Timeshare Education

Things You Need to Know About Timeshares

Things you need to know about Timeshares

The first thing timeshare owners must do, is be honest with themselves about the situation, and face these facts:

  • The IRS values your timeshare, and all timeshares, as worthless.
  • No legitimate charity wants your donated timeshare. Charities cannot take on debt, and your timeshare is considered a liability. Period.
  • Timeshare companies are allowed to remain in business because they spend millions to influence both Democrats and Republicans in state government. Ever wonder why timeshares are allowed to stay in business?

Even if you sell your timeshare on eBay for a dollar, you’re still responsible for payment to the timeshare developer if your buyer ever stops making payments.

You heard it right. Most timeshare companies structure their contracts so the original owner can only transfer the timeshare by way of a quitclaim deed. But a quitclaim deed merely transfers title; it doesn’t transfer the legal obligation to pay a monthly mortgage or an annual maintenance fee. So while the new owner will have legal title, the original owner will still be on the hook for any payments due for the life of the timeshare.

In other words, if you are the original owner, you will always be ultimately responsible for payments. So if you do sell your timeshare for a dollar, make doubly sure the person to which it is transferred is someone you can trust to make timely payments for the rest of your life, not theirs. And remember, those pesky maintenance fees increase an average of 8%-12% per year, so there’s a high likelihood that your buyer will eventually tire of making payments. When that happens, your timeshare company will find you and demand payment in arrears.

What’s more, the use of quitclaim deeds has also allowed fraudulent charities to trick unsuspecting timeshare owners into thinking they have transferred title to the charity as a donation. Instead, the charity will take your “donation fee,” and simply stop payment to the timeshare at some point in the future, leaving you, the original owner, on the hook for payment. Here’s an article from the San Francisco Chronicle on quitclaim deeds.

So if you can’t sell it or rent it, and you can’t even give it away, what can you do?

The only surefire way to permanently rid yourself of a timeshare is to legally cancel the contract.

Remember, you signed a legally binding contract with the timeshare resort. It’s going to take legal means to cancel that contract. This means that you must negotiate directly with the timeshare company and convince them to issue an official release. Timeshare cancellation companies do this by holding timeshares accountable for the misdeeds of their salespeople, which include FTC and FDCPA violations, omissions of fact, and outright exaggerations.

The Missing Investment Component

It’s been said in poker that if you can’t spot the patsy, it’s you. This also applies when purchasing a timeshare. The ones benefiting from the transaction are the salesperson and the owners of the resort. You, unfortunately, are stuck with a small slice of a unit that has little or no resale value.

Most have high yearly maintenance fees that faithfully increase faster than the rate of inflation. For the amount that you pay in maintenance fees alone (forget about the initial “investment”), you could stay at a decent-quality hotel for a week.