It’s easy to see why sales pitches for timeshares are attractive, apart from the free prime rib dinner or other gift you score for sitting through the presentation. Who wouldn’t want to secure a regular spot at an amenity-and-sun-filled vacation destination?
But over the years, that timeshare can suck your hard-earned savings dry through mounting annual maintenance fees. And if you decide you want out — as 85% of timeshare owners do, according to a University of Central Florida study — you’re going to meet some serious resistance.
Option 1: Review the contract
If you’re still within the 'rescission period':
When you buy a timeshare, you typically become part owner of a condominium at a resort area that you can use for a certain period of time each year.
If you have immediate buyer’s remorse, you can do something about it. You might still be within the “rescission” period, when you can leave the contract with relative ease and without paying any penalty.
The rescission or cooling-off period varies between states but usually lasts from just three to 15 days after you sign the contract. Check your timeshare agreement for details on the rescission period for your purchase.
If you’re still within the window, then write a cancellation letter and mail or deliver it by hand to the timeshare company. Your contract will specify how the developer accepts cancellations.
Send it by registered or certified mail, because that will create a paper trail showing that you acted during your rescission period. In your letter, make sure to include a clear statement that you are canceling your timeshare within the allotted time.
Include the following information in your letter:
- The current date.
- Your name, address and contact information.
- The timeshare company’s name.
- A description of the timeshare you bought.
- The date you bought the timeshare.
Keep a copy of your letter and hold onto all the mailing and contract information, just in case.
If you’re past the cooling-off period:
If the rescission period has already ended, it’s going to be more difficult to get out.
To get started, review your contract to see if there’s an option for a “deed back.” This option would allow you to sell your timeshare or simply give it back to the developer.
While most timeshare developers do not offer this option, Club Wyndham and Diamond Resorts are two that do have timeshare exit programs, depending on where the property is located.
Diamond Resorts’ "Transitions" program allows members in certain resorts to give up all or part of their ownership as long as the timeshare is paid off, the maintenance fees are current, the person backing out has a clear ownership title, and all future reservations have been canceled.
Club Wyndham’s “Ovation" program gives owners access to its timeshare exit team's services for free. The team helps owners rent their timeshares, sell them, or give them back to the resort.
Other companies will not make things so easy. They may insist that you pay maintenance fees for one or two years while they look for a new buyer to take over ownership.
Option 2: Try selling your timeshare on your own
If the developer won’t take back your timeshare, then selling it on your own might be an option. Though the secondary market will likely get you a fraction of what you paid, it can be better than paying a lifetime of yearly fees.
To get the best deal out of the situation, speak with a licensed real estate agent or broker who has experience or specializes in timeshares.
The timeshares business tends to attract scammers, so make sure to check any broker's record with the Better Business Bureau, to make sure he or she is reputable.
Be smart about accepting advice in your situation. Seek it only from a proven timeshare exit company.
Avoid timeshare exit businesses that clearly over-promise — such as by telling you they can offload your timeshare for a good price — or any company asking for an upfront fee before they'll do any work for you.
Option 3: Speak with an attorney
When all else fails, it might be time to speak with an attorney who has expertise in dealing with timeshare exits. These professionals can examine your timeshare contract in depth, and might find a way to get you out of the contract with less hassle.
If you bought a timeshare internationally, then you might need to consult with a lawyer in the other country.
Always consider your choices very carefully, even when they come as legally-backed advice.
Lawyers sometimes suggest that unhappy owners not pay their annual fees or make timeshare loan payments, because some timeshare companies may release you from your contract if you don't pay.
However, a timeshare developer might just as easily report you to a collection agency or credit bureau, for nonpayment. Having an account in collections can drop your credit score, which can be very damaging to your finances. Additionally, your pay could be garnished to collect the money you owe.
When a timeshare is causing you serious financial stress, another legal way out is by declaring bankruptcy — but that also will bang up your credit score, and the bankruptcy and will stay on your credit report for up to 10 years.
Filing for bankruptcy also costs money: from several hundred to thousands of dollars, including attorney fees.
Options to avoid
Don't rent out your timeshare. Timeshare companies may recommend renting out your timeshare rather than giving it up. While this might sound like a good way to offset the annual maintenance fees and get some cash, it’s not. With so many unhappy timeshare owners renting out properties, the market is oversaturated. Potential renters have many options, which pushes rents down. This means you won’t be able to charge much for your rental. Having strangers use your timeshare also runs the risk of damaging the property. As the owner of the timeshare, you would be on the hook to pay for repairs.
Don't try to donate the timeshare. Given all of the strings attached, such as lifetime ownership and annual fees, a donated timeshare is not something any charity wants.
Hard truths about exiting your timeshare
In general, it’s very difficult to get out of a timeshare. Timeshare agreements are designed to be hard to break, to ensure that owners pay maintenance fees as long as possible.
As a result, even if you are eventually able to dump your timeshare, you'll likely lose a good sum of money along the way.
Selling a timeshare or giving it back are the best ways to get out of one, even if you won’t recoup the cost or may be stuck with maintenance fees for a time. Paying the annual fee for a year or two is a lot better than being saddled with it for the rest of your life.
Once you’ve managed to get rid of your timeshare, your real vacation can begin.
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