Can You Sell a Timeshare Back to the Resort?

Timeshare ownership offers vacation opportunities but can become a long-term financial commitment. Many individuals wish to end these obligations and inquire about selling their timeshare back to the resort. Understanding the feasibility and process of such an action, alongside other potential exit strategies, can provide clarity for owners navigating this complex landscape.

Resort Buyback Eligibility

A direct buyback by the resort, also known as a deed-back or legacy program, is a primary consideration for many timeshare owners seeking to exit their contracts. While some major timeshare developers offer these programs, their availability is not universal across all resorts or ownership types.

One significant factor influencing a resort’s willingness to accept a timeshare back is the owner’s account status. Owners are required to be current on all maintenance fees, special assessments, and any outstanding mortgage payments. A timeshare with a remaining loan balance or unpaid fees is ineligible for a buyback program.

The specific type and location of the timeshare also play a role. Highly desirable properties in popular vacation destinations or newer resorts may be more likely to be considered for a buyback, as the developer might have greater demand for that inventory. Conversely, older properties or those in oversaturated markets might face more stringent conditions or outright refusal. Some resorts may only consider buybacks in cases of significant life events, such as job loss or death, requiring owners to demonstrate such circumstances.

The existence of a formal “exit” or “legacy” program within the resort’s structure is a prerequisite. Not all timeshare companies have established such programs, and even among those that do, the terms and conditions vary widely. Owners should review their original purchase agreement for any clauses related to buyback options or contact the resort’s owner services or a dedicated exit department directly to inquire about their specific policies.

The Resort Buyback Process

Once a resort indicates a willingness to consider a timeshare buyback, the process involves a series of procedural steps to formalize the transfer of ownership. This mechanism is designed to release the owner from future financial obligations, such as ongoing maintenance fees and assessments, rather than to provide monetary compensation. Owners should not expect to receive payment for their timeshare through a resort buyback.

Owners will need to gather and submit various documents to the resort. This documentation includes the original timeshare deed, the purchase agreement, and recent maintenance fee statements to verify the account’s current status. If there was a loan associated with the timeshare, payoff statements from the lender are also required to demonstrate that the property is free of encumbrances. Ensuring all requested paperwork is accurate and complete facilitates a smooth transfer.

Upon review of the submitted documentation and verification of eligibility, the resort may present an offer. This offer involves taking back the timeshare and releasing the owner from their contract. It might include specific terms, such as a small administrative fee ranging from a few hundred to a couple of thousand dollars to cover the resort’s processing and transfer costs.

Formalizing the transfer involves signing new agreements that legally transfer the timeshare back to the resort. This may include a new deed or other legal documents, which are then recorded in the property’s jurisdiction. The entire process, from initial inquiry to final transfer, can take several weeks to a few months, with processing times ranging from 30 to 90 days. Owners should clarify all associated costs and timelines with the resort.

Other Options for Timeshare Exit

If a direct resort buyback is not an option, timeshare owners have several alternative strategies. One common approach is selling the timeshare on the secondary market. This involves listing the timeshare for sale through licensed timeshare resale brokers or online platforms.

Owners should set realistic expectations regarding the resale value, as timeshares often depreciate significantly and sell for much less than the original purchase price. Before selling, check the timeshare contract for a “Right of First Refusal” (ROFR) clause, which gives the resort the option to repurchase the timeshare at the agreed-upon price with a third-party buyer.

Another alternative is donating the timeshare to a charitable organization. For this to be a viable option, the timeshare must be deeded real property, as the Internal Revenue Service (IRS) does not allow deductions for the donation of a “right-to-use” timeshare. If the timeshare’s fair market value (FMV) exceeds $500, IRS Form 8283, Noncash Charitable Contributions, must be filed with the tax return. For donations valued over $5,000, a qualified appraisal, no more than 60 days old at the time of the gift, is required to substantiate the deduction. Consulting a tax advisor is advisable to understand the specific tax implications and eligibility criteria.

For owners facing financial hardship or who are significantly behind on payments, a “deed in lieu of foreclosure” or surrender process can be pursued directly with the resort. This involves deeding the timeshare back to the developer to avoid a formal foreclosure. While this option can release the owner from future financial obligations and loan debt, it may still negatively impact their credit score, similar to a foreclosure. The impact on credit is less severe than a full foreclosure, but it remains a consideration.

Owners can also address timeshare ownership within their estate planning. A timeshare can become a burden for heirs due to ongoing maintenance fees and potential legal complexities if not properly managed. Heirs are not obligated to accept a timeshare inheritance and can legally disclaim it, often by filing a formal refusal with the probate court, provided they have not used or financially benefited from the property. Planning ahead can help ensure the timeshare does not create an unintended financial responsibility for beneficiaries.

Finally, owners must exercise extreme caution regarding timeshare exit companies. The Federal Trade Commission (FTC) and various state Attorney Generals have issued warnings about fraudulent companies that promise to cancel timeshare contracts for hefty upfront fees, often failing to deliver. These scams can cost consumers thousands of dollars. It is recommended to first contact the timeshare developer or resort directly, as they may offer legitimate exit programs at a lower cost than third-party services.