Is There Such A Thing As A Good Timeshare?

 A reader writes in:

Hi Lisa,

Came across your blog and wondering if you might be able to provide some input?

My in-laws have a timeshare at the Maui Banyan in Kihei Hawaii that they purchased in 2004, paid off in 2014, they bought it for $20K, but with interest over the term, looks like $40k overall.

The maintenance fees about $900 or so, taxes about $200 per month, so figure on $1200/year, = $100/month. For 2 weeks, bankable (i think) and usable at other destinations.

What's the pros and cons of this type of timeshare? Why buy? Why not?

My response:

It’s a complicated question that I can’t answer comprehensively without knowing much more. 

I’ll say this much, the vast majority of timeshares that the developer is attempting to sell, including what your in-laws purchased, is available on the legitimate secondary market, albeit with some usage restrictions, for a small fraction of what the developer is selling it for. Add to that insult the fact that with rare exceptions, the resorts make inventory open to renters who can then get the benefits without the large buy in price and in some cases less than the annual fees. 

So from a purely financial standpoint, buying from the developer doesn’t seem all that wise. 

In my opinion, the industry has a long way to go before the value proposition of owning is back to what it used to be 20 or 25 years ago. 

And while I used to be a big proponent of timeshare points due to their flexibility, I no longer am. For the most part, they are unwieldy, I’m not 100% certain resorts are not overselling inventory and then there’s the fact that while a week in 2020 was a week in 1990 and will be a week in 2040; most point based timeshares offer no inflation protection leading to constant attempts to up sell the owner. 

Sure, the resorts are almost always nicer than a hotel. But as I pointed out, you don’t have to be an owner to stay at the resorts. 

So, while I’m still pro the concept of timeshare, I feel that in order to stay viable, the industry is going to have to do some serious retooling. 

Thoughts?

Lawyers...Who Needs Them?

 Living in Central Florida, I face a barrage of commercials from lawyers every time I turn on the television. It seems as if the local channels derive 95% of their advertising revenue from a combination of 3 or 4 law firms  

You can understand why I’m not a big fan of law firms. But for every loud mouthed attorney, or their equally loud mouthed clients, there’s a timeshare owner facing a problem that should only be handled by a timeshare savvy attorney. 

Let me explain. 

Timeshares are governed by many laws, most of which are impossible for the average consumer to grasp. It’s that way by design. 40 some years ago when timeshare was a new product, it required new rules and laws. Who writes new rules and laws?  Lawyers of course. If you have any doubts, go grab your timeshare documents and begin reading. I’ll bet you can’t get past Page 3 without throwing your hands up in confusion. Go ahead, I’ll wait. 

Good, you’re back. Now, if this short  exercise taught you anything, it’s that you probably should have had a lawyer, your lawyer, read over the timeshare contract before you purchased, or at the very least, before the legal...there’s that word again...rescission period ended. Sadly, we can’t go back in time to remedy that. But we can look to the present and future with our eyes wide open. 

For some timeshare owners, the time will come where they want “out” of their contract. I’m not speaking of those owners that wish to sell their interest and are able to do so. I’m speaking of the owners who are not paid in full and therefore can’t sell it, or those who feel they were mislead/lied to or that the developer is not holding up their end of the bargain. 

These owners require, yes, legal assistance. Why?  And why not just pay one of the myriad of companies that claim to get you out of your timeshare, some of whom even claim to get you your money back?

It’s simple really. The breaking of a legal, there’s that word again, requires legal action which can only be used by people with a legal standing, e.g. a lawyer. And not just any lawyer. Those ubiquitous lawyers advertising every 10 minutes in Orlando are not the ones to handle these issues. 

Let me give you an example. Let’s say you have a MacBook that’s acting wonky. Do you call a dude who says he is a “computer technician”?  Trick question of course, as MacBooks don’t ever act wonky!  OK, a real example. Let’s say you’re looking to purchase some stocks. Do you use a licensed stockbroker who is legally, again that word, licensed to facilitate the transaction or do you give your $5,000 to Joe down the street who bills himself as “The Stock Buying Team”?

Getting out of a timeshare contract is never as easy or simple as getting into one as you may imagine. As mentioned previously, the industry has had 40+ years of crafting these contracts to favor them. That’s not an indictment of the industry, it’s a fact. While you may indeed have encountered a salesperson who grossly over represented the benefits of the timeshare, that’s not reason enough to be let out of your obligations, which as you may have guessed, are legal obligations. 

Now that I’ve hopefully impressed upon you the need to seek legal counsel from a licensed attorney instead of a company that has no lawyers on staff, let’s turn our attention to those firms that may or may not have attorneys on staff. 

There are any number of firms with huge advertising budgets...you know where huge advertising budgets come from, right...that claim that they can obtain a legal release for you because they have a “team of attorneys.”  But it’s important to understand what these “teams of attorneys” can and can’t do vs. hiring an attorney to work for you. By the way, issuing a a Power of Attorney, known as a POA, is not sufficient in these cases. 

To begin with, at the very least, the attorney you hire to take on your timeshare matter should:

>Hold a current, valid attorney license in the state they practice in

>Have not been disbarred, ever

>Have more than 10 years of timeshare experience 

>Be able to tell you how much their services will cost you and provide that in writing 

>Clearly identify one or more actual attorneys that are working on your case that you have access to, I.e. you’re not being “farmed out” to a nameless, faceless entity

>Do more than provide you with a few letters that require you to send off to the developer 

>Provide you with a factual, honest and thorough evaluation of your case

>Turn down your case if your complaint is nothing more than “we can’t trade our week in a Branson for a week in Hawaii”...a good attorney is not there to bail you out of your poor choices. An attorney will take your case if in fact there has been a state or federal violation. 

You should be able to do due diligence on your attorney. Check their credentials online. This is impossible to do with those “teams of attorneys” because you’re not working with an individual attorney. 

Your attorney will operate under strict confidentiality as it’s part and parcel of any agreement drawn up. 

Your attorney will understand what a judicial foreclosure is and the impact that it has on your credit. Additionally, they’ll understand the significant difference between obtaining a judgement that releases you from your timeshare, I.e. commonly referred to as a cancellation, and a more encompassing judgment relieving you of your timeshare as well as any and all HOA encumbrances. 

In same cases, obtaining a judicial foreclosure will be the best outcome. Those firms with their teams of attorneys will not be able to repair your credit, and your credit will take a significant hit in this instance, which has many, serious implications unless you’re 89 years old and won’t be buying anything on credit for the next 7 years. 

Finally, an attorney will be able to obtain, or at the very least work towards a release on your terms, not the resort’s. You may think you only have one or two options, in much the same way you have one or two options when you return that Size 4 pair of shorts at a Kohl’s only to find out that 4 months of isolation has packed on a few pounds. An attorney will work with the resort’s legal department and slapping together a few boilerplate letters and sending it off to someone at the resort, as these teams of attorneys will do, won’t cut it. 

I’ll leave you with this...in my opinion, 95% of those companies that claim to get you out of your timeshare are outright scams and do more harm than good. That number goes up to 99% when we talk about companies/firms that heavily advertise these services. 

You’ve been warned. Now make good choices. 

Questions?  Email me at lisaschreier617@gmail.com