Timeshare. Why is it such a minefield?
Timeshare has gained a progressively negative reputation in recent years and much of this is to do with the disjunction between what is originally promised to the buyer and the reality they actually face once they have ‘signed on the dotted line’.
Getting into timeshare ownership is incredibly easy. There is often a very sales driven pitch showing beautiful pictures (but glossing over the finer details). Promises that the unit will steadily go up in value and will be easy to sell – should you ever want to – are often thrown around and within a flash the purchase is made. No faff, no difficulty, the unit is yours.
The issue really begins when an owner of timeshare decides that the purchase they made is actually no longer fit for purpose. Whether this be due to a change in lifestyle – say the arrival of a new baby, the loss of a job, a change in ability to travel or just the desire for more flexibility in a holiday – the outcome is more often than not that getting back out of the deal that was so easy to get into is incredibly difficult.
The bleak reality of the situation is often that owners are left with a timeshare unit they no longer want, and with rising maintenance fees, one they can often no longer comfortably afford. Re-sale is slow, if not impossible, and often owners find they literally cannot even give their unit away or hand it back to the resort.
But, why is it such a minefield to leave a timeshare contract? We want to look at some of the complexities here and offer some hope in relinquishing the property you no longer wish to own.
The Cooling off period
The grace period or the ‘cooling off’ period after purchasing your timeshare is formally known as the recession period. Once you have signed up to a contract, you are usually given around 3 – 15 days to ‘cool off’ and change your mind. In this period you are legally allowed to cancel your contract and walk away with no obligations.
If you are reading this and have just got home from a holiday where you sat through a sales pitch and signed up to a timeshare contract without fully understanding the implications then you should check your contract to see how long you have to back out of your agreement (this will differ considerably between different resorts).
If you find that you are still within your recession period then you will most likely be expected to write a formal cancellation letter stating your intention to leave. If you follow all of the actions within your contract to cancel and are within the grace period, then you should be able to get out of the contract and be refunded your money.
While this sounds simple in theory, timeshare resorts and companies will often purposefully create confusing clauses and wording within their contracts and will try almost anything to put you off trying to leave your agreement early. We have heard of cases of resorts refusing to allow a cancellation even within a grace period and legal action has had to be sought out by the buyer to allow them to leave without harassment from the timeshare company.
Even if you are outside of this recession period, occasionally timeshare resorts will allow you to ‘surrender’ your contract. Most will be very reluctant to do this as it is much better for them to have you as a regular source of income, but it has happened before. Therefore, it is always worth asking the question and having an open conversation with your timeshare company. Be sure to consider issues like: if you owe any money on the property or if there are any unpaid maintenance fees – in these situations it is very unlikely they will allow you to simply hand it back as you will still be liable to pay outstanding fees. In this scenario you will need to seek out legal advice from a qualified timeshare solicitor who can advise you on your next steps (but don’t lose all hope as this doesn’t mean you won’t be able to leave).
The in perpetuity clause
One of the most common legal issues within a timeshare contract is the ‘in perpetuity clause’.
This clause essentially means that your contract is set to last forever – which clearly is ridiculous when you take into consideration the age that many people actually take out a contract. The likelihood is that any contract in timeshare which is ‘in perpetuity’ will mean that the responsibility and money owed will ultimately be passed onto family members and be a burden for years to come.
Thankfully, recent laws have deemed that these types of contracts, that either exceed 50 years or have no fixed end date, are illegal. These types of clauses in contracts are incredibly unfair and can leave people feeling helpless and trapped in a situation that they either very much want out of or even can no longer financially support.
On your own, it can be a minefield trying to work through your contract and prove that it has inconsistencies or that it is in fact illegal. A qualified timeshare solicitor can work through your contract and help you exit it legally. If any illegal clauses are found within your contract, your solicitor can even pursue a compensation claim on your behalf.
Rising Maintenance fees
Rising maintenance fees are one of the biggest minefields in timeshare. This is one of the most common issues we help our clients with as they have become extremely worried that they can’t actually stretch to cover the costs any longer. A yearly sum that was once manageable is now getting out of control and often our clients have realised over the years that they could be finding much cheaper holiday alternatives to their timeshare (sometimes in the very same resort!)
Unfortunately, in many cases without the help of a specialist, timeshare companies can become very intimidating when you try and approach them to explain you can no longer afford to make the payments. They may even try and convince you that you will never win the case legally and send threatening letters.
We never advise you to simply stop paying your fees without taking out legal advice. A specialist solicitor will be able to tell if these are merely false claims being used as a bluff or if they are indeed something to worry about.
Flooded resale Markets
Another issue within the minefield of timeshare is selling a timeshare unit that you no longer want. The harsh truth is that timeshares are very difficult to sell on once they’ve been purchased. Many timeshares are sold at very heavily discounted prices due to the ‘flooded’ market with many people trying to sell up.
Many people find it extremely disappointing – especially after being told from the start that their timeshare would be ‘easy’ to sell when the time came. It’s advisable to come to terms with the likelihood that you may have to accept much less than you originally paid.
When it comes to selling a timeshare it can be a long, arduous process. You will have to continue to pay for maintenance until it is sold so this needs to be carefully considered. We also never suggest paying any company an upfront fee that promises to sell your unit for you. If it doesn’t sell you could be left even further out of pocket. These companies sometimes try to convince you to swap one contract for another but don’t be tempted into signing up for anything else. If in doubt, seek the advice of a regulated solicitor first that you can trust.
How can I exit my timeshare contract?
We often have clients who ask “Why can’t I just hand back my timeshare?” and we do understand these frustrations. To help further explain the complexities of timeshare, this article looks at three clients we have personally worked with successfully who were in very different situations within their contract.
If you are looking to exit your contract but have been rightly confused by the minefield that surrounds your contract then we can help. We work closely with all of our clients to understand their unique situation and frustrations so that we are placed in a strong position to advise you on the next steps you can take. We have many years of experience in this industry and many success stories for clients who have been in your position, and we may be able to help you too.
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