Following on from our last article where we focussed solely on costs, this article will explore other considerations to be made before buying a timeshare. Apart from the expense of initially purchasing timeshare there are a lot of factors that need to be carefully considered. On the surface, and according to developers, timeshare ownership presents a wonderful way to engage in the long term holiday market but does it? Metaphorically, lifting the bonnet of timeshare and looking at more than the glossy bodywork is all important. In this article we will attempt to look at areas you should be aware of before making a leap of faith into timeshare ownership. We will start with the resort tour and push forward from there.
The resort sales team
For many, the first experience of timeshare is what the industry calls a “tour”. Yes there certainly is a tour of the resort but this is followed by lengthy and possibly aggressive sales techniques. The resort sales team are programmed to tell prospective buyers anything they like be it true or false, in the quest to complete a sale.
From minor distortion of the truth to downright lies, the sales team don’t care as long as they get the deal. No matter what is said, the developer will take no responsibility. Buried in the rather verbose closing documentation will be a “non verbal reliance” clause, in basic terms, this clause absolves the sales team of anything they say because the clause clearly states that the buyer should not pay any attention to what has been conveyed verbally, for the reason that what is actually being purchased is contained within the contract, nothing more, nothing less. This verbal misuse impacts on most parts of the sales presentation, in reality, it’s a licence to lie.
Travel locations are limited
Whilst it’s true to say that there are timeshare resorts in around 120 countries, there are certainly places where timeshare ownership can’t take you. Despite the sales team stating that you can travel all over the world, this is only true if you pay considerable sums to purchase, even then there are some holiday hot spots devoid of timeshare.
At entry level, there is an expectation that the cost will be around £20,000, however, despite what the sales team say; at this level destinations will be limited. If £20,000 buys one week in Spain, it can hardly be realistic to think that this can be exchanged for a similar week in the Caribbean or any other exotic destination; it simply isn’t going to happen.
Scheduling and destination conflicts are an issue
Here is yet another area where the sales team mislead. As far as they are concerned, you can go where you want, when you want, but this is rarely the case. As we have previously reported, availability complaints are now the number one issue raised by timeshare owners.
Booking a holiday comprises two important factors, destination and timeframe. In the ordinary world of holiday planning, these two criteria can generally be satisfied. Timeshare on the other hand, by and large, presents problems; you may get the destination but not the dates or the other way round. Many timeshare developers often impose impossibly long booking periods, it’s not uncommon to expect to have to book one year in advance, and even then there is no guarantee that either the destination or dates will be available.
Loan repayments and upfront costs
Yet another area that is glossed over is the overall cost of finance. With such high level entry costs, for many the only way to purchase is via finance. Being unsecured lending, interest rates are extremely high. In some cases, taken over the term, the interest payable can equal the loan amount meaning if you borrow £20,000 you may end up repaying £40,000 in principle and interest, this effectively doubles the cost of buying the timeshare in the first place.
Closing fees are more prolific in the USA and vary but an expectation of around $700 per $10,000 purchase is not unrealistic. In some countries, such as Spain, timeshare attracts Value Added Tax (VAT) albeit at a reduced rate of 7%. You need to be aware of these potential “add ons”.
Maintenance and other fees
We often hear reports from consumers that at sales presentations it’s stated that maintenance fees will only rise by minimal amounts; this of course is not true. Maintenance fees are a contractual liability of all timeshare contracts and must be paid whether or not the timeshare is used. An example was the recent Covid pandemic, despite lockdowns and the inability to travel, plus resort closures, most developers still charged the full annual maintenance fee.
Timeshare developers also reserve the right to charge what are known as “special assessment fees”. In essence these charges relate to expenditure made to cover costs outside the regular maintenance fee. By way of example, Marriott Maui Ocean Club owners recently received their maintenance bills for 2024. Contained within the bill was a special assessment for plumbing reserves. The fee charged is between $538 and $795, dependent on accommodation owned. The reality of this additional cost is that the real increase on fees over the 2023 figure was not 9.8%, as stated in the accompanying letter, but slightly over 23% in total.
Terminating the contract can be overwhelming
The vast majority of timeshare developers have no published exit strategies, the reason they are not published is that there aren’t any. Timeshare contracts are long term commitments; however life has a habit of bowling curve balls, often life changes mean the once desired and affordable timeshare has to go.
With the exception of a few developers, getting out of a timeshare is nearly impossible. In the USA the problem is more noticeable. By way of example, Westgate Resorts, who are the world’s largest privately owned timeshare company, has this to say, and we quote:
“Though Westgate Resorts does not formally provide a timeshare exit program concerning its resort properties, exit options may be available for owners to work with The Westgate Legacy program,”
Couldn’t be clearer, no formal exit program; note the use of the word “may”. Although we cite Westgate, this practice is pretty much common place across the whole USA timeshare industry. Similar stories abound concerning European timeshare.
Selling or buyback
Here is a further area where sales staff often misleads the consumer. Firstly, looking at whether or not the developer will buy your timeshare back, in short, the answer is no. There are a few exceptions notably Disney Vacation Club and certain Marriott resorts, but in general developers will not buy your timeshare from you. Exiting, if possible, would involve you handing back your timeshare to the developer for free. As per the above, if exits aren’t allowed then this indicates that the developer isn’t willing to take it back, even for free, that being the case, what chance is there of the developer buying it back?
Selling timeshare is also problematic, simply because the supply and demand are out of balance. There are too many sellers and not enough buyers. Sales staff will tell you that it’s easy to sell your timeshare, and even make a profit; this is about as far from the truth as you can get. EBay is littered with owners trying to offload their timeshare and in many cases for a single Dollar, still with no takers.
TCA comment
Timeshare sales presentations always catch people off guard. We can’t think of a single case where those who purchased timeshare suddenly had the desire to do so. Most would be buyers end up being sold timeshare after falling into the baited trap of a free gift. This being the case, there’s no surprise that timeshares need to be sold, and sold hard. If punters were queuing at the doors of developers to buy this slice of holiday heaven, there would be no need for massive sales decks and teams.
It’s been proven over many years that what the sales team say, and what ends up being purchased are as different as chalk and cheese. Knowing the exact details of the devil you are possibly going to buy is of paramount importance. If a used car salesman tells you that a Ford Fiesta can reach 0 to 60 in the same time as a Ferrari, you’d fall over laughing. If a timeshare salesman tells you your one week in Fuengirola will get you to St Lucia next year it’s about as laughable as a Fiesta keeping pace with the Ferrari, but you will never know the truth till it’s too late.
Buying a £20 duffer from an online Chinese website, only to find it doesn’t match the sellers’ description, and worse still it doesn’t actually do what you bought it for is annoying. When it’s £20,000 and the product doesn’t match the sellers’ description and doesn’t do what you expected it to, well that’s an entirely different matter.
If you are unfortunate enough to waste nearly a day of your life attending a timeshare sales “tour”, never, and we repeat never buy on the day. Take the facts away as explained to you, do some serious research to see if what you were told matches what you are about to buy. In 9 out of 10 cases what the sales team have told you will be nowhere near the actual product. Finally, be aware of the last lie in this story, “If you don’t buy today the price offered won’t be there tomorrow” utter nonsense, just add this one to the never ending list of lies you’ve already collected.
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