One of the most frequent questions that we get asked by consumers that come to us, is on the subject of timeshare exit. As we have stated on many occasions “It’s easy to get into timeshare but very difficult to get out”, why is this? Well the answer is both simple and clear. Most of your original purchase cost went towards the sales and marketing expenses encountered by the resort in getting new owners signed up. Logic then dictates that in order to pay the continued overheads of running the resort, annual owner maintenance payments are of paramount importance to all timeshare companies. If all owners decided that they wanted out, then the resort would collapse and this simply would not be allowed.
There are a number resorts that have accepted the fact that not all owners want to stay with them forever and do offer some form of exit plan, however those we’re afraid are few and far between. The message we get from most enquirers is that having talked to their resort, there seems to be no way to escape from the burden.
Exit Companies
Because of the intransigence of resorts to help owners exit, there has been a significant increase in companies that assure you they can, for a fee, extract you from the penal servitude of your long term timeshare contract. A good number of these companies are totally legitimate and their results speak for themselves, however, for every good guy there are at least a dozen or so bad guys. Another point to remember is that not all resorts will offer an exit strategy, not even to a bona fide exit company. A legitimate exit company will make you aware that if your resort is one of those old draconian institutions hell bent in keeping their owners trapped, they will tell you so and not seek to entertain your custom. Whereas those less than reputable companies will promise anything in order to get you to part with your money!
As we have said on numerous occasions do your homework before engaging a company or worse still paying fees. Exit companies are not regulated so there is no right to reply if things go wrong.
If they can do it why can’t I?
To answer this we first have to take a brief look at the structure of timeshare resorts. There is more to it than at first meets the eye, for example:
- Sales/new business, front office.
- Hospitality – Bars, restaurants, maid service, laundry etc.
- Maintenance – Pools, public areas, apartments etc.
- Administration – Bookings etc.
- Back Office.
As an owner you will normally encounter most of the above during your stay, but you will rarely see or be involved in the “Back Office”. This is where the overall management of the resort takes place. When you call or write to the resort to cancel your ownership it is invariably the front office you will deal with, their brief is to retain owners at all costs, as it sits firmly within the sales brief of the resort. Owners getting to the back office, the inner sanctum, is very hard and rarely happens.
Within the back office is the department that deals with inventory. Inventory in timeshare terms means units that are available for sale, these can either be part of a new development, unsold weeks, fractional ownerships, points or ownerships that have been exited.
Over the years bona fide exit companies will have forged relationships with the inventory department and would have negotiated deals to accommodate the exit of ownership. With the advent of resorts opening their doors to the public via online booking sites, inventory pressure is not as great as it may have been a number of years ago, as spare capacity can be absorbed without the necessity to sell it to new owners. So it is quite fair to say, it’s not what you know it’s who you know in this type of business.
Handing back via the inventory department is not without costs, most resorts will work on a multiple of annual maintenance fees as an exit charge. So the exit charge is totally dependent on what you own in your personal circumstance and the amount of your current maintenance fees. Obviously the exit company will add their own administration costs to the figure, but after all in life there’s owt for nowt!
It is also very important to point out that you must not be in arrears with your maintenance fee at the time of exiting. If this is the case then in most circumstances the resort will want the debt reversed before they will entertain any exit request.
The basic process
With anything, there are set procedures to follow when exiting a timeshare. We think it would be valuable to look at the mechanics in greater detail. The basic format is the same for all genuine exits:
- The client signs a relinquishment contract and completes the fee payment.
- Within approximately 24 hours the exit company administration department contacts the client and explains which timeshare documents are required; whether copies or originals are appropriate and where they should be sent.
- The assigned exit consultant will contact the client and introduce themselves. The client is advised that further contact will be made upon receipt of the timeshare documents.
- Upon receipt of documents the exit consultant will review them before contacting the client to explain the process and whether the clients’ participation will be required.
- The cancellation process commences.
- The completion of the cancellation is indemnified by the client receiving a written confirmation from the resort, its management company or its trusties.
The duration of cancellation varies depending on the location of the resort and the timeshare company concerned. On average the entire process should not take much longer than 8 weeks, however less common locations such as America or Australia etc.… could take between 4 and 8 months depending on the individual circumstances.
The important point to highlight is that genuine exit companies will ensure that upon the completion of your extrication, you will receive official confirmation from the timeshare resort, its management company or its trusties informing you that you no longer own and that any future liability has been removed. Remember, without this documentation you could still find that the ownership is intact and what you paid, as stated above is “Owt for Nowt”.
Is it worth it?
This is a question only you can answer, but in doing so you have to apply a modicum of financial logic. We received an enquiry recently where the owners had purchased a significant number of timeshare weeks and upgrades over the years to the point where their annual maintenance commitment had climbed to a massive £5,400! We suggested that they contact a specialist exit company from our white list, to which they duly obliged. They later informed the TCA that the fee quoted to totally extract them from all the liability of the ownership was only £7,900, most of that being payable to the resort. They went ahead on the basis that the figure quoted was well below a further 2 year’s maintenance fees, so from a financial logic point of view it made sound sense. So was it worth it, we would say yes.
Conclusion
If you feel trapped in an unwanted timeshare and have failed in disposing of it yourself then help is at hand. Sure you should expect to pay upfront for the service, but upon considering the financial logic, in most circumstances it should make sense.
But whatever you do, don’t play ostrich by burying your head in the sand. Believe us the problem will not go away on its own, failure to pay your annual maintenance fees will not absolve you of your liabilities, instead it will just exacerbate the problem. Certain resorts can be quite ruthless in chasing owner’s for unpaid fees, often with County Court Judgements resulting in much larger bills and a wrecked credit history to boot.
Because of the plethora of rogue traders in the exit industry, if you are in any doubt or require a solid recommendation of a bone fide exit company, please get in touch, we will be most delighted to assist.
A final thought:
Unfortunately a Timeshare is the equivalent of a very bad marriage, expensive to form, expensive to maintain and very expensive to end; especially if you employ the wrong representation!!
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk