Timeshares initially sound very appealing. You get to visit a dream location every year, enjoy resort amenities and pay only annual maintenance fees (once the initial cost is paid off). But the appeal can quickly fade if your financial situation changes or you grow tired of visiting the same place.
That’s when you may, unfortunately, encounter the ugly side of timeshares.
“Timeshare agreements are notorious for being difficult to get out of. A lot of people find themselves feeling unable to get rid of them because the companies make it seem like exiting isn’t an option,” Seamus Nally, the CEO of TurboTenant, an online rental management platform, said in an email.
Regardless of how it may seem, you can get out of any timeshare agreement without breaking the law. Here are the steps you can take.
Check the Cool-Down Period
If you have buyer’s remorse shortly after purchasing a timeshare, review your contract to see if it includes a cool-down period.
Most states have rescission laws that require timeshare companies to include cool-down periods, which typically range from three to 15 days, in their contracts.
“Look for a rescission time that lets you back out of the deal soon after you buy it, without paying a fee,” Mark Hirsch, a personal injury lawyer at Temple and Hirsch in the Miami area, said in an email.
Contact Your Timeshare Company
“If the rescission window has passed, you should talk to the timeshare company directly about canceling or deleting your rights,” Hirsch said. The company may be willing to assist you.
For example, Wyndham Destinations — one of the largest vacation ownership companies in the U.S. — has a Certified Exit program. Timeshare holders can use it to discuss options like returning ownership if their loan is paid off or applying for a hardship exception.
While timeshare companies’ contracts vary , it never hurts to ask. Deed-back programs, in which you can give or sell back paid-off timeshares, are common.
Sell Your Timeshare to a Third Party
Another option is to sell your timeshare to a third party. To do so, your timeshare typically can’t be encumbered — secured by an outstanding timeshare loan — and you can’t be late on associated costs like maintenance fees.
As for where to sell it, you can:
— Advertise it yourself.
— Use reputable online timeshare marketplaces like RedWeek.
— Ask for help from your timeshare company.
— Enlist the help of a licensed real estate agent — preferably one with experience selling timeshares.
No luck with buyers? You can also try to give your timeshare away. While you’ll take a loss, the transfer of ownership will free you from the ongoing fees.
[READ: How to Save $1,000 for Your Summer Vacation]
Be Careful With Third-Party Property Exit Companies
Exiting timeshares has become a widespread challenge for owners. As a result, third-party property exit companies have cropped up to help. However, not all are trustworthy.
A growing number of unscrupulous companies use misleading information, scare tactics and false advertising to scam timeshare owners out of their money.
“Be wary of property exit companies that claim to help you quickly but charge high fees. Do a lot of research on these companies. Reliable ones should have good reviews and a transparent fee structure. Stay away from those that want upfront payments with no promises,” Hirsch said.
The Federal Trade Commission recommends researching company names online with the words “scam” or “complaint” to see if you find any red flags. Additionally, check with the Better Business Bureau to see if companies are accredited and well-rated.
If a company seems legit and provides an appealing offer, get it in writing and review the fine print carefully. You may also want to run it by someone you trust. On the other hand, if you think you’ve encountered a scam, report it to the FTC at ReportFraud.ftc.gov.
[Related:What to Consider Before Buying a Vacation Home]
Default on Your Timeshare Payments
If none of the above options provides a viable solution and you need to get out, you can stop paying your timeshare loan or maintenance fees. But beware that doing so will cause you to default, which can lead to penalties, credit score damage, collection attempts and foreclosure of the timeshare.
[Read: What Happens If You Default on a Loan?]
The lender may also sue you in an attempt to win a judgment and recover its losses. While not ideal, defaulting is not illegal and will bring your timeshare ownership to a close.
The Bottom Line
Exiting a timeshare can be difficult, but you can put yourself in the best possible position by understanding all your options and the laws and terms that apply to your situation.
“Know that each state has its rules about exiting a property. Learn about your rights and possible responsibilities, such as any ongoing upkeep fees until the exit is finalized,” Hirsch said.
Also, beware of scammers. Unfortunately, some companies are preying on vulnerable people who want or need to get out of these complicated contracts.
More from U.S. News
Pay-Yourself-First Budgeting: What It Is and How to Do It
Things You Can Rent Out For Cash
15 Money Moves You’ll Be Thankful For
Looking to Get Out of a Timeshare? Here’s How to Do It Legally originally appeared on usnews.com
Update 08/27/24: This story was published at an earlier date and has been updated with new information.
