Timeshares can be appealing to some who travel often. Some do benefit from timeshare arrangements and save money through the setup because of their consistent use of their vacation timeshare.
Others, however, end up regretting the decision to buy into a timeshare. Timeshare business comes with lots of fine print. Getting legal advice from an experienced attorney and financial expert when buying and/or trying to get out of a timeshare deal can protect a buyer's best interests.
What Is a Timeshare?
Buying into a timeshare agreement is not the same as buying a vacation home. Developers purchase or build one or more condominium-type units and complete the required legal steps in order to sell brief time-period stays (usually weekly) in these units. (Some states consider some timeshare arrangements to be actual pieces of real estate, making other real estate laws applicable to timeshare agreements.)
A deeded timeshare means that the person/people who have bought into the timeshare own a certain amount of that vacation property. The person typically buys in for a certain place and/or certain unit for a specific number of weeks during a year. Maybe it is one week.
You will share this piece of real estate with a number of other people. Buyers are part of a fractional ownership with the others, owning, for example, 1/52 of a unit. Though that might sound minimal, it can still be legitimate ownership. For some, that is important.
Other timeshare purchases might be a leased timeshare arrangement. This differs from a deeded timeshare because one entity owns the real estate property and is renting it out to those who buy into the timeshare arrangement. Fractional ownership isn't a thing in this scenario.
Buyers are simply renting vacation time, probably a set week or two annually without earning anything to show for it besides the vacation and memories made. This may be okay, depending on why you are purchasing a timeshare. Just note the FTC warning that: "...the value of a timeshare is in its use as a vacation destination, not as an investment." In other words, know what you are buying and that this is not an investment in the same way as buying real estate can be.
The Risks of Timeshares
Timeshares can have a bit of a bad reputation. That is not to say all timeshares are a bad idea. However, you should consider several factors prior to purchasing a timeshare. These include:
- The background of the seller, developer, and management company
- The current maintenance budget (NOTE: in some cases, maintenance budgets can increase significantly over time. Make sure you know if there are limits on maintenance fees).
- The purchase arrangement (deeded or leased)
- Options to get out of timeshare
Many travelers succumb to the temptation of the timeshare pitch. Some might simply listen to the charming marketing of a development's representative. It might get them a free night at a hotel. Not all move forward with buying in or renting in to the vacation option. Millions of others do — almost 10 million in fact.
Millions undoubtedly enjoy the financial, personal decision to go in on a timeshare. Others end up needing or wanting to find a way out of their timeshare agreements. Maybe it was too difficult to travel the way they'd hoped or had been promised. Maybe they run into financial hardship.
How To Try to Get Out of a Timeshare
Getting out of a timeshare arrangement is not always an easy option. Timeshare companies/owners have a financial interest in keeping people in their contracts. However, that doesn't mean there is no way out.
Some timeshare developers offer options to get out of your contract. This can come at a cost but it tends to be more of a short-term versus long-term cost. Someone interested in a timeshare should ask about options for getting out before committing. Those who are already in their contract but want out can still reach out to a developer to see what help they might be willing to offer.
Other relief options exist. For example, you can rent out your timeshare. This is unlikely to get you to come out ahead or even cover your costs but renting can offer some financial relief while allowing others to enjoy the vacation.
Most states now regulate time-sharing, either under existing state land sale laws or under laws that were specifically enacted for time-sharing. Many state laws on time-shares carry specific protections for buyers with rights to cancellation of purchase. The regulating authority is usually the Real Estate Commission in the state where the timeshare property is located. See State Regulation of Timeshares.
Have An Attorney Guide Your Steps
If you have found yourself in an unwanted timeshare situation, you might already feel scammed. Just keep in mind that there are some scams out there that target people desperate to get out of their timeshare agreements. It is wise to not make any more contract decisions before talking to an attorney experienced with timeshare matters.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.