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Understanding the Types of Timeshare Relief Companies

Understanding the Types of Timeshare Relief Companies

What are timeshare transfer companies? Understanding the Types of Timeshare Relief Companies

Timeshare Relief Companies

There are countless people scouring the internet and their local yellow pages right now, seeking assistance in terminating their timeshare obligations. A purchaser may want to walk away from their timeshare interest for any number of reasons, after all – perhaps a timeshare is no longer the right fit for their lifestyle, or maybe the burden of annual maintenance fees has become too great.

Whatever the situation, a consumer searching for a way to extricate him or herself from a timeshare obligation is going to come across numerous “relief” companies presenting themselves as the end-all, be-all for a solution.

Let’s look at a few of the most common examples of timeshare relief companies. What services can they offer? What do they really provide? And can they actually consistently accomplish the hefty task of extracting people who own long-term timeshare interests from their binding contracts?

Inventory Redemption Companies

When we speak of an inventory recovery company, we are referring to inventory recovery agents for timeshare developers seeking to recover inventory for the purposes of resale. In some cases, these organizations are directly connected to resort developers themselves; in others, they are independent third parties. In either case, these companies operate by means of informal inventory recovery agreements with the resorts and travel clubs, which buy back inventories in bulk.

Therein lies the rub for consumers. The success of a timeshare owner’s attempt at redemption often comes down to whether a resort developer will be willing to take back their specific interest at any given moment, a decision that is driven by a number of factors outside of the consumer’s control, including market conditions and whether the developer believes the interest will be easily marketable to a new purchaser.

This makes this process an uncertain one for owners, who can never be entirely sure whether or not their interest will be redeemed, or even whether or not the unlicensed third party handling the inventory transfer will even still be in existence in a few months or years, as these companies tend to come and go all the time.

Timeshare trade in programs Timeshare Transfer Companies

When we refer to a “transfer company,” we are discussing a private company whose methodology is to transfer the ownership of the interest away from the owner to another third party, circumventing the developers altogether.

There are a number of things for consumers to keep in mind when it comes to these transfer companies, the most pressing of which is a question: “Transfer to whom?”

Where is your interest actually going when you sign and pay an upfront fee to one of these transfer companies? Bear in mind that the secondary market for timeshare resales is already saturated with countless offers to sell timeshare interests for mere pennies, with the sellers even offering to cover all closing costs or transfer fees. With this in mind, who are the individuals or organizations ready and willing to pay good money for an interest that, given the state of the market, could easily be called valueless?

To get around this problem, some timeshare relief companies have been known to create brand new business entities, corporations, and LLCs for the sole purpose of taking title to the unwanted properties. Resort developers and property owners associations have started to come down hard on this method, however, and many will no longer permit transfer of title to either an unknown entity with no credit rating, nor to individuals who won’t agree to be credit checked as a condition of their acquisition.

One more thing to consider? The transfer method only applies when there are no mortgage or maintenance fee liens on the interest. And an owner will be on the hook for those payments until the transfer is successful – which, for all the reasons discussed above, is a day that may well never come. Many don’t know this, however, and default on their payments, creating an even more fraught financial situation for developers and owners alike.

Advocacy Companies and Legal Professionals

An advocacy company may act as a middleman between a timeshare owner and their developer, offering its services as a negotiator or assistant to a consumer who feels as though they are out of other options. In some ways, their services are similar to that provided by law firms like Finn Law Group, P.A.

However, as our own Michael Finn explained recently, there are some fairly significant distinctions between a law firm from a non-lawyer based advocacy company. A few huge things to bear in mind:

  • Only a law firm may review and dispute contract clauses and/or advance legal principles and/or theories to enhance their ability to engage resort developers, and utilize persuasion, and/or litigation effectively. No non-lawyer advocacy group may advance those issues without engaging in the unauthorized practice of law.
  • Only an attorney is lawfully able to present “strategic default” as a tactic to their client, and most importantly be in the legal position of insulating his or her clients from third party debt collection activities under FDCPA, which clarifies that third party debt collectors may not contact consumers who are represented by a lawyer. With an attorney’s guidance, however, this can be an effective tactic for gaining the attention of a resort developer, who may be otherwise tempted to shrug off the pleas of an advocacy company if a purchaser’s underlying contractual payments continue on schedule.
  • An advocate need not possess any sort of professional license to represent a timeshare purchaser. Similarly, there is no educational requirement and, indeed, no way to verify their employment history, or criminal record. A lawyer, on the other hand, has a license to lose. Practicing attorneys have worked hard to obtain their law license with three more years of schooling and the passing of the bar exam. They do not want to have their professional reputation damaged, nor do they want to lose their license to practice over a timeshare dispute.

In our experience, there are the primary types of organizations available to assist consumers who want to somehow exit or get out from under their timeshare obligation. If you’re looking to get started down the right path, one of the most important things to remember is that a long-term purchase contract is a legal issue, with many important legal ramifications.

As Michael put it recently – after admitting to a certain level of bias:

“If it was easy to terminate an otherwise enforceable contract, the consumer ought to be able to do so without any representation whatsoever, and in fact, at Finn Law Group, we recommend that the first thing a potential client ought to try is to contact the resort to see if they can get the resort to take back the interest.

Once that possibility is exhausted and a decision is made to seek professional help, it seems to me a slam dunk decision to hire an attorney.”

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.

Disclosure: This article is for information purposes only and is not intended as legal advice.


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