Timeshare Exit Strategy
The timeshare rescission rate is around 15%, but the number of owners who express dissatisfaction with their interest or a desire to get rid of it is substantially higher. With this in mind, is there a practical timeshare exit strategy in place for a consumer to exit their timeshare interest?
Timeshare Exit Strategy – Step 1 – Contact the resort
First and foremost, it makes sense that the timeshare purchaser should attempt to contact their resort, to see if they can negotiate an exit solution with them. Though a consumer’s options may be limited once their state-mandated rescission period has passed, it is nevertheless a key first step to make contact with your resort developer, management company, or property owner’s association; there could well be a buy-back or resale program in place already.
If that attempt to negotiate a contract cancellation with the resort fails, a consumer is seemingly still left with a number of possible options to exit – or at least mitigate the financial burden of – their timeshare.
Timeshare Exit Strategy – Step 2 – Third-Party or Resale
Many timeshare owners attempt to rent out their interests using the online marketplace; others may reach out to third party redemption or resale companies to attempt to cancel or otherwise sell off their interests. Though they certainly do work in some cases, each of these potential solutions does offer up a number of drawbacks, and is limited in what it can actually accomplish for the timeshare owner.
Timeshare Rental Marketplace
When it comes to entering the rental marketplace, for example, many timeshare owners find themselves in the midst of an already-oversaturated game. It can be difficult, frustrating, and costly to list your interest and find renters, and many owners quickly become disheartened when they realize that they may never be able to turn a profit from all their efforts, particularly given that they will still be on the hook for rising maintenance fees.
Timeshare Resale Market
The same holds true for timeshare owners who turn to the resale or redemption market. As our own Michael Finn has noted on this blog before, there has been a systematic effort among developers to strangle the secondary market of timeshare resales for some time now, leading to an anemic marketplace that offers little value to the consumer, while also being loaded with potential pitfalls at every step of the process.
Many third party resellers, for instance, simply list timeshare interests via message boards or online retailers, charging consumers for an action with no guarantee of success, which they could easily undertake themselves. Other private redemption or relief companies, which operate by means of inventory recovery contracts with major resort developers, tend to be short term and subject to change without notification because the products developers are looking to regain are constantly in a state of flux; that is, if an owner’s interest is not valuable to the resort, the developer may well pass on it, leaving the consumer no better off than where they started. At the same time, owners will still be liable for paying maintenance fees and other costs during this often protracted process.
And this is to say nothing of the dangers of timeshare resale and redemption scams, which claim thousands of dollars from innocent timeshare consumers every single year!
Timeshare Exit Strategy – Step 3 – Cancel Your Timeshare
With the limits of other timeshare exit strategies taken into account, let’s take a moment to reframe the issue. Rather than thinking simply, “how do I cancel my timeshare?” we propose that consumers think of a different question: “How do I cancel my timeshare contracts?”
These truly are two different questions; the latter reframes the matter as a legal issue, which, indeed, timeshare cancellation inherently is. After all, there can be no denying that the owner, when they signed on the dotted line with the developer, entered into a legally binding agreement.
With that in mind – and a hefty amount of professional bias admitted – it makes sense that bringing on an attorney may well be the best choice for consumers looking to cancel their timeshare contract and get out from its burdensome obligations.
Why hire an attorney with experience in formulating timeshare exit strategies? For one thing, your attorney will only be beholden to the needs of you, his or her client; unlike third party organizations which depend, in many cases, on parasitic relationships with resort developers, your attorney has a legal and ethical obligation to care for you and you alone. An exit company that is all about profit cannot make the same promise!
More to the point, having a timeshare attorney on your side can also offer practical, material benefits when it comes to timeshare cancellation. Only an attorney, for instance, can suggest the practice of strategic default, in which the consumer stops making payments in order to gain leverage in their negotiations with the resort. Why? Under FDCPA, a consumer can be shielded from third party debt collectors as long as he or she has retained an attorney; instead, the debt collector must contact your attorney, unless the attorney fails to respond or grants the debt collectors explicit permission to do otherwise.
Only an attorney, too, can offer the opportunity to pursue litigation if it is warranted; knowing all of this, many resort developers may be more open to negotiations than they would be with a consumer who comes to the table without representation.
In an ideal world, the timeshare aftermarket would be a thriving sector that offered a practical solution to the consumer, and terminating an enforceable contract would be a much more straightforward matter. Until we reach that day, having an attorney by your side may be the most effective way to navigate the fraught reality of timeshare cancellation as it exists in the real world.
Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.