Timeshare "Walk Away"?

Hello...my first post. I stayed at Marriott Summit Watch for two night last week and almost purchased from the sales pitch...but was fortunate to find this site overnight before purchase and did not buy!

Since then I have been reading alot of the threads and am beginning to learn some of the basics...although I can see it would take a LONG time to be an "expert"

As an "analyitical" personality I tend to cover my downside as part of my research. I am now cofortable in finding what a fair market is for a re-sale timeshare and understand that there are costs of re-sale should I decide TS was not right for us.

One issue I don't understand is the liability for the MF if you find yourself with a "white elephant" of a TS that you cannot sell...or give away. Can you just walk away and turn your unit back to the HOA? Can they sue for continuing MFs?...do you have the equivalent of a personal guaranty of payment of MFs and specials?

I am still working on a strategy for owership...ie gold vs silver, etc and will continue to watch and learn. I also sense that you almost need to buy one to get the full understanding of the use, scheduling, trading etc.

Thanks for all the info...Tom R

Maintenance Fees Forever, Eternally, World Without End, Amen.

Tom R said:

One issue I don't understand is the liability for the MF if you find yourself with a "white elephant" of a TS that you cannot sell...or give away. Can you just walk away and turn your unit back to the HOA? Can they sue for continuing MFs?...do you have the equivalent of a personal guaranty of payment of MFs and specials?

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With a deeded timeshare, what I really own is the obligation to keep on paying those annual fees indefinitely on into the future as long as I'm the owner -- which is OK as long as those fees, plus an appropriate share of the original acquisition cost, add up to no more than a reasonable cost for my vacation accommodations. My timeshare standard is spacious, luxury accommodations for roughly Motel 6 & Super 8 rates. Sometimes that works out, sometimes it doesn't. So it goes.

Now with an RTU (i.e., leased) timeshare, I'm still obligated to keep on paying throughout the term of the lease. For those el longo RTUs, it works out to a lifetime commitment for old guys like me -- unless I can sell off my RTU timeshare to somebody else who wants it for nice vacations when I'm done with it.

Fortunately, there are also el shorto RTU timeshare leases out there, renewable -- click here for the only example I'm semi-familiar with -- that obligate the person leasing'm for 3 years (in this example). That arrangement provides an opportunity to try it & drop it if I don't like it -- or to re-up for another term if I do like it.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

Tom, there isn't anything wrong with a cautious entry into something with ongoing expense- like TS MFs. As a way to increase your knowledge and see if you can place value on your MF dollars, why not try renting a TS unit and see if it compares favorably with what you have been spending for vacation lodging? Many are available to rent (here on TUG or many other sources) for approximately their MFs.

I'd encourage you, if you do decide to buy, purchase one that you can use. Somewhere you can drive to, and somewhere you could see yourself going at least 3- out of 5 years. Exchanges are nice, but don't buy based on NOT using your purchase. It makes writing the check for the MF a lot easier!

I don't know if this answered your question or just muddied the waters so to speak.

Jim Ricks

Tom R said:

One issue I don't understand is the liability for the MF if you find yourself with a "white elephant" of a TS that you cannot sell...or give away. Can you just walk away and turn your unit back to the HOA? Can they sue for continuing MFs?...do you have the equivalent of a personal guaranty of payment of MFs and specials?

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Tom,

So glad you found TUG before touring and therefore avoiding the buying trap.

Generally speaking, if you own a timeshare, you also own the obligation to pay the MF's and any SA's that may also come your way. Very few HOA's will take back a unit once sold, as they are difficult (and somewhat costly) for them to unload, especially if they are not set up for sales.

I know of people who have had timeshares they couldn't give away, all the while still being stuck paying the MF's until they could find someone to take it off their hands. For that reason alone, one should be very careful in what they buy or acquire via resale. You don't want to have someone else's white elephant.

Timeshare Von said:

Tom,

Generally speaking, if you own a timeshare, you also own the obligation to pay the MF's and any SA's that may also come your way. Very few HOA's will take back a unit once sold, as they are difficult (and somewhat costly) for them to unload, especially if they are not set up for sales.

I know of people who have had timeshares they couldn't give away, all the while still being stuck paying the MF's until they could find someone to take it off their hands. For that reason alone, one should be very careful in what they buy or acquire via resale. You don't want to have someone else's white elephant.

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What happens if you quit paying the MFs...or do we not have any info of this ever happening? Is "foreclosure" on the deed the only answer?...or can they enforce the debt like it was "guarantied" by the unit owner. This is somewhat theoretical...but still of some interest.

Thanks...Tom R

$ $ $ $

Tom R said:

What happens if you quit paying the MFs.

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Marks against your credit rating. Bill collectors. Lawsuits. Added claims for interest on unpaid debt plus all collection charges & attorney fees. Much unpleasantness. Not for the faint of heart.

Better not to buy timeshare than to buy with the idea in mind of not living up to the payment obligation that goes with it.

BTW, for the price difference between "used" (resale) timeshares & "new" timeshares (big-bux developer units bought at full freight), the owner can cover years & years of timeshare maintenance fees & still be way ahead financially. Plus, there's no such thing as a new timeshare anyway -- no matter how much you pay they're all used-used-used by the time anybody shows up & checks in -- so there's no reason to buy big-bux timeshares for full freight anyway.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

If you quit paying your maintenance fees, it will hurt your credit, just like any other unpaid debt. And they can take you to court, just like any other unpaid debt.

To avoid this - buy a popular season, at a good resort. Then, if you ever need to dump it quickly, you can simply put it on ebay for $1 and let it go. If you buy a studio, off-season, at a middle of the road resort, it may be hard to get rid of it later.

However, since buying a timeshare is a luxury purchase, I would not consider buying one if there was any doubt in my mind that I would be able to pay the maintenance fees in the future.

For your first timeshare:

Buy resale
Buy where you want to go at least half the time, or buy 2 every other year resorts - like one in the mountains and one on the coast.
Buy a 1 bdm. minimum - or a 2 bdm. if you have a family (easier to rent/exchange)
Buy a popular season for that area
Buy a resort that has some demand for rentals and exchanges
Buy within driving distance of your home
Buy a TS you can afford to pay cash for

Don't buy with the expectation of making a profit by renting your unit, or getting glorious exchanges to resorts far superior to the one you own.

Exchanging gets more frustrating all the time, so you are much better off buying where you want to go. That's why I suggested 2 every other year TS's. That way you have variety, security, and the perks that go along with ownership.

Before you buy, become an ebay expert. This is what we paid for our last 4 purchases on ebay:

Scottsdale - Sheraton Desert Oasis (Starwood) $2,000
Tahoe - Kingsbury Crossing - $255
Kauai - Pahio Kauai Beach Villas, ocean FRONT - $1,300
Kauai - Pahio Kauai Beach Villas, ocean FRONT - $1,500

There are some great deals out there - take your time, do your homework, and you will find them. Good luck!

Tom R said:

What happens if you quit paying the MFs...or do we not have any info of this ever happening? Is "foreclosure" on the deed the only answer?...or can they enforce the debt like it was "guarantied" by the unit owner. This is somewhat theoretical...but still of some interest.

Thanks...Tom R

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I think Alan and Denise have covered it adequately.

I will add that one resort that I own has legally gone after deadbeat owners who have failed to pay their MF's and have obtained judgements against them for the full amount of fees due. They have also taken back the ownership, which does not relieve the financial obligation of the former owner. When this happens, the resort's HOA will typically put the ownership up for sale, either to existing owners or through an open auction process, to pay off the amount owed plus legal/collection costs.

I have personally taken a strong stand against owners who simply abandon their ownership obligations in terms of paying the MF's as when that occurs, it drives up the fees for everyone else involved in ownership with that resort/HOA.

DeniseM said:

For your first timeshare:

Buy resale
Buy where you want to go at least half the time, or buy 2 every other year resorts - like one in the mountains and one on the coast.
Buy a 1 bdm. minimum - or a 2 bdm. if you have a family (easier to rent/exchange)
Buy a popular season for that area
Buy a resort that has some demand for rentals and exchanges
Buy within driving distance of your home
Buy a TS you can afford to pay cash for

Don't buy with the expectation of making a profit by renting your unit, or getting glorious exchanges to resorts far superior to the one you own.

Exchanging gets more frustrating all the time, so you are much better off buying where you want to go. That's why I suggested 2 every other year TS's. That way you have variety, security, and the perks that go along with ownership.

Before you buy, become an ebay expert. This is what we paid for our last 4 purchases on ebay:

Scottsdale - Sheraton Desert Oasis (Starwood) $2,000
Tahoe - Kingsbury Crossing - $255
Kauai - Pahio Kauai Beach Villas, ocean FRONT - $1,300
Kauai - Pahio Kauai Beach Villas, ocean FRONT - $1,500

There are some great deals out there - take your time, do your homework, and you will find them. Good luck!

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This is really GREAT advice for anyone looking to get into timeshare for the first time

Thanks Denise for summarizing it for all of us!

Timeshare Von said:

This is really GREAT advice for anyone looking to get into timeshare for the first time

Thanks Denise for summarizing it for all of us!

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Why, thank you!

DeniseM said:

Buy a popular season for that area

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I just want to emphasize this one. Wherever you buy, buy one of the MOST popular weeks at that resort. This means, if it's a beach resort in the Northeast, you want the highest of high summer, weeks 26-32. If it's a ski resort, you want (ideally) Christmas week or President's Week. Remember to think in terms of school calendars, because many of the people who own and trade timeshares have children and need to travel when the kids are off from school.

I don't think any Marriott will be difficult to sell as there is always demand...even for the silver and bronze weeks.

Thanks all for the good! info...don't take me wrong...I was just curious as to the legal liability.

I can afford the MFs and will not buy one unless I am a committed owner.

Thanks...Tom R

P.S. I will begin to follow e-bay...TMR

Tom R said:

Thanks all for the goof info...

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That's exactly what many timeshare sales people think of the info here!

(I know it's a typo - I type pretty goof myself.)

ALL of this advice is GOOD but I just have to throw in my $0.02. DW and I just bought our first timeshare this year and like Denise we had a list of things we were looking for. Many of them are the same as (or similar to) Denise's list

• Take your time. It's a lot easier to buy a timeshare than to sell one.
• We wanted something within about 4-5 hours. We bought at Hilton Head which is only 3 hours away.
• We wanted to see the timeshare we were going to buy. The weekend before we bought we happened to drive by the resort. I even remarked to DW that I wouldn't mind owning one of the Cottages.
• We wanted to pay cash. We bought our TS on ebay for $1025.
• We also wanted low MFs. On Hilton Head that can be tough but we got one with a MF of $498. We bought Cottages at Shipyard which is not as nice as some others. Some who prefer more luxurious accommodations won't have this requirement. Everyone wants different things.
• We also wanted reasonable trading power. Buying on HHI for week 27 gave us that.
• We have two adult children who will be traveling with us. Thus we got a two bedroom. They won't be going with us on many of our other vacations. We're looking for a second TS and will probably settle on a one bedroom.

We were fortunate. We shopped for over a year before the auction on ebay came along. Patience was the key in our case. I fully expect to shop for 2 years before we buy our second timeshare.

Good luck finding a place,
Jim

On Ebay right now there is the Summit Watch 2 bedroom week 45 for $2550 with 5 days left and no bids. Week 45 would be one of the lower demand weeks, colors will be gone, will be cooler so hiking wont be so good and no skiing. I have seen better weeks (not ski weeks) go for $5K, Im talking summer weeks.

When I think of buying a timeshare. I think about it as a lifetime investment because you never know how long you will have it. The mf's sometimes might feel like a ball and chain (especially if you have multiple timeshares and they all become due around Christmas) but if you go into the purchase knowing that, then its an educated choice.

You have to decide if the value is there. So take the $5K divide it by 20 years (depending on how old you are) = $250 + mf $800 = $1050/week. Now if you arent going to go to Park City every year then you will need to add in a trade fee. Of course the 2 bedrooms are lock offs so you could divide it. You will still pay the trade fee twice but the mf only once.
There are lots of options and different circumstances.

I will trade for one of the top 5 Utah timeshares every year (I live in Salt Lake) I usually go in May, June, August or September. Have even hit Thanksgiving week once. I use one of my low mf $400 + trading fee $150 so I am into it $550 + - . I paid $100 for my timeshare. Why do I trade for something so close to home. In my case I have too many timeshares until I retire, so this is a fun thing I do for my family. We will take turns going up there for a day or two. I will get the weekend and we will go fishing up at Strawberry and go out to dinner and relax; the next morning we are half way to Strawberry and then go fishing again.

There is a lot to be said for owning a Marriott but when they want me to buy from the developer, I just cant see doing it. My co worker has bought 5 timeshares direct from Marriott. He has $130,000 invested in his timeshares that he might be able to sell for $40K. We vacation close to the same way and I have $20K invested in my 7 1/2 timeshares (that I could sell for $12K). Dont think of buying a timeshare as a monetary investment, that doesnt happen very often. Timesharing is good for me because just like your salesperson said "It makes you vacation" You make that committment. I budget for it, I plan for it and its a big part of my life and I very much enjoy that part of my life.

Walking away from mfs

I'm new to timesharing also, haven't yet purchased or decided that I will purchase. I'm surprised more people don't just walk away from maintenance fees. When people get stuck financially, moral obligations tend to take a seat. I'm also surprised that ts aren't usually bought back by the resort itself; it'd be cheaper than pursuing a foreclosure and they could resell at their "quick" 90 minute presentations. As a landlord and real estate agent I know how tough it is to get someone to pay an obligation if they don't want to--I've been the one in court trying to collect money too often. Associations that don't have a better policy than taking deadbeats to court are probably wasting owners' money. You can't draw blood from a stone and a judgment against someone in another state is worth about the cost of the filing fees. I bet that for many people, pulling their credit score down a few dozen points is cheap compared with maintenance fees. If the purchaser purchased the ts through an LLC (as I do with my "real" real estate investments) the debt isn't going to reflect on my credit score. If I was planning on walking away from my mfs, I'd purchase through an LLC. I think it'd make sense and save money for both the associations and the owners who no longer want to be burdened by mfs to have a repurchase plan in place.

Good luck!

There have been long threads here about the possibility of buying a timeshare through an LLC to avoid personal liability. That generally works if the LLC has a business. But if the purpose of the LLC is to hold personal assets, such as a timeshare used for personal purposes, there are some legal issues that can allow creditors (and the courts) to look through the LLC to the owner of the LLC for payment.

Thus, trying to defend such an arrangement can eventually be even more expensive than simply being subject to normal collection action by those that the resort hires to collect delinquent fees.

It is bizarre that this topic came back up.

I was contacted via email recently by a tug member who is in this very position.

the resort is colorado ski resort.

He has an off season week with a maint fee of over 1400 dollars.

He has exhausted every option to sell and or donate the timeshare that we have spelled out.

He has put it on ebay for a dollar...he has tried to donate it (and they accepted it and attempted to sell it for best offer with no results). He has tried to deed it back to the resort and the offer was refused. (claimed too many owners had done this already)

I do not believe even the PCCs will accept this resort either.

So in his position...he is stuck with a $14xx bill every year with very few options.

Encouraging Timeshare Owners To Walk Away Might Not Be All That Smart.

picante said:

I'm surprised more people don't just walk away from maintenance fees. When people get stuck financially, moral obligations tend to take a seat.

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Well, shux, the obligation to pay timeshare maintenance fees may be moral all right, but it's also official -- as in legally binding & enforceable & all that. As I mentioned just today (right here elsewhere on TUG-BBS): Abandoning timeshares is bad business. The HOA-BOD will sic the bill collectors on you & then the lawyers & then the process servers & before it's all over you will wish you had not tried to pull such slick moves. Just buying resale instead of paying full freight is getting over on the system plenty enough as it is. Everything else is gravy. [ Or words to that effect. ]

I'm also surprised that ts aren't usually bought back by the resort itself; it'd be cheaper than pursuing a foreclosure and they could resell at their "quick" 90 minute presentations.

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Not all timeshares are under the control & management of timeshare companies. Timeshares under independent management by their own owner-elected HOA-BODs are not in the timeshare selling business -- & may not even be allowed to resell timeshares, either because state laws limit sales activities to licensed brokers or because of exclusivity agreements with the official Developer Of Record (or both).

So an independent timeshare HOA-BOD ends up owning some weeks -- what are they spozed to do with'm after that?

With a timeshare company that is in the business of selling timeshares, maybe taking'm back after they're paid in full -- with nothing owing on the purchase or on the fees -- would make sense.

I think it'd make sense and save money for both the associations and the owners who no longer want to be burdened by mfs to have a repurchase plan in place.

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Maybe. Sometimes. In some cases. Possibly. Depending on the situation.

There was some extended TUG-BBS discussion on this very topic recently -- with no final-final-final resolution that all participants agreed upon totally. So it goes.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

TUG Improvements! said:

He has put it on ebay for a dollar...he has tried to donate it (and they accepted it and attempted to sell it for best offer with no results). He has tried to deed it back to the resort and the offer was refused. (claimed too many owners had done this already)

I do not believe even the PCCs will accept this resort either.

So in his position...he is stuck with a $14xx bill every year with very few options.

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I thought the specific resort name should not be in the post?

So even with donation, the deed still come back? That will probably be the same if try PCC route.

Without knowing anything about it, I will start with my ridiculous suggestion.

1. has the owner try to group togther so they could look into resort's budget in more detail way? Maybe HOA has wrong doing, or Management company has wrong doing
2. Assume the 1,400 is due to unbillable week. The resort should be in stage agressively sell the interval, if not, then any payed owner has the right to the walk-out week. Ask for that rights
3. group with owner to push at least 1 or 2 people in the board or overtake the board, so at least can make sure the budget is right. Also, can propose to end the life of the resort
4. rent out his week at a loss (or maybe even money). Don't think this as loss. Think this from the view as the cost of what (s)he think the reasonable cost for that resort, then start from there. Use RCI ev, lc and other exchange company's rent program, so kind of strech the week into more week. Say if the area resort avg. cost is $500. Rent out for $800, get 2 LC, so the cost is $900 instead of 1400.
5. With renting, it bring opportunity to sell.
6. Consider offer to pay closing and MF in eBay listing.

Sorry, don't have any ideas.

Jya-Ning

LLCs

TUG Improvements! said:

He has exhausted every option to sell and or donate the timeshare that we have spelled out.


So in his position...he is stuck with a $14xx bill every year with very few options.

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He's in a perfect situation to test the LLC option. Have him set-up an llc rental company and transfer ownership to that--perhaps in a state different than the one where the ts is. The courts might frown on it, may find that he is still liable, may think he's trying to manipulate the system, etc, but the guy could drag the thing out for years and in the end if for some reason the llc doesn't work, he is no worse off.

I've found that the winner in a real estate lawsuit is usually the one who can put up the most hurdles in front of the other party. The guy might want to counter-sue--consumer fraud, mispresentation, it doesn't really matter too much. If the guy can demonstrate to the courts that he cannot afford the pay the $1,400 there is little the HOA will be able to do. If he can't pay the $1400 he's not going to be able to pay the $1,400 and additional legal fees the hoa would like him to pay.

If the association says that nonpayment has happened on other occasions than the owners need to understand that their current methods--lawsuits of non-paying owners--is not resolving the problem and should look to other avenues. Nobody wins but the lawyers when you're talking about $1400/year fee. The association can win suit after suit, can ring up tens of thousands in legal fees to be paid by the defendant, can crush the guys credit score. But they can't get him to pay if he doesn't want to.


I have not been a legal party to any real estate suits involving timeshares, but I can only imagine, what with reputation of timeshare deals, an hoa is not going to have any better luck recouping costs than a mortgage lender, landlord, bank, etc. The hoa is just not going to win--even if they do receive a judgment.

Jya-Ning said:

I thought the specific resort name should not be in the post?

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good call..name removed.

So even with donation, the deed still come back? That will probably be the same if try PCC route.

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well in most donations...the deed doesnt change names until they have a buyer or a use for it....they just try to sell the timeshare and then take care of the incidentals afterwards.

1. has the owner try to group togther so they could look into resort's budget in more detail way? Maybe HOA has wrong doing, or Management company has wrong doing

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good question...although in this case I fear the week itself is perhaps off season.

2. Assume the 1,400 is due to unbillable week. The resort should be in stage agressively sell the interval, if not, then any payed owner has the right to the walk-out week. Ask for that rights

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that week along with quite a few others is on the resorts website already for sale by owner (they have their own page for this specifically).

I believe the mf is so large due to the size of the room.

3. group with owner to push at least 1 or 2 people in the board or overtake the board, so at least can make sure the budget is right. Also, can propose to end the life of the resort

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perhaps an option...but if others are happy with their on season weeks? (just speculation)

4. rent out his week at a loss (or maybe even money). Don't think this as loss. Think this from the view as the cost of what (s)he think the reasonable cost for that resort, then start from there. Use RCI ev, lc and other exchange company's rent program, so kind of strech the week into more week. Say if the area resort avg. cost is $500. Rent out for $800, get 2 LC, so the cost is $900 instead of 1400.

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renting was mentioned as an option, I got the impression the owner already attempts this as well as a way to allevaite the amount owed per year.

6. Consider offer to pay closing and MF in eBay listing.

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believe this was done as well...but not positive.

Sorry, don't have any ideas.

Jya-Ning

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I was a bit at a loss for advice moving forward as well :/

AwayWeGo said:

Not all timeshares are under the control & management of timeshare companies. Timeshares under independent management by their own owner-elected HOA-BODs are not in the timeshare selling business -- & may not even be allowed to resell timeshares, either because state laws limit sales activities to licensed brokers or because of exclusivity agreements with the official Developer Of Record (or both).

So an independent timeshare HOA-BOD ends up owning some weeks -- what are they spozed to do with'm after that?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

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I'm not sure what they should do. But if they're not sure what they should do they should take steps to avoid getting in that situation. I read very little about buyers looking at the financial statements and by-laws before purchasing a timeshare. Do sellers provide these or do buyers need to contact the hoas?

Sure, spend money to try to avoid an obligation

picante said:

He's in a perfect situation to test the LLC option. Have him set-up an llc rental company and transfer ownership to that--perhaps in a state different than the one where the ts is. The courts might frown on it, may find that he is still liable, may think he's trying to manipulate the system, etc, but the guy could drag the thing out for years and in the end if for some reason the llc doesn't work, he is no worse off.

I've found that the winner in a real estate lawsuit is usually the one who can put up the most hurdles in front of the other party. The guy might want to counter-sue--consumer fraud, mispresentation, it doesn't really matter too much. If the guy can demonstrate to the courts that he cannot afford the pay the $1,400 there is little the HOA will be able to do. If he can't pay the $1400 he's not going to be able to pay the $1,400 and additional legal fees the hoa would like him to pay.

If the association says that nonpayment has happened on other occasions than the owners need to understand that their current methods--lawsuits of non-paying owners--is not resolving the problem and should look to other avenues. Nobody wins but the lawyers when you're talking about $1400/year fee. The association can win suit after suit, can ring up tens of thousands in legal fees to be paid by the defendant, can crush the guys credit score. But they can't get him to pay if he doesn't want to.


I have not been a legal party to any real estate suits involving timeshares, but I can only imagine, what with reputation of timeshare deals, an hoa is not going to have any better luck recouping costs than a mortgage lender, landlord, bank, etc. The hoa is just not going to win--even if they do receive a judgment.

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That would cost money. Money better spent paying the fees or finding someone to take the week (in other words PAY them to take it). After all f the place has no value why did this owner buy it? In the end this owner would lose money, the resort would lose money, the owner will have negative credit reports - what would doing the LLC route - very likely to fail in the long run - really get this owner but years of more hassles about this timeshare?

Bad idea but of course they are free to try it. If the resort is smart they will keep billing them, raise the total due so when the negative reports are filed they will be a significant hit. And they will rent the unpaid time for as much as they can - even if it's still a loss as that remains due from the owner. I wouldn't want to take that route but some might be willing to try it.