resorts will often go to great lengths to keep you from escaping your contract. Before you decide on a cancellation or resale strategy, it’s important to consult a lawyer or timeshare attorney to understand your legal rights and the best course of action for your situation. That’s why it pays to work with experts who have experience dealing with these companies. We guarantee our services, in writing. If we don’t deliver, you get all your money back, guaranteed.
Here at Lonestar Transfer, we help timeshare owners cancel or transfer their investments in a safe and legal way. Our knowledgeable staff has offered cancellation services for timeshares from a huge range of resorts and developers, and we’ll be happy to help you cancel your mortgage as well. To learn more about what we can do, contact us today.
