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Can I get out of a Diamond Resorts timeshare?

Timeshares are notoriously hard to get out of. They’re designed to be lifetime contracts that never end. Many of these companies, however, have been accused of shady sales practices. Diamond Resorts is one of those companies—for example, it settled an action by the Arizona Attorney General in 2016 by entering into an “Assurance of Discontinuance.” While Diamond Resorts denied it did anything wrong, the Arizona Attorney General disagreed. They accused the company’s “Vacation Counselers” of making “unauthorized representations or misrepresentations in connection with sales.” These included falsely claiming that increases to maintenance fees would be “minimal” when they could rise “up to 25% per year” or misleading consumers into believing they were obligated to stay for lengthy presentations or rushing them into signing documents. You can read the full settlement online here.

So what if you experienced something similar and want out of your timeshare?

There are only a few basic options. Here’s what works from a legal perspective:

1) Cancelling within the rescission period. Diamond Resorts contracts generally allow a short “cooling off” period which is required by law in most states. You can read a more detailed explanation of this on our post here, along with some examples of contracts from public lawsuit filings that show what some of the clauses require.

Unfortunately one of the things the Arizona Attorney General alleged was that “Some Consumers alleged that Diamond failed to honor their requests to cancel the purchase and security agreement….” As explained in our post about timeshare cooling off periods for Diamond Resorts, it’s really important to do this quickly – and to make sure you get a notice out that follows the requirements of your specific contract.

But the cooling-off period may only last for a week or so—it won’t be long.

2) Negotiating directly with Diamond Resorts. This is always an option. The company has a program called “Transitions” designed to deal with requests for people to get out of their timeshares. A couple things to think about, though: it will require you to cancel or complete any vacations and stop using the timeshare. And you may have to get on a list. If there’s a long wait, then you could be losing your legal right to make claims in a lawsuit or arbitration if you wait too long. The statute of limitations is always ticking, so the further you are away from your sales pitch or any potential breaches of contract, the harder it will be to pursue a legal claim.

3) Lawsuits or arbitrations. This is the approach we recommend, assuming you have a legal claim. With Diamond Resorts, the contracts generally contain an arbitration clause. We explain more about how that works on our post about filing an arbitration against Diamond Resorts. But there are all kinds of legal claims a consumer may have, from breach of contract to fraud in the sales process to legal problems with the contract itself. It just depends on what happened to you, when it happened, and what state you’re in or what state you signed the contract in. Our law firm is not a “timeshare exit” firm—in fact, a large number of our cases don’t even involve timeshares. We sue companies over all kinds of abusive or deceptive business practices, so you’re getting a real law firm whose experience is in winning lawsuits. If you think you may have a legal claim against Diamond Resorts, call us at 657-845-3100 or e-mail us at contact@kneuppercovey.com.

Here’s what DOESN’T work to get out of a Diamond Resorts time share:

1) Letters from attorneys or timeshare exit companies. If you’re outside the cooling-off period, then letters don’t do anything on their own. Many exit companies will claim to have certain kinds of letters they can write that cause an exit, or claim they will have a lawyer write you a letter which establishes that you’ve exited your timeshare. A demand letter is the first step for a lawyer, not the last step. If your lawyer isn’t backing it up with the willingness to actually a lawsuit or arbitration, no one will take it seriously.

2) Deeds. Some timeshare exit companies have engaged in deed schemes that are designed to look like they’ve done something. They may claim you’ve transferred it to another person or company that they work with and now it’s not yours—so you don’t have to pay the fees anymore. This generally isn’t true and can blow up your credit score if you rely on it.

3) Selling the timeshare. This one can work – if you have a real buyer (and often only if the timeshare company agrees). The problem is that there are a lot of scams out there – demanding you pay money so they can arrange the buyer and then disappearing, for example. One of the things timeshare owners often complaint about is that there isn’t any resale market for their timeshares. In fact, Diamond Resorts said the following in an annual report it filed with the Securities and Exchange Commission in 2015: “There is not currently an active, organized or liquid resale market for VOIs, and resales of VOIs generally are made at sales prices substantially below their original customer purchase prices.”

A VOI is a “vacation ownership interest” or their word for timeshares.

4) Donating your timeshare to charity. This is generally another scam – if you don’t want your timeshare, why would a legitimate charity? They can’t sell it to anyone either.

Our attorneys have represented clients in hundreds of arbitrations on various consumer protection issues. If you think you have a legal claim against Diamond Resorts, call us at 657-845-3100 or e-mail us at contact@kneuppercovey.com.

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