En español | "My parents purchased a timeshare more than 30 years ago,” began the email from Kim Seney, a recent retiree from Northern California. Over the years, I've gotten so many questions like this that I knew what was coming next. Seney was hoping to help her widowed mother unload the timeshare and the $1,200 in annual fees that came with it. The family hadn't used the timeshare, outside of Reno, Nevada, in years.
Seney had done her research. She'd looked into selling it on eBay and donating it to charity, to no avail. The next step looked to be a timeshare exit company, but the cost was high. “I'm uncomfortable paying $10,000 to get out of this thing,” she said.
She isn't the only one. Almost 10 million households own some sort of timeshare, according to the American Resort Development Association. About 850,000 of them (based on a pre-pandemic estimate) would like to sell within two years. Some, like Seney's mother, Joann Johnson, 85, can't travel anymore. Others can't afford the management fees that continue for as long as you own the property, whether you use it or not. Still others are frustrated that they haven't been able to swap their property as promised. If you've ever wondered why you see so many ads for timeshare exit companies — businesses promising to help you get out of your contract — this is why.
The very first move, experts agree, is to check with the resort itself. When you call them up, don't talk to just anyone. Ask specifically for the person who handles “deed-backs” or “surrenders” — which is when you return your property to the company, maybe for a fee of a couple hundred dollars or so. Explain your situation in detail and see if you can find a solution. Though few advertise it — a resort might have information about surrenders online — “almost all the major programs have some sort of deed-back program,” says Brian Rogers, who runs Timeshare Users Group, a site his father founded 27 years ago. To qualify, you generally can't be behind on your dues and you can't have a loan balance. Some will let you deed back the property only if you have a financial hardship. Smaller resorts and developers that don't have official deed-back programs may relent anyway. “In many cases, the squeaky wheel gets the grease,” says Rogers. Just be wary of any resort company that tries to talk you into buying more points or “upgrading” before it allows you to cancel. Say no, hang up and move on to one of the following solutions.
1. Stop paying. Before you do this, take stock of your situation. If you took a loan to buy the property and you still have a balance, stopping payment will have an impact on your credit. “The creditor doesn't care that you bought a timeshare,” Rogers says. “You borrowed money and didn't pay it back.” But if you simply stop paying annual fees, it's possible a company won't report that to credit bureaus.
Often, stopping your fee payments is the push resorts need to allow you to surrender. Why? Accepting a surrender often costs them less than foreclosing on the property, explains Daniel Blinn, a Connecticut-based attorney who has handled timeshare cases. “The amount of money usually is not enough for the resort to bring suit. They typically will remarket the timeshare."
2. Offer it on the resale market. You'll get little or no money, except perhaps for a premium timeshare in a higher-end chain like Disney, Marriott or Hilton. But if you do find a buyer, you deed that person the property, who will then be responsible for the fees. Although you'll find listings on eBay and Craigslist, there are two major forums just for timeshares: tug2.com (the website for Timeshare Users Group) and redweek.com.
3. Use a company to help you exit. Be very, very careful here. The Better Business Bureau (BBB) reported in 2019 that “complaints against Missouri-based timeshare exit companies have exploded in recent years.” (Many sprouted in Missouri as an outgrowth of timeshare companies in the Branson resort area; more have popped up as timeshare owners cut back on spending during the pandemic.) Complaints revolved around hard-sell tactics, fear-mongering — no, your kids won't have to keep paying fees after you die — and cases that drag on for years. The biggest red flag, Rogers notes, is a requirement that asks you to pay upfront. “We would never, ever suggest the use of an exit company. Period,” says Rogers.
Pretty much the only reason to even consider the exit company route is if you absolutely can't bear to deal with the timeshare company yourself, and you're willing to pay a lot — prices vary widely, but around $4,500 is common — for someone else to deal with it. The company, or a lawyer associated with it, will in most cases do what you can do on your own: start the deed-back process or let the timeshare people know you aren't going to be paying anymore.
If you go this route, look for a company that has been in business 5 years or more, then read the BBB site to see how they've handled complaints. “If they've been in business long enough, they've had complaints,” says Gordon Newton, whose company Newton Group has an A-plus rating from the BBB. “Did they take care of them? Did they refund them, and did they make things right?"
To Seney's delight, she didn't have to jump through any of those hoops. She called the resort company, explained the situation and was told that, although there was no formal deed-back program, as long as she could send them her father's death certificate, they'd take it back. It would go through a foreclosure process, but it would not hurt her mother's credit score because the resort company wouldn't report to a bureau. All in all, it should be wrapped up in less than six months. “I'm over the moon,” Seney said. “I wish I'd discovered this two years ago."