Q: I read your recent article on timeshares with great interest. I would also like to get rid of a timeshare. We enjoyed the timeshare for many years when our son was growing up and the maintenance fees were at a reasonable rate. At this point in time, our son is no longer interested in vacationing with us and the maintenance fees for the timeshare have skyrocketed.
Would you please recommend the easiest way for us to get rid of our timeshare? We were planning to offer it back to the timeshare company. If they refuse to take it, we may give it away. Even if we give it away to the first person we see on the street! Your advice would be greatly appreciated!
A: Here’s the sad truth about timeshares: Unless you live in a timeshare development that is popular, you may find it hard to get rid of your timeshare.
We’ve written about this in the past. When you buy a timeshare, you might buy the right to use a specific property during a specific week of the year. You might also buy a right to trade that week for points in a system that allows you to use other properties.
But what you really buy is the ongoing obligation to pay real estate taxes, insurance costs, and maintenance obligations relating to the building and the timeshare you purchased. You may have had plenty of good years using the timeshare, but your payment obligations continue whether or not you use the timeshare now and in the future.
Many buyers purchase a timeshare with the expectation that they will use it in the same way for years to come. And many do. But others find that they use their timeshare for a couple of years and then want to get rid of it.
Timeshare sellers may discover that buyers are hard to find. There are companies that claim they will find you a buyer or will act as a broker for you to find a buyer. These will often require an upfront fee, which will be a waste if the timeshare doesn’t sell. (Some of these websites have plenty of complaints against them so be sure to type the name of the website and the word “ratings” and then the name of the website or company and the word “complaints” as part of your due diligence before you sign a contract or pay any fees.
Some timeshare developers have a process in place that allows timeshare owners to sell their units to buyers waiting in line. The timeshare developer or manager takes a cut of the sales price, but you get rid of the ongoing financial obligation.
Other timeshares are much harder to unload. You might own a timeshare in a large development where dozens of units are for sale. Or, your timeshare development may be older, less desirable, has issues, or is no longer what it used to be.
These are tough timeshares to sell. Contacting the management company to see if they have a system in place for selling the units is the smart first move. You can also advertise in the timeshare development to see if any other owner is looking to extend their time or needs additional space during their weeks.
If you can’t unload it, you might try to rent out your timeshare to minimize the costs to you of ownership. You might have an easier time renting it than selling it. When it comes to giving away the timeshare, you’ll need to treat it like a sale and make sure that whoever takes it off your hands agrees to become legally responsible for the financial obligations of timeshare ownership. You may need a legal sales agreement that spells this out, but transfers ownership for no money or perhaps $1.
Most importantly, the timeshare management company must release you from any further liability to pay future expenses. This is important, because you don’t want to give it away and still have the management company come after you for unpaid bills. Contact them to understand their process for a transfer of ownership.
(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through their website, bestmoneymoves.com.)