Timeshares sound like such an appealing idea. You basically get your own consistent vacation home in a destination that you love while paying a fraction of the price of having to own that home. However, timeshares are usually financially a bad idea. If you have one, then you might want to learn how to legally exit a timeshare contract.
What Is a Timeshare?
There are a variety of different types of timeshare contracts. However, basically, it’s a part-time vacation home. You pay an upfront fee to join the timeshare. Then you pay an annual fee to cover maintenance costs. In exchange, you’re allowed to book a certain amount of time at this vacation home each year. In some instances, you can trade with others so that you can go stay in a different timeshare location. The concept is that you get to have your “own” home that you’re used to in a destination you want to visit annually. Obviously, the price is a lot cheaper than actually buying your own home in that location and only using it once a month.
Why Are Timeshares Usually a Bad Financial Choice?
Saving Advice has a good set of articles explaining why timeshares are bad. The short answer: it’s a waste of money. You usually pay more than you need to for the service of having a timeshare. You could get hotels for cheaper. You can even rent timeshares from other people. If you decide to sell your timeshare, then you almost always lose money. Although there are certain timeshares that work well for some people, usually it’s not a good investment. Therefore, you might want to legally exit a timeshare contract if you have one.
How to Legally Exit a Timeshare Contract
When you bought your timeshare, you signed a contract. Dig out that paperwork and read through it. After all, that’s going to tell you exactly what the rules are for your particular situation. That said, AARP recommends the following three strategies to legally exit a timeshare contract:
1. Ask About Deed-Back / Surrender Programs
Many timeshare resorts do have a program in place for people who want to legally exit a timeshare contract. You want to call the resort and/or developer. Then request to speak to the person in charge of the deed-back program. They might also call it a surrender program. This is the person who can walk you through what the rules are for returning your property to the resort company. Usually you can expect to pay a few hundred dollars in fees. Be wary if asked to pay more than that.
2. Sell/ Donate Your Timeshare
You own the timeshare. You’re allowed to sell it. AARP notes that you’re rarely going to get money for the sale. However, you’ll get rid of the timeshare. You won’t have to pay for it anymore. You’ll deed it to the new person and be done with it. US News and World Report notes that you can also gift a timeshare to a family member or friend.
People have been particularly interested in how to legally exit a timeshare contract during the pandemic. After all, they often can’t travel to the vacation spot. Moreover, they might not have the same income as before to cover annual fees. Therefore, this can be a great way to get that burden off your back. AARP recommends Timeshare Users Group and redweek.com as two options for timeshare resales.
3. Timeshare Exit Companies
There are companies that exist specifically to assist you in figuring out how to legally exit a timeshare contract. However AARP, and other sources, say to do your research before going this route. There are some great legitimate companies out there that will do all of the work for you at a fair price. On the other hand, there are companies that overcharge you and take advantage. So check with the Better Business Bureau and read online reviews if you opt to go this route.
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Kathryn Vercillo is a professional writer with more than a decade of experience writing about healthy living and personal finance. She lives in San Francisco, where she has learned to maximize frugal living tips in order to thrive as a freelancer in one of the nation’s most expensive cities. When she’s not writing, she’s exploring the city on foot with her rescue dog. Learn more about her at www.kathrynvercillo.com. Kathryn also writes about saving money with coupons over at GroceryCouponGuide.com .