Category: NEWS

Timeshare Passed To Next Of Kin

There are a lot of things that we wish could last forever: the perfect evening on the beach, time spent with family, the lovability of a new puppy. For most people, that list doesn’t include timeshares.

It may come as a surprise, but 74 percent of all timeshare contracts are in perpetuity, meaning they have no fixed end. While some timeshare resorts sell this idea as securing a comfortable lifestyle for your children, other resorts may not even mention the clause at all. Timeshare perpetuity places a financial burden on the next generation, as they’re now responsible for paying escalating annual maintenance fees, even if the timeshare mortgage is paid off or not used.

It’s no wonder timeshares continue to be one of the fastest- growing  people complain about,  according to the Consumer Federation of America.

So, why are there perpetuity clauses in most timeshare contracts? The American Resort Development (ARDA) notes that the average timeshare owner is 51 years of age, with the majority in the Baby Boomer generation. Bringing in first-time and younger buyers remains a longstanding challenge for an industry that prioritizes growth over the next decade. One way to ensure continued revenue, is to lock down the next generation in a contract their parents have signed.

If you are concerned that your timeshare will be passed on to your children after you pass away, then you need to find out if your timeshare contract includes a perpetuity clause. Timeshare Exit Pros has experience with these contract clauses and can help you navigate a way out.

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Staff Writers July 14, 2019 0 Comments

A Few Reasons Why People Still Buy Timeshare

3 Reasons Why People Still Buy Timeshares in 2018

We’ve entered an age where toddlers operate smart phones, cars can drive themselves, and soulmates are found with a swipe. For many individuals, innovation has fueled their consumer behavior with a need for instant gratification and social acceptance. While several industries haven’t been able to stay in tune to meeting these needs, most of the travel industry has proven to thrive in this environment.

As travel continues to become more affordable and easier for consumers to use, the principles of timeshare ownership no longer hold the same worth it used to carry. In the 1970s, people associated timeshares with a sense of pride and prestige. For many, this association has since changed to hold a more negative connotation. Still, an ever-pressing question remains, why do people continue to buy into the primarily outdated practice of timesharing when the rest of the travel industry is booming with progress, convenience, and value?

In 2016, the American Resort and Development Association (ARDA) reported an approximate total sales volume of $9.2 billion, an increase of 7% from the previous year. Yet, even with the external progresses in the travel industry, ARDA states in their 2016 case study that nearly 41% of these timeshare sales came from new owners¹. You might be wondering how the timeshare industry has been able to pace with the other advances in the travel industry, which is why we’ve identified 3 reasons why people continue to buy timeshares today.

Bit by the travel bug

Consumers tend to eat more, sleep more, and spend more while on vacation. There’s a “travel high” that takes over. When people travel for pleasure, there’s a natural tendency to leave reality at home, and timeshares thrive on this. ARDA reported in their 2016 case study that 100% of resort respondents reported using on-site, in person presentations as sales tactics². Resorts are eager to take advantage of people while they are on their peak during this state of euphoria. Vacationers can’t associate what responsibilities they are taking back home with them after purchasing a timeshare like maintenance fees and perpetuity clauses. For many new owners, it’s not until they go home and read the fine print of their 50 page contract that the travel high dissipates and buyer’s remorse sets in.

Misconceptions

Many people have become timeshare owners after attending mentally and sometimes physically straining high-pressured timeshare presentations. More often than not, the presentation is usually the very first interaction a typical consumer has ever had with timeshares. This allows the timeshare salesmen to emphasize the benefits of timeshare ownership greatly, knowing that most consumers don’t have much background of the associated risks. There’s a great deal of ignorance and lack of regulation on the subject. Even outside of the standard sales presentation, timeshares are selling for $1 on sites like eBay – which may initially seem like a great deal in comparison to rental or booking sites like AirBNB or Expedia that list similar amenities for hundreds of dollars. Without taking the time to properly educate oneself on the pros and cons of timeshare ownership, consumers sign into contracts simply because they’ve been sold on false promises or haven’t fully vetted what it means to own a timeshare.

Lifestyle Alignment

Timeshare contracts are unique, and mortgages and maintenance fees can vary even within the same property. Given the number of frustrated owners, it is unclear how effective timeshares are at identifying the demographic that can fit a timeshare in with their lifestyle vs those that cannot. And even though consumers now have many avenues and platforms to book travel, some consumers do still enjoy timeshare ownership. These individuals find value in it because it fits their lifestyle. These consumers can book their timeshare, have the time to use it, and have the finances to support the responsibilities that come with ownership. Some timeshares are also point-based allowing owners to travel to more than one location which gives them more options to create and share new experiences.

As the general travel industry advances and becomes even more consumer focused, it’s possible that the timeshare industry may follow suit. Recent changes to protect consumers from high-pressured sales tactics and unfulfilled guarantees have come but the industry has proven to make little change to their practices throughout the decades. If you or a loved one is considering purchasing a timeshare, or maybe you’re just about to plan your summer vacation – we encourage you to educate yourself on the risks associated with timeshare ownership to decide if it will align with your lifestyle before you sign a contract.

If you currently own a timeshare and are looking to get out safely, educate yourself on your options. Reach out to others who have successfully exited and take the time to read through and understand your timeshare contract. Timeshare Exit Pros offers free consultations where you’ll be able to get an expert to review your documents with you. If your timeshare no longer fits your lifestyle, maybe it’s time to be one of the many who are actually getting out of their timeshare in 2018.

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Staff Writers July 14, 2019 0 Comments

Timeshare Purchase Remorse

A timeshare may seem like a great purchase at first — a guaranteed vacation for you and your family year after year. But what happens when the appeal fades and you have a timeshare that you either can’t, or don’t want to use?  With over 9 million timeshare owners in the United States2 alone, this can be a common occurance.

The top reason for this regret stems from the financial burden that comes with timeshares. Not only is there the significant cost of the original purchase, but there are also rising maintenance fees, the risk of special assessments, and the reality of lifetime contracts.  On average, a timeshare costs over $20,0003 purchased new from the resort. Many owners finance this purchase, oftentimes through a credit card through the timeshare company directly. This means that they are making money off of both the original sales price, and interest accrued through the mortgage. With an average interest rate of 14%4, these high interest loans are a huge profit center for the timeshares.

Even if a timeshare is purchased on the secondary market at a lower cost, there is still the obligation of maintenance fees. The average annual maintenance fee is $9705, and must be paid to the timeshare year after year, regardless of whether or not the timeshare is used. Maintenance fees also increase over time, meaning that $970 fee is going to look a lot different by the time your children inherit it.

The less frequently mentioned financial liability is the risk of special assessments. A special assessment is a fee added on top of the maintenance fee, usually to cover the unexpected costs faced by the timeshare. This could include natural disasters, upgrades, or new management. A natural disaster such as a hurricane could damage a resort and cost owners thousands if the timeshare doesn’t have the funds reserved. Consider when owners at the Hawaiian resort Point of Poipu were faced with a special assessment of $5,893 to pay for the damage caused by “water intrusion.”6 $5,893 for every week or interval owned translated into an unexpected bill for over $10,000 for those who owned multiple weeks.

Another top reason for regretting the purchase of a timeshare is that many contracts can be passed on to the owner’s estate and/or children. If your timeshare ownership includes “perpetuity” language, you may want to have a discussion with your loved ones to see if they value the timeshare as much as you did when you first purchased. If not, they may end up inheriting something that feels more like a burden than a blessing.

While these are not the only reasons owners regret their timeshare purchase, these are four of the most common reasons people seek relief from the burden of ownership. Those who are considering exiting their timeshare for good should consider asking their resort directly to see if they offer a legitimate exit path. If a direct exit through the resort is not available, owners can seek out other proven and recommended means to exit such as Timeshare Exit Pros.

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Staff Writers July 14, 2019 0 Comments

Double booking at the Resorts. Why?

Key Takeaways:

  • With an average of more than 45 owners per timeshare unit, booking your vacation can prove tremendously difficult (ARDA)
  • In 2016, the timeshare industry reported more than $1.9 billion in rental revenue (ARDA) – generated when unit owners are unable to book their vacations

Everyone who enters a timeshare contract knows that their new unit doesn’t belong just to them – you can’t just saunter off to your unit for the weekend on a last-minute whim – you must work around who has already booked their time and wait for your opening. Scheduling your hard-earned vacation time is a difficult venture even when you don’t have to consider the schedules of other owners – but the timeshare resorts want to make that scheduling process easy for you, right?

Unfortunately, double-booking or even triple-booking timeshare units is an all too common occurrence, leaving at least one owner or family tied up at a resort with nowhere to stay. Even more unfortunate is that the resorts actually benefit from it happening – it has turned out to be an incremental source of revenue for them!

There are approximately 206,080 timeshare units in the US and 9.5 million total timeshare owners across the country (ARDA). That means, on average there are more than 45 owners per unit attempting to book specific weeks of vacation, on top of resorts ‘blacking out’ travel-heavy dates like Memorial Day or Labor Day. Keep in mind that this is the average – in some cases, there are over 52 owners per unit (as many weeks in a year), which makes it impossible for some owners to redeem their hard-earned vacations. A competition among owners for preferred vacation times is inevitable – and so is the resulting disappointment when owners can’t secure the weeks that work for them and their families.

While the timeshare industry reported a whopping $9.2 billion in sales in 2016, another $1.9 billion was generated by secondary market – rentals (ARDA). How does that work? Essentially, if an owner is unable to use their property during their allotted time, that time goes directly back to the resort. Then, the resort rents that vacancy one-off to non-owners. By doing this, resorts can capitalize on this new secondary rental revenue, plus the original fixed sale revenue of the unit. In other words, why would the timeshare resorts bat an eye when their units’ owners are unable to redeem their allotted vacation time? Further, any damage to your unit caused by renters could result in special assessment fees – falling directly on your tab at year’s end.

While this secondary revenue is a boon for resorts, one would hope they’d be more mindful and prioritize consumers so they get to experience the vacation they paid for – especially when the consumers already don’t realize the full benefits of traditional second-home-ownership. For instance, if you own a vacation home independently, not only do you get to use it whenever you want, but you also get the financial bonus of renting that home out to others. In the timeshare industry, the rental revenue can go directly back to the resorts.

We have heard about this pain-point of timeshare ownership far too often, and it has regularly driven owners to exit. If you have had your timeshare unit double-booked and had to rent another unit as a result, we want to hear from you! Sometimes direct exit through a timeshare resort is not a viable option – if that is the case for you, reach out to Timeshare Exit Pros for a free consultation.

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Staff Writers August 18, 2018 0 Comments

A Patient Process, but well worth it

As of 2017, 9.2M Americans own some type of timeshare,  unfortunately, many of those people find it incredibly difficult (or seemingly impossible) to leave their timeshare contracts if they want to.

That’s exactly why companies like Timeshare Exit Pros exist – to support consumer financial health and assist people in exiting their timeshare contracts when they have no other option. That said, there’s not always a one-size-fits-all approach to exiting your timeshare. We wanted to share some of the different exit options

that consumers should consider if they’re looking to get out of their timeshare contract:

  • First, you can try selling your timeshare via a no-up-front-fee listing company – but this comes with some inherent risk, like still being attached to maintenance fees or in breach of contract with the resort.
  • If selling doesn’t seem like the best approach for you, we at Timeshare Exit Pros recommend calling your resort to see if there is a legal, low-cost way out of your contract.
  • If that doesn’t work, a good attorney can help but they may not guarantee their service – not all attorneys specialize in timeshare exits and the high hourly rates can add up quickly.
  • In that case, it may make sense to consider using a timeshare exit company. When selecting an exit company, you should be wary of anyone who puts you under high pressure sales tactics, asks for a credit card before your contract is signed, or promises a timeframe that sounds too good to be true.

Timeshare Exit Pros is a smart choice for consumers looking for a company to help them legitimately and legally exit their timeshare contract. Understanding your individual situation gives us a customer-first approach: we offer free, no-pressure consultations where you can learn more about your ownership and exit options.

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Staff Writers January 7, 2018 0 Comments

Fees Are A Family Burden

An infrequent but brutal pain point for timeshare owners that we encounter is the dreaded special assessment fee. Special assessment fees come in many forms but are, at their essence, bills that timeshare resorts charge their owners beyond regularly-scheduled maintenance fees or ownership dues. Unlike maintenance fees, which are scheduled payments and therefore somewhat predictable, a special assessment fee could land on a timeshare owner’s doorstep at any time.

Here are a few types of special assessment fees I’ve seen timeshare owners deal with:

  • The Upgrade: Typical, run-of-the-mill unit upgrades are the most common reason you’ll see an extra line-item on your timeshare bill. When resorts upgrade their services or amenities, timeshare ownersare left to foot that bill.
  • The Natural Disaster: Natural disasters are the second major reason for exorbitant unit fees. Many resorts are in parts of the country that get hit particularly hard by destructive weather – Florida and Hawaii are likely suspects.
  • For example, in 2017, Sea Pines Resort required timeshare owners to pay $1,018 as a special assesment in addition to their $1,028 annual maintenance fee as a result of damages from Hurricane Matthew.
  • The New Owners: Some resort conglomerates make it their business to snatch up smaller resorts that are struggling to make ends meet and flip them into profitable businesses under their ownership. Whenever this happens, timeshare holders at the newly-adopted resort can expect to see some new fees fall in their laps. Most resorts will claim that current-standing units don’t live up to the high standards expected with their brand and will fund renovations in part by existing owners.
  • The Tragedy of the Commons:When other owners refuse, or otherwise can’t pay their fees, the resort will make up the difference elsewhere. This is often referred to in the industry as a “revenue gap” created by “owner-delinquency or non-payment”. When this happens, the HOA or resort board will levy special assessment fees on the other owners to compensate for the monetary loss.

Between resort wishes and mother nature’s plans, timeshare owners should be aware that assessment fees may happen, regardless of what special event you’ve been saving up for.

Fear Not, Here’s What You Can Do:

Depending on your circumstance, you may have a few different options when it comes to your timeshare’s special assessment fees:

  • Some owners can put up with special assessment fees if the unit is everything they dreamed it would be – in this case, keep paying them. Regardless of your attitude towards special assessment fees, do not evade them – resorts may increase the prices in the future to make up for it.
  • If you hear of other owners in your resort who are getting bombarded with random assessment fees and are unhappy about it, it may be worth pursuing a group legal review to see if there is a viable claim. While this tactic can send a strong message to the resorts, lawsuits can be extremely costly in legal fees with no guarantee of a positive outcome, so this option does not work for all parties.

If you have been hit with these exorbitant fees and want to get rid of your timeshare, reach out to us at Timeshare Exit Pros. We are committed to helping owners like you fight back against resorts and protect your financial well-being.

Special assessment fees on your timeshare are unfortunate. Take the time to stay informed so you can better predict when these fees may come through.

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Staff Writers April 22, 2017 0 Comments