Reader Question: What restrictions are there for resale purchasers when buying a Hyatt Residence Club timeshare on the resale market?

Navigating a timeshare purchase on the resale market can be tricky.  Prices are not very transparent and there are plenty of timeshare sellers but there are definitely some that you should stay away from due to potential scams or lower quality expertise that may leave you with a purchase or bills that you didn't expect. 

I keep promising a full timeshare resale guide and it is in the works but time has been difficult to obtain for the past few weeks but it will be here soon. 

If you have read this blog before, you know that I recently purchased a second Hyatt Residence Club timeshare week. 

I purchased a resale week since I predominately use my Hyatt Residence Club points for transferring to Interval International.  I went through the various ins and outs of my purchase but a reader sent me a question inquiring about the potential restrictions on resale purchases. 

If you have been to a timeshare presentation before, the salespeople tend to avoid any questions concerning resale and attempt to change the topic when these items come up.  The price discrepancy between buying from the developer and buying resale is massive with potential savings of greater than 90% off developer pricing when buying resale. 

Timeshare developers know this so they do a couple of things to persuade people to avoid purchasing resale. 

Unknown Bills

When you purchase a resale timeshare, there could be past due maintenance fees, a loan associated with the week or pending special assessments. If you do know adequately inquire with the timeshare developer or main timeshare program, you could get stuck purchasing a week with a hefty amount of debt.  This is why you NEED to obtain an estoppel certificate.  You can read about it here. 

Restrictions 

The other major item that timeshare developers due to resale owners is create additional restrictions on the use of the timeshare.  Vistana (Starwood brands) has some of the worst timeshare resale restrictions.  If you purchase resale on the vast majority of their timeshare properties, you CANNOT trade internally with other Vistana timeshares.  There are a few timeshares properties that DO come with this ability but this is a significant restriction that you need to be aware of before purchasing a Vistana timeshare on the resale market.  Here is an overview of that program which details some of these items. 

Hyatt Resale Restrictions

To finally get to the point of this post, I wanted to explain the resale restrictions that the Hyatt Residence Club implements to encourage you to purchase directly from the developer.  For owners who purchase directly from the Hyatt Residence Club, you can exchange your week into World of Hyatt points where you can use those World of Hyatt points at various hotel properties throughout the world.  Here are some details on how that aspect of the program works. 

If you purchase resale, YOU DO NOT GET THAT ABILITY.  The Hyatt Residence Club blocks resale owners from participating in that program and you cannot exchange your Hyatt Residence Club week or points into World of Hyatt points.   You can only use your points to exchange internally to other Hyatt Residence Club properties or exchange through Interval International.

Additional Resale Restrictions on the Hyatt Residence Club

The inability to exchange into World of Hyatt points was the single restriction that the Hyatt Residence Club implemented for resale purchase for a long time.  Resale owners still had the ability to exchange into other Hyatt properties at the same rates as developer sold weeks and had the same reservation Windows as developer sold weeks.  Essentially, the only difference between a resale owner and a developer owner was the inability to exchange into World of Hyatt points.  All other aspects of the program worked exactly the same. 

The New Hyatt Portfolio Program

As you may know, Hyatt has recently rolled out a new program called the Hyatt Portfolio program.  The program is different in that instead of owning a week which has a set amount of points allocated to that week, you purchase points.  The more points you purchase equates into various different levels of ownership which provides better reservation windows or points banking capabilities.  The details of the new program are here. 

The issue with the new program is that the points, while being able to be resold, are subject to a right of first refusal (like the legacy weeks).  However, I have been told but I have not confirmed this, that the points are subject to a set repurchase amount by Hyatt.  In that case, Hyatt would be able to repurchase these points at a set price (likely a tremendous discount to the original purchase price) which would prevent the ability for a secondary market to develop since Hyatt would likely just scoop up the cheap points and resell them for top dollars. 

Conclusion

In a long winded answer, the only restriction on purchasing a legacy Hyatt Residence Club timeshare week on the resale market is the inability to exchange into World of Hyatt points.  Thats it!  Everything else is exactly the same.  

In my opinion, saving thousands of dollars makes this restriction completely bearable and in all honesty, the exchange rate for converting into World of Hyatt points is generally poor where even if I could exchange my weeks into World of Hyatt points, I WOULD NEVER DO SO. 

The issue with many timeshares is that the rules change and evolve so there is always the risk that new restrictions can be implemented on resale purchases.  All timeshares track this item so they will always know where you purchased it and how much you paid.  

Existing timeshare owners are the easiest demographic to market the purchase of additional timeshare weeks or points so the big timeshare companies generally do not want to impose harsh restrictions on resale owners but they do want to impose some meaningful restrictions which can allow them to market owners the ability to purchase additional weeks directly from the developer and remarkably remove these "restriction". 

There have been plenty of timeshare presentations where I have been given the opportunity to remove my resale designation IF I purchase another week directly from the developer.  I have not been persuaded to do so as the inability to convert to World of Hyatt points is not significant enough for me to want to spend tens of thousands of more dollars for a developer week. 

What do you think of this restriction?  Would this prevent you from buying a timeshare on the resale market?