If you’ve taken a trip to Orlando, Florida, or Las Vegas, or vacationed at a resort in Mexico or a Caribbean Island, chances are you’ve been approached by a sales rep promising a $150 gift card or discounted tickets to Disney World or a free dinner for two in exchange for you and your spouse attending a 90-minute seminar (breakfast included).
In that case you’ve heard the time-share spiel. But once you sign on the dotted line, in most cases you’re locked in for life.
That’s the time-share dilemma. You sign on to a contract so restrictive some compare it to signing your soul away to the devil.
Back in the ’70s when time shares were first offered, these properties were pooled as available for six-week intervals primarily in the Northeast as well as in Florida. Since then they have expanded into a lot of different variations, but the one thing all time shares have in common is that these are contracts of perpetuity. Walking in is easy; walking away is a dogfight.
There are few industries, if any, that bind a client to a contract that, apart from the rescission period, admits no formal term or condition that will allow an owner to easily walk away from the lifetime obligations they have entered into.
In order to spare you the frustration and heartache of trying to get out of one of these contracts, BlackEnterprise.com spoke with Greg Crist, a consumer advocate for time-share owners who’s with the National Timeshare Owners’ Association; and Patrick Kennedy, an attorney with the Finn Law Group, a real estate law firm that specializes in time-share litigation.
Crist tells us, “If you take a look at the way that time shares have been historically sold up till today, a time-share is a product that is sold, not purchased. You don’t typically wake up and decide to buy a unit. It’s usually a purchase made after listening to a sales pitch.” He says, “There are tremendous benefits for those that can use the product the way it is intended. Where things go awry is when people cannot get the benefit of the bargain or use the product as it was sold to them, and yet they are still obligated to maintain their portion of the interval.”
And that’s the dilemma thousands of Americans are in, including the elderly, who are often too old to travel and unable to continue ponying up maintenance fees and mortgages on property they haven’t used in years.
Crist says, “When this industry started getting cranked up in the ’80s, these were baby boomers in their late 30s or early 40s. They had disposable income and frankly, I’m not certain that the industry looked down the road 20 years and saw that life requires a lot of change when you become elderly, and they do in fact create legitimate hardships.”
Kennedy says, “Hardship is not a legal defense. These contracts are restrictive because of the way they are packaged and sold and because they are a form of real estate that requires you to join an owners association who, in fact, share an obligation with that resort. For example, there are 3,000 owners in a 50-unit resort, and those 3,000 owners share the maintenance fee obligation.”
Here’s one tip. Although the industry has not taken a unified approach, that’s not to say that some developers have not created some deed back programs. It’s never published and never publicly stated that these are available and on the table.
But there is a pattern of it and it’s a problem because many owners don’t know what to do. They’ve turned to resale entities, but unfortunately there are a lot of retail scams, so if they get taken by one of these scams they get shell-shocked and don’t know how to search out legitimate resources in which to divest themselves properly, either through a sale or through direct connection to the developer.
So why won’t the resorts just take back the property, especially when the mortgage is paid in full, and resell it to someone else?