7 Reasons the Future of Timeshare Ownership Looks Bleak

7 Reasons the Future of Timeshare Ownership Looks Bleak

Over the last decade, the timeshare industry has done little to keep up with the evolution of destination travel. While technology and online booking continues to advance, the tactics and value propositions of timesharing have essentially remained the same. The diminishing number of uninformed consumers has begun to work against new acquisition as many consumers have begun to lose faith in the purchase.

Knowing what timeshare ownership might entail is enough to persuade vacationers to pursue other travel options. Instead of waiting for timeshare companies to get with the program, consumers seem content with watching the entity fade off into the sunset. Unless the industry makes a hard right turn, it’s difficult to envision a mass recovery over a mass exodus.

Even if things were to change, will it ever be enough to overcome a half-century long reputation? Let’s take a look at some of the reasons why we believe the future of timeshare ownership is looking bleak.

1. The Increasing Costs and Liability of Timesharing

Over the years, certain occurrences have caused vacation ownership to steadily rise in cost. Besides general inflation, developers didn’t properly assess demand during most of their expansion efforts. In the early years, decisions seemed to be based on opportunity instead of probability. When timeshare ownership wasn’t able to sustain its popularity (due to bad experiences and mistrust), resorts turned to current owners for the difference. What they didn’t realize was, this approach affected the perception of happy fractional owners.

Because timeshare companies are now left scraping the barrel for gullible consumers, expansion opportunities are ceasing to exist. This forces them to sell more aggressively while charging more per unit. Over the past few years, timeshare maintenance fees have been steadily rising at 4-5%. Surprise, special assessment fees have become more common. Resorts have found ways to recoup earnings when acquisition slows down.

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According to the ARDA (2016 AIF Owner’s Study), 66% of timeshare owners wanted to exit their contract because “the maintenance fees are too high.” Moreover, 46% of those that cancelled a timeshare mentioned annual fees as their primary reason. Small increases can amount to thousands of dollars over time. What makes this interesting is that resorts have notably avoided proper upkeep at some resorts. Not only are users not getting what they paid for, but they’re paying more for lower quality. The liabilities that come with these decisions are one of the reasons we believe the future of timesharing looks bleak.

2. There is No Resale Value for Timeshare Properties

Like we’ve mentioned in previous articles, a good number of new timeshare owners aren’t aware of the actuality of the resale market. Aside from the misspeak that timeshare sales reps use to persuade potential buyers, there are a ton of misleading options that take advantage of those looking to exit timeshare contracts. Once they realize that reselling isn’t ideal, it’s too late. Attempting to sell something that no one wants can be extremely costly. Throwing more money at something they don’t want and can’t make any money on can be demoralizing. Many of our clients talk about how they’ve spent thousands of dollars on resale platforms that didn’t provide a single lead.

Learning that you were lied to during the timeshare presentation and realizing the market doesn’t exist can be hard enough to swallow. On top of this realization, many timeshare owners underestimate the number of scams that cloud the resale arena. Just ask Darren Kittleson. When things aren’t working out and all hope seems lost, predatory agencies know exactly how to persuade you otherwise. They always have a meticulous agenda that uses disappointment and desperation to their advantage. Although platforms worth trying do exist, the overall uncertainty creates a bleak outlook for the industry as a whole.

3. The Timeshare Industry is Now Flooded with Scams

When it comes to timeshare fraud, the mischief doesn’t just dwell in resale. Victimizers also dabble in the buyer’s market from time to time. Claiming to have amazing deals in premier destinations, they lead people on long enough to collect quite a bit of cash. Verified Craigslist posts and Ebay listings have milked travel enthusiasts for decades now.

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At the same time, these are only a few examples of the consistent and ever growing misconduct in the timeshare industry. People are now being scammed before the purchase, during ownership, while they attempt to exit the contract and once they’ve terminated the agreement. If you’re already disgusted by the lies your timeshare company has fed you (to keep you under contract), realize this is only the tip of the iceberg.

Scammers know how trapped most timeshare owners feel and how desperate they’ve become. There are plenty of angles they can take to deceive you into believing their solution is worthwhile. From advocacy groups to legal representation, it’s difficult to know what to believe anymore. Anything seeming “too good to be true” normally is.

Some 3rd party agencies even work with resorts to ensure timeshare owners don’t make progress with cancellation. Not to mention that a large percentage of timeshare exit companies aren’t real. Thousands of dollars have been wasted on resolutions that don’t even exist. It’s a real shame, but only adds to the stigma of the industry. Even if you’re able to finally cancel your timeshare agreement, scams surrounding travel clubs, vacation rentals and advanced payments can flood your inbox – due to your online behavior. Since many consumers and industries refuse to touch timeshare with a 10 foot pole, the future looks bleak.

4. Today’s Travel Options Are Valued More by Travelers

Instead of waiting to see if timeshare companies are willing to overcome the reputation they’ve built (at the consumer’s expense), travel enthusiasts are now pursuing vacations that better suit their needs. Perpetual contracts just don’t make sense anymore as luxury vacation rentals and retail resorts are prevalent in today’s society. While scams do exist in other travel options, a number of platforms have established themselves as trustworthy entities.

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When timesharing first came about, most people were thrilled to be able to afford a vacation in a place they’d never dreamed of visiting. The ease of global travel has given consumers the unique ability to explore the world without being tied to one location. Although points and exchange programs broadened the horizon for timeshare owners, availability and quality was still a problem.

For the most part, today’s vacationing options consistently meet the expectations of travelers. The experience usually matches the presentation. Even if small inconveniences occur, the user isn’t tied to payments. They also have an ability to review their experience to order to warn future travelers or find resolve with the property. Timeshare companies have failed to value the user experience. Because of this, the future doesn’t look bright for timeshare ownership.

5. The Evolution of E-commerce in the Travel Industry

Options for travelers is only one element of timeshare competition. Since fractional ownership is based on perpetual (or lifelong) agreements, retail travel makes more sense. One click bookings have taken the market by storm over the last decade. Consumers now flood to reputable sources for online vacation deals and packages. Travelers even have the option to schedule flights, lodging and a rental car in the same place. It’s very difficult for the timeshare industry to compete here.

Even online retailers are now pushing timeshare weeks without ownership. Air BnB, VRBO and HomeAway are currently dominating vacation rental. Because of the user experience, travelers now feel far more comfortable using consumer to consumer e-commerce sites for travel related bookings. Removing the middleman (Ie: timeshare company, rental and resale platforms) allows them to keep everything in front of them. Instead of believing in “promised solutions,” timeshare owners are now taking matters into their own hands. This alone should tell you how standoffish people are about the timeshare industry – whether it comes to perpetual agreements or retail access to their inventory.

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6. Timeshare Companies Have Been Overselling Inventory

Ever since the timeshare rush in the late 1900’s, developers have been selling non-existing products. As the points evolution grew, this became even more popular. It was a way for timeshare companies to, once again, keep buyers under contract. It’s almost as if they never saw the repercussions of doing so. Overpromising and under delivering has never really been fruitful. It’s just not sustainable when it comes to large purchases.

In a recent article, we wrote about the ramifications Midtown Manhattan Club received for selling unavailable reservations. Although the property remained full, this rightfully angered their users. You’d think they’d at least limit the inconvenience when selling air. In the end, the NY Attorney General required them to pay $6.5 million in restitution, amongst other things. This goes to show that regulations are increasing and timeshare companies are no longer able to just get away with unethical sales practices. For this reason, the outlook of timesharing doesn’t look good.

7. A Consistent, Perpetuated and Tarnished Reputation

If you analyze each of the aforementioned reasons, you’ll realize that the timeshare industry has had every opportunity to redeem themselves. But the growing level of greed has basically clouded the entirety of experience altogether. Temporary solutions have sprouted up, but have failed to actually address the problems timeshare owners have. The thing is, it’s not like timesharing has only been around for a short while. For nearly 60 years, the industry has compiled substantial amounts of skepticism.

Every travel innovation experiences roadblocks. Even vacation rentals have endured some backlash from consumers. The difference is their willingness to make things right. The way the timeshare model is set up, there’s limitations on what they can do to overcome negative perception. They’ve already proven their unwillingness to decrease prices. High pressure sales and unethical tactics have remained consistent. Worthless incentives and non-existent service has been their achilles’ heel for a long time.

The best way to understand this is that they’re maximizing profits before the market runs out. Either way, the consumer continues to lose unless they’re able to prove misconduct in court. As we’ve discussed before, this is very difficult to do. Timeshare companies are banking on their ability to hold onto their fractional owners for life. A lack of interest in overcoming this perception and repaying those taken advantage of is the main reason we believe the future of timesharing looks bleak.

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If you’re interested in learning more about getting rid of your timeshare contract or what you’re options are, we’d love to provide you with a free consultation. If you believe you’re ready to pursue cancellation services, feel free to fill out a qualification form below.

The Result of Walking Away from Timeshare Maintenance Fees

The Result of Walking Away from Timeshare Maintenance Fees

As we’ve discussed in previous articles, timeshare ownership can be full of unexpected occurrences that don’t align with the anticipated experience. From booking frustrations to surprise assessment fees, the vacation haven can quickly shift from butterflies to a perpetual payment of regret. Not only can this type of expense drain people’s bank accounts, it can damage their perception of the travel industry – and rightfully so. Although it may seem like common sense to pay attention to every detail when planning a trip or settling on a timeshare, many travelers are distracted by potential. Once they become privy of the reality of their situation, it’s normally too late for them to turn back.

When you think about it, preparing for a vacation is stressful enough on its own. Adding additional fees and a lack of availability to the equation can create quite a bit of animosity – towards the resort and at home. Unfortunately, the timeshare industry could care less. If you haven’t already found out for yourself, its overflowing with deceitful promises. Once you think you’re in the clear, something else backfires. No matter how many options there are to find timeshare relief, they all seem to lead you back to the same problem. Owning the property can be quite the drag in this scenario.

Walking Away From Timeshare Maintenance Fees Sounds Good

Many timeshare owners despise the sight of their annual timeshare maintenance fees. They just so happen to arrive in the mailbox during this time of the year. Just in time to spread, I mean kill, some holiday cheer. If money is tight or the timeshare owner is simply fed up with the expense, they might consider doing something drastic. Some might look to make a statement and seriously consider walking away from timeshare maintenance fees altogether.

Whether they’ve paid off the contract or not, they might feel like the value of the purchase isn’t adding up. Dumping the timeshare and it’s fees might seem like a viable option to those that desperately want to get rid of timeshare expenses. Do you find yourself contemplating whether or not to walk away? It’s important that you don’t let your emotions or resentment cloud your judgement on this one. Thousands of timeshare owners have been and will be penalized for this decision.

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Why We Care About the Decisions You Make.

At VOC, we speak to thousands of unhappy, disgruntled timeshare owners every year. A good number of them simply cannot afford making payments anymore. It’s a sad truth that’s much more prevalent than most people know. The purchase has been a lot more overwhelming than they ever expected. Helping them find a resolution is important to us – whether they decide to cancel the timeshare or not. At the same time, in order to help them help themselves, we have to make sure they don’t act irrationally. Before you go through with walking away from timeshare maintenance fees, we want to explain what you can expect in return.

Why You Shouldn’t Stop Paying Timeshare Maintenance Fees.

When it comes to maintenance and assessment fees, the amount charged is unfortunately out of the timeshare owner’s control. These costs are determined and governed by a management company (or board) and the transparency is basically non-existent. Although they usually cover property maintenance, operations, budgetary concerns and improvements, a number of “various expenses” typically arise.

Even when timeshare owners don’t agree with the amounts being charged, they’re contractually obligated to cover the expenses of the resort. Almost all timeshare purchases involve perpetual agreements. In other words, they’ve agreed to pay for an infinite period of time. Getting rid of timeshare contracts is nearly impossible as is. If you breach your contract, you can typically expect the following repercussions.

1. You’ll be Refused Reservations and other Options.

When you veer off from the contract requirements, the resort reserves the right to deny your reservation requests. Although this may not apply to those wanting to cancel the timeshare purchase in the past, it’s still something the resort will make sure you’re aware of. If you do decide to book your week, the check-in desk will refuse the reservation due to a contract violation.

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Aside from your annual vacations, the timeshare will also refuse to process rental requests. You may think you’re being cunning by offering your week as a rental, but you’ll soon find out it’s not that easy. What happens when you have to process a refund and find the traveler another place to stay? Talk about a costly mistake.

You might think an exchange will work in your favor as well. But, when you’re not current on your maintenance fees, depositing your week (or interval) may no longer be an option either. Your right to process anything regarding the resort is restricted when you decide to walk away from the obligation you signed up for.

2. You’ll be Pursued for Timeshare Maintenance Fees

Defaulting on the timeshare by walking away from the fees will also initiate attempts by the resort to hold you accountable for the breach. Failing to honor the contract gives them every right to pursue you to the furthest degree. This can range from aggressive forms of communication by an internal team to sending you to a 3rd party collections agency.

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The resort is going to do everything they can to pressure you into making any type of payment. Similar to the sales tactics used to close or upgrade you, they know exactly how to hit you where it hurts in order to collect. Many timeshare owners would rather pay the maintenance fees than deal with the consequences. But, some are stubborn enough to dare the resort to act.

In addition to collection attempts, it’s important that you realize the resort will also hit you with penalties and late fees. If you’re still paying on a mortgage and walk away, then you have to anticipate compounding fees for both. Most loans come from a 3rd party lender that has nothing to do with resort obligations. You could end up being harassed by two separate entities if you’re not careful.

When a certain amount of time has passed without success (normally 30-90 days), it’s almost a guarantee that your delinquency will be reported to a credit reporting agency. Although this may not initially worry you, a damaged credit history can eventually hinder your ability to borrow money for an extended period of time. A car loan or another mortgage may be out of the question until the negative reporting falls off. If the timeshare company is extra stingy, they can continue to renew the balance owed for a long time.

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Just like most timeshare owners hope things will work out in their favor, the timeshare company normally assumes you’ll eventually pay up. If they get the drift that you’re serious about refusing to pay, they may begin to threaten you with legal action. Although some of the smaller timeshare operations don’t have the capabilities or means to legally pursue you, a large majority do – and they will. Assuming this is another scare tactic can backfire on you quickly.

Aside from the time investment, a legal battle can easily cost you everything you have. Remember, resorts have the leverage of a legally binding contract on their side. They also have the firepower to legally pursue you to the fullest extent if they want to. Is walking away from timeshare maintenance fees really worth all that?

4. The Resort Can Pursue a Foreclosure.

Besides compounding late fees, collections and credit reports, the developer (or HOA board) also has the right to pursue a foreclosure on the property. No different than a legal battle, the timeshare can add foreclosure costs to the amount you owe them. Court fees, attorney expenses, filing costs and other documentation efforts can be financially damaging.

The foreclosure process can be dragged out for years if it has to be. Even if you think you’re in the clear and collection agencies stop calling, a foreclosure may be in the works. Some timeshare owners don’t hear about this for years and are blindsided by the repercussions. Once the courts are involved, the outlook isn’t very favorable for the timeshare owner. Just like delinquent balances sent to collections, a foreclosure can drastically impact your credit scores.

5. Other Owners at the Resort Will Pay the Price

What can be hard to swallow for most timeshare owners, is the impact their decision has on their peers. On top of individual repercussions, walking away from timeshare maintenance fees causes other owners to pick up the slack. The resort may initially absorb the costs, but they’ll eventually disperse the loss amongst their remaining fractional owners. Although this takes time, it’s inevitable.

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In most cases, this affects those that are in good standing with the resort. Resorts have no problem charging those that pay their bills on time. In other words, you’re giving owners without problems the same frustrations that caused you to walk away. Resorts will make sure you’re aware of this. Guilting you is another form of leverage they’ll play in order to get you to pay. Even if it’s by force, they have no intention of losing you as a customer or their residual income. At the end of the day, someone will pay for the maintenance fees so the resort can cash in on the profits they estimated for the year.

Walk Away From Your Timeshare Legally with VOC.

Understanding the result of walking away from timeshare maintenance fees can be gut-wrenching. If you were set on ceasing payment, the reality of the repercussions may cause you to lose the little bit of hope you had. But, you’re not alone. Escaping the clutch of timeshare ownership is on the minds of thousands of travelers across the country. We want you to know there’s no need to give up and give in if you’re serious about getting out.

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At VOC, we specialize in helping timeshare owners find a resolution. Once you’ve exhausted all options, we’re able to provide you with guaranteed timeshare cancellation services. What differentiates us is the simple fact there are no pressure sales, no broken promises and zero misrepresentation. Since 2014, we’ve upheld our reputation by terminating 100% of our client’s timeshare contracts. Not only have we followed through with our promises, but we’ve provided timeshare owners with the professional experience they deserve. If you’re considering walking away from timeshare maintenance fees, we’d love to point you in the right direction. The only result you should be focused on is a memorable vacation that’s timeshare free.

Check Your Eligibility

View our eligibility form below to inquire about our qualifying for our timeshare cancellation program. This is the first step in getting to know how to get out of timeshare maintenance fees and the contract with the resort altogether.

How Timeshare Assessment Fees Are Different Than Maintenance Costs

How Timeshare Assessment Fees Are Different Than Maintenance Costs

Purchasing a timeshare can be an exciting time for those that have dreamed about vacationing every year. It’s easy for most to commit to a monthly agreement that seems to be cheaper than spending money on one-time vacation packages. But, they soon find out that additional expenses and fees easily push them outside of their budget while expectations typically don’t match the presentation. Aside from maintenance costs catching new property owners off guard, timeshare assessment fees can be maddening. Moreover, they can be devastating. Getting out of a timeshare may be desired, but the financial burden can handicap their ability to cancel the contract when they need to the most.

Unlike vacation rentals or travel deals, timeshare ownership leaves many feeling trapped. Once they sign the contract, they’re obligated to adhere to the terms they agreed to – even if the details weren’t ever made clear to them. As we’ve mentioned in other articles, far too many interested consumers are distracted by the value propositions of owning a timeshare and overlook the actualities that come with a purchase of this magnitude.

Know the Details Before Signing the Contract!

For whatever reason, timeshare sales presentations are so persuasive that many travelers don’t even research the opportunity before spending tens of thousands of dollars into the property. If they did, they’d quickly realize most timeshares have zero resale value. A large percentage of timeshare owners aren’t even aware that their financial commitment can drastically increase when repairs, damage or acquisitions occur. Misinformation is common in the timeshare industry. But, pointing fingers at unethical sales practices isn’t going to solve the problem.

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At VOC, we take pride in helping potential timeshare owners understand what they’re getting themselves into before making the purchase. Educating current owners on the terms of their contract also allows us to help them find the best way to cancel their timeshare for good. So, before you call the resort to complain about unexpected expenses, let’s discuss the major differences between timeshare assessment fees and maintenance costs. Knowing what to expect will help you better navigate the muddy waters of timeshare ownership.

What Are Timeshare Maintenance Fees?

As we discussed in our previous article, timeshare maintenance fees are annual charges that go towards maintaining the resort and the operational costs of the property. If you’d like to see the resort invest more money in laundry services or to update the carpet, then the cost of these “upgrades” will eventually come out of timeshare owners’ pockets. For example, properties with excess greenery or golf courses use yearly timeshare maintenance fees to spread out landscaping costs. The amenities and elements of the resort that initially caught your eye during the presentation aren’t necessarily included in your mortgage.

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Unexpected Maintenance Fees Are Unpredictable.

What’s worse, is that these yearly fees fluctuate every year depending on what the timeshare claims as maintenance. There’s no questionnaire that goes out to property owners asking for their opinion or input on decisions about the premises. At the end of the day, they can basically bill their occupants for whatever they want. What’s more concerning is that yearly timeshare fees continue to rise. A 10-year mortgage for $20,000 can easily become a $30,000 expense when you factor in maintenance fees. Keep in mind, this isn’t even including your interest rate (15-19%) and unexpected timeshare assessment fees.

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What Happens When You Pay Off the Timeshare Contract?

Do you still think owning a timeshare is cheaper than your family vacation for four? What many don’t realize is that they’ll still be on the hook for maintenance fees once they’ve paid off their timeshare mortgage. Contracts don’t become expendable once payments are complete. It’s the gift that keeps on giving. As long as you’re under contract, you’re responsible for your share of property expenses. This is when a good number of timeshare owners begin thinking it might be a good idea to dump the timeshare altogether.

What Else Can Increase Maintenance Fees?

You’ll typically see a large increase in timeshare maintenance fees when an acquisition takes place. If the resort decides to transform the location into luxury suites, property owners are expected to quietly foot the bill. Similar to a new property management company gutting an apartment complex, the acquirer will say major changes need to take place in order for the resort to be profitable. In other words, they justify the increase with a few open ended promises.

Unfortunately, most don’t improve anything about the property and simply spread out acquisition costs through maintenance fees. A $500 increase for 100 rooms with 50% occupancy can generate them a quick $1.3 million in the first year. While maintenance fees can range from a few hundred dollars to a few thousand, timeshare assessment fees can be substantial.

Explaining Special Timeshare Assessment Fees

Unlike maintenance costs, timeshare assessment fees are not annual expenses that you can anticipate (or save up for) every year. In most cases, these unexpected fees are sent out to timeshare owners after a natural disaster or extensive damage occurs to the property. Hurricanes, wildfires and volcanic eruptions have led to several recent lawsuits regarding timeshare assessment fees.

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Instead of rolling out damage control or resort improvements over an extended period of time, most timeshare companies give their owners a few months to pay them hefty sums of money. Unless you’re up to date with everything going on at the resort, you’ll more than likely get blindsided by timeshare assessment fees. Some vacation owners are forced to hand over the deed to the property due to their inability to pay the fee on time. Losing the timeshare can be a punch to the gut, but dealing with collection agencies and a damaged credit score can be even more devastating. Failure to pay timeshare maintenance fees and assessment costs can even result in a foreclosure if you’re not careful.

What Can Impact Assessment Fees?

With an increasing number of owners legally cancelling their contracts or defaulting on payments, timeshare assessment charges have been used as damage control. When there is less money coming in, the resort needs to make up for the difference. The costs that timeshare companies deem “billable” isn’t going to change when there are less timeshare owners in the building. It simply costs every remaining owner more money to keep their share. At the end of the day, the resort’s board of directors has total control over what they charge their timeshare owners for. 

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Are Timeshare Assessment Fees Related to Maintenance Costs?

Similar to maintenance fees, people under contract really have no choice but to pony up the cash for timeshare assessment costs. The only time the two charges are related is when “special” assessment fees are issued because the revenue from maintenance fees wasn’t an ample amount. Whether fees are considered “required” upgrades (like a new pool during the offseason or improved telecommunications) or uncovered costs, timeshare companies will find a way to distribute the expense. Unfortunately, they have every right to do so.

Why Legal Timeshare Cancellation Makes Sense

By ignoring contract details during signing, many timeshare owners end up being held hostage by their agreement. Fees can end up doubling or even tripling their anticipated annual expense. This makes it easy to understand why ownership turnover is so high. A timeshare sold for $20,000 can realistically cost consumers $40,000+ over 10 years. Not everyone has this kind of money laying around. Either way, the timeshare profits at the consumer’s expense. Although some scams are obvious enough to lead to class action lawsuits, not all timeshare owners are presented with ample relief options.

Once disgruntled owners start to consider timeshare cancellation, hundreds of predatory agencies and con artists await their desperation. Attempting to find an affordable solutions more than likely puts them even further in debt. What seemed to be a small investment towards a great time can become a headache with no end in sight. Although many are stubborn about the purchase, a good number know what they have to do.

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How to Get Rid of Timeshare Fees Altogether.

Whether your timeshare contract is paid off or you still own a mortgage, unexpected fees can be a nuisance. Most of our clients decide to finally get rid of timeshare obligations when the value of ownership doesn’t add up to the cost. Maintenance and assessment fees getting out of hand makes it easy to look for relief. The problem is, many wait until they’re in the hole financially to take action. It makes it very difficult for them to do anything at all. Walking away from these fees can also make matters much worse.

This is why we provide eligible timeshare owners payment options for our services, like $0 down and 0% financing. At VOC, instead of preying on desperation and over promising, we actually take the time to understand your situation. Paying for a timeshare cancellation service after spending thousands to own the timeshare may sound crazy, but the long term benefit is evident. In order to eliminate the fees associated with owning a timeshare, it’s important that you realize time is not on your side. The longer you put off getting out of the agreement, the more fees you’ll experience over time. Money saved is money earned when it comes to getting out of a timeshare.

If you think you are ready to legally cancel your timeshare contract we’d love to schedule a free consultation with you. Give us a call or fill out our form today to get the process started. We aren’t going to ask you for your credit card to simply answer your questions and have agents standing by to educate you on how our process works. There’s no need to worry about pressure sales or broken promises anymore. Take control of your situation, eliminate your timeshare assessment fees and become contract-free with VOC!

Apply For Our Timeshare Cancellation Services

The Reality of Timeshare Maintenance Fees

The Reality of Timeshare Maintenance Fees

In order to make an educated decision on purchasing a timeshare, understanding the fees associated with timeshare ownership is a must. The problem is, hundreds of thousands of consumers don’t. Like many great sales organizations in the travel industry, timeshare presentations intentionally leave out the details regarding fees and accessibility while distracting attendees with “what ifs” and “free” rewards. They know exactly how to tap into desires by using misleading benefits that persuade listeners into making long term agreements. Their goal is to get you excited about vacationing with them, not necessarily what can hinder your enjoyment. This leaves many feeling like they’ve been taken advantage of when their experience doesn’t match the presentation. Getting billed annually for timeshare maintenance fees and assessment costs (on top of their monthly expense) normally adds insult to injury.

But, before we dive into some of the bothersome details, let’s talk a little bit about what maintenance fees actually entail. Every property management company occurs management and maintenance costs that need to be paid for. If you look at the fine print, every timeshare contract includes a section detailing timeshare maintenance fees and assessment costs. Although this might bother some timeshare owners that assume this is accounted for in their payment plan, they don’t have to look far for an initial roadmap. Similar to residential mortgages, homeowners have additional expenses that they’re responsible for.

What Are Timeshare Maintenance Fees Similar to?

The most relevant example of timeshare maintenance fees would be the HOA (Homeowners Association). If someone is considering buying a home in an HOA neighborhood, they’re required to pay the annual fee. At the same time, most home buyers understand that this type of cost isn’t included in the mortgage. Moreover, they tend to value an added expense that preserves the quality of the entire neighborhood they’re paying for. In other words, HOA fees are accepted and approved by the residents that choose to live there.

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What Does an HOA Entail?

Although the city may have some say in regulations, the subdivision is normally maintained according to the requirements of the community’s development team. The biggest contrasting factor is the simple fact that HOA residents are able to attend routine meetings and even play a role in what transpires with their funds. When it comes to assessing HOA costs, they normally derive from management salaries, community swimming pools, parks, landscape and other features. Payments are placed in an escrow account and used for routine maintenance, when repairs come up and during strategic developments for the residential community.

The Difference Between the Two

Timeshare companies validate maintenance fees by making similar claims. The thing is, they get to decide where money is spent and how much you pay them. Aside from the fee being quite larger than an HOA, they also hold the power (or right) to increase the maintenance costs at any time. When it comes to fee increases, there isn’t really much clarity behind why they’re charging you more and where it’s going to be spent.

Timeshare companies don’t need your input in order to deem something repairable – they just do it. They make it a point to remind you that you chose to purchase a share of their resort and it’s your responsibility to maintain their premises, that you signed up to enjoy. The biggest difference between HOA costs and timeshare maintenance fees is transparency. It’s hard to really know where your money is going.

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Are Timeshare Maintenance Fees Being Used?

What can be troublesome for most timeshare owners is the fact that some resorts aren’t properly staffed and the upkeep is unacceptable. Even if you feel like your experience is being hindered due to poor maintenance, they’ll point you to the contract. This causes many owners to complain about timeshare maintenance fees and demand that something be done. They feel like the money they’re spending isn’t matching their expectations.

Do you think resorts are interested in your opinion on financial planning when they’re cashing in? Do you think they’re going to do anything about your dissatisfaction when they know it’s nearly impossible for you to get out of a timeshare contract? It’s not their first rodeo. Timeshare owners have been caught off guard by maintenance fees for years. Unlike an HOA, the timeshare company isn’t held to a certain standard and has no obligation to provide anything outside of the bare minimum. Be careful when you complain because the resolution could end up including a hike in your fees.

The Revenue From Timeshare Maintenance Fees

When analyzing timeshare maintenance fees, it’s easy to understand how they can be used to build a new pool or repair one. It’s easy to understand that the landscape needs to be maintained and employees need to feed their families. It’s understandable that an emergency plumber is needed when the entire building is backed up or the hot water isn’t working. It’s even more understandable when renovations are required to improve guest safety. New bedding, upholstery, appliances, furniture, cleaning supplies, kitchenware and the little mints at the front desk cost money. We get that. But, does the amount charged align with the amount needed?

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Timeshare owners should be less worried about what their fees go towards and more concerned with how much of their money is actually being used. Although timeshare maintenance fees have increased since Statistica completed their report, the average fee per interval for a U.S. vacation timeshare (in a beach resort) was $860. Looking back to 2012, the American Resort Development Association (ARDA) reported that the average cost for maintenance was $660.

How Much Do Timeshares Make on Maintenance Fees?

In order to create some simple math, let’s aim low and assume each resort charges every timeshare owner $500 per year for maintenance. According to the ARDA, the average timeshare consists of 131 units. This gives the timeshare 6,681 weeks to sell, while 1 week per year is dedicated to maintenance of the unit. If they’re able to fill 50% of these weeks with a timeshare owner (3,340), they could potentially cash in on $1.7 million annually. How much do you think it costs to manage and maintain the resort? One can’t help but wonder how much is being pocketed by the resort.

Instead of getting upset that $350 was added to your yearly maintenance fees for a pool renovation without your consent, realize the timeshare just deposited upwards of $1,192,100! I hope the pool now has a diving board and an option to swim with dolphins. Many timeshare owners are currently experiencing annual fee increases due to acquisitions. In some cases, maintenance fees are tripling even though nothing is being done to the resort. They’re simply covering the acquisition costs so they can get out of the red faster. Once you sign the dotted line, there isn’t much you can do to put a halt to the greed behind the timeshare industry.

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Understanding the revenue focus of timeshare companies is normally enough for unhappy timeshare owners with unwanted properties to get rid of the contract altogether. Just remember, if you can’t sell the timeshare, you’re still going to be on the hook for monthly payments. Once you’ve made the decision to get out, make sure you’re allocating a reliable option.

The Long Term Cost of Owning a Timeshare

As aforementioned, most people buy into the whole timeshare ownership mantra without really considering the details. Timeshare companies know how to persuade people into believing that $250/month is ideal – Especially when vacations for a family of 4 have an average cost of $4,580 ($382 monthly cost per year).

The problem is, the $22,000 purchase price quickly turns into $40,000 after 10 years with 15-19% interest (most rates are higher than 17%). Not to mention the annual timeshare maintenance fees! The limited-time-offer that once seemed promising can eventually turn into lifelong regret and a lot of debt. These situations cause many people to make irrational decisions. When timeshare owners become desperate to find a worthwhile solution, they’re often bombarded with pressure sales pointed towards upgrade options. This is the last thing they need to do. 

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Owning a timeshare can be devastating when you aren’t aware of what you’re getting yourself into. Even when you pay off the contract, you’re still on the hook for timeshare maintenance fees for life. Many people wonder what happens if they simply stop paying for the fees. Unless you’re prepared to battle additional fees and a foreclosure-type-situation, we wouldn’t recommend it. What’s worse is that many timeshare owners seek relief only to be scammed. This only adds salt to the open wound that has yet to heal.

It’s hard to overcome the scars or financial ruin of timeshare ownership – but it can be done. If you’re struggling to keep up with payments or you’re tired of being held hostage by your contract, we’d love to help. We understand how resorts and predatory agencies take advantage of vulnerability and we take pride in providing a permanent solution that makes sense. Every single one of our clients have successfully gotten rid of their timeshare. Stop wondering if someone can help you eliminate your maintenance fees. Our ability to cancel timeshare contracts is unmatched in the industry and we stand by our promise.

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