Strategies For Exiting A Timeshare Contract

Quick answer

• Understand your contract’s rescission period for immediate cancellation.
• Explore the “right to cancel” clause if available in your contract.
• Contact your resort developer or management company to inquire about buy-back programs or exit solutions.
• Consider working with a reputable timeshare exit company, but research them thoroughly.
• Explore selling your timeshare on the secondary market if allowed by your contract.
• Be aware of potential exit fees or penalties.
• Consult with a legal professional specializing in timeshare law for complex situations.

Who this is for

• Timeshare owners who regret their purchase and want to exit their contract.
• Individuals seeking to stop ongoing maintenance fees and other associated costs.
• Those who have been unable to sell their timeshare through traditional methods.

What to check first (before you act)

Your Contract and Rescission Period

Review your original timeshare purchase agreement. Many states have a statutory “rescission period” (also known as a “cooling-off period”) immediately after signing, during which you can cancel the contract without penalty. This period is typically short, often just a few days.

Your Resort’s Exit Policies

Check your contract for any clauses related to voluntary termination, buy-back programs, or transfer options. Some developers or management companies offer pathways for owners to exit, though these may come with fees or specific conditions.

Your Financial Situation and Timeshare Costs

Assess the total annual cost of your timeshare, including maintenance fees, special assessments, property taxes, and any other recurring charges. Understand how these costs impact your budget and your overall financial goals.

Outstanding Debt on the Timeshare

If you still have a mortgage on your timeshare, understand the terms of repayment and how exiting the contract might affect your credit. High-interest debt associated with a timeshare can be a significant financial burden.

Your Credit Score and Financial Health

Be aware that any actions you take to exit a timeshare, especially if it involves defaulting on payments or a loan, could potentially impact your credit score. Protecting your credit is crucial for future financial endeavors.

Step-by-step (simple workflow)

1. Locate Your Timeshare Contract:

• What to do: Find all original documents related to your timeshare purchase. This includes the contract, any amendments, and related financial statements.
• What “good” looks like: You have all necessary documents readily available for review.
• Common mistake and how to avoid it: Misplacing documents. Keep a dedicated folder for important financial agreements.

2. Identify the Rescission Period:

• What to do: Carefully read the contract for any mention of a rescission, cancellation, or cooling-off period. Note the exact number of days.
• What “good” looks like: You understand if you are still within the rescission window.
• Common mistake and how to avoid it: Assuming there’s no rescission period or missing the deadline. Act immediately upon realizing you want to cancel.

3. Notify in Writing (if within Rescission):

• What to do: If you are within the rescission period, send a formal written notice of cancellation to the developer or seller. Use certified mail with a return receipt requested.
• What “good” looks like: You have proof of sending and receiving your cancellation notice within the legal timeframe.
• Common mistake and how to avoid it: Cancelling verbally or via email only. Always use a documented method like certified mail.

4. Review Contract for Exit Clauses:

• What to do: Thoroughly examine your contract for any provisions allowing for voluntary termination, buy-back, or deed-back programs.
• What “good” looks like: You understand the developer’s stated procedures and any associated fees or conditions for exiting.
• Common mistake and how to avoid it: Assuming no exit options exist. Many contracts have specific, albeit sometimes restrictive, clauses.

5. Contact the Developer/Management Company:

• What to do: Reach out to your resort developer or management company directly. Inquire about their official exit programs or if they have any buy-back options.
• What “good” looks like: You have a clear understanding of their policies and any proposed solutions.
• Common mistake and how to avoid it: Giving up after the first attempt. Be persistent and document all communications.

6. Research Reputable Exit Companies:

• What to do: If direct options fail, research companies specializing in timeshare exits. Look for established businesses with good reviews and transparent fee structures.
• What “good” looks like: You have a shortlist of well-vetted companies and understand their services and costs.
• Common mistake and how to avoid it: Falling for scam companies that promise guaranteed results with upfront fees. Always check reviews and ask for references.

7. Understand Exit Company Fees and Process:

• What to do: If you engage an exit company, clarify their fees, payment schedule, and the exact process they will follow. Ensure you understand what “success” means to them.
• What “good” looks like: You have a written agreement clearly outlining all terms and conditions.
• Common mistake and how to avoid it: Paying large upfront fees without a clear contract or understanding of the service.

8. Consider Selling on the Secondary Market:

• What to do: Investigate options for selling your timeshare on the resale market. This might involve listing it yourself or using a licensed broker.
• What “good” looks like: You have realistic expectations about sale price and market demand.
• Common mistake and how to avoid it: Expecting to recoup your original purchase price. Resale values are often significantly lower.

9. Consult a Legal Professional:

• What to do: If your contract is complex, you’re facing legal threats, or you suspect unfair practices, seek advice from an attorney specializing in timeshare law.
• What “good” looks like: You receive clear, professional guidance tailored to your specific situation.
• Common mistake and how to avoid it: Trying to navigate complex legal issues alone. Professional advice can prevent costly errors.

10. Cease Unauthorized Transfers:

• What to do: Do not attempt to transfer ownership or sell your timeshare outside of the contractually permitted channels.
• What “good” looks like: You are adhering to the terms of your contract or have a legitimate, documented exit strategy.
• Common mistake and how to avoid it: Engaging in fraudulent or unauthorized transfers, which can lead to legal trouble.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Missing the rescission period	Inability to cancel the contract without penalty, locking you into ownership.	Act immediately upon realizing you want to exit; understand your contract’s rescission terms.
Ignoring maintenance fees	Accumulation of debt, potential legal action, and damage to your credit score.	Pay fees on time or pursue an exit strategy before fees become unmanageable.
Paying large upfront fees to exit companies	Risk of being scammed, losing money with no resolution, and still being obligated to the timeshare.	Thoroughly vet exit companies, look for escrow services, and avoid companies demanding full payment upfront.
Attempting to sell without developer approval	Contract violations, potential legal action, and the sale being invalidated.	Follow your contract’s guidelines for selling or use approved resale channels.
Defaulting on timeshare mortgage payments	Foreclosure on the timeshare, significant damage to your credit score, and potential collection actions.	Communicate with your lender about hardship options or pursue a formal exit strategy before defaulting.
Believing “guaranteed” exit claims	Falling victim to scams, losing money, and remaining in your timeshare contract.	Be skeptical of guarantees; research companies and look for realistic promises and transparent processes.
Not documenting communications	Difficulty proving agreements, disputes, or attempts to resolve issues, weakening your position.	Keep records of all calls, emails, and letters; use certified mail for important notices.
Transferring ownership without proper consent	Contractual breaches, invalid transfers, and potential legal liabilities for both parties.	Ensure all transfers are conducted according to your contract and with the developer’s or management company’s knowledge and consent.
Relying solely on online forums for advice	Misinformation, bad advice leading to costly mistakes, and potentially violating contractual terms.	Use forums for general awareness but verify all critical information with your contract or legal counsel.
Not understanding the true cost of ownership	Underestimating financial burden, leading to missed payments and difficulty exiting.	Calculate all annual costs (fees, assessments, taxes) and consider their long-term impact on your budget.

Decision rules (simple if/then)

• If you are within the first few days of signing your contract, then immediately send a written cancellation notice via certified mail because this is likely your rescission period.
• If your contract includes a buy-back program, then review its terms and conditions carefully because it may be the simplest exit route, but could involve fees.
• If you have significant debt on your timeshare mortgage, then prioritize understanding how exiting will affect your credit score because a default can have long-term financial consequences.
• If you are considering an exit company, then research their reputation and look for escrow services because this helps protect your money until the service is rendered.
• If your resort developer is unresponsive or uncooperative, then explore independent exit companies or legal counsel because you may need external assistance.
• If your timeshare contract is very old or complex, then consult with an attorney specializing in timeshare law because they can navigate intricate legal situations.
• If you are unable to sell your timeshare on the secondary market, then investigate other exit strategies rather than continuing to pay fees indefinitely because the financial drain can be substantial.
• If you have a fixed-week or floating-week timeshare, then research the demand for that specific type of ownership on the resale market because some types are harder to sell than others.
• If you discover hidden fees or misrepresentations during your ownership, then document everything and consult an attorney because this may be grounds for contract rescission.
• If you are facing financial hardship, then contact your resort management company or lender to discuss options before missing payments because proactive communication can prevent severe consequences.
• If your contract has a “right to cancel” clause, then follow its specific procedures precisely because deviating could invalidate your attempt.

FAQ

Q: How quickly can I get out of a timeshare contract?

A: The fastest way is usually within the initial rescission period, often just a few days after signing. Beyond that, the timeline depends on your contract, the developer’s policies, or the effectiveness of an exit company.

Q: What is a rescission period?

A: It’s a legally mandated “cooling-off” period after purchasing a timeshare, during which you can cancel the contract without penalty. The length varies by state.

Q: Can I just stop paying my maintenance fees?

A: While you can stop paying, this is strongly discouraged. It will likely lead to foreclosure on your timeshare, significant damage to your credit score, and potential collection actions.

Q: Are timeshare exit companies legitimate?

A: Some are legitimate and can help, but many are scams. Thoroughly research any company, check reviews, and be wary of those demanding large upfront fees or making unrealistic promises.

Q: What happens if I inherit a timeshare I don’t want?

A: You are generally obligated to fulfill the contract terms. You’ll need to go through similar exit strategies as an original owner, such as selling or working with an exit company.

Q: How much money can I expect to get if I sell my timeshare?

A: Often, you will get significantly less than you paid for it, and sometimes nothing at all. The resale market for timeshares can be challenging.

Q: What is a deed-back program?

A: Some developers offer a “deed-back” option where they will take back the timeshare ownership from you, usually for a fee.

Q: Can my credit score be affected if I exit a timeshare?

A: Yes, especially if you default on payments or a loan associated with the timeshare. A successful exit through proper channels should ideally have a neutral or minimal negative impact.

What this page does NOT cover (and where to go next)

• Detailed legal advice for specific contract disputes. (Next: Consult a qualified timeshare attorney.)
• Specific resale market values for your particular timeshare. (Next: Research your timeshare on resale websites and consult with licensed brokers.)
• Tax implications of timeshare ownership or exit. (Next: Consult a tax professional.)
• Negotiating with timeshare developers for specific concessions outside of stated policies. (Next: Consider professional negotiation services if available and reputable.)
• International timeshare exit strategies. (Next: Seek legal counsel specializing in international property law.)