RTU Contracts - Legal Question - Please help!

[twinmommy19]

Can someone please explain the risks associated with walking away from a RTU contract? What is the real credit risk involved and do the circumstances matter at all?

This isn't about trying to get out of the maintenance fees. We are in use year 27 of a 30 year RTU contract @ ESJ Towers in Puerto Rico and the last straw has just been pulled. The letter came yesterday. They are completely remodeling the units, and they want us owners, most of whom will not be owners anymore once the work is done to pre-pay for it so they can resell - in our case, they've asked $2,100 on top of our Maintenance in one lump sum. No way are we paying this.

Please understand that we have honored our contract through thick and thin - bought when the Towers were affiliated with the luxury resort next door. Continued paying through the years despite the blow that timeshare owners could no longer use the hotel grounds or facilities. Of course, the maintenance went up, and we continued to pay and would have done so until the end of our contract even with Puerto Rico in the undesirable crime ridden state it's in right now. We were prepared to honor our contract - to pay out 3 more maintenance cycles. Heck we'd be willing to still do this if they would just give us our Interval deposits up front now before that work is done and void the RTU. Yes we'd prepay the 3 remaining years if they'd let us do that. But we will not give ESJ an additional $2,100 above and beyond the $18K we already pissed away 27 years ago when we purchased.

So please help. What happens if we simply don't pay this assessment? We already prepaid 2018 maintenance and have confirmed trade with II. Can they take this away if we don't pay? I assume they can't ask II for a deposited week back right? What will happen to our credit if we walk away from this ownership now? Is it even legal that ESJ is doing this? The letter said the Board voted for this, but that means nothing if the Board isn't represented by any owners who are about to finish their 30 year ownership blocks. Is there any way to fight this?

 

[TUGBrian]

as with most timeshare questions...it depends.

in most cases you can expect a ding on your credit and to be turned over to collections. in other cases, folks report absolutely nothing happened to them.

YMMV

 

[b2bailey]

w

I don't think you need be concerned about a hit on your credit report, worst case you are allowed to write a response to go on file with it.

I do believe you could lose your 2018 reservation. There have been postings from people who have 'lost' a previously confirmed week because the resort 'took the week back'.

If it were me -- I'd be furious. It is an unreasonable request. I would find it wrong even if it was a lifetime ownership rather than R T U.

 

[WalnutBaron]

This is a tough one. I agree with b2b--if I were an owner under these circumstances, I would be furious--and the resort management is clearly trying to complete upgrades on the backs of loyal and responsible owners like the OP. Ideally, I'd advise legal representation, but there are three problems with that: a) you need an attorney that understands timeshare and interval ownership property law, and those are hard to find; b) it's made triply hard because in your case the attorney needs to be licensed in Puerto Rico to practice law there; c) it would almost certainly cost more than the $2,100 assessment.

I have a couple of questions:

1. Is there an Owners Association Board, and are the board members--or the preponderance of the board members--owners like yourselves? If so, you need to contact your board representatives right away and protest this blatant ripoff.
2. Is there a Facebook group of owners for your resort or some other way to contact a number of the owners in order to organize against this pending action?

Ultimately, I suspect you're faced with a terrible choice--either pay the assessment or risk a downgrade to your credit history. But before that happens, I'd recommend researching every available avenue to fight this thing.

 

[twinmommy19]

Thank you all for your responses. WalnutBaron - you've asked the million dollar question - we wish we knew. The unique feature about ESJ is its a hybrid property. I believe about half of the units are full time condo residents. Obviously those condo folks' units aren't being renovated as I assume they furnish themselves? They have just refurbished the lobby so I guess those owners would share in that portion of the cost but not to have the timeshare rooms redone? ESJ sent no information about the breakdown of costs. Shouldn't we be entitled to this?

But anyway - I have no idea about the composition of the ESJ Board in terms of the breakdown of timeshare vs condo owners let alone timeshare owners who are in similar predicament to us in terms of their RTU expiration date. ESJ timeshare units were sold in a couple blocks. Not that it matters now, but only the first one (ours) would have been priced at a premium because it was advertised as a property that shared grounds with the El San Juan Hotel & Casino. That feature was ripped away from us after a couple years of ownership. I imagine it was hard enough to sell later blocks without having that selling point. But now Puerto Rico is in financial ruin. It's going to be near impossible for the developer to resell these timeshare units until that situation changes regardless. The nerve of them to bill us for the ability to try though!

Also - ESJ was recently purchased by Azul Vacations and we have no idea how or if this impacts us at all. As RTU owners, we really don't receive much information and haven't cared much to this point. We make the most of our II deposits and have been riding it out - until this bomb arrived!

 

[WalnutBaron]

My advice would be to contact the resort and ask them for contact information of the Owners Association, including all existing board members. Contact them by phone or email and ask for details on the questions you've posed. You might also want to dig out your original purchase contract and see what it says about special assessments. It's possible that there is no clause or stipulation which could give you a legal escape hatch to avoid paying without repercussion.

I sincerely empathize with you. Please keep us posted.

 

[twinmommy19]

Hi all - wanted to check in to provide an update. It appears the ending on this one may not be so bad. We decided to call the new management company, Azul Vacations, directly to complain about our situation - that it's unfair to expect us to bear this expense to upgrade the resort when our ownership will end after only 3 more uses. There was no hesitation in the response. A note was made on our account (so the rep said) and she told us we did not need to pay the assessment. End of story. Thinking about it more, we should have asked for an email or written confirmation but the response (complete lack of push back) was so unexpected.

While this feels a bit like an insurance company instructing an underwriter to automatically deny all claims until questioned or threatened in the hope of collecting as much as possible, at least it seems we will not need to pay after all. According to Azul, our original purchase was actually a distressed resale unit and most of the original RTU contracts from phase one already rolled off a few years ago (i.e. there aren't many owners in our situation.) Perhaps this is partly true as our unit had been owned for a year or two before we purchased (the 1BRs were all sold out and my parents had no interest in buying a studio.) The developer was still actively pushing the harder to sell studios at the time we purchased but as I had mentioned ESJ is a hybrid building with condos so it's possible most of the remaining units sold as condos, not RTU timeshares.