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Getting Rid of Your Piece of Justus Morgan |
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As the
sound of Santa’s sleigh bells fade and another Instead
of trying to convince you why you should or should not buy a time-share, I
want to focus on what to do when you no longer want the time-share you own.
Not only does the length of this column prohibit me from delving deeper into
to the intricacies of time-shares, but my pen is no match for the glossy
brochures, free stays and polished sales pitch of someone offering you a
piece of paradise. There are
four common methods for divesting yourself of an interest in a time-share
including a cooling-off period, reselling to another buyer, deeding the
property back to the resort, and donating to charity. If you
have buyer’s regret soon after your time-share purchase, the Federal Trade
Commission’s “Cooling-Off Rule” may help because it allows you to cancel
purchases up to three business days after the purchase for items worth $25 or
more that were bought from home, workplace, or facilities rented by the
seller such as hotel rooms, convention centers or restaurants. Some states,
such as Assuming
you purchased your time-share interest after the cooling-off period ended,
you have several other options. You can attempt to resell the time-share to
another person. A quick search on the internet reveals a booming business of
firms offering to resell your time-share. Unfortunately, most want money up front
to list your property. Based on anecdotal experience, this method has been
the least successful for our clients. Another
option is to transfer the deed for the time-share back to the resort or
association. Not all companies will accept these transfers so you will have
to check with your particular time-share company regarding the feasibility of
this option. Most likely there will be expenses involved that you will have
to incur to cover the cost of attorney fees and document filing charges. You
should also verify what happens to any outstanding loan balances used to
finance the purchase of the time-share. The last thing you want to do is
unload the time-share interest but still be liable for the loan created to
pay for it. A final
option worth considering is donating your time-share interest to charity.
There are several organizations that will accept time-shares and take care of
the resale process on your behalf. Instead of receiving cash, you get a tax
deduction for the fair market value of your time-share. Charities
are selective in which time-shares they accept because they want to be able
to sell them on the secondary market. A couple of organizations that accept
time-share donations include Donate for a Cause (www.donateforacause.org) and Gifts
for Sight (www.giftsforsight.org).
When it
comes to ridding yourself of a time-share interest, the money you receive (if
any) will most likely be substantially less than what you paid. If your
efforts to transfer the time-share are unsuccessful, you will continue to be
liable for the annual maintenance fees regardless of whether you plan to
continue to use the time-share. So while you imagine yourself soaking up the
sun’s rays for years to come in your time-share, also remember to identify
your exit strategy when it’s time to get out of the sun. Justus Morgan is a
Certified Financial Planner with Financial Service Group, Inc., a registered
investment advisory firm in |