What Happens If I Stop Paying My Timeshare Maintenance Fees?

[Craigvince Junior Member Find all posts View Profile Close Craigvince]

What happens if someone owns a timeshare and just stops paying the MFs? Is there any legal recourse to the owner? I suppose the county could come after them for the property tax portion, but what rights does the resort have? What happens to those ownerships that aren't paid. I know an owner can't use their week or points until the MFs are paid current, but what's to keep someone from walking away altogether?

[Craigvince Junior Member Find all posts View Profile Close Craigvince]

For clarification, I'm asking this as a hypothetical question. I like what I own currently, and will buy one or two more before I'm done.

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

Is there any legal recourse to the owner?

Yes, they have. But it will depends on local law and your state's law to say what kind of action they can. And it will depend on resort to see if they will really take any action at all.

but what's to keep someone from walking away altogether?

Not too much. In worse economic situation, what to prevent people file bankrupcy?

Jya-Ning

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

It depends a lot upon the resort. Some are more aggressive at collection than others.

Many now report you to the three credit bureaus, so the unpaid debt will hurt your credit. At some point thereafter, which may be a few months or up to two years, they will foreclose. Many will also send that foreclosure to the three credit bureaus, and a foreclosure does serious damage to your credit score for 7 years.

They can also get a deficiency judgment on the remaining debt, assuming they bid in a minimum at the foreclosure sale, and then use whatever methods are open in your home state to collect that judgement (which would require getting a new judgment on the deficiency judgment from the state where the timeshare is located). If they do that, in many states, they can garnish your wages or in all states seize and sell your assets. Most do not go that far, but they could. Usually it ends with a black mark on your credit.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

The process varies by developer and association so this is a general response only. Also, the process can vary tremendously if the ownership is a non-deeded membership as compared to a deeded ownership interest. The info below is normally related to deeded timeshares.

Normally, when your maintenance fee payment is late- you will receive a notice of non-payment in the mail. This will add a late fee and interest rate to the amount due and provide you with a new due date.

If this new invoice is not paid, the next notice will normally be a "lock out" notification, which informs you that until your financial account is brought current you will not be able to access your vacation ownership interval or points. This letter will also normally give you a final due date, and inform you that if not paid by that deadline the account will be given to a third-party collection agent (a few resorts will use their own internal collectors).

When the debt collector receives the file, they will send you a notice of their intent to collect. It is at this time that the consumer has the ability to contest the debt, or to request written proof that the debt is actually owed. Once the debt is confirmed or accepted, the collection agent will call to try and arrange a payment collection schedule. If you don't pay, then the unpaid debt will normally be submitted to the various credit reporting agencies at this time.

The collection agent will continue to pursue payment with routine letters and calls. It's important to note here that as long as the collector is a third-party agency, they must follow the Fair Debt Collection Act practices. You can find info on the FDCPA at Debt Collection FAQs: A Guide for Consumers. If the collection agent is an employee of the company owed the debt, they normally DO NOT have to follow those guidelines.

Often, when an owner falls behind two years in fees- the developer or association will either authorize the collector to offer a deed in lieu, or will begin a foreclosure process. Again- policies and procedures vary widely and there are multiple variables that are often considered such as the likelihood of the resort being able to collect on a judgement if it is awarded by the judge..

For the consumer, it is important to understand that a deeded timeshare foreclosure normally impacts the personal credit rating of the individual in exactly the same way as a home foreclosure, so it can have a long term impact even after the collection calls stop!

It is always recommended that a timeshare owner attempt to resolve the issue with their resort in some manner that does not end up as a foreclosure. It is much better for the consumer, as well as the association to negotiate a settlement. If your resort management company threatens you with foreclosure, always consult with a local attorney to ensure you properly understand the possible consequences that may impact you, both short term and long term.

(The new laws allowing non-judicial foreclosure in some states may have changed the traditional processes as well. Perhaps a member who is on their resort's board of directors can help shed some light if things have changed for their property.)

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

. . . . . .

[shaggy Moderator Find all posts View Profile Close shaggy]

I must confess I walked away from my Highlands of Sugar last year. I called them and told them I was sending them back the deed and they could resell it . I've had it over 20 yrs and never was late and paid all the special assessments. It was a great summer week but due to unseen circumstances I gave it back. They sent me another bill this year and I called and reminded them I gave it back. They said I couldn't. I told them to do whatever and I've done what I had to do . I will probably be hit sometime or other but it was my choice. shaggy

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

I must confess I walked away from my Highlands of Sugar last year. I called them and told them I was sending them back the deed and they could resell it . I've had it over 20 yrs and never was late and paid all the special assessments. It was a great summer week but due to unseen circumstances I gave it back. They sent me another bill this year and I called and reminded them I gave it back. They said I couldn't. I told them to do whatever and I've done what I had to do . I will probably be hit sometime or other but it was my choice. shaggy

Good for you.

Someone who has the nads to back up what they feel.



Wanna start a movement, and see if the industry keeps ignoring this problem?

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

I must confess I walked away from my Highlands of Sugar last year. I called them and told them I was sending them back the deed and they could resell it . I've had it over 20 yrs and never was late and paid all the special assessments. It was a great summer week but due to unseen circumstances I gave it back. They sent me another bill this year and I called and reminded them I gave it back. They said I couldn't. I told them to do whatever and I've done what I had to do . I will probably be hit sometime or other but it was my choice. shaggy

If you mailed them the original deed from someone else to you, that did not do anything to change the title. If you had a new deed prepared from you to them and recorded it, then that would have transfered title, and there is a presumption of acceptance from the recordation, but that is rebuttable if they challenge it. Acceptance by the grantee is one of the elements necessary for validity of a deed.

[Craigvince Junior Member Find all posts View Profile Close Craigvince]

Very interesting....

Thanks for the replies. Being rather new here, I'm trying to edjumakate myself.

I've read other threads that would indicate the possible long term effect of people walking away, and the resulting rise in maintenance fees for the rest of us. I've seen a lot of "bargain deals" where people are willing to give away their TS, but the MFs are so high that nobody wants them at any price. It's a sad story that seems to be prevalent. I've picked up a couple of good deals over the past couple months, but have learned only to buy something that can be rented out for approx MF if I'm not able to use them.

Of course, all of this education is because of this forum and the "other" one. I notice several individuals are very active, posting and replying daily. For this, I am grateful to you all.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

I notice several individuals are very active, posting and replying daily. For this, I am grateful to you all.

Yup, the more you post, the righter you are.

Like in golf . . . the harder you swing, the farther it goes.

[shaggy Moderator Find all posts View Profile Close shaggy]

If you mailed them the original deed from someone else to you, that did not do anything to change the title. If you had a new deed prepared from you to them and recorded it, then that would have transfered title, and there is a presumption of acceptance from the recordation, but that is rebuttable if they challenge it. Acceptance by the grantee is one of the elements necessary for validity of a deed.

I sent the deed of the one that I got when I originally bought it 20 yrs ago. If that isn't right then so be it. I don't have the deed anymore, they do. Over the 20 some years I'm given them enuff to put a nice downpayment on a beach house. shaggy

[Glitter Brunello Super Moderator Find all posts View Profile Close Glitter Brunello]

I sent the deed of the one that I got when I originally bought it 20 yrs ago. If that isn't right then so be it. I don't have the deed anymore, they do. Over the 20 some years I'm given them enuff to put a nice downpayment on a beach house. shaggy

There are a few people I'd like to mail deeds to, if that would work

Maybe you'll get lucky and they won't bother chasing you. Good luck.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

I'm afraid that will not work. Unless you have prepared, executed, and recorded (in the county where the real estate is located) a new deed transferring ownership from you (the grantor) to the other party (the grantee), there can not be a transfer of ownership.

Also, as Carolinian explained- grantee acceptance is a requirement for the legal conveyance of a deed. Even if you recorded a quit claim deed back to the resort or association, they would have the right and ability to dispute the conveyance.

I would strongly urge you to contact the resort manager and explain that you have tried in good faith to give the ownership away without success, and that the resort can either accept a deed back from you, or can proceed with foreclosure if they feel that is best.

I remember you had placed a good summer week in the freebies section, but there was a special assessment if I remember correctly. Sorry it's come to this point! Good luck!

[danielle299 Junior Member Find all posts View Profile Close danielle299]

If you default on your payment, you may receive correspondence in the form of mail, emails or telephone calls from collections agencies such as Concord Servicing Corporation, Resort Recovery Solutions, Monterrey Financial Services, or Textron Financial Corporation. They will try to contact you through every avenue possible to collect the debt owed. They can be very aggressive in their collection tactics, almost verging on harassment, making an already difficult situation even more uncomfortable for you. There are good articles about timeshares, REMOVED YOUR LINK