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Turn your unwanted timeshare back to company

timeos2

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it may very well wind up to not be, however at the current time...the biggest issue with the industry is the collapse of the resale market...and the proliferation of the resale scams.

noone currently has a "perfect" solution for either of these...but something has to be done.

The first time any resort is forced to take back week every other owner had better be quick to do the same OR be faced with instantly occurring, unsustainable increases in fees. How would you like to be the number 51% that said "Take it back" but now there aren't enough paying owners left to cover it? If the individual can't sell one week how is the Association supposed to dispose of 100 or more?

The idea is not an option and in all likelihood isn't remotely legal. It isn't a viable answer, it is moving the burden from one group to another and that too isn't allowed by law.
 

DeniseM

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Jimmy likes it! Though I think 30 days is too long a rescission period. 7 working days oughtta be enough. JR

I think it needs to be longer - you might not even be home from vacation in 7 days.
 

DeniseM

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The first time any resort is forced to take back week every other owner had better be quick to do the same OR be faced with instantly occurring, unsustainable increases in fees. How would you like to be the number 51% that said "Take it back" but now there aren't enough paying owners left to cover it? If the individual can't sell one week how is the Association supposed to dispose of 100 or more?

The idea is not an option and in all likelihood isn't remotely legal. It isn't a viable answer, it is moving the burden from one group to another and that too isn't allowed by law.

John - thanks for joining the winning side of the debate! :D
 

Mel

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I don't think the number who would 'walk' after paying $xxxx.xx is anywhere close to 50% in the long run. It might be maybe 10-20% in this economy where TSs have so little value, but I doubt even that. As the economy improves, people have more disposable income, more vacation time, and will naturally see the value in 'owning' their vacation property. TS values, even resale should go up some.
I wouldn't be surprised by 40-50%. We had close to that level when our resort had to be rebuilt due to hurricane. It took more than 10 years to accomplish, and one of the results was a significant number of deedbacks once the HOA announced a willingness to take them. If the state passes such a law, and people know the HOA has to take the weeks, I could see numbers getting that high. Consider that once that first 10% do it, eveyone else's fees go up 10%...
Look, WE all saw value in TS ownership when we bought originally. Sure, a percentage have had their lifestyles change to the point that any way out of any debt is attractive, but the vast majority of us are using our TS.

Having laws on the books (allowing paid-up deed-backs) in one or more jurisdictions would force management to keep up the value of the properties all over for all owners. Call it a wake-up.
But again, it is puting the burden on the other owners - the other owners who also pay the same high fees (or in many cases, not really so high, just higher than some owners are willing to pay).

I would only support such a law if there were criteria the "seller" would need to meet. I don't think it's reasonable for owners to be able to deed back just because they're tired of using their timeshare. Yes, forclosure is more expensive, but an HOA is not set up to sell timeshares - and in some states would need to register as a developer if they're trying to sell that many weeks.

Maybe a law requiring the developer to take the deedbacks, even if they no longer control the HOA...
 

bilfbr245

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The first time any resort is forced to take back week every other owner had better be quick to do the same OR be faced with instantly occurring, unsustainable increases in fees. How would you like to be the number 51% that said "Take it back" but now there aren't enough paying owners left to cover it? If the individual can't sell one week how is the Association supposed to dispose of 100 or more?

The idea is not an option and in all likelihood isn't remotely legal. It isn't a viable answer, it is moving the burden from one group to another and that too isn't allowed by law.

I am not sure why it would be illegal, especially if legislation is passed on this point to require it. I don't really see the requirement as moving a burden from one group to another. The problem of dealing with potential defaults is already baked in the cake in a shared ownership system. We did not buy into a unified system. We bought into a complex system with many working parts, with clearly forseeable vulnerabilities. Until the industry develops a viable strategy do deal with the issue this provision is designed to address, the issue will remain an overhang that will continue to undermine the resale market.

The resale market is undermined because potential buyers do not want to take on an albatross around their neck from which there can be no escape. Once this problem is resolved, the resale market should improve, and it might be easier for the hypothetical resort you mention to sell the 100 units surrendered to them than for single owners to sell under the current framework. But if, as you say, the whole matter snowballs, and owners all run for the exits as the maintenance fees mount, the solution is dissolution, In fact, I wonder whether there is an unspoken premise in your position that most people would abandon their unit for nothing if only they had a chance. If so, the answer truly is dissolution, but even if not, dissolution may still be a viable alternative in many cases. There is no reason why real estate should remain committed to a timeshare model if most owners want out. There should be some underlying value to the real estate if put to another use, so there should be at least some money to split up upon dissolution. In some cases, including waterfront locations, it might even be surprisingly high. This is preferable to units becoming worthless because they can never be sold. And when some resorts dissolve and there are less timeshare units on the market, the value of the ones remaining should should move closer to instrinsic value.
 
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Bill4728

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Years ago I suggested that all resorts in active sales be required to take back all full paid & up to date weeks.

I do not want to ask a sold out resort to have to take back units.
 

jacknsara

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Aloha,
If legislation can fix the timeshare market, then I hope congress fixes the stock market and restores my 401K. :rolleyes:
I believe that like any commodity market, price is highly dependent on the relative number of people who are interested in buying versus selling. In an environment of increasing population, as long as the growth of timeshare supply is linked to real market conditions, I believe that the traditional American way of letting markets function is better than the alternative. (I’ll leave the logic branch related to shrinking population for a time when it is not purely hypothetical.)
The current situation makes it clear that something is out of balance and some change to the system may be justified.
A relatively simple legislative fix would be to require developers to purchase back any timeshare that an owner wants out of for some minimum price – say 50% of current sales price or 50% of average of last say 5 years, whichever is larger. This would do far more than ROFR to set a floor on value for young resorts. Large developers would have to factor this mandate into their business decisions.
A measure (law) like this would act to maintain long term balance between supply and demand. It would not address short term market/economic dislocations.
My $0.02
Jack
 

timeos2

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The end of condo's. Maybe a bit drastic?

I am not sure why it would be illegal, especially if legislation is passed on this point to require it. I don't really see the requirement as moving a burden from one group to another. The problem of dealing with potential defaults is already baked in the cake in a shared ownership system. We did not buy into a unified system. We bought into a complex system with many working parts, with clearly forseeable vulnerabilities. Until the industry develops a viable strategy do deal with the issue this provision is designed to address, the issue will remain an overhang that will continue to undermine the resale market.

It would be illegal because the terms of a SOC (Shared Occupancy Community) are accepted by the buyers under a legally binding agreement. The agreement has never included the requirement that any owner can, at will, decide to force the Association to take ownership of any rights (and thus the costs). In fact the ONLY reason an Association can even own a property is for the benefit of the owners OR due to foreclosure. There is no provision, nor has any owner in the declaration / POS docs agreed to that. It simply isn't legally allowed. Passing such a law would never stand up retroactively although it might survive as a new rule for future sales (also most likely guaranteeing the end of SOC's as we know them today. Not just timeshares but condos as well).

Yes there is a problem but this idea is not an answer. But lets not let it die - we just have to find something that works within real estate law & creates a way out for owners. RTU? Never ending Developer liability? "Retirement" of the project (a modified RTU)? Automatic owner vote to maintain the project? Who knows. But it does have to be addressed. This just isn't the answer if there even is one.
 

bilfbr245

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It would be illegal because the terms of a SOC (Shared Occupancy Community) are accepted by the buyers under a legally binding agreement. The agreement has never included the requirement that any owner can, at will, decide to force the Association to take ownership of any rights (and thus the costs). In fact the ONLY reason an Association can even own a property is for the benefit of the owners OR due to foreclosure. There is no provision, nor has any owner in the declaration / POS docs agreed to that. It simply isn't legally allowed. Passing such a law would never stand up retroactively although it might survive as a new rule for future sales (also most likely guaranteeing the end of SOC's as we know them today. Not just timeshares but condos as well).

Yes there is a problem but this idea is not an answer. But lets not let it die - we just have to find something that works within real estate law & creates a way out for owners. RTU? Never ending Developer liability? "Retirement" of the project (a modified RTU)? Automatic owner vote to maintain the project? Who knows. But it does have to be addressed. This just isn't the answer if there even is one.


I am not convinced that there would be much affect on condo's. We are talking about a giveback of an unmortgaged and properly maintained unit with all fees up to date for no compensation. That is not likely in the condo market. It is hard to imagine a situation where a condo owner would want to give away his real estate under such circumstances. I suppose a set of extreme circumstances could be imagined, but I think that it is highly unlikely.

As to the legality, I guess it would depend on the actual language in the particular documents, but the ones I have seen provide a fair amount of flexibility for changed circumstances and reasonable discretion to management to deal with such changes, not to mention changes in law. My guess is that the contract language would be amenable to a change like this. Also, I am not sure that any of the potential alternatives you cite represent less of a change that would remove a legal barrier if in fact one does exist.
However, all of the ideas are worth considering if they address the underlying issue.
 
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theo

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Original condo documents prevail...

How about this:

Make all TS's 20 year RTU - or give the option of buying a 10 Year RTU at a higher fee to cover the costs of reabsorbing it after only 10 years.

Give owners the legal right to rejoin in 10 year increments after 20 years

For all existing facilities with legally sufficient and lawfully recorded original documents, I doubt that this is even an available option for consideration, realistically speaking.

It would take an overwhelming majority of owners at an exisiting facility to agree to develop and implement and record any and all such changes before they could begin to be implemented. Having seen owners disagree with one another on matters as petty as paint color for a few decades now, I cannot imagine any such thing ever happening. In an ideal or fantasy world, maybe. In reality, not a chance....
 

nkldavy

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Two of The Resorts We Own At ...

... use the foreclosed deeds and run a rental program with them to keep the rest of the owners with as low a maintenance fee as possible. Indeed one of the resorts makes a good profit on them. I realize this is not possible in all locations, but for a fair number it could work well.

I've often wondered if this problem would be lessened if the maintenance fees were graduated in correspondence to the weeks desireability. Less likely to be foreclosed on and more likely to resell ?

Uncle Davey
 

timeos2

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The nail head is contacted very well with a firm blow (good post)

I've often wondered if this problem would be lessened if the maintenance fees were graduated in correspondence to the weeks desireability. Less likely to be foreclosed on and more likely to resell ?

Uncle Davey

Yes. One of the big problems with a vast majority of (especially older) timeshares was the sale as weeks with the same fees due on the junk time as the most valuable weeks. Great for the 20% that own the best times, not too bad for those who are in the middle but the bottom 40%+ get hosed. They are effectively subsidizing the top weeks and not getting fair value back. Thats one of many reasons why points systems, properly set up, help resorts. They can have fees based on value.

Some states don't even allow varied annual fees so in those cases resorts really have to be creative to find value for the poor season owners and not depend on handouts from third parties like II or RCI to gve those weeks any value. Most resorts don't seem up to the task and simply flounder with ever increasing rates of delinquencies and higher fees for the owners that hang on. Far better they should find a way to spread the costs more fairly and make all weeks have whatever value they can thus self supporting the operation.
 

teepeeca

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I understand where some people are coming from---regarding having "less" maintnance fees for "lesser value weeks. And, I also understand that some states do not allow for a fee differential---all "like type" units have to have the same fees.

One thing NOT talked about --- and this goes back to the "developer sales". Most, or all of the time, the "lesser value weeks", were sold at a "deep discount", and the original purchaser was informed of that. "Since this is NOT a bright-red week, we will charge you less for it. Your annual fees will be the same for all weeks."

Of course that quote might not apply, IF the original purchaser didn't ask about maintenance fees---which "should have been" part of the purchase discussions.

Tony
 

Mel

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I am not sure why it would be illegal, especially if legislation is passed on this point to require it. I don't really see the requirement as moving a burden from one group to another. The problem of dealing with potential defaults is already baked in the cake in a shared ownership system. We did not buy into a unified system. We bought into a complex system with many working parts, with clearly forseeable vulnerabilities. Until the industry develops a viable strategy do deal with the issue this provision is designed to address, the issue will remain an overhang that will continue to undermine the resale market.
I suspect it would be legal to require all NEW timeshare development include this requirement, but not for existing timeshares. There is no such provision in the founding documents, and it would place an extra burden on every owner. The laws that protects us from having the developer change the rules midstream also protect us from an outsider coming in to do the same. If they can legislate a requirement for the HOA to take these weeks back, why stop there? Have the HOA accept any weeks where the maintenance fees are current... most timeshare loans are consumer loans, so let the developers/banks argue about who owns it, and who is responsible for the debt - if they want the weeks back, they can take them (this is no different than if the HOA were to forclose). For that matter, how about a system in lieu of forclosure where the HOA can choose to take back any week that is in default for more than one year of fees, without requiring forclosure, so long as the process is defined in the bylaws or condo docs. Perhaps the HOA can simply not pay the property tax, and let the county forclose for back taxes... in many cases the HOA could purchase a tax deed, and not have to worry about the mortgage...
Take it to another direction, how about regular condos? If a Condo Association decides to improve the complex, and the owners of some units decide it has become too expensive, should the Condo Association be forced to take title to their condo? Is this really any different?
The resale market is undermined because potential buyers do not want to take on an albatross around their neck from which there can be no escape. Once this problem is resolved, the resale market should improve, and it might be easier for the hypothetical resort you mention to sell the 100 units surrendered to them than for single owners to sell under the current framework. But if, as you say, the whole matter snowballs, and owners all run for the exits as the maintenance fees mount, the solution is dissolution, In fact, I wonder whether there is an unspoken premise in your position that most people would abandon their unit for nothing if only they had a chance. If so, the answer truly is dissolution, but even if not, dissolution may still be a viable alternative in many cases. There is no reason why real estate should remain committed to a timeshare model if most owners want out. There should be some underlying value to the real estate if put to another use, so there should be at least some money to split up upon dissolution. In some cases, including waterfront locations, it might even be surprisingly high. This is preferable to units becoming worthless because they can never be sold. And when some resorts dissolve and there are less timeshare units on the market, the value of the ones remaining should should move closer to instrinsic value.
So, should we expect a bailout of the timeshare system? Is this really any different than all the people who how own homes worth less than their mortgages? These people saw value in their purchases when they made them - if we're talking about people whose weeks are paid off, they we're mostly talking about people who have owned for a while. If most owners want out, most timeshares CAN be dissolved. But the reality is that most owners don't want the timeshares to disolve, only some do.
 

funtime

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Part of the problem will be alleviated - and hopefully we TUGGERS are doing are part - when owners learn how to use their timeshares. How often do people say that they must get rid of X timeshare and when pressed, they have not traded it, rented it or used it for years. Then all of a sudden their frustration boils over and it must be gone. A lot of timeshares can be rented for the maintenance fees or more which will help tide owners over until the economy gets better. Funtime
 

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Probably the best exit program out there is from timeshare's very first developer, Hapimag, based in Switzerland. This has always been a points based program (sorry points fans, it is actually weeks that is the newer improved version of timeshare ownership) and members receive one or more shares of stock. Hapimag has resorts all over Europe, including many urban centers, and trades through DAE and DRI but not RCI or II.

A Hapimag owner who has purchased from the developer and owned his stock at least a certain number of years can return the stock to Hapimag and is paid a certain percentage of the then-current sales price for the stock. The only real catch is that if Hapimag is offered more stock back during a period of time than it can digest, it is allowed to drag out the repurchase schedule somewhat. That happened when many of the original purchasers started reaching the age they could no longer travel, and the times I think got to the point it took a couple of years.

It is always a good idea to try the deedback scenario. Most resorts do not advertise that they will do that, but many HOA's will. A deedback is much cheaper and quicker than a foreclosure. Some HOA's report delinquent t/s accounts and foreclosures on credit reports. Be careful if that is the case. Ruined credit may cost you more than the m/f, especially if there is a t/s foreclosure reported on your credit.
 

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One thing NOT talked about --- and this goes back to the "developer sales". Most, or all of the time, the "lesser value weeks", were sold at a "deep discount", and the original purchaser was informed of that. "Since this is NOT a bright-red week, we will charge you less for it. Your annual fees will be the same for all weeks."

Of course that quote might not apply, IF the original purchaser didn't ask about maintenance fees---which "should have been" part of the purchase discussions.

Tony

Many people who purchased the low value weeks, at a lower price, at an RCI affiliated resort, were assured that they would be able to exchange the week for a more desirable week if they could make their vacation reservation plans within 45-60 days of the check-in date. This benefit was prominently touted near the front of the annual RCI members' book for many years. (I have a copy of a two page spread on the topic). It was especially popular with retired folks who had the time and flexibility to travel on short notice.

And in fact it worked out very well for many years prior to RCI's foray into renting these weeks to the general public. I have one deep off-season week that traded like a "tiger" for years as long as I deposited it 1-2 years in advance, and did lots of on-line searches.

Too bad the developers and major resorts, with whom RCI has "been in bed" for years, didn't fully calculate the future consequences of their actions. Many owners, who bought their week to use for the promised last minute great trades, are walking away from them after years of not being able to get any exchange they can use. And the developers are unable to sell much of anything nowadays due to the economy but also because so many people have learned about the advantage of renting vs. ownership.

I do see a need for legislation to prevent heirs from being saddled with a timeshare they do not want. This is the biggest "selling point" used by the slimy "postcard companies." I have attended about 20 of these presentations, just to keep abreast of what they are saying. I went to one just two weeks ago and the same 'ole scare tactics are being pitched, verbally and in a film. The majority of the attendees are seniors and this is the main motive for their willingness to shell out thousands of dollars to rid themselves of their timeshare so that their children will not be stuck with the "burden." This needs to stop!

One resort, where I own 3 weeks, charges the owners of prime weeks $150. more in maintenance fees than owners of the off season weeks, They allow the prime week owners to reserve 3 bonus nights (per week owned) between mid-November and mid-March. During that time there are many weeks that they were never able to sell, or that were abandoned, or accepted as deed-backs. During the off-season, they close down several of the buildings, and open up just enough units to accommodate the owners coming in to use their bonus time.

The resort also joined RCI Points. The summer weeks owners receive a decent amount of extra Points for their 3 bonus nights, in addition to the full value of their summer week. The resort charges a very low fee to any owners wishing to convert to Points. They are not trying to make a killing on the conversion fee, as too many other resorts do, but are mainly interested in putting the unused winter weeks to use to discourage defaults.
 

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The real key for HOA's is to realize that RCI has proven itself an unreliable partner at best and a cutthroat competitor (from the rentals) at worst, and respond accordingly. One response is to seek to migrate members who exchange to other exchange companies.

One area that has potential for many for not all resorts is to find markets for off season weeks for people who will own to use. That way they do not have to be concerned about what RCI does. Several resorts in the UK do this by marketing to people who live in the area to use the resort facilities yearround, with the week of accomodations as just something extra they happen to get. Two OBX resorts have also taken this tack with considerable success. Some of the locals who buy to use the facilities yearround end up using their actual timeshare week for visiting relatives to stay in, while others may occupy it themselves for a change of pace, and some exchange it. Another OBX resort which is on a golf course and members get free golf, uses that aspect to market to golfers as off season buyers. Since off season on the OBX corresponds with duck hunting season, another HOA there, which is only a couple of miles from about 20 federal park duck blinds that are availible to the public, targets duck hunters to sell off season weeks. The opportunities are out there for many of them if the HOA's would just identify the potential markets.
 

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While I agree that it is unfortunate that other owners have to take a hit if a resort is required to take back units, in the longer run I think it helps those other owners. The risk of having to shoulder a liability forever with no feasible solution will dry up the remaining demand to purchase timeshares.

Thus, it not only hurts the timeshare owner shouldering the liability, it also hurts the whole timeshare market. Really, what sensible person would want to buy a timeshare under such circumstances, and now that you mention it, isn't that the broken system we have now? A rule such as the one Brian suggests would make the market more liquid. Once liquidity is restored, market forces will start working. Units will start selling for a dollar, then five dollars, and eventually find an equilibrium.

I could not agree more with the point Brian makes that such a rule would require management companies to become more responsible. There is really now no effective check on bad management. There are simply too many owners and no reasonable way to organize them to fight back. Management companies can just keep increasing fees, and in fact, many of them get a management fee that is a percentage of overall expenses. What kind of incentive is that to keep expenses down? The more they spend, the more they earn.

If a resort is required to take back units, that will be the beginning of the process of injecting more reality in the system. While in the short run the costs may be painful for some, in the end it would move the timeshare industry to a more solid footing.

I agree.

I have posted several times about this issue and the fact that resorts must offer a VALUE PROPOSITION to their owners. If an current owner no longer sees the value in the ownership and wishes to deed back a fully paid and no fees owed week to the HOA that should be an option.

To the HOA and the management company that means being committed to running an efficient operation and producing a VALUE PROPOSITION for their owners. Selling or renting the acquired units because they can demonstrate that they hold value to prospective customers (maybe even to existing owners who realize this fact) should not be a problem for a well run operation.

Treating owners like lemmings who will be required to pay ever increasing maintenance fees that strip the VALUE from ownership (does anyone recognize Starwood in these words) is not a sustainable business model. Management companies need to run the resort like their survival is dependent on it. Unfortunately, and all to often they run it like an entitlement program.
 

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I have posted several times about this issue and the fact that resorts must offer a VALUE PROPOSITION to their owners. If an current owner no longer sees the value in the ownership and wishes to deed back a fully paid and no fees owed week to the HOA that should be an option.

To the HOA and the management company that means being committed to running an efficient operation and producing a VALUE PROPOSITION for their owners. Selling or renting the acquired units because they can demonstrate that they hold value to prospective customers (maybe even to existing owners who realize this fact) should not be a problem for a well run operation.

Unfortunately it is an almost insurmountable problem for small, independent resorts in places like Cape Cod where no one wishes to vacation during the harsh winter months (November through March). April and May are not desirable either because everything is closed--restaurants, stores, ferries to Nantucket and Martha's Vineyard, etc...Owners like us, who can reserve 9 totally free bonus nights during this time frame, never use them. I have posted them on the TUG Last Minute Rental board, for free, and only occasionally hear from someone who lives nearby (hearty souls) and wants a few nights for a visiting relative or friends, or to just to escape themselves from their daily routine.

There's no real value in these off season weeks.They were sold to the owners by the original developer in the 1980's who convinced them that they could be used to trade to more desirable places. That doesn't work very well anymore. The developer is long gone.

The HOA is composed of loyal long-time owners who love the resort and want to see it remain viable. They have varying degrees of knowledge but are not professionals when it comes to running a resort. The President and the Resort Manager work tirelessly to keep the resort in good condition on a tight budget. They have been seen on their hands and knees planting flowers in the Spring. Retired owners have worked as volunteers painting units. To bring in a management team like VRI (if they would even agree to take on the responsibility) would necessitate a rise in maintenance fees which could lead to more of the owners (predominantly seniors) abandoning their weeks.

This is the situation facing many timeshares that are not located in a 3 or 4 season area. That's why there has been virtually no new resorts built in these areas in recent years.
 
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patcarteret

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Deeding timeshare back to company

I have tried that - they do NOT want it. I have tried everything I can think of....that is why I am here - to see what other folks have done. Thanks.
 

DeniseM

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I have tried that - they do NOT want it. I have tried everything I can think of....that is why I am here - to see what other folks have done. Thanks.

Have you tried giving it away? It can be done very inexpensively:

There are two places on TUG where you can give away your TS's for free (no charge for the Ads.)

TUG Marketplace - the only cost is your TUG membership - $15 (List it for $1 and it will automatically go in the Bargain Basement Ads.)

Bargain Deals - just write a simple post with all the pertinent info. - Totally FREE!

To make it more attractive I would:

1) Pay 2010 maintenance fees

2) Pay for the title transfer (you can get a simple professional transfer for about $100)
I've used this company and the owner is a Tugger. - Note, this is my personal recommendation, not as a representative of TUG.

3) Reserve a popular holiday week in 2010 for the new owner​

Good luck!
 

JMAESD84

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Unfortunately it is an almost insurmountable problem for small, independent resorts in places like Cape Cod where no one wishes to vacation during the harsh winter months (November through March). April and May are not desirable either because everything is closed--restaurants, stores, ferries to Nantucket and Martha's Vineyard, etc...Owners like us, who can reserve 9 totally free bonus nights during this time frame, never use them. I have posted them on the TUG Last Minute Rental board, for free, and only occasionally hear from someone who lives nearby (hearty souls) and wants a few nights for a visiting relative or friends, or to just to escape themselves from their daily routine.

There's no real value in these off season weeks.They were sold to the owners by the original developer in the 1980's who convinced them that they could be used to trade to more desirable places. That doesn't work very well anymore. The developer is long gone.

The HOA is composed of loyal long-time owners who love the resort and want to see it remain viable. They have varying degrees of knowledge but are not professionals when it comes to running a resort. The President and the Resort Manager work tirelessly to keep the resort in good condition on a tight budget. They have been seen on their hands and knees planting flowers in the Spring. Retired owners have worked as volunteers painting units. To bring in a management team like VRI (if they would even agree to take on the responsibility) would necessitate a rise in maintenance fees which could lead to more of the owners (predominantly seniors) abandoning their weeks.

This is the situation facing many timeshares that are not located in a 3 or 4 season area. That's why there has been virtually no new resorts built in these areas in recent years.

While I can appreciate the difficulties that highly seasonal locations like Cape Cod face, they too should offer a VALUE PROPOSITION to their owners.

I don't live far from Cape Cod and the hospitality businesses on Cape Cod do just fine for hundreds of for-a-profit businesses that operate there. There is absolutely no reason why a timeshare resort could not be run efficiently enough to offer a VALUE PROPOSITION to owners in a cooperative arrangement without a profit motive. If there is no value to off-season ownership, then let those off-season weeks be turned in and run the place as a seasonal resort. Do what it takes to make it work for those that still wish to have the resort for their use during the best seasons WITHOUT leaving those who are not receiving appropriate value NO WAY OUT.
 

bilfbr245

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While I can appreciate the difficulties that highly seasonal locations like Cape Cod face, they too should offer a VALUE PROPOSITION to their owners.

I don't live far from Cape Cod and the hospitality businesses on Cape Cod do just fine for hundreds of for-a-profit businesses that operate there. There is absolutely no reason why a timeshare resort could not be run efficiently enough to offer a VALUE PROPOSITION to owners in a cooperative arrangement without a profit motive. If there is no value to off-season ownership, then let those off-season weeks be turned in and run the place as a seasonal resort. Do what it takes to make it work for those that still wish to have the resort for their use during the best seasons WITHOUT leaving those who are not receiving appropriate value NO WAY OUT.

I think that your focus on "value proposition" is very helpful. Locking people into a situation from which there is no escape when a unit has "negative value" is not a viable longterm strategy for the timeshare model. Its fine to say that one could give it away, but if it truly has negative value, who would accept it? And even if someone might be tempted, that potential recepient would decide against it when he realizes that he too might be stuck with the "gift" forever. In fact, the negative value of many units results from the fact that it is so difficult to get rid of them.

Properly structured, a unit should not have negative value. That anamoly results from a combination of seasonality, poorly conceived resorts, maintenance fees that exceed rental value, and illiquid, essentially frozen, markets. But the real estate the resort occupies does not itself have negative value. The negative value is an anomaly that results from the way the unit is structured. So really, the first step to develop a solution is to take a good hard look at that structure. I continue to think that a very good way to inject reality into such cases, and facilitate the helpful influence of market forces that can correct these anomalies, is this proposal to allow givebacks to the resort, for no compensation, of units with all fees paid up to date. No doubt there may be other solutions worthy of discussion as well, but I do think that this is a workable solution.

I realize that it would be more palatable to have the giveback be to the developers, rather than to owner associations. And I do see that there might be some hardships. But once these hardships are addressed, and solutions worked out, the whole system becomes stronger. If a resort starts to get a high number of givebacks, that will be a warning sign that it has problems to address. Different solutions might be called for. Some resorts should probably be taken out of the timeshare model and dissolved. Others may need to allocate costs differently. And some may just need to take a harder look at costs, because in many cases I suspect that maintenance fees are higher than what is reasonably required to adequately maintain and manage the resort. Other creative solutions will also be found. The incentive to face hard choices and develop these real solutions will be created by the "injection of reality" that this proposal will provide.

It may seem to some that this proposal only helps the disgruntled timeshare owner. But I think it really helps the long run viability of the timeshare model. Also, if units that have "positive value" (including those cases where naive owners are simply not able to extract the value themselves and become discouraged) are also given back free, that should help the resort if it properly manages those gifts.
 
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JudyS

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I'm all in favor of HOAs being required to take back unwanted paid-in-full-weeks. And, I'm saying this despite being happy with almost all of the 21 timeshares that I own (the only ones I might want to deed back are, as it happens, at a resort that accepts deed-backs.) I don't know if such a law can be applied to existing timeshares (and the relevant laws may vary from state-to-state), but if it can be done, I'm all for it!

However, as part of the legislation, I feel it should also be made easier for timeshares to dissolve and divide up the proceeds from the sale of the underlying real estate. If there is no easy way for owners to vote to dissolve and many owners want out, then bankruptcy might be the only way to dissolve the timeshare, and that would be difficult, time consuming, and might destroy the property's value.

The owners ARE the resort. Management companies don't own the resort - all the owners do...
But developers still sometimes control the resort and its MFs. Isn't that the situation with Starwood? Requring deedbacks would give the resort management a desperately-needed incentive to keep MFs down.

...
Yes, some people get ill, or lose their jobs, or have an accident and can't pay their bills - but we already have legal solutions in place for those people, and they should pursue that legal resolution. I'm not talking about them.
....
IMNSHO, I'm not willing to pay for other people's bad financial decisions, and I've paid hundreds of dollars in MF this year, to cover those who didn't pay.
....
Maybe all TS's need to be 20 year RTU?
In North Carolina, timeshare covenants are only for 40 years. After 40 years, the owners have to vote whether to continue the timeshare, or dissolve it and divide up the property. They then have to vote again every 10 years. I think Foxrun's 40 years will be up within a decade or so, and I'm eager to learn what the owners decide. (Assuming my personal "covenant" hasn't expired by then! :rofl: ) The real estate at Foxrun should have quite a bit of value, assuming the real estate market has recovered.

I think the 40-year expiration cause is a great idea, but it's too long a time period to handle the problems we are discussing now. The 40-year expiration cause should be good for situations where land usage has gradually changed, or buildings have deteriorated.

As for "legal solutions in place" for people who fall ill or lose their jobs, the only one I'm aware of is bankruptcy. I'd hate for a timeshare to be the "last straw" that drives a person into bankruptcy -- most people who lose their jobs or have a serious illness try to keep paying their bills, and many of them succeed. (Actually, DH and I have been dealing with both expensive illnesses and lack of permanent employment for almost four years now, and we are not even close to considering bankruptcy.) Also, as has been discussed on other threads, timeshares are difficult to discharge in bankruptcy, because they are often in a different state than the bankruptcy filer.

....
As far as inheriting a unwanted TS, everything I have read on TUG states that an heir cannot be forced to accept unwanted property....
It is also my understanding that no particular heir can be forced to inherit a timeshare. However, I believe the estate remains on the hook for any unpaid MFs. This can reduce the value of the estate, and also may delay the settling on the estate. So, when someone shows up on TUG and says, "My grandparents left me a timeshare I don't want," we here on TUG are correct that they can turn it down BUT if no one else wants it, they may have a problem with receiving their other inheritance from the estate. Perhaps someone here with more legal background can comment on this.

I'm sorry I seem to be picking on you, Denise, but you have been doing a great job of arguing against allowing deed-backs, so I'm trying to refute your arguments! (John brought up the very valid point that requiring deed-backs may not even be legal, but I'm not up on the laws, so I don't have much to say there.)

While I can appreciate the difficulties that highly seasonal locations like Cape Cod face, they too should offer a VALUE PROPOSITION to their owners.

I don't live far from Cape Cod and the hospitality businesses on Cape Cod do just fine for hundreds of for-a-profit businesses that operate there....If there is no value to off-season ownership, then let those off-season weeks be turned in and run the place as a seasonal resort....
Exactly! I've often wondered why Cape Cod resorts don't just close down for the winter. Lots of other Cape Cod businesses do, and the heating bills for a timeshare have got to be steep in winter!
 
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