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[2008] What happens if I just quit paying my maintenance fees?

Discussion in 'Buying, Selling, Renting' started by don't use it anymore, Oct 6, 2008.

  1. don't use it anymore

    don't use it anymore Guest

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    I have a [timeshare] that I don't use any more and would like to get out of. Selling it hasn't worked; Donating it seems like a hassle and may take longer than when the next maintenance fee is due (January 2009). What are the repurcussions of just not paying the maintenance fees anymore and sending them a note that I no longer want it? Seems like they'd just take it back and resell it. It's Mexico so it's not deeded, just a vacation week. Will it affect my credit rating here in the states somehow?



    [Info. that may make this post appear to be advertising has been removed.-DeniseM Moderator.]
     
    Last edited by a moderator: Oct 6, 2008
  2. dougp26364

    dougp26364 TUG Review Crew: Veteran TUG Member

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    In short, they put a collection agency on you, report your unpaid debt to the credit bureau's. Eventually they'll foreclose on the unit and put that on your credit record as a foreclosure and uncollectable bad debt. They may file suit against you for the unpaid amount which could end in a garnishment of your wages.

    IOW, it's really not a good idea to just skip out on an obligation or debt. There is no Fannie Mae.Freddie Mac insurance on your timeshare mortgage. It's more like when you stop paying on a car. They come get it, sell it and bill you for the difference and expenses. If you don't pay, they file against you in court, win a judgement and then attempt to garnish your wages if you dont' pay up.
     
  3. don't use it anymore

    don't use it anymore Guest

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    I don't owe anything on the timeshare except a maintenance fee. There is no mortgage - I paid off the timeshare purchase long ago.
     
  4. luvsvacation22

    luvsvacation22 Tug Review Crew: Rookie TUG Member

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    Give it away on Ebay for free, buyer pays transfer and closing fees!

    Dorene
     
  5. yumdrey

    yumdrey TUG Review Crew: Veteran TUG Member

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    the fastest way to get rid of your TS is selling it through ebay for 0.01. If buyer wants to split closing cost 50/50, then do it if it is cheaper than MF. It is better than just skipping MF and hurt your credit.
     
  6. DeniseM

    DeniseM Moderator

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    The MF is a contractual obligation as well - they will turn you over to collections for non-payment.

    We have a board here called the Bargain Basement where you can give it away for free and stipulate that the new owner pay any transfer costs....but in this economy, even some free TS's are going without takers.

    For the Bargain Basement Board, click on Classified Ads in the red bar at the top of the page and you will see it on the menu. It's totally FREE to post your Ad!

    And....WELCOME TO TUG! :hi:
     
    Last edited: Oct 6, 2008
  7. CarGuy2003

    CarGuy2003 TUG Member

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    Timeshare MF is NOT a contractual obligation?

    Is there any reason an owner can't deed away a free and clear timeshare to a 3rd party (person or company), notify the resort of the transfer (and pay the transfer fee) and simply be done with the timeshare?

    The owner never signed a contract with anyone, just bought the timeshare years ago on eBay for cash. So, once it's out of the owner's name, the resort has no ability to come after the (now prior) owner for anything, right?

    If this is correct, and my understanding of the law (in California at least) is that it is, does anyone know of a company that the owner can deed the timeshare to?
     
    Last edited: Nov 20, 2010
  8. Talent312

    Talent312 Tug Review Crew: Rookie TUG Member

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    ... If the TS is "free and clear" (meaning are MF's paid up) and the transfer is not a mere sham (which can be refused or set aside). IOW, its a legitimate sale.

    Remember being shown a big-book full of legal jargon iwhen you bought your TS or some reference being made to declarations and covenants in your deed (or contract for use). Guess what...

    When one accepts a deed or signs a contract for use of a TS, one is also accepting a slew of obligations that are imbedded with the TS, i.e. the the declarations, coveneants, and other governing documents of the TS management or association, which means that (a) each owner has a personal obligation to pay MF's, (b) the MF's are also a lien upon the TS which may be foreclosed, and (c) management may refuse to accept the transfer of any TS delinquent in its MF's.
     
  9. theo

    theo TUG Review Crew: Veteran TUG Member

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    Nope, NOT right...

    In order for there to be a legally valid deed transfer, there must be a fully informed and willing recipient who accepts the transfer in the first place. You can't just unilaterally deed it over to some unsuspecting person or entity. The individual state involved matters not one bit on this particular detail.

    Purchase / ownership is by definition a contract, regardless of the presence or absence of any paperwork formally entitled or labelled "contract". The knowing and willing recipient who once accepted ownership also simultaneously inherited all of the associated obligations, with or without actually "signing a contract".

    Have you asked your resort HOA about the possibility of "deed in lieu of foreclosure"? They likely won't be interested, but it costs you nothing to at least ask. If you ultimately have to bite the bullet and give it away for free (perhaps even having to pay the closing costs to do so) then so be it, but please don't try to unilaterally deed it to some other unsuspecting person or entity (which would constitute fraud, by the way). Please don't get some bogus "shell" company recipient involved either, which is both highly unethical and supremely inconsiderate of all the other responsible owners at that resort who then have to pick up the financial slack created by those who decide not to pay their (contractually obligated) fees...
     
    Last edited: Nov 20, 2010
  10. 1950bing

    1950bing Guest

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    This comes up a lot but is worth answering again.
    The answer is, what would happen if you just stopped paying for your house ?
     
  11. ace2000

    ace2000 TUG Member

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    Here lately, nothing.
     
  12. 1950bing

    1950bing Guest

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    Good Point !
     
  13. e.bram

    e.bram Guest

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    Theo:
    Are you an attorney or can you cite some legal statute or decision, or is this just your opinion.
     
  14. DeniseM

    DeniseM Moderator

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    e.bram - Now why is it that when I ask you the same question about your schemes to dump timeshares, you never respond? ;)
     
  15. teepeeca

    teepeeca TUG Member

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    e.bram

    You don't have to be an attorney to know the law, and specific statutes. I don't believe "Theo" was giving actual legal advice---just what the LAW states.

    How have your "legal submissions" worked out? (Haven't seen you posting of your actual successes.)

    Tony
     
  16. LannyPC

    LannyPC TUG Member

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    What are these "shell" companies? Are they the same as some of these PCCs that claim that they can "get you out of your TS contract" or "cancel" your contract?
     
  17. CarGuy2003

    CarGuy2003 TUG Member

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    We need to clarify. We're not talking about a situation where someone owes money on a timeshare mortgage. We're talking about a free and clear timeshare. The owner would only be leaving the obligation to pay annual maintenance. So, it would compare to a home owned free and clear, where you only stopped paying the taxes. The government would foreclose, IF it had any value, which many timeshares don't at the moment. But, that government foreclosure will NOT show on your credit and does not leave you open for a deficiency judgment. The only risk is from the timeshare coming after you. If you've deeded it to a willing third party entity, even a company formed for the purpose of owning timeshares no one wants, and you've paid the transfer fee to the resort and given them the recorded deed, they can't come after you either. So, you're FREE of your timeshare obligations. If what I'm writing is incorrect, please explain exactly why. I'm trying to figure this out. So far, no one has given a valid reason.

    By the way, several have mentioned the "moral" issue. I take "moral" issues seriously. But, this is NOT the same as a mortgage you've promised to pay. In this case, you've simply accepted a free timeshare from someone, or purchased it and paid for it. You have the right to stop owning it and stop paying to maintain it. You do NOT have an obligation to continue to pay for the rest of your life just because other owners would suffer. They have the same ability to divest their timeshare if desired.
     
  18. LannyPC

    LannyPC TUG Member

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    ... but you have the obligation to pay because you signed a contract stating that you would pay.
     
  19. DeniseM

    DeniseM Moderator

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    Apparently you didn't read post #9 - it explains it very clearly.

    You have come to the wrong place to promote this scheme. Most of the people who post on TUG enjoy timesharing and don't enjoy paying the maintenance fees for dead beats.
     
  20. LannyPC

    LannyPC TUG Member

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    Correct. If you've legally deeded it to a willing third party (done all the legal paper work and documents, etc.), and the third party signs the legal documents accepting ownership of the unit, then, yeah, you're free. But the question was raised What if you walk away from paying maintenance fees? That is not the same as legally deeding it to a willing third party.
     
    Last edited: Nov 21, 2010
  21. Fredm

    Fredm TUG Member

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    When a timeshare (or any condominium) is purchased, the owner (any owner) is subject to the Governing Documents of the condominium association. Those documents make the owner responsible for payment of the fees levied by the association.

    If the fees are not paid, the association can (and will) place a lien on the ownership interest, and can foreclose for non-payment.

    Rights to a timeshare (or any condominium) cannot be transferred to another party without also transferring the rights and obligations as stipulated by the Governing Documents.

    The timeshare rights include the ability to make a reservation, subject to the reservation rules in the Governing Documents.
    The obligations (there are many) include the payment of fees.
    These rights and responsibilities are inseparable from the deed or ownership certificate.

    An owner can choose to not exercise their rights, but cannot escape their obligations.
    Fees are a legally incurred debt, and are subject to collection and the ramifications of non-payment.

    End of story.
     
    Last edited: Nov 21, 2010
  22. Talent312

    Talent312 Tug Review Crew: Rookie TUG Member

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    First... It matters not that the TS is free and clear. The MF is a lien on the property "as if" a mortgage, just like local government property taxes or a neighborhood owner's association dues, and whoever takes title, takes it subject to the sums due.

    Don't pay... (1) lose your right to use, (2) be turned over to a collection agency, (3) have your credit score lowered o the point where it adversely affects your ability to get loans, insurance or rentals, and (3) then, be sued for foreclosure with claims for attorney's fees and court costs.

    OR before that happens... Get it out of your name with a transfer that the TS-managers will recognize as legit... (1) deed it back or (2) deed it to a third-party. However, if its a sham transaction or a shell corporation, the corporate veil will be easily pierced and you could face a claim of fraud.

    I advise against listening to "e.bram"... He's been on my ignore list for a long time.
     
  23. Dave H

    Dave H TUG Member

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    This reply carries the following disclosure, this is not intended to be legal advice, to get legal advice, one must consult a lawyer.

    Ok, first, you did accept the timeshare, free was the consideration. Look at your deed, see in the legal description where you have wording that looks something like this:

    This conveyance is subject to and by accepting this Deed, Grantee does hereby agree to assume and abide by the conditions and restrictions imposed by the following:

    1. Taxes for the current year and subsequent years;
    2. Conditions, restrictions, limitations, reservations, easements and other matters of record, including but not limited to the Declaration;
    3. The specific use restrictions set forth in the XXXXXX Vacation Club Resort Agreement, as the same may be amended from time to time, an initial copy of which is attached as Exhibit "F";
    4. The specific use restrictions set forth in the rules and regulations contained in the Disclosure Statement for Club Members of the XXXX Vacation Club, as the same may be amended from time to time, an initial copy of which is attached to the Declaration as Exhibit "G".

    Lets look at this in what it says. This conveyance is subject to (means you agree to the following) and by accepting this deed (means you took it and accepted the deed from the seller (grantor)), hereby agree to assume and abide by the conditions and restrictions imposed by the following (says you promise to be bound to the things listed below):

    Now, do you see the part about the Declaration of Condominium or the part in 2) above. The recorded Declaration spells out maintnenance fees and assessments.

    When you took this deed from whoever gave it to you you agreed to be bound by all the requirements in the Declaration. So you do have a financial obligation to the resort.

    Then you ask about deeding it to someone else unbeknownst to them. First a timeshare follows the real property acts in all states. You have bought real property, it is called a condominium that you have limted use to. You agreed to that when you accepted the Declaration of Condominium.

    To convey property you have to have all of the following conditions.

    Traditionally and under common law, to be valid and enforceable, a deed must fulfill several requirements:

    It must state on its face it is a deed, using wording like "This Deed..." or "executed as a deed".

    It must indicate that the instrument itself conveys some privilege or thing to someone. This is indicated by using the word hereby or the phrase by these presents in the clause indicating the gift.

    The grantor must have the legal ability to grant the thing or privilege.

    The grantee must have the legal capacity to receive it.

    It must be executed by the grantor in presence of the prescribed number of witnesses, known as instrumentary witnesses (this is known as being in solemn form) or be notarized.

    A seal must be affixed to it. Originally, affixing seals made persons parties to the deed and signatures were optional, but most jurisdictions made seals outdated, and now the grantor and either witnesses signatures or notarization are primary.

    It must be delivered to (delivery) and accepted by the grantee (acceptance).
    It should be properly acknowledged before a competent officer, most often a notary public.

    If you notice there has to be ACCEPTANCE. If the Grantee does not accept the deed, it is not a valid conveyance. This is why if you try to deed it to the resort, and yes, most watch the public records on a regular basis to see if someone is filing deeds back to them, they then record an Affidavit of Non-Acceptance which says they did not accept the deed and it is still yours.

    So now, you want to set up a sham company, opps, I mean a shell company. So you deed it in to the shell company so that it is out of your name, but to set up a company, most states require that you have Officers or Managers.

    As soon as you deed that to the shell company and pay the resort the transfer fee, you have effectively made the shell company the owner. However, you need to talk to an attorney because in many states, as soon as that company is dissolved, the officers/managers may become personally liable. Opps, that puts it all back on you again. Hmm, wasn't that what you were trying to avoid.

    Bottom line, like everyone has told you, you agreed to the fees when you took it. Life is full of choices and with those choices come the consequences of our actions (acceptance of the choices).

    You made the choice to take a timeshare deed. By doing that you made the choice to pay maintenance fees and special assessments. Now the consequences of that choice, is if you quit paying, you get foreclosed on and you get negitive information on your credit report.

    The choice you can make to avoid that is either give it away or sell the timeshare and be done with it.

    It reminds me of an old saying, we make choices and sometimes those choices make us. Make the wrong choice and you have to deal with the consequences. Something the younger generation has yet to learn. Its not everyone elses fault for the choices you made. You need to take responsibility for the choices you make.
     
  24. theo

    theo TUG Review Crew: Veteran TUG Member

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    Well said...

    Simply and truthfully stated. Amen. :clap:
     
  25. Carol C

    Carol C TUG Lifetime Member

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    Too funny!
     

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