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The Time-Share Trap

There aren't many good options if you're stuck with an unwanted time-share

Time share trap


Freeing yourself from a time-share you no longer want can be a tricky endeavor.

Dear Ron,

My father-in-law is 86 and in poor health. He owns a time-share he doesn't use, but it costs $800 a year in fees. That obligation will apparently pass on to his estate. There is no market for resale, and we even asked the owners association to take it back at no cost, but the association refused. Can you help us find a way out of paying forever on something we will never use?

— Debbie Kim, Overland Park, Kansas

Here's my advice for anyone tempted to buy a time-share: Tread carefully. As Debbie has found, resale value is often nonexistent, with no good way to get out of paying hundreds or thousands of dollars a year in fees. Of course, there is no shortage of companies offering to help you unload your time-share property—at a steep price. Many are scams.

I reached out to Dan Reeves, the volunteer board president of the Vintage Landing Property Owners Association in Lake of the Ozarks, Missouri, where the Kim time-share is located. I pleaded the family's case, but no luck. "I'm in the same boat," Reeves said. "I signed the same contract as Mr. Kim did. We can only hope the economy picks up."

Many time-share associations aren't much bigger than your average condo association, and they depend on annual fees to cover operating costs. The system typically works well, until owners stop paying.

"It's a common downward spiral in the industry," says time-share-industry expert Brandon Reed, CEO of Reed Hein and Associates. "Too many wanting out of their properties at the same time—no one is buying, and the property declines."

My suggestions if you're stuck with a time-share:

  • Offer it back to the resort at no cost. If you get an acceptance, feel lucky.

  • Pay the resort to take it back. The owners association is worried it will lose needed cash flow if you abandon the property. Sweeten the deal by offering two or three years of future fees along with the deed.

  • Enjoy it. Time-shares are real estate. Abandoning one is legally equivalent to abandoning any other property. You could severely damage your credit rating.

  • Rent it out to help defray the costs. And who knows—you might run into someone who loves the place and wants to buy you out.