Do "Voluntary Surrender" Programs Help or Gouge Owners One Last Time?

[PamMo]

After reading TUGBrians's post about ARDA's new Responsible Exit program to help owners out of unwanted timeshares (https://responsibleexit.com/), I was hopeful about an email I just received from Owner Services at Solmar.com (parent company of Solmar, Playa Grande, Grand Solmar @ Land's End, and Grand Solmar @ Rancho Lucas...in Cabo San Lucas). The email listed options on how to use your owner week for the year, including this one (my boldtype, not theirs):

5) Close your account via Voluntary Surrender. If you find that you can no longer use your membership, at this time you may choose to close your account with us. This is done directly through us, not with a 3rd party or broker. Fees apply. Please contact ***** for more information. This program will be cancelled indefinitely this year. If you would like to close, please do so immediately. [Sounds a little like a timeshare sales pitch.]

*IF you close now you will not be responsible for 2019 maintenance fee, providing you have not paid it or already banked/used the week.
​

OK, so I'm optimistic that they are offering a "Voluntary Surrender" for owners. That sounds friendly. It's a positive step, right? But, I'm curious about those Fees, so I write back and ask for details. I have nine years left on my contract for two fixed prime weeks, in a fixed top floor oceanfront unit. MF's are $950/wk. It's one of our favorite timeshares and we always use it, but I wanted to see if "exiting" a timeshare is starting to get easier. We get so many owners posting on TUG that they are desperate to get out of their contracts/deeds. What does it take to "surrender" a timeshare to the developer at one of the resorts that I own? Well, here's the response:

Good afternoon. You can close your paid in full accounts from now until March 30th, 2019 via Voluntary Surrender (VSL). The VSL is a legal and permanent closure in which both parties agree to end the contract early. The VSL is the only way to close your account before the allotted time without any negative repercussions. The resort does charge a one-time fee of $2,700 USD to close week #* and $1,800 to close week #*.

Please note that this program is ending indefinitely as of March 30th. All VSL's are handled 100% in writing by email for your protection, we do not do them on site nor by phone.

If you are not planning to use or deposit your 2019 week, and you close the account by January 20th, I can waive the 2019 maintenance fee.

Please let me know if you would like to review the VSL before deciding. ​

So, I wonder how many people will take them up on this offer to close their accounts? Paying 2-3X MF's to end a RTU contract seems pretty high to me, especially with only 9 years left on a contract. On the other hand, it would save an owner from paying more in future MF's, so it might be tempting for people who really need an out.

What are your thoughts on surrender programs like this? Will/have developers come up with a standard fee (multiples of MF's?) to take back unwanted weeks from owners? What sort of fees do you think are reasonable? Do you have any other examples of Voluntary Surrenders?

 

[TUGBrian]

we have seen many mexican timeshares use this "multiple of annual mf" as a cancellation amount (or transfer amount for that matter)...nothing more than trying to extract more money out of owners.

some resorts here in the US have also adopted this strategy as well, although not quite to the 5/6/7x numbers ive seen at some mexican resorts!

 

[LannyPC]

we have seen many mexican timeshares use this "multiple of annual mf" as a cancellation amount (or transfer amount for that matter)...nothing more than trying to extract more money out of owners.

But these amounts are probably still cheaper than using these exit/cancel/rescue companies.

 

[TUGBrian]

yea but the majority of mexican timeshares are not deeded property and are instead closer to "memberships" than timeshares.

when push comes to shove, if the mexican resort doesnt want to offer a reasonable exit solution, ending the maint fee payments to them will certainly terminate your ownership!

 

[PamMo]

Yes, some Mexican timeshares DO have a horrible reputation. In the U.S., Diamond Resorts will take back a timeshare for $750, which entails legal work to file a new deed. That's w-a-y more reasonable than Solmar's fees.

 

[jackio]

Holiday Inn Club Vacations will do a deedback at no charge providing the unit is paid off.

 

[bogey21]

I did Deed Backs at 4 HOA Controlled Independent Resorts a number of years ago. Zero cost on two of them. On another I paid $150. The 4th one was a special circumstance. Resort had a major structural problem which required a large 3 year Special Assessment. As an alternative to the Special Assessments the Resort offered to accept a Deed Back for $1,000 which I accepted. But note, none of the 3 I initiated came easily. I had to ask, ask again and again before I got the deals done...

George