Are you considering signing a timeshare contract with a timeshare company? Hold that thought! Before you dive into a long-term commitment that could haunt you for years, it’s essential to understand the harsh realities of the timeshare industry. Many eager buyers are lured in by promises of dream vacations and exclusive ownership. Later, many find themselves trapped in a web of hidden fees, legal loopholes, and endless maintenance costs. In fact, many timeshare owners end up regretting their decision, wishing they had known the truth before signing on the dotted line.
In this post, we’re revealing 15 shocking reasons why you should never sign a contract with a timeshare company. These eye-opening insights could save you from financial ruin and give you the clarity you need to make an informed choice about your vacation future. Don’t make the same mistake others have—keep reading to discover the secrets the industry doesn’t want you to know!
1. You cannot always take legal action against them
According to a recent Diamond Resorts timeshare contract, once you agree to arbitration, regardless of whether the company provides you with the service you expected, you agree not to take any legal action against them.
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’re essentially taking out a mortgage with a separate lender
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 finance by Wyndham PTY Limited.
3. You may not have consumer protection should anything go wrong
When purchasing a timeshare, you may find yourself lacking essential consumer protections if things go awry. Unlike traditional real estate transactions, which often come with various legal safeguards, timeshare agreements can leave buyers vulnerable to unfair practices and hidden fees. In many cases, timeshare companies may not be held accountable for misleading sales tactics or failures to deliver promised benefits. This can leave owners with limited recourse. Without strong consumer protections in place, it’s crucial to be aware of the potential risks before committing to a timeshare contract.
4. Many timeshare 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 end of the contract is represented by 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 have a relationship with the “mediator,” not with the Unlimited Vacation Club that you signed up with.
Who is Erick Gildargo Jimenez, Ortiz? From my research, he is a Mexican national with no business license to sell timeshares in Panama, where the contract is legal. The mediator is not a part of the corporation and is not listed as an “agent” in Panama.
If you have problems, you may have to take a trip to Panama, a tax haven for illegal activities. Many other Mexico and Caribbean travel clubs operate the same way and direct you to Panama. Read before you sign.
5. The timeshare companies and some real estate departments admit they will not support what the salesperson said
If you have a problem with what was said to you during the sales presentation and what you actually got, there is no proof. It is your word against the sales rep.
Diamond’s timeshare 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 available to him should he purchase. 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 went to the site, the resorts mentioned were not included in his purchase. Although he canceled his membership, he was still obligated to pay the $48,000 balance.
6. Studies show that 85% of timeshare owners are dissatisfied. What’s wrong?
Studies reveal that a staggering 85% of timeshare owners are dissatisfied, and this widespread discontent stems from several critical issues. Many owners feel trapped by misleading sales tactics that promise endless vacations but deliver little flexibility and high maintenance fees. Additionally, the allure of ownership often fades when owners realize the ongoing costs associated with their timeshare, including rising fees and unexpected expenses. Many also find themselves struggling with limited availability and restrictive booking processes, which diminish the overall value of their investment. This disconnect between expectations and reality contributes to the overwhelming dissatisfaction among timeshare owners, highlighting the urgent need for potential buyers to conduct thorough research before committing.
7. You should not be paying closing costs or maintenance fees for many resorts
Mexico and the Caribbean island timeshares are not timeshares at all but vacation clubs. The timeshare company is nothing more than a travel agency. They do not own the properties. Therefore, members should not be participating in maintenance fees.
8. When visiting timeshare resorts, the marketing staff can destroy your vacation
While you’re supposed to be enjoying your vacation, either you will be directed to the resort’s commissioned marketing staff, or you will receive a phone call to attend an “owner’s update.” 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.
If you are exchanging from another resort, they also have a handpicked group of sales reps who will invite you to look at their product. This is another sales presentation. The friendly sales rep will either try to 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.
9. When you sign, you agree to an increase in maintenance fees to up 25% per year
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.
10. When you sign, you agree to add more fees, even if you can’t see them
When you sign a timeshare contract, you unknowingly agree to incur additional fees, even if they aren’t clearly outlined. These hidden costs can include maintenance fees, special assessments, and various service charges that can significantly increase your financial burden over time. Many owners find themselves blindsided by these extra expenses, which can add up quickly and create ongoing financial strain, making it essential to read the fine print and understand the full scope of your commitment before signing on the dotted line.
11. The timeshare companies can make any changes they deem necessary, even without your consent
Timeshares were once deeded. Now, they have coerced members into the points system. They charge up to $10,000 to convert. In order to use their new points systems, they are being coerced into buying more points to get where and when they want. This is one of the industry changes that the timeshare industry has consumers or existing owners frustrated.
12. Some contracts are over 50 pages of legal jargon focused on your obligations, not the company’s
Unless you are an attorney in that state or country, you may have no idea what you’re signing.
13. Many timeshare companies will not allow you to rent out your timeshare, or else
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.
14. The average time it takes to do the timeshare presentation is 3-6 hours
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 about three to six hours. The sales department is keeping you there to determine what it will take to make a sale.
They will offer more gifts, points, excursions, benefits, 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. They’re trying to determine the “real objection” to why you are not buying. It could be a 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 three to six 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, an additional one to two hours can be expected, depending on how many sales occurred at the time.
15. 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 they 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 gets worse. According to Diamond’s timeshare contract, your membership is perpetual, and it’s up to them if they decide to release you are not. They will allow you to transfer your membership only to the “ideal” candidates they approve. If they don’t approve of it, according to the contract, IT IS FOREVER.
This is something 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.
In conclusion, while purchasing a timeshare can potentially be a great investment, it’s crucial to approach it with caution and awareness. Many buyers find themselves overwhelmed by hidden fees and unexpected costs, which can lead to significant dissatisfaction. To maximize your investment and avoid common pitfalls, I recommend purchasing from existing owners on resale sites, where you can often find better deals and more transparency.
For those looking to navigate the complexities of the timeshare industry, I invite you to purchase my book, Everything About Timeshares. It provides valuable insights, practical advice, and a wealth of resources to help you make informed decisions and ensure a positive experience. Don’t let the timeshare industry catch you off guard—empower yourself with the knowledge you need to secure a successful vacation investment!