Timeshare Agreement Loopholes

Written by: Chuck McDowell Updated: Jan 23, 2024 Published: Aug 17, 2022 7 minute read

Timeshare agreements are legally binding documents that require the buyer to pay a certain amount of money each year for a certain amount of time. Alas, some of these agreements often contain loopholes that allow the buyer to get out without paying the total amount.

These timeshare agreement loopholes can be found in the fine print and must be carefully read and understood before signing. No matter how much resort brokers downplay the significance, buying a timeshare comes with immense financial obligations. Often, a purchase like this carries substantial risk with little reward. Hence, the all too common feeling of "buyer's remorse" for timeshare owners.

study by the University of Central Florida (UCF) concluded that 85% of consumers in the industry regret their purchase. From the high maintenance fees and mortgage payments to the abundance of misinformation in timeshare sales pitches, it's no wonder so many timeshare buyers are dissatisfied. Owners curious about potential loopholes to get out of their timeshare will find this article of the utmost importance.  

Types of Timeshare Agreements

Two types of timeshare agreements are available, outlining who owns the property and how you can visit it.

Shared Deeded Agreement

A shared deeded timeshare contract divides property ownership between you and all other timeshare owners. Every person is usually assigned a specific week or set of weeks to use. A share-deeded agreement also gives you the right to sell, gift, or bequeath 

Shared Leased or Right-to-use Agreement

Shared leased or right-to-use timeshare contracts divide property use between you and everyone who pays for the timeshare. The lease allows you to use the timeshare for several years. It gives you no right to sell or rent your timeshare or any real estate interest; it gives you no ownership rights.

What are the Legal Implications of a Timeshare Agreement?

Real estate complications, contract stipulations, and business laws are some of the most prominent legal issues that arise with timeshares. Those who own timeshares may fall behind on their payments. Others may fail to pay property taxes or other bills. Many timeshares are actually scams that some people fall for when purchasing interest. When a single property is divided among multiple timeshare owners, numerous conflicts may arise. When no one is coordinating the months or weeks of the year, the times they travel to and live in the building may cause a problem. When two parties schedule the same times for rest and relaxation, a legal battle between each party or against the owner is possible.

When two parties have a schedule for the same time, it can lead to conflict if they bring others or if there is only enough room for one. Some timeshare properties have enough rooms for multiple people to stay without additional space. However, these issues may arise if they are unwilling to share the space simultaneously. Other legal concerns revolve around timeshare cancellation or when there are overlapping state laws in the area. Multijurisdictional complications arise when the owner lives in a different state than the property and has a legal issue.

Other Timeshare Legal Issues

Those who wish to transfer their rights to another person may discover that this action is fraught with legal complications. Others attempt to sell the timeshare interest to a third party. However, when dealing with the other owners, the possibility of giving away or selling the interest without consulting the other owners or the original contract of sale may not exist. Many timeshares have a final sale agreement that cannot be changed. Others have a time limit for returning funds where cancellation is possible. However, this document may permanently bind the party to the terms.

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Timeshare Agreement Loopholes

Timeshare agreements are written, so people must stay with their arrangements for as long as possible. Today, millions of people in the United States own timeshares. With the current pandemic causing travel restrictions and financial stress, many timeshare owners are looking for a way to get out of theirs. Despite the COVID-19 pandemic, few timeshare resorts have offered their owners any exit program. As a result, timeshare owners are forced to take matters into their own hands.

Examples of Timeshare Agreement Loopholes

Timeshare loopholes such as selling your timeshare, renting out your timeshare, and timeshare exit are all viable options for getting rid of the rising fees. Some of the most common loopholes include the right of rescission, which allows the buyer to cancel the purchase within a specific time, and the right of first refusal, which allows the buyer to refuse to purchase the timeshare if the seller offers it to someone else. Other loopholes include the right to transfer ownership, which allows the buyer to transfer ownership of the timeshare to someone else, and the right of non-payment, which enables the buyer not to pay the annual fees if they cannot use the timeshare.

Timeshare exit is the quickest and most likely permanent way to eliminate your timeshare. A consumer rights attorney or a reputable timeshare exit team can assist you in getting out of your unwanted timeshare. 

Let's look at these options more in-depth.

Use the Rescission Period

The best way out of a timeshare is to rescind the purchase. Alas, it's not always the easiest. The rescission period, also known as the "cooling-off" period, is the only time in which timeshare owners can cancel and receive a full refund. However, as with everything, the rescission periods have a limited grace period. More times than not, buyers miss the opportunity. Each state has different laws and regulations, but the standard is a 1-2 week rescission period at most.

Rescinding a timeshare typically entails writing a rescission letter and delivering it to the original sellers. Learn more about the process of writing a timeshare cancellation letter.

Ask the Resort to Take it Back

When the chance of rescission slips away, the next best option is to ask the resort developer to consider accepting the property back. Some timeshare companies are open to providing a deed-back program. Albeit, this is limited to deed-back clauses. Nevertheless, it's worth inquiring about before looking at other solutions.

Be cautious when interacting with timeshare representatives, as they may attempt to upsell you on property upgrades instead. An upgrade may sound like an easy fix, but they seldom work out in the owner's favor. 

Transfer the Timeshare to Your Family or Friends

If the resort does not take the timeshare back, maybe a friend or family member would be interested in owning it. Be upfront about the transfer closing costs and annual maintenance fees to make for a smooth and effortless process. Just because timeshare ownership wasn't appropriate for you doesn't mean your family or friends can't enjoy it.

Donate the Timeshare to Charity

Too often, timeshare agreements are designed to entrap owners indefinitely. That is why some owners give their timeshare property away. That includes offering it to a timeshare donation company or charity. Donating a timeshare may not recoup your losses, but it makes a positive change. Compared to the next timeshare exit strategy, this route can prevent a long and complicated process.

List in the Timeshare Resale Market

The most typical exit strategy is reselling. Owners with a deeded timeshare often have the right to list it for sale in the secondary market. To resale, there needs to be a willing buyer and a closing company to authenticate the transaction. When venturing into the resale market for timeshares, owners can enlist a real estate agent or real estate brokers or go through an online marketplace. 

Competitively pricing a timeshare can help recoup expenses but is not guaranteed. Use caution when browsing timeshare resale sites, as many claims to be resellers only to swindle the upfront payment. Refer to the Timeshare Users Group (TUG), the largest advocacy organization, to find reputable resale companies.

Rent Out Your Timeshare to Cover Expenses

Just because you no longer want to be a timeshare owner does not mean you have to get rid of the property. Developers who do not offer a deed-back program often recommend renting out the units during the allotted time. By doing so, profits can go toward the property's annual expenses. However, timeshare expenses increase so a rental plan may be a temporary fix.

Hire a Timeshare Exit Company

For years, timeshare resorts have put innocent people in uncompromised financial predicaments. To combat this, the timeshare exit industry emerged. Resorts make it challenging to escape purchase agreements, so timeshare exit teams specialize in terminating these biased deals for the victims. Outsourcing a timeshare exit program has proven to be the best option for owners. Timeshare cancellation companies have already helped thousands of families relieve unnecessary burdens. You may be eligible for a timeshare exit company even with no other loopholes.

Why is it Difficult to Get Out of a Timeshare Agreement?

Simply put, the timeshare resorts make it so. Almost every owner would be out after the first year if it were easy. Resorts do not want to see their clients walk away, so they do whatever it takes to ensure that doesn't happen. The following are a few examples of why getting out of a timeshare agreement can be problematic:

Misinformation and Lies Are Routine: The average timeshare vendor is not honest. Much of what is promised in a timeshare presentation, such as an easy exit plan, never comes to fruition. 

Timeshares Are a Lifetime Agreement with Annual Maintenance Fees: More times than not, a timeshare agreement is written in perpetuity, meaning it lasts indefinitely. Not only that but there are also annual maintenance fees. Permanent financial obligations make it difficult to walk away from.

Entrapping Clients in Perpetuity Profits the Timeshare Industry: As long as resorts can keep clients entrapped, they charge annual fees at a total profit. 

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Common Loopholes For Timeshare Ownership

A misconception about timeshares is that they're impossible to get rid of. While timeshare developers go to extreme lengths to enforce their client's sales agreements, there is sometimes an escape clause. Below is a list of common loopholes to backing out of a timeshare purchase agreement:

Exiting Timeshare Without Scams

Avoiding potential timeshare fraud is critical. Like the resale companies, timeshare exit scams are taking further advantage. These are the three features for finding legitimate timeshare exit companies:

  • A Staff With Industry Experts
  • Offers a Money-Back Guarantee
  • Demonstrates Proven Success With Reviews From Past Clients
  • Work with a cancellation company that meets the qualities outlined above. 

Wesley Financial Group, LLC*

Wesley Financial Group, LLC* (WFG) is an excellent example of a reputable exit company. As a pioneer of the timeshare cancellation industry, WFG's track record speaks for itself and surpasses the qualifications above. With more than a decade of experience, they have canceled 40,000 timeshares and counting.

If you experienced deceptive sales tactics with your timeshare purchase and are looking for a way out, it may be worthwhile to contact WFG for more information. Their timeshare termination services may be able to help you achieve financial freedom.


*Wesley Financial Group, LLC, and its affiliates, successors, or assigns are not lawyers or a law firm and do not engage in the practice of law or provide legal advice or legal representation. All information, software, services, and comments provided on this site are for informational and self-help purposes only and not intended to substitute for professional advice, legal or otherwise.

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