What Can a Lawyer Do for a Timeshare Client that an Exit Company Cannot?
Demystifying the Legal Process
Consumers attempting to unload their no-longer wanted timeshare interest have a choice in selecting the right third party to assist with terminating their timeshare contract. What they do not generally have is the information they need to make an informed choice! Lawyers will advise that seeking relief from a no longer wanted timeshare purchase contract involves skills best suited for a lawyer to handle since the timeshare purchase contract is a legal contract. Clearly, it is in the timeshare resort’s economic best interest to continue that purchase contract as long as possible, because of the ongoing cash flow they expect to continue to receive for annual maintenance fees at minimum, even if the purchase price aspect of the contract has been completed. Indeed, timeshare purchase contracts are intentionally written with no termination clause, because that is what is in the timeshare developer’s economic best interest! Therefore, when a termination of a legally binding contract is the objective, and particularly when there are legal issues involved, hiring a lawyer, someone who is professionally educated and trained specifically to handle this sort of legal matter is the logical choice!
Another option for timeshare owners hoping to put their timeshare purchase contract behind them, is to hire a third party, known in the industry as an ‘exit company’, as they advertise to the timeshare owning public that they can “guarantee” that they can terminate a legally binding timeshare contract. They do not however, typically say exactly how they can accomplish that task. Often the consumer is not particularly concerned with “the how”, given the money back guarantee. Guarantees are wonderful assurances of performance, if the company offering same is a reputable, licensed, organization with a proven track record, a detail often overlooked by anxious consumers. Additionally, since per the ‘exit company’ service contract, the services allow two years to perform, no guarantee claim can be made until the expiration of that time period, so a question becomes whether or not the company will still be in existence at that time.
Another important distinction between an ‘exit company’ and a law firm is that lawyers are licensed professionals required by their Bar Associations to meet professional standards in providing legal services to their clients, while no such requirements for licensing or educational requirements exist for exit companies. In fact, there are absolutely no educational, or licensing requirements promulgated by any state or federal jurisdiction in order to own and/or operate an ‘exit company’. Arguably then, closing an exit company and quickly reopening another under a different assumed name would not be a terribly difficult maneuver to accomplish.
Nothing mentioned above should be interpreted to suggest that ‘exit companies’ cannot or have not successfully assisted timeshare owners with terminating timeshare interests. They have undoubtedly enjoyed some success. Presumably, some of that success is related to fulfilling the timeshare developers own requirement to recover inventory for resale. However, one should inquire to what extent that specific exit company has been successful with that particular developer, and perhaps attempt to gain an understanding of how the “exit company” achieves its success, given that the timeshare interest owner’s initial request for termination from his own developer was denied, i.e. why would the developer say yes to an exit company after turning down its own owner?
As lawyers, our process is not dependent on the resort developer’s need for specific inventory recovery, but instead begins with a focus on consumers laws and the written content of the actual purchase contract binding the client. Does it, and the other related paperwork provided by the developer, fulfill the developer’s requirement to provide all statutorily required disclosure materials to the consumer? What about claims of material omission, if applicable? Was the ‘real value’ of the purchased interest properly disclosed to the purchaser? All of these issues and countless others, depending on individualized fact situations, can become bargaining chips for the lawyer to drive the developer to the negotiation table! Additionally, if the client, after consultation with their attorney concerning potential credit downgrading concerns, concludes that paying further monies to the resort during the negotiation period will be counterproductive to the ongoing negotiation process, their law firm can actively and lawfully shield their client from all third-party debt collectors practices, this tactic can quite often incent the developer to enter termination negotiations, and further, provide extra peace of mind for the client!