How to Legally Exit a Timeshare Contract

Congratulations, you’ve bought a timeshare!

If you are like a lot of people, your next move will be trying to get rid of it.

Buyer’s remorse grips a lot of timeshare owners. If they’re lucky, they can get out before the “cooling off” window closes. After that, they have to sell it or just walk away.

What many don’t realize is that timeshare contracts are often so ironclad, they can even be passed down to heirs through inheritance. That means your kids could be stuck paying the same annual fees and dues for a vacation spot they never wanted to visit.

Both options are costly, but many consumers think they’re worth it to escape annual maintenance fees that averaged $1,170 in 2024. All of that in addition to property taxes, utilities, repairs and even special assessments.

A University of Central Florida study found that 85% of timeshare buyers regret their purchase. Other studies dispute that, but there’s little doubt many purchasers think the timeshare industry is built on selling fanciful vacation dreams that never come true.

“There are a number of good guys in the market,” wrote Lisa Ann Schreier, author of the book “Timeshare Vacations For Dummies.”

“But little if anything is being done to disassociate themselves from the bad guys, therefore the consumer is still, rightfully so, leery.”

Whether you’ve been duped into buying a timeshare rip-off or just made a bad decision, what are your options?

How to Legally Cancel a Timeshare Contract

The Federal Trade Commission (FTC) has a three-day “cooling off period” on many purchases. So, if you bought a Mongolian dinosaur skull for $200,000 and your spouse is threatening divorce, it’s comforting to know you have 72 hours to save your marriage.

A timeshare won’t cost $200,000, at least not right away. But maintenance fees and other timeshare investment risks might make you want to move to Mongolia and leave no forwarding address.

Buyers paid an average of $24,140 for their timeshare interval in 2024, according to the American Resort Development Association. The average maintenance fee in the U.S. was $1,170.

Think twice and get some real estate advice before signing up for that. What if your spouse is threatening to leave because you were dumb enough to commit all that money to a timeshare in Detroit?

Good news! You have nine days to cancel in Michigan.

The FTC cooling off period is three days, but states also have fixed periods in which you can cancel. It’s often called a “rescission” or “revocation.”

The beauty is you usually don’t have to come up with some elaborate justification. In fact, you don’t have to give any reason. It’s your right to change your mind, especially if your marriage depends on it.

There are two main types of timeshares, deeded and right-to-use. With deeded, you buy an actual piece of property for a specific period each year.

With right-to-use, you buy the right to use a property for a specific number of years. At the end of that period, all rights revert to the property owner.

Whichever type you might purchase, the cancellation process is usually the same. It typically begins on the date you sign the contract, or the date you receive a disclosure statement. Sellers are required to provide information on cancellation and place your money in an escrow account until you close the deal or cancel the purchase.

Recission periods vary based on which state or country the contract was signed in. They are usually between three and 15 days.

Are you out of luck if the recission period has expired? Not necessarily.

You’d just have to prove the timeshare company violated the law or the contract language. Potential legal bases to cancel include fraud, breach of contract, the resort didn’t maintain the property, or the salesperson made false or misleading statements.

You don’t necessarily need to hire an attorney if you think the timeshare company has broken the rules. You can file a complaint with the Consumer Financial Protection Bureau, the FTC or your state attorney general’s office.

Understand Your Timeshare Contract

Speaking of attorneys, you might be tempted to hire one to look over your timeshare documents. Like all real estate contracts, these contracts are long, winding and full of legalese.

It’s about as much fun as reading a carburetor-repair manual, but you should review the fine print on financial obligations, cancellation policies, usage rights, ownership type, contract duration and resale regulations.

Ask as many questions as necessary. You’re making a big decision, so make sure it’s an informed one.

Timeshare Rescission Period

How much “cooling off” time you’ll have depends on where you were when you signed the contract. It varies from three to 15 days in the U.S.

Source: NOLO

Internationally, it’s a crapshoot. Mexico’s recission period is five business days. England’s is 14 days. Some countries have no recission laws, though most of those aren’t exactly timeshare hotspots to begin with (think Mongolia).

Whatever the deadline, it’s up to you to beat it. Some contracts allow buyers to verbally cancel their contracts, but you don’t want to rely solely on a conversation.

To be safe, get it in writing!

To be doubly safe, send it via registered mail or some other verifiable delivery service. The cost is a pittance compared to potentially backing out too late and enduring the real estate foreclosure process.

And in case you’re wondering, the recission period is nine days in Michigan. So, if you really did buy a timeshare in Detroit, you’d have less than two weeks to come to your senses.

Sample Timeshare Cancellation Letter

Put the following in writing when submitting a cancellation letter:

• The current date
• Your name as it’s written on the contract
• Your address, phone number and email address
• The name of the timeshare company
• A specific description of the timeshare
• The date you bought the timeshare
• A clear statement you are cancelling the contract

Make copies of the cancellation letter and all related documents, and make sure the envelope is postmarked before midnight of the final day of the rescission period. Proof of mailing date and receipt are important, so send the letter via certified mail to confirm it was delivered.

Grounds for Cancellation

If the rescission period has ended and you want out, you’ll need to show where the timeshare company failed to live up to the contract. Those are the “grounds” for your complaint.

Timeshare companies don’t give up deals without a fight, so you’ll need solid ground(s) to stand on. Examples include:

• The salesperson made false or misleading statements about the timeshare’s value or other benefits.
• The timeshare company engaged in chicanery like forging signatures.
• Breach of Contract. The resort didn’t maintain the property or provide the promised amenities.
• Undue sales pressure. The salesperson used fear or intimidation to close the deal.
• Health issues. It’s a longshot, but you might be able to cancel if you can demonstrate a medical hardship that prevents you from traveling to or using the timeshare.
• Financial hardship. Lack of money alone won’t get you out of a contract, but it might make it easier to negotiate an exit without losing what’s left of your shirt.

The whole point of escaping a timeshare is to strengthen your financial position and avoid or eliminate your debt.

Along with sending a cancellation letter, you can file a complaint with the Consumer Financial Protection Bureau and/or the Federal Trade Commission.

» Learn More: Debt FAQ’s

Timeshare Exit Strategies

Don’t give up all hope if you miss the recission period. Just give up most hope. There are other ways to unload your timeshare, but most are financially painful. Here are some options:

• Sell the timeshare. Pros – If it’s in a desirable destination, you might find a buyer and even make a profit. Cons – You have a better chance of finding a 7-foot-tall pygmy. The market is so glutted, timeshares are going for $1 on the internet.
• Donate the timeshare. Pros – You can take a tax deduction. You’ll avoid further assessments and possible foreclosure. Cons – Your payments must be up to date. You’ll have a hard time finding a charity willing to take it.
• You basically give the timeshare back to the company. Pros – You escape maintenance fees and future money-sucking assessments. Cons – Your account must be current. You don’t recover any of the money you’ve spent. Timeshare companies often charge a fee that runs into thousands of dollars.
• Rent your timeshare. Pros – It’s income! Cons – It’s a buyers/renter’s market, so the income probably won’t cover your maintenance and other fees. Renters may leave your timeshare looking like a meth house. The timeshare company might not allow renting.

What Happens If You Stop Paying on Your Timeshare?

Owning a timeshare is like owning a house in at least one respect. Even after you pay off the mortgage, the bills never stop coming.
By bills, we mean property taxes, utilities and repairs. The difference is that if the driveway to your house gets washed out, you are free to ignore it.

When a timeshare needs a major improvement or repair not covered by insurance, the timeshare association that governs the project can hit you with a special assessment. You must pay it even if you have one leg and can’t use the new tennis courts that the assessment might buy.

If you fall behind in your mortgage payments or the other fees, the timeshare association can get a lien and repossess the property.
There are two types of timeshare foreclosures. In a judicial one, the timeshare association must file a lawsuit and get court permission to sell the timeshare to satisfy the lien. In a non-judicial foreclosure, the association doesn’t have to file a lawsuit. Instead, it follows procedures dictated by state law.

Those laws vary from state to state but typically result in the association taking ownership of the timeshare.

Consequences of a Timeshare Lien

A lien is a legal claim against a property that serves as collateral for a debt. It allows the creditor to foreclose on the property, meaning they can seize and potentially sell the timeshare if the borrower fails to repay the debt.

If you are foreclosed upon, it’s not the end of the story. You will also have to pay any outstanding fees and other costs. They typically include:

• Late charges
• Attorney fees
• Unpaid assessments
• Fines
• Interest

How a Timeshare Foreclosure Affects Credit

Timeshare associations don’t always report foreclosures to credit reporting bureaus. State laws vary. The process could be judicial (the lender goes through the court to foreclose) or nonjudicial (it occurs outside the court system).

Either way, foreclosures are public record and credit bureaus typically search them for consumer information.

So, your foreclosure will probably be red flagged. And it’s a cinch that it will damage your credit score.
A drop of 100 points is typical, though it will be more if you miss foreclosure-related payments. And foreclosures stay on credit reports for seven years.

More bad news: You could also face a “deficiency judgment.” That’s when the sale price of your foreclosed timeshare is less than what you owed.

Say you owed $15,000, but the foreclosure sale brings only $11,950. The deficiency is $3,050.

Some states allow the foreclosing bank to seek that monetary difference against the borrower. The legal term is “deficiency judgment,” but feel free to simply call it “rubbing salt in the wound.”

Should You Use a Timeshare Exit Company?

The timeshares industry is so big ($10 billion annually) it has spawned a sub-industry: Timeshare exit companies.

They handle the dirty work for you, or at least that’s the sales pitch. Exit firms are often big on promises but short on results. And consumers pay steep upfront fees ($5,000 to $80,000 or more, according to the FTC) for their services. For that kind of money, you could hire an attorney to deal with the timeshare company or simply try to negotiate for yourself.

That doesn’t mean all exit companies are out to scam you. Just look for red flags, like unsolicited calls offering help or instructions to stop paying your mortgage or fees.

Check the Better Business Bureau website to see whether the firm is legitimate and has a decent rating. A hasty decision probably got you into a timeshare fix. You don’t need another nightmare trying to get out of it.

FAQs About Timeshare Cancellation

Can I cancel my timeshare after the recission period?

Yes, but it won’t be easy. You’ll have to prove misrepresentation or fraud by the timeshare company.

Does it affect my credit?

Not if you contractually agree to give up the timeshare and have met all financial obligations. But a foreclosure will knock about 100 points off your credit score and stay on your credit report for seven years.

How long does the process take?

Timeshare cancellation can take anywhere from a few weeks to 18 months. It depends on the contract complexity and how responsive the timeshare company is.

Do I need a lawyer?

No, but hiring a lawyer is worth considering. Having a knowledgeable person negotiate for you and guide the process can help you avoid legal and financial complications.

What if I inherited a timeshare?

If you want nothing to do with perpetual maintenance fees and other expenses that come with your inheritance, you can file a Disclaimer of Interest with probate court.

In most states, you’ll have nine months to file. It’s like an extended recission period to make sure you don’t end up spending all future vacations at a timeshare in Detroit.