Timeshare owners have been pleasantly surprised to see a few attempts at buy-back programs, initiated by some of the largest resort organizations. One of the biggest complaints that consumers have about timeshares, is the nature of the predatory lease contract, that is so notoriously difficult to exit from. Even after the consumer has enjoyed years of use, and the resort has experienced loyal, and regular payments from the member.
If you have enjoyed some of our consumer protection blog posts, you will have a deeper understanding of why Aconsumercredit™, is so committed to helping timeshare owners. We know that there is one winner in every timeshare contract, and it is never the consumer, when it comes to long term return on investment.
But if you have been curious about timeshares that have advertised ‘buy back’ programs, we weigh in with more than a decade of experience in the industry, to help consumers understand the nature and intention of the offers, and why they are not a great deal for timeshare owners.
Why Do Timeshare Buy-Back Programs Exist?
In our professional opinion, the prevalence of new buy-back programs from the timeshare industry, is an attempt to put a positive spin on bad customer service. It’s not difficult to find examples of several major timeshares, that have pages of online complaints from dissatisfied members.
The accusations against timeshare companies are always the same. First, that they sell the opportunity of timeshare ownership in a misleading way, with hidden costs and expenses. Second, that when the consumer wishes to end the obligation, the contract is iron clad, expensive and difficult to cancel.
Our experience tells us that the often-short-lived buy-back programs are really an attempt by the industry to address negative public relations. They want to both be perceived as flexible, and willing to help consumers, and encourage existing members to remain. What better way to persuade other timeshare members to stay in their contracts, than portray an image of demand. If the timeshare is willing to buy-back the lease, they must have many people waiting for timeshares within the resort.
Truthfully, the entire industry has come under increased public and legal scrutiny, for instances of fraudulent behavior. Buy-back programs can be short-term incentives, that are also used to draw consumer attention to a resort, that may be struggling with vacancies. No matter how understanding it appears to be, it is still a sales tactic that is being used successfully, to lure in more buyers, and quiet complaining existing members.
Some Strings Attached
The Marriott Vacation Club, as an example, offers a timeshare buy-back program, that they refer to as a “Right of First Refusal”. Before any Marriott timeshare can be sold, or transferred to another buyer, the offer and purchase agreement must first be sent to Marriott to review. The timeshare has a limited time in which to review the contract, and they have the option to buy out the owner, for the same terms as the prospective transfer buyer.
In this case, the existing buyer may be refunded a portion of their investment in the vacation membership. Marriott will then sell the timeshare, to the buyer named in the new agreement, for the stated offer, provided it is at a market value that the timeshare approves of. Not only does this make the buying and selling process arduous for owners, but it also artificially insulates the value of the timeshare properties. Marriott maintains a minimum price, to retain valuation, and refuses to allow for contract transfers that are below their own standards of fair market prices.
When you hear of buy-back programs, read the fine print and talk to another timeshare owner who has been through the same procedure. Many sellers are dismayed to discover all the strings attached, and how difficult it is to set a competitive sale price, when the price must be approved by the timeshare first. Westgate is another large timeshare corporation, that uses a similar “right of first refusal” model.
Deed Back Contract Clause
If you have maintained your current monthly membership and maintenance fees, some timeshares allow a deed back within the contract, as an option to exit the plan. This type of clause must be written into your contract, to be an option. Until the timeshare is deeded back to the resort legally, owners are responsible for keeping all fees current, including down payment financing or loans.
In many cases however, a timeshare will refuse to deed back any timeshare, that has a mortgage or loan associated with it. Legal documentation and evidence to demonstrate that there are no outstanding financial liens on the timeshare is required, prior to deed-back.
When a consumer has this option, they forfeit all equity that they may have built up in the property. For instance, you cannot attempt to sell it, to recoup some of your lost expenses. A ‘quit claim’ deed is processed to transfer ownership, and some administrative costs and transfer fees will also apply.
Why Timeshare Owners Need an Advocate
Regardless of the options to cancel your timeshare contract, you can count on delays, non-communication and other ‘stonewall’ techniques designed to keep you inside your timeshare contract. Why work with our timeshare cancellation team? We know the laws, and we have more than a decade of experience working with timeshare organizations. Our team helps by ensuring all legal requirements are met, while cutting through the red tape to eliminate discussions, and zero in on the result you want. To end your timeshare contract for good.