Timeshares FAQ

Get answers to common timeshare questions, like whether you can cancel a timeshare contract, how can a timeshare be foreclosed, and how to avoid timeshare scams.

Updated by , Attorney (University of Denver Sturm College of Law)

If you're considering buying a timeshare or plan on attending a sales presentation to get a free hotel stay or another gift, you should go into the timeshare tour with your eyes open to avoid getting taken for a ride. (Better yet, don't deal with timeshare sellers or presentations at all.)

And if you've already bought a timeshare and want to unload it, you need to protect yourself from the many timeshare resale scammers who will try to take advantage of your situation.

Keep reading to learn the answers to the most frequently asked questions about timeshares.

What Does a Timeshare Pitch Usually Involve?

Timeshare sellers are notorious for offering a half-price parasail ride, a free day's rental car, a free hotel stay, or a free gourmet meal (you name it) to get you to attend a sales pitch. The presentations vary, but most include high-pressure sales pitches that drone on for hours, leaving visitors desperate to leave.

Timeshare salespeople frequently go over the advertised time allotted for their presentation and don't respond if you complain. They sometimes refuse to give the promised gift or discount if you don't buy. Although it might be illegal to refuse to give you a gift or discount, few consumers complain—they want out.

If you go to a timeshare presentation, you'll likely hear about the money you'll save over the years by buying a timeshare or timeshare plan instead of paying for hotel rooms. The salesperson will probably downplay how much the timeshare will cost you, including the purchase price, special assessments, annual maintenance fees (which are already expensive), and other fees that might and probably will go up.

How Do Timeshares Work?

Here's how timeshares generally work.

Deeded Timeshares vs. Right-to-Use Timeshares

With a deeded timeshare, you own an interest in the property, typically a percentage of a timeshare unit, along with other people who purchased interests. You'll get a deed that lays out your ownership rights, and your interest is legally considered real property.

If you take out a loan to buy a deeded timeshare, you'll ordinarily sign:

  • a purchase contract
  • a promissory note, and
  • a mortgage (or deed of trust). (In this article, the terms "mortgage" and "deed of trust" mean the same thing.)

You'll have to make mortgage payments, typically monthly, until you repay the debt. In addition to making mortgage payments, you'll ordinarily have to pay annual maintenance fees, special assessments, utilities, and taxes.

You don't get a legal interest in real property if you purchase a right-to-use timeshare interest. Instead, as you might expect, you're buying the right to use the property. Right-to-use timeshares often expire after a certain number of years, like 20 or 99 years, and at the end of this time, your right to use the timeshare ends.

Week-Based System Timeshares vs. Points-Based System Timeshares

With deeded and right-to-use timeshares, weeks or points are commonly used to allocate the property's use.

Week-based system. In a week-based system, the timeshares (both deeded and right to use) are sold in one-week intervals, typically numbered 1 to 52 (because there are 52 weeks in a year). You can purchase as many weeks as you want, which are fixed, floating, or rotating.

  • With a fixed-week schedule, your week to use the timeshare is at the same time each year.
  • With a floating-week schedule, your week to use the timeshare varies from year to year.
  • In a rotating schedule, your week also changes from year to year, but it rotates based on a fixed schedule. For example, if you're on a three-year rotating week schedule, you might get week 11 the first year, while the next year, you get week 28, and the following year, you get week 45. Then, in the fourth year, the schedule restarts, and you get week 11 again.

Point-based system. Deeded and right-to-use timeshares are also sometimes point-based. A points-based timeshare generally appeals to purchasers interested in staying at the main property and other places. With a deeded points-based timeshare, you get an ownership interest at one location, commonly called your "home resort," and you get a deed to that property. Your interest in the property is also worth a certain amount of points each year, which you may use to visit your home resort or a different resort associated with the same development. The number of different locations you can choose from varies widely among timeshare developments.

Timeshare Trusts

Sometimes, points-based plans don't have a home resort. Rather than purchasing an ownership interest in a home resort, you buy into a timeshare trust. This setup is a right-to-use point-based system, sometimes called a "vacation club" or "vacation plan." You won't receive a deed.

Basically, you buy a certain number of points and exchange them for time at different resorts.

Can I Lose My Timeshare to Foreclosure?

Yes. If you take out a mortgage loan to buy a deeded timeshare and stop making the payments, the lender, usually the resort developer, will probably foreclose.

Also, in most cases, timeshare owners must pay annual maintenance fees and special assessments to their homeowners' association (HOA.) If, as an owner, you don't pay the fees and assessments, the HOA may sue you for money or foreclose your timeshare.

How Timeshare Foreclosures Work

State law governs timeshares, and the foreclosure process varies from state to state. Depending on state law, the procedure could be judicial (the lender goes through state court to foreclose) or nonjudicial (where the foreclosure occurs outside the court system).

The procedure for a timeshare foreclosure might be different than the typical process for residential properties. In Florida, for example, residential foreclosures are judicial, but state law allows the lender to use a nonjudicial process to foreclose timeshare properties. (Fla. Stat. Ann. § 721.855 and § 721.856.) (To find out which foreclosure process lenders regularly use for residential properties in a particular state, check our Key Aspects of State Foreclosure Law: 50-State Chart.)

Deficiency Judgments Following a Timeshare Foreclosure

In a foreclosure, the borrower's total debt might exceed the foreclosure sale price. The difference between the total debt and the sale price is called a "deficiency." For example, say the total debt owed for a timeshare is $15,000, but it only sells for $10,000 at the foreclosure sale. The deficiency is $5,000.

Whether you'll face a deficiency judgment (a personal judgment for the deficiency amount) after a timeshare foreclosure depends on state law. In Florida, for instance, the lender can't get a deficiency judgment against you after a nonjudicial timeshare foreclosure so long as you don't object to the nonjudicial foreclosure process. (Fla. Stat. Ann. §§ 721.81, 721.855, and 721.856.)

Timeshare Repossessions

With a right-to-use timeshare, people generally sign a contract and agree to make monthly payments. While a developer may foreclose a deeded timeshare, a right-to-use timeshare is repossessed, a legal process different from foreclosure.

I Just Bought a Timeshare, But Now I Have Cold Feet. Can I Cancel the Deal?

Maybe. Most states have "cooling-off" laws; these laws let you get out of a timeshare contract if you act within a few days after signing, usually within three to ten days, depending on the state.

If state law doesn't provide a cooling-off period, or if you change your mind after the time has passed, your only recourse might be a formal lawsuit. Timeshare sellers are accustomed to handling claims from unhappy buyers and are unlikely to refund your money unless they're forced to do so.

How Can I Avoid Timeshare Scams?

If you decide to attend a timeshare presentation, even if your intention is just to get a free gift, you need to be on the lookout so you can avoid a bad deal.

How to Spot Timeshare Scams

When you think about timeshares, it might conjure up the image of a shifty, fast-talking salesperson who pressures you relentlessly to make a purchase. But maybe you're willing to put up with the presentation to get a free night at a hotel or another prize.

Keep in mind that many people who attend timeshare sales presentations walk out as timeshare owners whether they plan on buying one or not. To stop this from happening to you, go into the presentation fully informed about how timeshares work so that you can make a rational decision about whether or not to purchase a timeshare.

If you're considering buying a timeshare in a particular resort, evaluate the developer before entering the presentation. Even if you think you won't be tempted to purchase a timeshare, it's a good idea to investigate the developer or seller ahead of time so you'll know who you're dealing with and, perhaps, their tactics. Here's how to start:

  • Check the Better Business Bureau website.
  • Run an online search to find out if there are complaints against the timeshare offeror. Timeshare owners and potential purchasers who've had difficulty dealing with the resort often post their experiences and warnings online.
  • Local real estate agents can also provide information about the resort and developer.

Timeshare Resale Scams

Unfortunately, if you get roped into buying a timeshare and your cancellation period has already expired, you'll probably have trouble unloading it. There's virtually no resale market for timeshares, and finding a buyer can be next to impossible. This is where the scammers come in.

In a common scam scenario, a timeshare reseller promises to set you up with a buyer, but first, you must pay an upfront fee. Timeshare scammers often convince owners to pay large upfront fees by saying they have someone ready and willing to buy the property or that the timeshares would be sold in a specified period of time. Once the timeshare owner pays the fees, the scammers either disappear or claim that they were simply offering to advertise the timeshare unit, and no buyer ever materializes.

Many states have strict laws governing timeshare resales, including restrictions on collecting advance fees. Talk to an attorney in the state where the timeshare is located to learn about relevant laws.

Don't Pay Mystery Fees in a Timeshare Resale

In another common scam, a potential "buyer" calls you and offers to purchase your timeshare for, say, double what you paid. The supposed buyer (or the buyer's representative) might not ask for an upfront fee.

However, in the middle of the transaction, you'll have to pay a "tax fee," "insurance premium," or something similar, but bogus. Fees will keep popping up, and as long as you pay them, the scammer strings you along, maybe telling you that you'll get reimbursed.

But there is no buyer, and you won't recoup your money.

Don't Sign Anything at the Meeting

Don't sign a contract at the first meeting if you're considering using a resale company (or buying a timeshare). Take the documents the company provides with you when you leave the meeting so you can read the fine print.

If specific promises were made, make sure those promises are covered in the contract. You should also review the contract and documents with an attorney.

Know Who You're Dealing With If You Use a Timeshare Reseller

If you decide to pay a fee to a timeshare resale service to help you sell your timeshare (even though you probably shouldn't), investigate it thoroughly before moving forward with the deal. Ask lots of questions and verify everything the company tells you.

  • Licensing requirements. Only licensed real estate brokers may list and sell timeshares for resale in some states. If your state requires a real estate or timesharing sales license, check with the state's Department of Real Estate to ensure the agent has a valid license. If the agent is licensed, check to see if any disciplinary actions have been taken against the agent.
  • Check with the Better Business Bureau. If you're thinking of using the services of a timeshare resale company, be sure to check the Better Business Bureau website for any complaints that might have been registered against the timeshare company. Don't do business with the company if grievances are filed against it.
  • Search the internet. You can also run an online search to learn more about the company you're dealing with—again, timeshare owners who have previously been scammed often post their experiences and warnings about scammers online.
  • Learn more online. New timeshare scams seem to pop up all the time. Check online to see what others have gone through to ensure you don't get similarly taken. The Federal Trade Commission website is a good place to start, and be sure to read people's comments.

How to Report a Timeshare Scam

If you think you've been a victim of a timeshare scam, contact:

  • your state's Department of Real Estate (if a real estate license is involved)
  • the Federal Trade Commission (1-877-FTC-HELP)
  • your state Attorney General's Office, and
  • your local Better Business Bureau.

Reporting unscrupulous timeshare schemes can help prevent others from becoming victims.

Are Timeshares Scams?

Timeshares themselves aren't necessarily scams. But they're usually not a wise investment or a good deal. And sometimes, timeshare salespeople are scammers who will say anything to make a sale. You must be extremely wary of any deal that sounds too good to be true. (Most timeshare contracts disclaim any statements or promises the salesperson made when selling you the timeshare.)

If the offeror says you'll have no trouble getting out of the timeshare deal or you can sell it for a profit if you don't like it, that's not true. Don't ignore these kinds of red flags.

Again, there's basically no after-market for timeshares. You can purchase most timeshares on the internet for pennies on the dollar. Very rarely does anyone make a profit when selling one.

Can I Sue the Timeshare Offeror if I'm the Victim of a Timeshare Scam?

You might bring several types of claims against a slippery timeshare seller.

Breach of Contract

The first, breach of contract, involves promises explicitly made and set forth in the sales agreements. If the size, location, condition, or some other important fact about the timeshare is materially different from what you agreed to in the sales contract, you might have a basis for claiming a breach of the contract.

But beware: the timeshare sellers' attorneys carefully draw up these contracts and are likely to cover almost any contingency—scrutinize the contract carefully before signing.

Unfair Business Tactics, False Promises, or Fraud

You may also bring claims based on tactics used and promises made before you agreed to purchase your timeshare. These claims might be covered under state laws prohibiting unfair business practices or those designed to prevent fraudulent inducement.

In both cases, the idea is that the seller used unfair sales tactics or outright lies to get you to buy the timeshare. You will have to show:

  • what the seller said or did
  • why it was misleading
  • that you wouldn't have bought the timeshare if the seller hadn't used misleading tactics or promises and
  • that you suffered some monetary loss because of the purchase.

Timeshare sales contracts usually include clauses that disclaim any promises made during the sales pitch. The contract you sign will ask you to agree that you are making the purchase only based on the representations in that contract.

Prospective purchasers who notice differences between what is in the contract and what was promised by the salesperson are likely to be told that the contract is only legal jargon, which isn't true. If a timeshare salesperson won't put a promise in writing, don't go through with the sale.

Otherwise, you might have to argue afterward that you relied on that promise, even though you signed a contract that explicitly says you didn't rely on any promises.

Getting Help

If you need more information about timeshare laws, how to cancel a timeshare purchase, whether you should sue a timeshare operator, or your options if you're facing a timeshare foreclosure, consider talking to a local foreclosure attorney or timeshare attorney.

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