Renting a timeshare unit without escrow services

I am not a timeshare owner but I like staying in a timeshare when I go on vacation. This is a good site for finding timeshares for rent to popular locations. However I have run into situations where timeshare owners will list their unit for rent but do not subscribe to the verified, payment, or escrow services that Red Week offers. Nor do they offer similar services privately. Seems like that should be a standard business practice. They want 100% upfront before transferring the reservation. If these verified/escrow services are not offered it puts 100% of the risk on the renter and we have all heard the horror stories of vacation scams.

Yes, I can choose not to rent with that owner but on some occasions the week I needed to travel only had owners that refused to use Redweek verified/escrow services. Both times this has happened everything work out fine but I was unhappy that I did not feel secure in the transaction.

It seems like most in the forum are owners but has anyone else run into this problem? Any suggestions on how to minimize the risk? Or as an owner what terms do you offer to potential renters?

bernadettem72 wrote:

I am not a timeshare owner but I like staying in a timeshare when I go on vacation. This is a good site for finding timeshares for rent to popular locations. However I have run into situations where timeshare owners will list their unit for rent but do not subscribe to the verified, payment, or escrow services that Red Week offers. Nor do they offer similar services privately. Seems like that should be a standard business practice. They want 100% upfront before transferring the reservation. If these verified/escrow services are not offered it puts 100% of the risk on the renter and we have all heard the horror stories of vacation scams.

Yes, I can choose not to rent with that owner but on some occasions the week I needed to travel only had owners that refused to use Redweek verified/escrow services. Both times this has happened everything work out fine but I was unhappy that I did not feel secure in the transaction.

It seems like most in the forum are owners but has anyone else run into this problem? Any suggestions on how to minimize the risk? Or as an owner what terms do you offer to potential renters?

First off, let's not confuse or co-mingle the terms "RedWeek verified" and "escrow', since the two concepts and services are distinctly different and not associated with one another in any way.

As a timeshare owner, on the occasions when I rent out a timeshare week, I willingly pay an additional fee to get "RedWeek verified". RedWeek then independently confirms that the owner and advertiser (me) are indeed one and the same person. This at least gives a prospective renter some reassurance that the owner is a known, traceable, paying and legitimate RedWeek member (in my case, for many years). I provide a detailed rental agreement for mutual signature, with all of my personal info contained within. No tenant has ever had a problem with its' content or ever declined to proceed with using it. As you correctly point out, any potential renter can simply choose to walk away if the rental terms and conditions are unacceptable to them. Risk in any rental is a two way street.

I always recommend (in writing, within the agreement) that tenants consider obtaining their own trip cancellation or travel insurance, since (like most owners) I will not issue any refund in the event of a last minute cancellation by the tenant. My maintenance fees have, after all, long since been paid and if it's a last minute cancellation I am left with no time or opportunity to find a replacement tenant.

That said, I do not and will not consider using "escrow", no matter who is paying the escrow fee. Escrow necessarily means that the owner will receive rental payment only after the rental has already been fully completed. No thank you, that's just unacceptable. Timeshare owners have to pay their maintenance fees 100% in full, long in advance of the actual usage and occupancy date. Understandably, many (maybe most) owners (including me) simply will not accept the risk of possibly never actually receiving rental payment at all, even though someone used and enjoyed their timeshare for a full week. Declining to use or accept escrow is every timeshare owner's right and prerogative.

A nervous renter can always choose to purchase their own travel insurance or trip cancellation insurance, fully protecting themselves from financial loss without requesting or expecting a timeshare owner to assume unnecessary risk; risk which exists in any "escrowed" rental, no matter who paid the escrow fee.

There are two sides and two perspectives in any timeshare rental. Either party is certainly always free to decline or to accept the terms and conditions of the other. I occasionally rent a timeshare week from another owner from a RedWeek ad. Knowing as I do the financial obligations and risks that all timeshare owners face, I would never ask any owner to consider "escrow" and receive their rental payment only after the rental is completed. I would never accept that risk or process myself and I would not ask or expect any other owner to do so either.

On RedWeek, both owner and renter must be paid, identified (and therefore traceable), so I think that the risk is quite low for either party involved in renting on RedWeek.

As always, to each their own personal choices, preferences and practices. There is risk involved on BOTH sides of ANY rental, so some measure of trust is required for all parties involved to be comfortable with the transaction. I always invite the tenant to contact me directly by phone to ask me any (timeshare specific) questions they wish, to demonstrate that I am completely legit. If that's not enough, they should perhaps look for a different rental from one of the relatively few owners willing to accept the delay and risk of escrow.

Ken, thanks for the detailed feedback. I understand better the difference between escrow and Redweek verified. But I am not understanding the risk to the owner of not getting paid when using an escrow service. Isn't the escrow company holding 100% of the rental fee in advance of the rental? It may not be timely for getting maintenance fees paid in advance of the rental period, but those same maintenance fees would be due if the owner used the week for personal use.

Its good to hear that you use Redweek verified when you do rent your week but for owners that choose not to use the Redweek services and ask for 100% upfront, how is renting under those circumstance a risk with both parties. Hasn't the renter accepted 100% of the risk now that the owner has 100% of the rent upfront.

I guess few business transactions are risk free but it feels like some owners do choose transactions that have a high level of transparency while others do not. But then again, Redweek does provide guidance to safeguard transactions for both owners and renters so both parties can make decisions based on their risk tolerance.

As long as the person renting pays by credit card there is always a chance that they will dispute the charges, and a chance they will win the dispute despite the contract. I do a few rentals with HomeAway which has an automatic escrow built in. For a unit that I would list for about $700-800 on a site like Redweek I list for $1100 to $1200 there. They add another fee of about $100 or so that the one renting pays. So the rental party pays $1200-$1300. Home Away keeps $250 from the rental price plus the $100 paid directly from the rental party which covers their commission plus the escrow. I don't get paid until about a week after. Basically I get an extra $150 for my inconvenience.

I don;t ask for 100% upfront although many do. I typically want a $50-100 deposit before I put the reservation in the renters name. Once that is verified by the rental party I ask for 50% and then the remaining 50% 6 months prior to fly to locations and 60-90 days prior for drive to seasonal rentals that I know I can re-rent easily if need be.

If you want escrow try offering to pay for escrow. If the person says no, try offering another $150-$300 to make up for the inconvenience of waiting.

tracey75 wrote:

As long as the person renting pays by credit card there is always a chance that they will dispute the charges, and a chance they will win the dispute despite the contract.

Yes --- this is indeed the fundamental risk an owner assumes with any rental transaction using "escrow". While most tenants are honest, I for one will simply never accept the risk of a dishonest person trying to get themselves a free vacation at my expense by filing a completely bogus and fraudulent credit card charge dispute. Even when the timeshare owner ultimately wins that dispute, it still takes too much time and unwelcome aggravation to prevail. No thank you.