TATOC Consumer Helpline

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TATOC Consumer Helpline Guide No. 61

Resignation/Cancellation/Defaulting.

For a variety of reasons, it sometimes happens that timeshare owners no longer wish to, or are no longer able to, continue with their ownership. It could be they can no longer afford the annual charges, maturing years/health have made it difficult to travel, they may have lost a partner, etc. and they are no longer able to use their timeshare asset.

In many cases family/friends have no interest in taking it over and people often find it difficult to sell their timeshare second hand. Indeed, in some cases owners are willing to give their timeshare away but cannot find any takers.

Timeshare is, and has always been, a long-term investment in quality holidays and not a strictly financial investment. The reality is that timeshare can be difficult to sell when you are no longer able to use it.

Some resorts/Clubs have a facility within their Constitution for owners to resign their membership, sometimes with the payment of a service charge. Other resorts/Clubs do not have such a facility, especially where the terms of ownership are “in perpetuity”. In these cases, timeshare owners are told by their resort/management company that resignation is not possible.

Some Timeshare Owners reach a stage where they simply cannot pay the annual charges, or feel disinclined to pay the annual charges when they can no longer utilise the facilities. In these circumstances, there is a real problem if the resort will not allow resignation or allow the return of the timeshare asset.

In these circumstances, we suggest you:

Make sure you have the latest copy of the legal documents detailing the rules governing your ownership. Study the documents for any reference to resignation, cancellation and annual fee defaulter procedures.

Speak to your resort and/or Management Company to see if they have any resale or renting facilities that may be of help to you.

Consider renting your timeshare to family or friends to cover annual fees while you try other options. It may also be possible to rent your timeshare through your resort or an independent rental company.

Contact your Owners Committee if there is one. Explain your circumstances and ask if they have any suggestions to help you. Perhaps there is an owner of the week before/after your week who might like to have an adjacent week at the right price. Ask your Owners Committee for advice on resignation, cancellation and defaulter procedures and for their experience of what happens when people simply are not able to continue with ownership.

Write to your resort and/or management company explaining your circumstances and why you cannot continue with ownership. Offer to return the timeshare to them.

Your resort or timeshare company may have certain exceptional circumstances which they will consider. We suggest contacting them directly for further information on this.

If your Constitution/Scheme Regulations provide for the timeshare to be repossessed if the fees are outstanding for a given period, you can allow yourself to become a defaulter and accept the penalty. You can write to the resort/Management Company formally requesting them to apply the specific regulation. If all else fails and you cannot sell, rent or give your timeshare away, and if there are no resale, resignation or facilities at your resort/Club, and if the resort will not repossess your timeshare, you have reached a very difficult position to which there is no simple answer.

The only options are:

Continue with your ownership and find some way to use it. Examine every possibility of maximising flexibility within your product and maximising the facilities of your exchange company (and others) to enable you to enjoy the benefits of ownership. While you do so make every effort to sell it or give it away.

Negotiation is always better then confrontation. Discuss your situation thoroughly with your resort and try to seek a negotiated settlement to terminate your timeshare agreement. Ask if there is any possibility to pay one or two years’ fees in advance before terminating your agreement to give them an opportunity to resell your timeshare.

Advise your resort/Club you cannot continue and default on your annual fees. The resort/Management Company will certainly chase you for the payment and it may become unpleasant and threatening. Your account may be passed to a debt-collection agency whose approach may be even more threatening. Whatever such companies may say – bailiffs cannot call at your house or take any actions against your property or finances unless a court case has been successfully brought against you and you have failed to comply with the actions demanded by the court. And remember – the only official notice of legal action against you is the one you receive from the court.

Timeshare companies are often reluctant to take the final step of taking an owner to court who has offered to return the timeshare asset to them, where there are extenuating health or financial circumstances, or where owners can demonstrate they have made extensive attempts to discuss, negotiate and compromise with the resort to find a reasonable solution. If you do receive a court date you can always review your options or be prepared to take your circumstances to the court and challenge the timeshare company. This option should not be taken unless there is literally no alternative, and you should seek legal advice if a court case is brought against you.

 

Download the guide: tatocconsumerhelplineguide61

About author

tatoc consumer help

TATOC, the Timeshare Association, is celebrating its 25th anniversary in 2014. The TATOC Consumer Helpline is TATOC's flagship service providing advice, support and information to timeshare owners and the general public. If you have a question about timeshare, don't hesitate to contact the Helpline team.

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