Timeshare USA – Diamond/Hilton Transitions, does it work?

First off, it’s refreshing that any developer takes the subject of exiting a timeshare head on and makes steps to allow application to exit. The transitions scheme came about in 2016 when the Arizona Attorney General’s office reached a settlement requiring Diamond to establish a relinquishment program. Arizona timeshare owners who met certain basic criteria could be allowed to approach Diamond for permission to exit, all good so far.

Rather than just restrict the Transitions programme to Arizona timeshare owners, Diamond launched the programme across all USA resorts. Whilst it has to be said that this was certainly a step in the right direction, the so called “basic criteria” was not perhaps as basic as it would seem at first glance.

Transitions criteria

Our first point would be that the Transitions scheme, whilst adopted by Hilton, does not include any Hilton Grand Vacation Club owners, only the former Diamond owners now part of Hilton Vacation Club. Not Grand Vacation Club. Below we will look at the criteria as shown on the Hilton site, then comment:

Conditions to Apply

• You must have no existing loan balance or other lien encumbering the vacation ownership.
• You must be current on the payment of all maintenance fees up to the year for which you are relinquishing.
• You must have a clear and free title to the vacation ownership.
• All future reservations must be cancelled or travelled on before submitting a request. The program does not apply to certain Fixed Week/Fixed Unit deeded week Owners who have their reservation automatically booked in advance. Please call the Transitions team at 855-342-3689 for more information.
• Your vacation ownership must be in a Diamond Resorts Collection or managed property. Currently, Members who own in the EU Collection or members of Hilton Grand Vacations Club do not qualify.
• You must have purchased your vacation ownership directly from Diamond Resorts or from a predecessor whose developer rights were acquired by Diamond Resorts. Members and Owners who inherited or were gifted a vacation ownership from family will qualify if the family members would have qualified.
• Participation with a timeshare exit or resale company or firm may negatively impact your ability to apply for Transitions.
• The enrolment in and completion of the Transitions program will negate your ability to be added to the Embarc Repurchase program list. In addition, if you are already on the repurchase list, your position will be forfeited upon completion of the Transitions program.

Where applicable, if you meet the Conditions to Apply for Transitions, we will consider your application on a case-by-case basis, reviewing it both on its own merits and in the context of all other qualifying Transition applications submitted to date. This program is subject to change or termination without notice.

The problems

In the order above, we will start looking at potential problems:

• You must have no existing loan balance or other lien encumbering the vacation ownership.

This is fine and dandy for those who purchased either outright or paid off their finance some time ago. With average entry level timeshare in the USA hovering around the $23,000 a large number of owners have had to take finance to purchase. For many, part of the reason to exit is they can no longer afford repayments. Unless these owners can find a way to extinguish the finance, then they are trapped.

• You must be current on the payment of all maintenance fees up to the year for which you are relinquishing.

Similar to the above, increasing maintenance fees and the inability to pay is one of the greatest reasons to try to exit. If owners have become delinquent, in other words owe unpaid maintenance, then again, they are trapped.

• Your vacation ownership must be in a Diamond Resorts Collection or managed property. Currently, Members who own in the EU Collection or members of Hilton Grand Vacations Club do not qualify.

Not really a serious problem to USA former Diamond owners, however, those Hilton Grand Vacation owners and those with Diamond in Europe are stuck. No Transitions for them.

• You must have purchased your vacation ownership directly from Diamond Resorts or from a predecessor whose developer rights were acquired by Diamond Resorts. Members and Owners who inherited or were gifted a vacation ownership from family will qualify if the family members would have qualified.

From this it may be established that for owners who purchased resale points, in other words purchased via the secondary market, tough, you are not allowed to use Transitions.

• Participation with a timeshare exit or resale company or firm may negatively impact your ability to apply for Transitions.

This is particularly penal. As neither Diamond, as was, nor Hilton shout the Transitions programme from the hill tops, many owners who don’t even know it exists have contacted either exit companies or lawyers in a hope to extract themselves from their contract. That being the case there is no access to transitions. We will look at a real example later.

“Where applicable, if you meet the Conditions to Apply for Transitions, we will consider your application on a case-by-case basis, reviewing it both on its own merits and in the context of all other qualifying Transition applications submitted to date. This program is subject to change or termination without notice.”

So even if you do meet all the criteria above, it’s not just a case of a rubber stamp and you’re out. You will be “considered” on a case-by-case basis so a no answer may still be the outcome.

A true story

Our interest was piqued by the following headline on a timeshare related website:

“In America, everyone has the right to an attorney, even criminals! EVERYONE that is…EXCEPT timeshare owners at Diamond Resorts International.”

That’s what Robert and Suzanne C of Folsom, California discovered when they tried to get Diamond to take their timeshare back under the Transitions programme.

They had purchased a timeshare with Pacific Monarch Resorts in 1999. Diamond acquired Pacific Monarch in 2011. But as Robert and Suzanne explained their timeshare experience was a frustrating one. Robert and Suzanne tried diligently to use their timeshare but in twenty years, they had never once been able to reserve it for a week that worked with their busy schedule.

Back in 2013, Robert and Suzanne tried to exit with Diamond but were refused, no surprise there. They then paid for the services of an attorney to assist them in transferring their timeshare to a new buyer. The attorney was unsuccessful and no longer represents them. Robert and Suzanne accessed their account on the Diamond website and saw that they were eligible for the Transitions program. This was no surprise to them as they met each of the agreed criteria, except one.

Shortly after formally applying for the Transition programme, Robert and Suzanne received an email from Diamond stating that their application was not processed. The email explained “Your application for Transitions ™ for contract XXXX7518 was not processed due to failure to satisfy the following condition(s) for application:” Strangely no failed condition was provided.”

Mr. C contacted Diamond to ask what condition he had failed to meet. Diamond responded that it was “unable to move forward due to the account history reflecting legal representation on your end submitted to relinquish your vacation interest.”

The communication went on to say “Since working with a third-party company or law firm is a disqualifier for Transitions, I am unable to submit a Transitions request for you.” In other words, because Robert and Suzanne had exercised their right to legal assistance before Transitions was even created; they lost their rights at Diamond!

TCA comment

As we said at the beginning of this article, any developer who makes a move towards a realistic workable exit strategy is to be applauded, but when, due to onerous terms, this merely becomes lip service, then it’s of no value. In life, we guess that bureaucracy and the need to jump through hoops is common place, but for a simple timeshare exit something is very wrong.

Once again, citing life, there are many reasons why we need to consult the legal profession and this should be our right, not a reason to penalise. In the USA there is the 6^th Amendment which in a nutshell says that even the hardest of criminals are afforded the right to have legal representation. Timeshare owners are hardly criminals but it seems the right to consult legal advice and/or other exterior advice is a no no, at least where Diamond/Hilton are concerned.

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