Most people today have at least a sense of what timeshares are. Sold as “vacation ownership,” the term “timeshare” can be loosely understood as several different kinds of programs where travelers can buy the right to use vacation property each year (or every other year). That real estate may be located in one place, or you may have the right to go to several different resorts.
Getting a timeshare is different in several ways from just buying a vacation home. If you own a house in Florida or some other popular U.S.-based vacation spot, chances are you hold a fee simple property interest in that home. In other words, the property is yours forever, and you can do whatever you want with it.
A timeshare, on the other hand, won’t give you that right, even if you do have a deed to that timeshare. By its nature, you have to share a timeshare with other owners, much like a hotel room. Unlike a hotel room, though, you have to pay to keep a timeshare clean and maintained forever, regardless of whether you use it.
This article will take a look at timeshares as they exist in the 21st century. We’ll look at the different types of timeshare contracts and the problems that exist with timeshares no matter what kind of contract you have. Finally, in the event that you are stuck in a timeshare, we’ll discuss how you can break the cycle with a legal, ethical, and lasting exit.
Before you can have a real discussion about timeshares, it’s important that you understand the different types of timeshare contracts. Starting in the 1970s, timeshares (also known as “fractional ownership”) were introduced to consumers as a supposedly cheaper way to buy real estate in desirable locations.
When you purchase a timeshare, you pay a large fee (often $20,000 or more) and sign a contract that either gives you a shared deeded interest or a right to use a given timeshare property. Along with those benefits are a number of serious legal and financial obligations, like the payment of annual maintenance fees and membership in exchange programs (like RCI or Interval International).
Over time, the industry has developed a few different types of timeshares. Following are three main types that you are likely to see when looking at the timeshare market.
The first concept was that, rather than renting a hotel room in their chosen vacation spot, people could take a relatively expensive piece of real estate and divide ownership of it on the basis of time rather than space. In other words, 52 different people might get deeds to a condominium, but each would have a deed giving them exclusive use of the property for a particular week each year.
Contrary to what you might expect, this form of deeded timeshare was not as cheap as advertised. The 52 owners in this situation are also responsible for a host of additional fees, including annual maintenance fees, that cost hundreds or often thousands of dollars per year. And if you couldn’t make your assigned vacation week in a year, you were out of luck.
It didn’t take people very long to see a very big downside of timeshares: little flexibility paired with a high purchase price and ongoing cost. To entice more people to buy, timeshare companies came up with another concept: floating-week timeshares. “Floating week” means that instead of the same week every year, you allegedly get to pick the week you want from a range.
In practice, floating-week timeshares don’t work that smoothly. You have to reserve the week you want, and if you don’t do it quickly enough, you won’t be able to use your property for that year. (Even worse, you may be able to make a reservation, but only at an undesirable time of the year, like during hurricane season or outside of ski season.) Of course, you’ll still have to pay your maintenance fees and other costs.
Floating-week timeshares didn’t give many people the amount of flexibility they wanted, so the timeshare companies came up with a new type of system: points-based timeshares. These are systems that give you the right to use various properties based upon the number of points (or credits, as they are sometimes called) you have, but not any actual timeshare ownership interest at any one resort.
Timeshare points tend to be the most popular kind of timeshare right now, with companies like Marriott and Wyndham using these programs. (Hilton also assigns specific weeks for timeshares.) These points systems require reservations, like floating-week timeshares, but are used for multiple resorts at once.
Point-based timeshares run into similar availability problems as floating-week timeshare units, and like those units, they also cost far more than a hotel room in the destinations owners would want.
Having looked at a number of types of timeshare contracts, you probably already have a sense of the drawbacks. But it might surprise you to find out that the vast majority of timeshare owners (85%) regret their purchase. There are several reasons.
When reading about timeshare companies (for example, reviews of Wyndham or Diamond Resorts), a common complaint is that the people working for these companies are unhelpful, dishonest, or even hostile. From untruths in timeshare presentations to poor customer service, these companies often make life miserable for their owners, who are stuck dealing with them.
While salespeople love to tell you that timeshares are an “investment,” that’s not borne out by the facts. It’s nearly impossible to get rid of your timeshare on the resale market, and even if you do, it will likely be for pennies on the dollar. (Also keep in mind that, in many cases, you don’t even own any property interest!)
And if that weren’t bad enough, the fees for maintenance, exchange companies, repairs, and any other number of items are constant and ever escalating. Even assuming that you could eke out a small amount of money selling or renting a timeshare, that amount would almost certainly be gobbled up by fees.
If you try to get out without their approval, timeshare resorts can cause you quite a bit of pain. They can try to foreclose on any property interest you have in a timeshare. Failing to pay them what they want can also ruin your credit or stop you from getting loans for other things you might need.
If you haven’t bought a timeshare yet, hopefully you have thought carefully about whether it is a good decision for you. But if you have already bought, you might be feeling like there is nowhere to turn. But that’s not the case. Centerstone Group is a business that was formed to help people just like you.
Collectively, our professionals have decades of experience in the timeshare industry. We know the best ways to navigate successful and lasting exits from timeshare contracts, no matter how old your contract is. We can help you navigate everything from a relatively straightforward cancellation to a more complicated pressure campaign against a developer.
And sometimes, we realize that more intensive legal help is needed. In those cases, we can find you a qualified timeshare attorney or law firm to help you, and we will even negotiate a lower rate for their services than you could get otherwise. Centerstone Group is an A-rated, accredited business with the Better Business Bureau, and we’ve helped a lot of people just like you.
A timeshare purchase is not an investment. It’s a prepaid hotel room with enormous upfront costs and huge financial burdens in perpetuity. If you are in the clutches of a ravenous timeshare company, you might not feel like you have many options.
You’re not alone, though, and we are here to help. Don’t keep paying huge amounts of money for a glorified hotel room. Contact Centerstone Group today for a free consultation and case evaluation.