Your Timeshare is a Liability, NOT an Asset

 

Why Do Many Owners Think Their Timeshare is an Asset?

Sadly, it is when consumers try ending their timeshare ownership that many first discover their timeshare is a liability and not an asset.

This is because timeshare sales representatives often mislead buyers at the time of purchase to believe their timeshare is an investment, not a liability, and that a timeshare may appreciate in value or has a secondary or “resale” timeshare market value.

According to Newton Group’s Timeshare Exit Study— based on over 9,000 timeshare ownership experiences—OVER 60% RESPONDED THAT THE TIMESHARE SALES REPRESENTATIVE(S)/PRESENTATION DECEIVED THEM AS TO THE INVESTMENT VALUE OF THEIR UNIT.

What Do Timeshare Resorts Say About Financial Value?

Below is an example of language taken directly from one U.S. timeshare resort’s public offering statement. Many resorts use similar language in their owner manuals, master agreements, or public offering statements.

“The purchase of a Unit Week should be based on its value as a vacation experience or for spending leisure time, and not considered for purposes of acquiring an appreciating investment or with an expectation that the Unit Week may be resold.”*

YES, ANY VALUE YOUR TIMESHARE HAS IS NOT FINANCIAL, RATHER, ITS VALUE IS ONLY IN VACATION EXPERIENCE OR LEISURE TIME.

According to the statement above, its value should not be considered “with an expectation that the Unit Week may be resold”.

Here’s one more point that’s also found in the Consumer’s Guide To Timeshare Exit:

“Units (other than Commercial Units) and Unit Weeks are offered for sale for personal use and enjoyment only and should not be purchased by any prospective purchaser for resale or as an investment opportunity or with any expectation of achieving rental income, capital appreciation, or any other financial return or valuable benefit, including but not limited to any tax benefit. Owners attempting to resell or rent their unit or unit week would have to compete, at a substantial disadvantage, with the developer in the sale or rental of its unsold units or unit weeks. Generally, there is no established market for the resale of Units and Unit Weeks or for the rental of Units and Unit Weeks in the Condominium.”*

So not only should you not purchase this timeshare “with any expectation of achieving rental income, capital appreciation, or any other financial return or valuable benefit…” Should you ever try to resell or rent your timeshare, you will be competing with the developer at a substantial disadvantage.

This statement begs the question, if the resorts clearly state all this in public documents and timeshare contracts, why does it come as a surprise to so many timeshare owners? First, that language above was taken from a public offering statement that is 249 PAGES IN LENGTH. Not quite an easy read. And second, according to the Timeshare Exit Study, many owners were not given the opportunity to read the contracts fully or closely, either on their own or with their own legal counsel, before signing. In fact, the study details numerous high pressure sales tactics used to sell timeshares.

 

Where Does This Leave Timeshare Owners?

Many owners find themselves at the end of their timeshare ownership lifecycle with expensive contracts that have little or no value and no end date—which means never-ending and ever-increasing maintenance fees. In other words: IT LEAVES THEM WITH A LIABILITY.

WHAT IS A TIMESHARE OWNER TO DO?

This is where Newton Group comes in. We ensure EVERY AVAILABLE OPTION IS PRESENTED TO YOU through our Comprehensive Exit Process.