Some questions customers ask
Contract Cancellation Experts
We have the answers!
I bet you were told that owning a timeshare was a great idea and by owning one you could go on vacation every year. Plus, if you got tired of it you could always sell it? Right? Wrong.
Truth is that Timeshares are one of the biggest scams on the market today. Once you are stuck in one, you are stuck in a black hole.
You are reading this today because you are thinking, why in the world am I paying thousands and thousands of your hard-earned dollars for a place with minimal square-footage that I might get the chance to visit for one week each year?
On top of that I have no equity in the place and I am paying ongoing “maintenance fees”, selling it is near impossible and it’s basically just an expensive, ongoing headache.
Sounds completely ridiculous, doesn’t it? That’s because it is!
Timeshares are one of the top sellers in the travel and hospitality industry. Thousands are available and millions of people “own” them. But that doesn’t mean timeshares are a good idea. An article on MarketWatch.com tells us that timeshares are generally marketed and sold to people who really can’t afford them. So if you think you can afford it, you
can’t. Even if you really think you can, your money is better off in a cookie jar.
The average cost of a timeshare in the U.S. is $14,500. If you put that money in a mutual fund averaging 12% over 10 years, you would have almost $48,000. Pretty good right?
In 20 years, you would have over $178,000. Even better.
In 40 years, you would have over $1.7 million! That’s a lot of free money!
Throwing money at a timeshare is not an investment and will not generate money for you. With timeshares, you’re just pre-paying your hotel bill for the next 20 years whether or not you use it.
In your initial meeting, you’re probably told about maintenance fees, right? The average fee across the country is $980 per year. But the surprise comes when you find out the fees go up every year, often much faster than the normal inflation rate. The latest numbers we have say the increase averages around 4% a year. So in hard numbers, your original $980 fee could be $1,451 by year ten—a total increase of 48%!
For the timeshare owner, these annual fees are collected by the timeshare management company yearly (or possibly monthly) for the stated purpose of covering the normal costs of maintaining their timeshare property. Just like regularly changing the oil in your car, timeshares need regular maintenance to make sure everything’s running well. This of course comes at a cost—and that cost is passed on to you.
Basically, these fees are for regular upkeep and repairs to the property. They could include:
- Landscaping—mowing grass, trimming hedges, raking leaves, and even sprinkler systems
- Amenities upkeep—pool cleaning and chemicals, gym equipment servicing, golf course maintenance
- Business costs—insurance on the property, record keeping, scheduling, and administration
Maintenance fees must be paid every year whether you use the property or not. They are non-negotiable. Read your contract carefully to see what is actually disclosed about your maintenance fees.
And here’s a sad yet interesting fact: Sometimes the maintenance fees are subsidized by the developer during the sales process. But when the initial push for sales is over, and the fees are left for the Homeowners Association (HOA) to handle, these puppies can go up dramatically without any warning!
We’re not arguing that regular maintenance needs to be done on a property. No one wants to stay in an “open air” property that really just has a hole in the roof! The problem is that the increased fees appear to be a major part of the income of the timeshare company. This indicates maintenance fees are used for much more than just upkeep on the property. And on top of that there are those nasty extra assessment fees. They’re worse because they seem to be catch-all costs thrown at you, the owner, and you have no choice but to pay them.
What Happens If you Stop Paying Timeshare Maintenance Fees?
When you break it all down, these fees make up a real debt that you owe . . . for life! If you stop paying it, the timeshare company will do what other companies do to collect, they’ll make phone calls and send letters, then they’ll assign it over to a collections company. They will do almost anything to get those fees out of you!
If you still don’t pay, the situation sinks even further into foreclosure and possible legal action against you.
Also, think about it. The moral thing to do is to pay your debts. Like it or not, maintenance fees are a personal responsibility, until they’re not.
How many of you have tried to sell or rent your timeshare?
If you’re thinking of selling a timeshare be careful. The FTC cautions you to question resellers — real estate brokers and agents who specialize in reselling timeshares. They may claim that the market in your area is “hot” and that they’re overwhelmed with buyer requests. Some may even say that they have buyers ready to purchase your timeshare, or promise to sell your timeshare within a specific time. All they need is an upfront fee to get the ball rolling. Bet you have all heard that – right?
Over the last few year there have been $15 million dollars lost by timeshare owners who were charged upfront fees of as much as $2,500 — or more — with promises they would rent or sell the properties. As time passed you were probably asked for more money, claiming the sale was about to take place and even characterizing the additional fees as closing costs. When the promises weren’t kept, consumer requests for refunds were routinely denied or ignored.
The fact is that timeshare have no value.
How to Get Rid of Timeshare Maintenance Fees
The only way to get rid of your timeshare maintenance fees and the other special assessment fees is to get rid of your timeshare altogether. As long as you own the property, there is really no way to end the yearly onslaught on your bank account.
Failure to pay these fees results in collection efforts by the management company. When you purchased your timeshare, your contract outlined the amount of the maintenance fees and their due date. You may incur interest, collection efforts and even foreclosure if you do not pay on time.
What to expect if you don’t pay
INTEREST & LATE FEES
GOING TO COURT
HARMING YOUR CREDIT
Do timeshare pass on to my children?
Timeshare contracts are so binding that even death doesn’t necessarily offer an escape. Most timeshare agreements contain a “perpetuity clause.” Basically, the clause requires you to pay the associated costs of owning the timeshare for the rest of your life. When you pass away, the timeshare becomes part of the estate. The obligation is inherited by the designated
beneficiary or next-of-kin. Depending on your child’s ability to keep up with the fees, the timeshare may be a gift or a curse.
If your children are the beneficiaries, your timeshare will get passed on to them after your death.
Responsibility to Pay
Your estate and the heirs are responsible for maintenance fees after your death. As the timeshare depreciates in value, the fees will likely increase. The timeshare company can’t go after your beneficiaries if they choose not to pay, but it can go after your estate. When the payments aren’t made, the late fees accumulate. The resort will foreclose and take back the timeshare. If the estate has assets at the time of death, the assets must be used to satisfy your debt. Some assets are exempt, such as your homestead property, but assets subject to probate are often unprotected.
Subject to Probate
The way your timeshare title is held affects how it passes to your beneficiaries. If you own the timeshare with a co-owner as “joint tenants” or “tenants by entirety,” it automatically passes to the surviving owner. Probate is eliminated, at least temporarily. When the surviving owner or sole owner dies, the timeshare is subject to probate.
A will doesn’t avoid probate, but instead directs how the assets should be distributed. The length of time it takes to complete probate varies based on the state laws and value of assets. During probate, your beneficiaries can’t use the timeshare. The executor of the estate is responsible for making sure the maintenance fees are paid while the timeshare is in probate. If you want to keep the timeshare out of probate, consider adding
your child or beneficiary to the deed as an owner or placing the timeshare in a revocable trust.
So what can you do?
If you don’t want to burden your heirs with the responsibility of your timeshare, get rid of it while the contract is still in your name. Although timeshare agreements are designed to last indefinitely, there are potential escape routes.
No matter what you have been told timeshare are NOT good for resale (see above). You can have an attorney review your contract to check for discrepancies. Unfortunately most attorneys charge between $300 to $600 per hours plus all the little incidental fees like paper clips, fax paper, phone calls etc. If the sales representative or resort misinterpreted the facts to lure you into the sale, you may have a legal way out but it could be very costly just to find out.
Your best bet is to exit your timeshare agreement completely, for good. Timeshare relief Association will help guide you out of the murky timeshare world once and for all! With our help you won’t have to keep looking over your shoulder or letting calls go to voicemail. You can be free and clear legally.
Timeshare relief Association works with professionally licensed paralegals who specialize in timeshare contract cancellation. Because we provide these professionals with a constant flow of clients they have given us a low flat rate with no hidden charges or extra fees. We are able to pass this savings on to you and get you out of your timeshare for a fraction of what others charge and most of them do not use an attorney or paralegal.
Call us today for a free phone consultation or attend one of our local events that travels around the country, but hurry, the time you waste is costing you money.
The four most common types of timeshares
Fixed week: This option buys you a deed to a specific unit at a resort for the same week year after year. You actually own a fraction of the overall property and the deed is officially recorded in government files.
Floating: Like the fixed week, you own a deeded week for a specific unit — but you have the freedom to book your week any time you want. This flexibility poses a risk, however, because others may be competing for the same week.
Right to use: RTUs don’t provide true ownership of the timeshare; instead, you buy a membership and lease the property from the developer for a period ranging from 20 years to 99 years.
Point based: This option buys you an allotment of points that can be used at a variety of locations, depending on the number of points you’ve accumulated through ownership. As with the floating option, getting a reservation during prime time can be difficult.
Interest and Late Fees
The timeshare contract will specify when and how the maintenance fees are due. If you do not pay in full by the due date, the timeshare company will begin calling to demand payment. You most likely will receive demands also by mail with notification of past-due bills. You may incur interest and
late fees if your contract allows for it, which then will inflate the total amount due to bring your account current.
After consistent failure on your part to pay the bill and work out arrangements, the timeshare management company will send the bill to collections: either an in-house or third-party agency. Collection agencies have more resources to force payment, including making consistent phone calls, mailing demands for payment, and offering settlement options. A negative entry appears on your credit report with the involvement of a collections agency, and your credit score will drop. The entry appears on your credit report for seven years, even if you pay the bill in full.
Taking You to Court
The timeshare management company can take you to court to pay your past due bills. The management company will file a lawsuit in the court in your jurisdiction. You must go to the court hearing and defend your failure to pay the bill to the judge. If the judge awards a judgment to the timeshare management company, you may face garnishment of wages or a bank levy. A judgment appears in the Public Records section of your credit report for seven years and will negatively affect
your credit score.
Deeded timeshares are a real estate property in which the buyer obtains a deed. Maintenance fees are part of the purchase contract. Failure to pay the maintenance fees results in the
resort foreclosing on the property and selling it at auction to recover money owed. You may face a judicial or non-judicial
foreclosure. Judicial foreclosures allow the lender to pursue a deficiency judgment for the balance due after the auction. Non-
judicial foreclosures, which are more common in California, provide the lender with a quicker foreclosure option. In return, the lender cannot pursue a deficiency judgment. Foreclosures
appear on your credit report in the Public Records section for seven years and can lower your score up to 160 points.