Welcome to a compelling exploration that aims to shed light on a topic that has left many unsuspecting individuals tangled in financial woes—signing a timeshare contract. In the pursuit of idyllic vacation dreams, many are enticed by the allure of shared ownership in luxurious resorts, promising a lifetime of exquisite getaways. However, as we unravel the layers of this seemingly glamorous arrangement, it becomes evident that beneath the surface lies a complex web of pitfalls.
In this blog, we embark on a journey to uncover the truth behind a timeshare contract and why, contrary to the enticing brochures and persuasive sales pitches, signing on the dotted line might not be the wisest decision. Buckle up as we delve into the 13 compelling reasons why you should exercise caution before succumbing to allure of signing a timeshare contract.
Each point mentioned in this blog serves as a cautionary tale to those considering entering into what may initially seem like a vacationer’s paradise. Our mission is to empower you with the knowledge needed to navigate this treacherous landscape and make informed decisions about your hard-earned money.
Whether you’re weighing the pros and cons as a prospective buyer or grappling with timeshare consequences, join us to uncover why the touted sun-soaked escape may not hold true. It’s time to break free from the shackles of misleading promises and take control of your vacation destiny.
1. You Cannot Always Take Legal Action Against Many Resorts.
According to a recent Diamond Resort contract, once you agree to arbitration, regardless whether the company provides you with the service you had expected, you agree not to take legal action against them. Their most recent timeshare contract includes mention of this item.
Your Acknowledgement. You have read, understand and voluntarily agree to this Arbitration Provision and acknowledge that if a Claim is arbitrated or is arbitrable, You will have no right to have a court or jury trial or participate in a class action.
2. If you finance your timeshare, you are agreeing to a mortgage with a separate company. Who are they?
Diamond Resorts contract states as follows…
THIS PURCHASE AND SECURITY AGREEMENT (this “Agreement”) is made and entered into this (date) between (“You”) and Diamond Resorts U.S. Collection Development, LLC, a Delaware limited liability company (“Diamond”).
You are not purchasing from Diamond Resorts, the timeshare company, but with a mortgage company.
Additionally, the most recent Wyndham Asia Pacific contract states that you are signing a contract with a separate company, not the timeshare company. Your credits are with WorldMark South Pacific Club. The timeshare is with Wyndham Vacation Clubs. Your contract is with another entity.
“This contract is separate to your application for vacation credits in the WorldMark South Pacific Club. This document outlines your obligations under this contract with financing by Wyndham PTY Limited.
3. You have no consumer protection in some cases.
When you sign a contract with many timeshare resorts, there may be no consumer protection should anything go wrong. For example, if the resort does not maintain the property as you may have expected, or the maintenance fees suddenly rise, there is nothing that a consumer protection agency can do for you, as you agreed to the terms in the contract.
4. Many of the contracts are unenforceable and illegal.
This is the case with the Unlimited Vacation Club contract that sells at AMResorts i.e. SECRETS, DREAMS, NOW, BREATHLESS) .
Their contract is a split between three different parties, represented by Erick Gildargo Jimenez Ortiz.
MEDIATION CONTRACT (THE “CONTRACT”) EXECUTED BY AND BETWEEN, ON ONE PART, UVC GLOBAL PANAMA, S. de R.L. AND UVC SALES PANAMA, S. DE R.L., REPRESENTED BY ERICK GILDARDO JIMENEZ ORTIZ (HEREINAFTER REFERRED COLLECTIVELY TO AS “MEDIATOR”), AND, ON THE OTHER PART.
Apparently, this contract states that you are forming a relationship with the “mediator,” not with the Unlimited Vacation Club that you signed up with.
If you have problems, you may have to take a trip to Panama, a tax haven.
Many other Mexico and Caribbean travel clubs operate the same way, and direct you to Panama. Read before you sign.
5. The timeshare companies admit that they will not support what the sales person stated.
Lack of proof exists if discrepancies arise between the sales presentation promises and the delivered product or service. It is your word against the sales rep.
Diamond’s contract states as follows…
Oral representations of Seller or Seller’s agents should not be relied upon by Purchaser as correctly stating the representations of Seller. – Diamond Resorts
I had an email from a recent purchaser who stated that the sales agents showed him all the resorts that would be available to him as an owner. He asked to see the website and the availability. The salesman informed him that he would not have access to the site until two weeks after the sale. When he finally visited the site, the resorts mentioned during the presentation were not included. Although he cancelled his membership, he was still obligated to pay the $48,000 he spent for the timeshare.
6. 85% of timeshares owners are dissatisfied. What’s wrong?
7. When visiting timeshare resorts, the marketing staff can destroy your vacations.
During your vacation, you may be directed to the resort’s marketing staff or receive a call for an “owner’s update,” disrupting your leisure time. The resort has handpicked the best sales reps to present this owner’s update which is nothing more than a sales presentation. You bought once, and you’ll probably buy again, if the deal is good enough. This is what they’re hoping. They will do all they can to sell you more points. They will give you the best deal, the most privileges, and whatever it takes to get the sale.
Owner upgrades occur while owners are using their timeshares and are invited by the sales or marketing staff to be updated on current events. This is nothing more than another sales pitch to generate more income for the resort.
Moreover, if you are exchanging from another resort, they also have a handpicked group of sales reps who are going to invite you to consider their product. This is another sales presentation, as well. The friendly sales rep will either try and get you to buy their timeshare, or trade in your timeshare for theirs. This is nothing more than a sales trick to get the sale. No resort in the world will give you anything for your timeshare. Period.
8. By signing, you agree to increase maintenance fees to up 25% per year
Here is example of what it might look like.
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- Annual Fees. Enrollment in THE Club exchange program is automatic. My Club Dues are billed annually along with my Maintenance Fees. My first year’s Maintenance Fees and Club Dues are estimated to be $——, and are subject to annual increases not to exceed 25% per year under governing law.
9. The timeshare companies can make any changes they deem necessary, even without your consent.
Timeshares were once deeded weeks. Now, they have coerced members into the points system. They charge owners the up to $10,000 to convert from deeded weeks to points. Additionally, to use their new point systems properly, they are coerced into buying more points to get where and when they want.
10. Some timeshare contracts are more than 50 pages of legal jargon focused on your obligations, not the company’s obligations.
Unless you are an attorney in that state or country, you may have no idea what you’re signing for.
11. Many timeshare companies will not allow you to rent out your timeshare, or else.
This is included in Diamond Resort’s contract…
I may not engage in any commercial rental activities to rent out Points for cash through online or print advertising to the gene —– understand that my membership may be suspended or terminated if I do.
12. The average time it takes for a timeshare presentation is 3-6 hours or a half day of your vacation.
Although consumers and marketing reps for timeshare resorts promise to take only 90 minutes of your vacation time, the average time for a complete sales presentation is 3-6 hours, sometimes longer. The sales department is keeping you there to determine what it’s going to take to make a sale: They will offer more gifts, more points, more excursions, more benefits and special privileges and anything else to get the sale.
They will send in more sales reps to try a different method or just to present a different personality. What they’re trying to do is determine the “real objection,” why you are not buying. It could be lack of trust, lack of funds, you’re tired and just want to leave, the children are waiting or some other reasons. Whatever it is, they will have an answer for that objection. This is why it takes 3- 6 hours.
The original “anytime price” that might have been in the tens of thousands of dollars is now under $10,000.
If there is a purchase, additional 1-2 hours can be expected depending on how many other sales in the room at the time.
13. Some resorts state in their contracts that there probably isn’t a secondary market for your timeshare.
If you are dissatisfied with your timeshare purchase and want to get rid of it, it may not be as easy as you think.
Within Diamond resort’s contract, they warn buyers that there may not be a secondary market, should you try to sell.
Diamond does not offer a rental, resale or buyback program and makes no representation regarding tax deductions, refinancing opportunities, or that there will be a secondary market for the sale of Points. Points do not typically appreciate in value.
So, what doesn’t appreciate is most likely going to depreciate.
It get worse. According to Diamond’s contact, your membership is perpetual, and it’s up to them if they decided to release you are not. They will allow you to transfer your membership only to the “ideal” candidates that they approve. If they don’t approve of it, according to the contract, IT IS FOREVER. This is something that you must agree to.
Transferring Membership. In the event I transfer my membership, the Association may deny a transfer if the buyer is a known or suspected fraudulent entity or person or is delinquent in the payment of any fees. A transfer fee of $250 (not $750) will apply for approved transfers. MY MEMBERSHIP IS PERPETUAL.
Before you consider purchasing a timeshare during a sales presentation, do your homework, read the contract thoroughly before you sign. If the resort does not provide you the time to read through the entire contract without a rescission clause, DO NOT SIGN.
Wayne C. Robinson is the author of EVERYTHING ABOUT TIMESHARES: Before, During and After The Sale. He is a former sales and marketing executive for several timeshare resorts in the U.S., Canada, Mexico and the Caribbean.
The U.S. Timeshare Cancellation Course and The Mexico and Caribbean Timeshare Cancellation Course
