According to recent estimates, around 15% of timeshare owners are so unhappy with their contract that they want to leave it. If that’s you, you’re in the right place for answers.
This guide will outline everything there is to know about a timeshare exit.
We’ll explain the process, the legal issues, and how to do it properly to avoid financial penalties. Read on to learn the smooth and stress-free strategies to get you out of a long-term timeshare arrangement.
Timeshares and the Concept of a Timeshare Exit: a Brief Introduction
A timeshare is a twist on a traditional vacation home. It’s a model that’s made vacation property more affordable for the average person.
Instead of being the sole owner of a property, you share that home with other people. You get to use the property for a fixed period each year. That’s often a week.
However, these are longer-term vacation investments than paying outright for a hotel. And since they need a commitment, some people find that the arrangement no longer works for them.
Perhaps they’ve changed jobs, or their vacation costs are too high. Or maybe family circumstances change. Either way, people sometimes find that their timeshare investment is something they no longer want.
This is where a timeshare exit becomes necessary.
A timeshare exit is a process to help you cancel your agreement. It means finding a way to transfer the share of that property to someone else. That could mean selling it or returning it to the resort.
The goal is to remove yourself from the financial responsibility of the contract legally.
The Appeal of Timeshares: Why People Buy
Why are timeshares appealing? What motivates people to buy in the first place if some change their minds and request a timeshare exit? There are lots of good reasons, which we’ll explore here.
It’s a Guaranteed Location
Timeshares often appeal because they offer a guaranteed destination. Perhaps you fell in love with a vacation spot and bought the timeshare. At the time, you envisaged going to that same destination every year.
Finding a vacation each year takes time and lots of research. A timeshare takes that task away from you. It’s a convenient way to head to the same destination – one you know.
Plus, you’ll go to a property fully furnished and maintained by the management company. That also offers the convenience that you don’t get from private property.
It Offers Cost Savings
Many people are attracted to timeshares, seeing them as a potential long-term cost saving. With a timeshare, they get access during peak season without paying high-season prices.
Timeshares often come with access to a variety of amenities. You might find your timeshare has a pool, fitness center, and restaurants. And that resort-style property appeals to lots of people.
Some timeshares offer the chance to exchange your week with another owner. This flexibility appeals to many and can sway people to invest.
Some people perceive timeshares as an investment opportunity. They buy, thinking that it’s a property that will appreciate over time or provide ongoing rental income.
The Reality of Timeshares: Why People Want an Exit
Now that we’ve examined the motivations behind buying a timeshare, let’s turn our attention to the flip side: why people want out.
Are timeshares a good investment? Not always. There are many reasons why people decide a timeshare is no longer suitable.
At the start, a timeshare might seem like a wise financial decision. However, some timeshare owners find themselves with unexpected financial burdens.
For example, most timeshares come with annual maintenance fees. If these fees go up yearly, it can catch owners off guard. Some also charge for repairs and upgrades, adding to an owner’s financial load.
The other cost some owners don’t factor in is taxes. All these expenses result in owning a timeshare that doesn’t offer the same financial benefit it did at the start.
Some may initially perceive timeshares as a flexible vacation option. But that can sometimes take another path, and owners face booking challenges they didn’t anticipate.
Timeshares operate on a schedule. As an owner, you’ll get specific dates. But if your circumstances change, this can create a roadblock.
Consider a life change such as having children and finding that your timeshare arrangements coincide with your children’s school schedule. It may be too difficult to overcome this problem.
An Underused Timeshare
For some owners, a hectic schedule means they don’t use all their timeshare dates each year. It reaches a point where you aren’t getting your money’s worth because your property is sitting empty.
Other life changes can also leave you with an unused timeshare. That could be health issues, job changes, or family demands.
A Desire to Resell
A timeshare is similar to any other financial investment.
There may come a time when you want to reallocate that money to something else. For some timeshare owners, this drives a desire to resell the property to someone else and exit the agreement.
A Decline in the Property
As a timeshare owner, you depend on a good property management company. Any resort needs upkeep and maintenance.
If you notice a decline in the property or resort since you first bought it, it will motivate you to sell, as you won’t feel it offers the same value for money as it did in the past.
Likewise, poor management and upkeep can feel frustrating. Unreliable maintenance companies may cause you to think that your timeshare is too stressful to retain.
Timeshare Contracts: What You Need to Know
Before you can consider how to get rid of a timeshare, you’ll need to understand the specifics of your contract. Here are some general pointers to help you translate some of the finer points of your agreement.
Some contracts may include perpetuity clauses. These are less common nowadays. Still, if you bought your timeshare many years ago, check your agreement.
A perpetuity clause means the timeshare is yours for life and can be passed down to your heirs. But this can add a financial burden for those who inherit from you.
Fees in the Contract
Before you exit a timeshare agreement, you should check the fees in your contract. Most contain maintenance fees; these are often annually charged for the property upkeep.
You may also see special assessments or other fees to cover significant repairs or upgrades. Additional expected costs include exchange fees and membership fees. Always check the charges in your contract when considering a timeshare exit.
If you want to exit your timeshare, the most important detail to check in your contract is an exit clause. Not all timeshare contracts include these. If it does, it may outline conditions under which you can exit the agreement.
It might state a timeframe or specific circumstances like illness or financial hardship. They vary between contracts; you’ll need expert advice to interpret these when exiting a deal.
Understanding a Timeshare Exit
Let’s now look in detail at what you should do if you’ve decided to leave your timeshare. Here’s what you need to know.
A timeshare exit is a legal way to remove yourself from your timeshare contract. It ends any future obligation you have for that property.
The process can require negotiation with the other party and may involve finding another buyer.
It can seem complex for a timeshare owner. Third parties like Lonestar have created an easier timeshare exit option, as we’ll explore later in the article.
Typical Exit Strategies
There is more than one way to exit a timeshare contract. Here are some of the typical exit strategies used by timeshare owners.
If you want to exit your timeshare, one option is to sell this asset to a new owner. You’ll need to know how to market and price your timeshare to do this.
The downside of this is that the market can be saturated. So you may have to lower your preferred price to secure a sale or wait a long period before you get your asking price.
You could donate your timeshare if you want to make a charitable donation. However, it’s worth noting that not all charities will accept something like a timeshare due to the fees and tax implications.
Deedback involves returning your timeshare to the management company. They repurchase it from you.
Not all management companies offer this; you might find information in your timeshare agreement. Those that do offer this may charge a fee.
You could rent your property to friends or family or via private rental websites. However, this involves some work on your part. You’ll need to find reliable tenants and ensure the rent covers all costs, including annual maintenance.
You could choose the legal route if you feel your management company has missold the timeshare or not abided by the contract.
However, legal action is a complex and costly, and time-consuming step. And you aren’t guaranteed that any court ruling will favor you.
The Lonestar Way
Lonestar offers two primary ways for you to exit your timeshare. The first is a title transfer. It legally transfers the timeshare out of your name, with Lonestar taking care of all negotiations directly with the resort or management company.
The second service is for those who still have a mortgage on the timeshare. In this case, Lonestar will also provide a service to cancel the mortgage associated with that timeshare.
Legal Considerations With Timeshare Exits
It’s essential to go the proper route when exiting any contract, like a timeshare agreement. Here are some of the legal considerations and risks you should know.
Understanding Your Legal Rights
As a timeshare owner, you have legal rights concerning your property. The specifics will depend on your contract and the laws in that jurisdiction. But it could include rights to rent, exchange, or sell your timeshare.
You must get legal advice and familiarise yourself with these rights. If you don’t, you could inadvertently break your contract, causing a potential dispute with the management company.
Risks and Potential Complications
Exiting a timeshare without proper guidance could create risks and legal complications.
Take the example of ceasing payment on your maintenance fees or mortgage. This could result in the management company starting legal proceedings. You might incur a hefty fine and damage to your credit score.
You could also put other assets or wages at risk if you create a debt on your timeshare agreement. In short, the stakes are costly, and you shouldn’t try and shortcut the process of a formal timeshare exit.
The Importance of Professional Advice
We’ve discussed the legally binding nature of timeshares and potentially costly risks. From that perspective, professional advice before a timeshare exit is crucial. Professional experts like Lonestar can provide strategic guidance on the best exit strategy.
They can help you navigate the legal complexity of leaving a contract without the consequences of breaking that agreement. Thus, sound legal and professional advice will help minimize your risks during the exit process.
Timeshare Exit Companies: Are They the Right Choice for You?
Lonestar is a professional timeshare exit team that offers services for timeshare owners. Here is a bit about what a professional exit company like Lonestar can provide and some of the benefits.
Professional Timeshare Exit Companies
A professional timeshare exit company can guide owners through legally leaving their contract. They’ll use specialist timeshare knowledge and an existing relationship with timeshare resorts to complete the exit smoothly.
These companies offer a variety of services, including:
- A contract review
- Negotiations with the timeshare resort
- Help with legal proceedings
- Assistance with the sale
All timeshare exit companies offer different services. So research the detail before choosing one for your situation.
Lonestar: What We Offer
Lonestar is one such professional timeshare exit company. Our services are designed to make an exit easy and stress-free.
We have a relationship with resort companies, so we take on your exit request on your behalf. We can handle a variety of timeshare exit scenarios, such as title transfer and mortgage cancellation.
Our experts have the know-how to remove you safely from your contract, protecting you legally and financially.
The Benefits of Hiring a Professional Timeshare Exit Company
Using a professional company rather than going it alone has several advantages.
First, it takes the burden away from you. Understanding the complexities of exit rules and legal jargon in a contract can leave many owners worried about whether they are doing the right thing.
Hiring experts gives you peace of mind that it’s handled properly from start to finish.
Second, it can speed up the process. Professional companies already have relationships with resorts.
These contact points can expedite the process. You don’t have to go online to find the right telephone numbers or wait in a phone line to get through to someone. A professional team does this for you.
Third, a professional company can often negotiate a better deal for you.
Using their vast experience in negotiating with timeshare management companies, and their knowledge of contracts, they can secure the best financial settlement on your behalf.
Finally, using a professional company lowers the risk of inadvertently breaking your contract, exposing you to legal action or financial penalties.
Choosing a Professional Timeshare Exit Company
Before you choose an exit company, do your research. It’s worth taking the time to find the best fit for your needs. Here are a few pointers.
Factors to Consider
Research as much as you can about your shortlist of companies. Read up on their reputation by checking online reviews.
Find out information about their success rate and track record. And see how many years they’ve worked in the industry, as this will point to their experience.
Read through any online testimonials and case studies. It will give you a better feel for how they operate.
Check fees and the payment structure too. You’ll need to factor in the cost of using a professional service as part of leaving your timeshare arrangement.
Use this information to compare and contrast your shortlist of companies to ensure you get value for money.
Some companies also offer a 100% money-back guarantee. Lonestar offers this guarantee. It provides added reassurance that you aren’t taking risks with your money.
The other thing to check is whether you’ll get a named point of contact. A dedicated consultant will make life easier for you and ensure you have someone with in-depth knowledge of your situation who can work on your behalf.
Beware Red Flags
It’s also worth knowing what to avoid when choosing a professional company. There are a few red flags. If you spot these, be wary about what you are getting for your money, and check the details.
The first red flag is an unusually high promise on your resale value. Another red flag is a company requesting large upfront fees without any guarantees. Another red flag is intense sales pressure to sign.
Finally, always check you are dealing with a reputable company by checking for a physical address, speaking to someone on the phone, and researching their background online.
Ask the Right Questions Before Signing
When choosing a company, ask some pertinent questions to help determine if they are the best experts for your case.
First, ask for client references or case studies. This will tell you how they handle individual cases. Ideally, get examples from the same resort as your timeshare.
Second, ask for their recommendation on what strategy is right for your circumstances.
Third, get information on their fee structure and ensure you have this in writing before signing.
You should also see when payment is due and how the payment is split during the process. Everything discussed should be followed up with a written agreement; it protects both parties.
Finally, ask about the timescales for the process.
An experienced company should be able to provide a realistic estimate of how long the process takes, and that’s useful if you have a deadline for when you need your money following your timeshare sale.
What Happens During the Exit Process
Once you have a strategy for your timeshare, it’s time to begin leaving your agreement. Here’s what to expect.
Step 1: Initial Consultation
If you use a professional company, your initial step will be a consultation. This informal discussion answers questions, raises concerns or objectives, and reviews the contract.
At this point, the professional will assess the viability of your case. And they will recommend the best strategy to take your case forwards.
Step 2: Draft an Exit Letter
Once you’ve decided to exit and consulted your contract, it’s time to prepare an exit letter. The letter will outline your intention to leave your agreement. It’s a formal step signifying your intentions, so this must happen in writing.
Step 3: Negotiations
You’ll move into a negotiation phase next. This is a series of communications between you and the resort. But you may delegate this to an exit company if you work with a professional team.
The aim is to reach an agreement that ensures you stick to your legal obligations but allows you to remove yourself from the contract.
Step 4: An Agreement
Once you have reached your agreement with the resort, it’s time to complete your exit. This could mean transferring the deeds to the resort or finalizing your sale if you sell to a third party. During this time, you’ll sign all legal paperwork.
Step 5: Follow-Up
After you’ve exited, ensure you have a copy of all the paperwork. Keep hold of this for future reference. Once this phase of the process is complete, you’ll be free of your financial obligations in your timeshare agreement.
Gaining Freedom With a Timeshare Exit
It’s not uncommon for us to change our might about something we’ve bought. And though a written contract for a timeshare agreement might seem like a lifetime commitment, it is possible to exit it.
Use this timeshare exit guide to help you navigate leaving your agreement. If you are ready to take that step, we’ve made things easy for you to start the process. Fill in this short form for a free consultation from our expert team.