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US justice department goes after Timeshare "donation" company Donate for a Cause

Jason245

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I think I was pretty clear that I was not addressing the actions of the company in question in this thread, but rather saying only that the process of valuation is more complex than often assumed here. I would NEVER assume that EBay reflects true market value when you can often get get so much more elsewhere. That is analogous to saying that the market value of a house is determined solely by foreclosure sales.
Appraisals are a very complex process, which is why appraisers get licensed and certified. They also have insurance. When they get it wrong, the person's on the losing end of the transaction usually sue them to try and recover the resulting damages.

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VegasBella

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To Denise's point made repeatedly in this thread, why should a typical owner not believe an appraisal that is significantly more than "pennies on the dollar"? It might even be accurate.
Because if the appraisal is accurate then they would do far better to sell the timeshare than to "donate" it. I'm having a hard time buying the logic that these people didn't consider other options before going to DFC. I'm having a hard time believing that there are significant numbers of ex-timeshare owners who are more generous to charity than the average person AND who utilize this particular method to deliver their generous charitable contributions.
 

DeniseM

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Because if the appraisal is accurate then they would do far better to sell the timeshare than to "donate" it. I'm having a hard time buying the logic that these people didn't consider other options before going to DFC. I'm having a hard time believing that there are significant numbers of ex-timeshare owners who are more generous to charity than the average person AND who utilize this particular method to deliver their generous charitable contributions.

Here is the problem in a nutshell - because YOU understand the situation we are discussing here, you have some how decided that all the timeshare owners who "donate" to DFC must understand it too, and therefore, they are willfully breaking the law.

This reminds me of a Chem professor I had in college. He had a doctorate, and was the head of the department. I was NOT good at chemistry, and I got called into his office for a meeting. He asked me why I was doing so poorly in class, and I listed the things I was having difficulty with.

His response, "I understand this perfectly, I don't know why you can't understand it." :wall:
 
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glmyers

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Appraisal reports are the key for taxpayers

heres what it says on their website

So who is responsible for the tax fraud. The individuals that take a b.s. deduction or the outfit that suggested that a deduction might be possible.

***************************************************************


"Upon transferring ownership of your timeshare, we will send you a receipt as proof of your donation, which you can then use to qualify for a tax write-off. The amount of your tax write off will be determined by the value of your property, which should be assessed by a licensed third party appraiser.

If you simply want to donate without first getting your property appraised, the tax code allows donors to take a deduction of up to $5000 without a formal appraisal. The donor must still provide support for their claimed value.

Once you receive your receipt, you should discuss its use with your accountant (or whomever you use for tax advice). You can also review the IRS web site regarding charitable donations at www.irs.gov/pub/irs-pdf/p526.pdf."

Most likely the taxpayer is only going to be responsible for paying the back taxes if they have an appraisal report they relied upon. The appraisers, Thor and Broyles, are both state-certified appraisers listed on the national registry so they meet the IRS qualification standards. Given there is no reason for a typical consumer to doubt the value in the reports the appraisers produced, the taxpayer is not guilty of fraud. Why would an average person think an appraised value is grossly inflated when it is let's say 90-95% of the price they paid?

I think this will be an interesting case to follow. It is one thing to claim the appraiser's reported opinions of value were inflated and quite another thing to prove it. I would not be a bit surprised if the cost of prosecution exceeds the value of any taxes received. The cost of the appraisal reviews alone could match that number. The financial penalties the appraisers will owe is only going to be 125% of their fees, which is likely to be well under $500 per report and likely to be money they cannot afford to pay.

I think it is good that this case is being pursued, but I would bet the government is hoping for a settlement rather than a trial.
 

comicbookman

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Here is the problem in a nutshell - because YOU understand the situation we are discussing here, you have some how decided that all the timeshare owners who "donate" to DFC must understand it too, and therefore, they are willfully breaking the law.

This reminds me of a Chem professor I had in college. He had a doctorate, and was the head of the department. I was NOT good at chemistry, and I got called into his office for a meeting. He asked me why I was doing so poorly in class, and I listed the things I was having difficulty with.

His response, "I understand this perfectly, I don't know why you can't understand it." :wall:

Sorry, Denise, your example is not comparable. If the people "donating" the timeshare really believe that it is worth what the appraiser says it is, then why would they pay $2k to donate it? even if they are generous, liquidating it and donating the proceeds would make more sense. It does not require an understanding of the non-value of timeshares, it only requires common sense. Either most people who use this method are really dense, or they know there is something fishy, but figure that other people get away with this so they can too. I am sure there are a few who truly believe, but a doubt it is a majority, much less a large minority. What you most likely have are a lot of people desperate to get rid of their timeshare and think this is a way to do it and almost break even. ($2k - tax savings) You always tell people if it sounds to good to be true it most likely is, and here it just makes no logical sense.
 

DeniseM

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You are assuming that people clearly understand exactly what an appraisal is, and the ramifications there of.

I do not believe they do - especially when they have been bamboozled by DFC.

I guess I'm no better at taxes than I am at chemistry, :D but if I were not a Tugger, I would be completely fooled by a licensed appraisal from DFC, if my CPA OK'd the deduction.

If my CPA said it wasn't legal, then I would of course take his advice, but if he OK'd it, I'd be 100% convinced that it was Legit.
 
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Susan2

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It's all well and good to say that you'd like timeshare contracts to be written in such a way that they can be "surrendered" but the reality is, there aren't surrender terms written in to them. What's written in to them is that once you sign on the dotted line and the rescission period expires, you're on the hook for the financial obligations and the only way out if you stop paying but can't/don't resell will most likely result in foreclosure proceedings against you. What's also written in to them is that if you don't satisfy your financial obligation, your financial burden shifts to the other owners.

What isn't written into them is anything that supports the notion that owners' costs should or will somehow correlate to how much a same interval can be had on any rental markets, or anything that supports the notion that a financial return can be had on any resale markets. TUGgers use those figures as value barometers but the timeshare developers sure don't - in fact they make it very clear in the contracts that value is measured in usage.

So again, we can hope for change that allows the contracts to be written differently but until they are I don't/won't support the idea that owners should be able to "surrender" their timeshares, because the end result is more of a burden on owners who do consider their obligations responsibly.

BALONEY! The contracts don't have to be written differently. -- Unless, of course, they CLEARLY disclose that you're on the hook forever. Even if you find the timeshare valueless.

If I buy a 24-month cell phone plan, it's clear that I can't get out of my contractual obligation without penalty within that period. The terms are stated in the contract in great big letters, and the salesperson is clear about it verbally. There is no cell phone contract that says I can't ever cancel it, though, due to my "contractual obligations" to the other members of the plan.

If you buy a timeshare, you're told you're buying something of lasting value, and the salespeople NEVER tell you that if you ever want to sell you may be lucky to get pennies on the dollar. Or that if, in the future, you decide this doesn't work for you, you won't be able to give up your timeshare to get out of the annual fees because you're buying into a "contractual obligation" to support the timeshare and the other owners.

If you lease an apartment, you have a contractual obligation. Again, it's for a certain term. And there are all sorts of rules in place to assist you if you want to get out of the lease, including the fact that the landlord has a duty to mitigate his loss by trying to find another tenant if you vacate the apartment before the end of the lease term.

If you buy a house, that's forever -- until you sell it. But you can't even get a mortgage without a licensed appraiser saying that the property is actually worth what you're paying for it. And on those occasions in those places where the real estate bubbles burst (as in Texas some years ago), people walked away from their houses and mortgages. There was no talk about their "contractual obligations" to support the lenders and their depositers, or the tax base in the community, or the schools who were relying on taxes, or the other members of the homeowner associations . . . Some of the banks failed. Many of the communities had financial problems for many years. Homeowner associations also failed, and some people whose homes would have retained value but for the masses of people walking away lost their equity, too.

The only penalty imposed on people who walked away was that they got a 1099 (to report on their taxes as "other income") for the difference between the mortgage they walked away from, and the actual value of the property. But even then, there were exceptions to the rule that this was taxable income.

This "contractual obligation" talk is pure crap IMO until and unless timeshare salespeople tell the absolute truth when they sell timeshares. 'Cause, like, THAT'S gonna happen!

What about the implicit obligation of the resort to keep its value?

When the timeshare industry actually requires its sales force to TELL THE TRUTH and make actual disclosure of the obligations and the downsides of owning a timeshare -- like be contractually obligated forever, even if you don't want the week anymore -- then, and ONLY then IMO can you talk about the owner's "obligation" to the resort.

Until that time, IMO, the resort has an obligation to make the timeshare week worth the maintenance fee AT THE VERY LEAST. Or to take it back.

SueDonJ seems to want to treat timeshares more as a partnership. Okay, then let's apply actual partnership laws. Such as ONE PARTNER can dissolve the partnership at any time. If the rest of the partners want to keep the partnership active, then they have to re-form the partnership. The only sticky part is the valuation of the dissolving partner's share of the partnership. That causes many court cases and FULL financial disclosure. If the partner wants to walk away with nothing, or the dissolving partner and the remaining partners agree on obligations, then no problem. But if the partnership wants to assess obligations on the dissolving partner ot which s/he doesn't agree, then it has to produce a great deal of evidence of value.

So let's apply those rules on timeshare owners who walk away AND ON TIMESHARE OWNERS WHO REMAIN via the HOA.

Fair's fair.

But this thread is really about the value of donated timeshare. How do I make this a separate thread?
 

Susan2

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You are assuming that people clearly understand exactly what an appraisal is, and the ramifications there of.

I do not believe they do - especially when they have been bamboozled by DFC.

I guess I'm no better at taxes than I am at chemistry, :D but if I were not a Tugger, I would be completely fooled by a licensed appraisal from DFC, if my CPA OK'd the deduction.

If my CPA said it wasn't legal, then I would of course take his advice, but if he OK'd it, I'd be 100% convinced that it was Legit.

Again, Denise, I agree. The FMV of a timeshare is a difficult thing to pin down, and the lowest sale price -- or the price for which that particular unit is sold -- should not be the governing rule of its value. It isn't for any other donations! Goodwill (and AmVets and the Salvation Army, and similar organizations) sell items for less -- often far less -- than the market value. That's the whole point of shopping there.

No one suggests that charitable stores figure out what the clothing and other items actually sell for and then give a tax deduction for that amount. Sometimes Goodwill sells boxes (truckloads) of clothing as rags, especially if they have too much clothing to put on the racks, or if items haven't sold. (So FYI don't decline to donate just because the clothing isn't in good condition. Goodwill can still use it.)

Of course, if the fair value were charged at those stores, they wouldn't sell anything. You only go there to get a bargain. I did when my [growing] sons suddenly needed suits for a funeral. $20 for a very nice quality suit for the one son, and a good navy blue wool blazer for the other for $10. And while I was there, I got fantastic leather jackets for both for just a few bucks. This is stuff that I just wouldn't pay retail price for (or even fair value) for kids who could wear it only one season.

i buy timeshares on ebay the same way. It's not a "willing unpressured buyer and willing unpressured seller" situation. it's a bargain store. A yard sale, not an antique dealer. People just want to get rid of their clutter in a yard sale. And bargain hunters shop for something they might want -- ONLY if it's a bargain. If you want something specific, you go to a store. If you want something only if it seems like a really good deal, you may go to a yard sale. Or Goodwill.

You want to pick up a bargain timeshare ONLY if it's a real bargain, you go to ebay.
 

ace2000

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If I approach my hoa and let them know that I have tried to sell my timeshare without success, and that I have even tried to give it away, and that Im done. I am not going to pay another dollar in mf ever. Then it seems to me the hoa has to take it back. They can do it the easy way and accept a deed back, or they can do it the hard way and foreclose, But the end result is the same...they have to take it back

Exactly right. Either way the HOA takes it back. It's a matter of how long they want to go without collecting the fees. It would be interesting to know how long the foreclosure process takes on average. I'm willing to bet it's at least 3, 4, or 5 years of non payment, and I'm willing to bet there are lazy HOAs that never pursue them. That's a lot of years of unpaid maintenance fees that the "paying" owners have to support just because the resort doesn't want to deal with these "worthless" weeks. That would be a question all paying owners should be curious about.
 

Susan2

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Exactly right. Either way the HOA takes it back. It's a matter of how long they want to go without collecting the fees. It would be interesting to know how long the foreclosure process takes on average. I'm willing to bet it's at least 3, 4, or 5 years of non payment, and I'm willing to bet there are lazy HOAs that never pursue them. That's a lot of years of unpaid maintenance fees that the "paying" owners have to support just because the resort doesn't want to deal with these "worthless" weeks. That would be a question all paying owners should be curious about.

You're absolutely right. If you ever get the chance, take a look at the collection non-efforts made by management companies who later go bankrupt. Or lose the contracts. But some self-managed resorts, too, don't want to spend the money to re-acquire the weeks. Or re-acquire them free. The balance sheet looks better with the old maintenance fees showing as an account receivable (an asset), rather than as a write-off on the profit-and-loss statement.

Read the newsletter. Show up at the meetings. Ask questions.
 
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Jason245

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Again, Denise, I agree. The FMV of a timeshare is a difficult thing to pin down, and the lowest sale price -- or the price for which that particular unit is sold -- should not be the governing rule of its value. It isn't for any other donations! Goodwill (and AmVets and the Salvation Army, and similar organizations) sell items for less -- often far less -- than the market value. That's the whole point of shopping there.

No one suggests that charitable stores figure out what the clothing and other items actually sell for and then give a tax deduction for that amount. Sometimes Goodwill sells boxes (truckloads) of clothing as rags, especially if they have too much clothing to put on the racks, or if items haven't sold. (So FYI don't decline to donate just because the clothing isn't in good condition. Goodwill can still use it.)

Of course, if the fair value were charged at those stores, they wouldn't sell anything. You only go there to get a bargain. I did when my [growing] sons suddenly needed suits for a funeral. $20 for a very nice quality suit for the one son, and a good navy blue wool blazer for the other for $10. And while I was there, I got fantastic leather jackets for both for just a few bucks. This is stuff that I just wouldn't pay retail price for (or even fair value) for kids who could wear it only one season.

i buy timeshares on ebay the same way. It's not a "willing unpressured buyer and willing unpressured seller" situation. it's a bargain store. A yard sale, not an antique dealer. People just want to get rid of their clutter in a yard sale. And bargain hunters shop for something they might want -- ONLY if it's a bargain. If you want something specific, you go to a store. If you want something only if it seems like a really good deal, you may go to a yard sale. Or Goodwill.

You want to pick up a bargain timeshare ONLY if it's a real bargain, you go to ebay.
I think you are confusing logic with tax law. The two are not connected. Tax law is written by the Congress who makes illogical decisions based on lobbiest dollers. There is no logic involved.

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SueDonJ

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BALONEY! The contracts don't have to be written differently. -- Unless, of course, they CLEARLY disclose that you're on the hook forever. Even if you find the timeshare valueless.

If I buy a 24-month cell phone plan, it's clear that I can't get out of my contractual obligation without penalty within that period. The terms are stated in the contract in great big letters, and the salesperson is clear about it verbally. There is no cell phone contract that says I can't ever cancel it, though, due to my "contractual obligations" to the other members of the plan.

If you buy a timeshare, you're told you're buying something of lasting value, and the salespeople NEVER tell you that if you ever want to sell you may be lucky to get pennies on the dollar. Or that if, in the future, you decide this doesn't work for you, you won't be able to give up your timeshare to get out of the annual fees because you're buying into a "contractual obligation" to support the timeshare and the other owners.

If you lease an apartment, you have a contractual obligation. Again, it's for a certain term. And there are all sorts of rules in place to assist you if you want to get out of the lease, including the fact that the landlord has a duty to mitigate his loss by trying to find another tenant if you vacate the apartment before the end of the lease term.

If you buy a house, that's forever -- until you sell it. But you can't even get a mortgage without a licensed appraiser saying that the property is actually worth what you're paying for it. And on those occasions in those places where the real estate bubbles burst (as in Texas some years ago), people walked away from their houses and mortgages. There was no talk about their "contractual obligations" to support the lenders and their depositers, or the tax base in the community, or the schools who were relying on taxes, or the other members of the homeowner associations . . . Some of the banks failed. Many of the communities had financial problems for many years. Homeowner associations also failed, and some people whose homes would have retained value but for the masses of people walking away lost their equity, too.

The only penalty imposed on people who walked away was that they got a 1099 (to report on their taxes as "other income") for the difference between the mortgage they walked away from, and the actual value of the property. But even then, there were exceptions to the rule that this was taxable income.

This "contractual obligation" talk is pure crap IMO until and unless timeshare salespeople tell the absolute truth when they sell timeshares. 'Cause, like, THAT'S gonna happen!

What about the implicit obligation of the resort to keep its value?

When the timeshare industry actually requires its sales force to TELL THE TRUTH and make actual disclosure of the obligations and the downsides of owning a timeshare -- like be contractually obligated forever, even if you don't want the week anymore -- then, and ONLY then IMO can you talk about the owner's "obligation" to the resort.

Until that time, IMO, the resort has an obligation to make the timeshare week worth the maintenance fee AT THE VERY LEAST. Or to take it back.

SueDonJ seems to want to treat timeshares more as a partnership. Okay, then let's apply actual partnership laws. Such as ONE PARTNER can dissolve the partnership at any time. If the rest of the partners want to keep the partnership active, then they have to re-form the partnership. The only sticky part is the valuation of the dissolving partner's share of the partnership. That causes many court cases and FULL financial disclosure. If the partner wants to walk away with nothing, or the dissolving partner and the remaining partners agree on obligations, then no problem. But if the partnership wants to assess obligations on the dissolving partner ot which s/he doesn't agree, then it has to produce a great deal of evidence of value.

So let's apply those rules on timeshare owners who walk away AND ON TIMESHARE OWNERS WHO REMAIN via the HOA.

Fair's fair.

But this thread is really about the value of donated timeshare. How do I make this a separate thread?

This thread is about a whole lot of things and the point I'm addressing is only one of several that've been raised; I really don't see a need to break it out into its own thread. Besides which, this topic of wah-I-didn't-know-what-I-was-buying-and-want-you-all-to-justify-me-walking-away-from-it-easily comes up ALL. THE. TIME. in many unrelated threads - this one is just another version of the same old song and dance.

All I can say is that my timeshares weren't sold to me under any pretense, and the governing docs for them DO clearly spell out the obligations and nature of the purchase as well as the fact that the governing docs terms&conditions clearly follow with each successive transfer. Here in my real world my timeshare ownership is not a partnership and not something I can walk away from on a whim just because I feel like it. I don't and won't support my fellow owners being given an easy out and putting their burden on me - I signed up for that burden only in the event that their delinquent ownerships are foreclosed, not in the event that the timeshare isn't their flavor-of-the-month anymore.
 
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ace2000

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All I can say is that my timeshares weren't sold to me under any pretense, and the governing docs for them DO clearly spell out the obligations and nature of the purchase as well as the fact that the governing docs terms&conditions clearly follow with each successive transfer. Here in my real world my timeshare ownership is not a partnership and not something I can walk away from on a whim just because I feel like it. I don't and won't support my fellow owners being given an easy out and putting their burden on me - I signed up for that burden only in the event that their delinquent ownerships are foreclosed, not in the event that the timeshare isn't their flavor-of-the-month anymore.

Despite your experience, we all know that many timeshares are sold with lies and misrepresentations. And by all means we should all be in favor of the HOAs keeping their foot on the timeshare owner's throats, according to your logic. That's regardless of their age, health, or their financial well being? All so you can enjoy your timeshare week at the expense of those who want out? Really?

If the weeks have value, the HOAs will generally take them back. If they don't have value - close the resort, or let the "paying" owners foot the bill. Several on here want to talk about the ethics of walking away from an "obligation", but how about the ethics on the other side?

It doesn't matter in my mind because everyone gets what they deserve here = on both sides. The ones that walk away suffer the credit hit and the ones that are in favor of "sticking" the people that want out, get to pay the higher fees.
 

richardm

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No one suggests that charitable stores figure out what the clothing and other items actually sell for and then give a tax deduction for that amount. Sometimes Goodwill sells boxes (truckloads) of clothing as rags, especially if they have too much clothing to put on the racks, or if items haven't sold. (So FYI don't decline to donate just because the clothing isn't in good condition. Goodwill can still use it.)

Actually, the IRS doesn't just suggest it in some cases, they insist upon it.. For timeshares and certain other items of "value", the charity is required to file tax form 8282, which discloses the specific sale price as long as the property is sold within a certain period of time after the donation. If I remember correctly, that is within two years.. Chances are high that most of the timeshare donations that were sold fell inside that time frame. The individual who donated is sent a copy of that form when the sale occurs, at the same time the IRS is notified...

However, the key is the certified appraisal.. I believe that the appraisal trumps the actual selling price. In my opinion, this is likely why a certified appraisal was part of the process and served to protect both the charity and those who donated the property. If this ever goes to trial, that part of their donation process will become a big part of the debate.
 

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Despite your experience, we all know that many timeshares are sold with lies and misrepresentations. And by all means we should all be in favor of the HOAs keeping their foot on the timeshare owner's throats, according to your logic. That's regardless of their age, health, or their financial well being? All so you can enjoy your timeshare week at the expense of those who want out? Really?

If the weeks have value, the HOAs will generally take them back. If they don't have value - close the resort, or let the "paying" owners foot the bill. Several on here want to talk about the ethics of walking away from an "obligation", but how about the ethics on the other side?

It doesn't matter in my mind because everyone gets what they deserve here = on both sides. The ones that walk away suffer the credit hit and the ones that are in favor of "sticking" the people that want out, get to pay the higher fees.

At what point does "Buyer Beware" come into the equation? Honestly, I will NEVER understand the illogic of buying a timeshare without knowing exactly what that purchase entails. I don't rely on a salesman to tell me the t&c's of my new sewing machine's warranty; why would I make that much larger a commitment without doing my own due diligence?! The lack of logic continues to confound me.

And I think you're misunderstanding me - my perspective isn't that of wanting to punish my fellow owners either in the case of them simply wanting to walk away OR their true financial hardship. My perspective is based on the t&c's that say a nonperforming interval will be foreclosed and its financial obligation assumed by the other owners - that's what I signed up for and that's what I want to be enforced because the threat of foreclosure is a deterrent to nonperformance. If the t&c's had said that any owners could easily walk away with those obligations foisted on the other owners, I wouldn't have signed up!

I'm not unsympathetic to those who find themselves owning timeshares that don't have usage value or to ownership bases that are dwindling due to age/health issues. But there again the t&c's should be reviewed to determine how the base can dissolve the timeshare if the added burdens are too much. IMO the answer isn't and shouldn't be changed in favor of able owners being allowed to walk away with a flippant, "I'm done, seeya, wouldn't want to beeya!" over their shoulders.
 

dioxide45

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You are assuming that people clearly understand exactly what an appraisal is, and the ramifications there of.

I do not believe they do - especially when they have been bamboozled by DFC.

I guess I'm no better at taxes than I am at chemistry, :D but if I were not a Tugger, I would be completely fooled by a licensed appraisal from DFC, if my CPA OK'd the deduction.

If my CPA said it wasn't legal, then I would of course take his advice, but if he OK'd it, I'd be 100% convinced that it was Legit.

I think however that many people that are using DFC are not using a CPA to do their taxes. Many are likely self preparing.
 

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Agreed- this case is about pressure more than anything..

I think it is good that this case is being pursued, but I would bet the government is hoping for a settlement rather than a trial.

I agree 100%.. A cash settlement, consent decree, and press release are the likely outcome of this..

Over the years, I have been asked for broker price opinions of timeshare interests from elderly people and their families who were denied health care assistance due to their "timeshare assets". They had timeshares that they could not sell or give away, and had to fight in court for the government to accept that their timeshare ownership actually had little to no resale value in the current market. If nothing else, hopefully this case will make it easier for people in that situation to get help if there is a precedent where the government is arguing that timeshares have little cash value.
 

Susan2

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Despite your experience, we all know that many timeshares are sold with lies and misrepresentations. . . .

If the weeks have value, the HOAs will generally take them back. If they don't have value - close the resort, or let the "paying" owners foot the bill. Several on here want to talk about the ethics of walking away from an "obligation", but how about the ethics on the other side? . . .

Amen!

IMO the HOAs and management companies have an ethical obligation to keep the resorts viable and desirable. They DON'T have a contractual right to keep placidly collecting maintenance fees (and collecting salaries, in the case of the managers) forever just because people once bought into the timeshare.
 

ronparise

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At what point does "Buyer Beware" come into the equation? Honestly, I will NEVER understand the illogic of buying a timeshare without knowing exactly what that purchase entails. I don't rely on a salesman to tell me the t&c's of my new sewing machine's warranty; why would I make that much larger a commitment without doing my own due diligence?! The lack of logic continues to confound me.

And I think you're misunderstanding me - my perspective isn't that of wanting to punish my fellow owners either in the case of them simply wanting to walk away OR their true financial hardship. My perspective is based on the t&c's that say a nonperforming interval will be foreclosed and its financial obligation assumed by the other owners - that's what I signed up for and that's what I want to be enforced because the threat of foreclosure is a deterrent to nonperformance. If the t&c's had said that any owners could easily walk away with those obligations foisted on the other owners, I wouldn't have signed up!

I'm not unsympathetic to those who find themselves owning timeshares that don't have usage value or to ownership bases that are dwindling due to age/health issues. But there again the t&c's should be reviewed to determine how the base can dissolve the timeshare if the added burdens are too much. IMO the answer isn't and shouldn't be changed in favor of able owners being allowed to walk away with a flippant, "I'm done, seeya, wouldn't want to beeya!" over their shoulders.

What you dont seem to understand, or refuse to accept is that foreclosuer is easy for the guy defaulting, The difficulty and expense is all on the HOA (the other owners) When I suggest taking the easier path, Im making that suggestion to the HOA> at the end of the day, deedback, or foreclosure makes no difference. Either way the hoa has a week on their books to deal with.

Remember too that an owner that "sells" to a timeshare relief company is trying to do the right thing. Rather than defaulting he is trying to transfer his ownership to someone else that will pay the maintenance fees. and to insure that, he is actually paying several years worth of maintenance fees ahead.

If we accept that a timeshare in a viking ship is a bad thing, and that a timeshare in the hands of the HOA is better, than it just makes sense that given a choice between a viking ship and a take back, the preferred choice would be a take back

Im not saying make it easy, The HOA ought to demand at least a years mf be paid in advance


If the resort is a desirable ownership (ie if the HOA has been doing its job) than managing this asset ought to be easy. I own at a resort where nearly 20% of the weeks are in default and therefore in the control of the HOA. You would expect my mf to be 20% higher than they should be, but no; my MF has not increased very much over the years, because the HOA rents these weeks to other owners and the general public. My point is that a large number of weeks in the control of the HOA need not be a bad thing
 

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Remember too that an owner that "sells" to a timeshare relief company is trying to do the right thing. Rather than defaulting he is trying to transfer his ownership to someone else that will pay the maintenance fees. and to insure that, he is actually paying several years worth of maintenance fees ahead.

this also assumes the owner has even attempted to give their timeshare away on the resale market, or even contact the HOA to ask if they will take it back.

Easily 75% of the folks that email us asking "hey have you heard of xyz company, they claim they can get me out of my timeshare" have not even placed an ad anywhere...or made any effort to contact the resort.

are there timeshares that are unsellable? absolutely...but there is also a huge % of owners who are for the lack of a better word...impatient...and just want a quick and easy out.
 

SueDonJ

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... Remember too that an owner that "sells" to a timeshare relief company is trying to do the right thing. Rather than defaulting he is trying to transfer his ownership to someone else that will pay the maintenance fees. and to insure that, he is actually paying several years worth of maintenance fees ahead. ...

This is hogwash and you know it. Although an owner might pay to a Viking Ship company enough to cover MF's for a period, there aren't any true Viking Ship companies that actually pay the MF bills when they become due. The two major reasons why some of us don't want VS companies to be involved at all in timesharing are that they prey on uninformed owners and they renege on the t&c's that they contractually assume.

As for foreclosure being "easy" on those who go though it, maybe so for some. But definitely not for all.
 

dioxide45

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I would say that a deed in lieu is always a better option than foreclosure to the HOA. It would be cheaper even in this day of non judicial foreclosures. Viking ship is possibly the worst as there could then be problems with having a clear title which then requires additional work to clear.

I think avoiding deeds falling to viking ships should be the goal of the HOA. My guess is that a lot of people that are transferring to a viking ship are not in default. So they would not fall in to the foreclosure process. They just want to end the yearly MF obligation.
 

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At what point does "Buyer Beware" come into the equation? Honestly, I will NEVER understand the illogic of buying a timeshare without knowing exactly what that purchase entails. I don't rely on a salesman to tell me the t&c's of my new sewing machine's warranty; why would I make that much larger a commitment without doing my own due diligence?! The lack of logic continues to confound me. . . .

If the t&c's had said that any owners could easily walk away with those obligations foisted on the other owners, I wouldn't have signed up! . .

Okay, so the salesperson sits down with the mark -- oops, sorry! I mean the "potential buyer" -- and starts the high-pressure sales pitch. (Don't pretend it doesn't happen.)

If that buyer knew anything about the industry, chances are very slim that s/he would ever buy from the developer. Yet that's the way most timeshares are sold. (Virtually all of them, in fact, are sold at least once this way.)

In your scenario, it is "illogical" for the buyer not only not to read the fine print, but also not to extrapolate from there to the future, asking him/herself "what happens if other owners want "out" some day, and no one wants to take their week because they consider it valueless?" Seriously? Who would think of that? And who would buy if they did?

And you also consider it poor practice for the buyer not to do "due diligence."
FORGET IT! Virtually every timeshare sales pitch (Disney being a notable exception) offers "first day incentives" to buy. And many pump oxygen into the sales room, just like the casinos do, to elevate the buyer's mood and excitement.

"Buyer Beware" is an ancient concept, but it's not the way our society works. Consumer protection laws are in place because buyers are not wary enough. Are you old enough to remember encyclopedia salesmen? Their practices (along with the practices of other door-to-door salespeople) resulted in a federal law requiring a three-day right of rescission on contracts.

I love my timeshares. And I believe in the concept of timeshares. But I am not blind to the fact that the industry is DIRTY in many facets. The industry needs cleaning up. Badly. And one of the worst features of timeshare after the initial purchase is the way many resorts attempt to hold owners hostage forever. (Not all resorts do this, of course.)

i challenge you to name me at least one other type of purchase that has a "forever" commitment (rather than a specific term) that I can't get out of by surrendering my ownership -- and for which I'm not allowed to freely surrender my ownership. I doubt you can, but if I'm wrong, let's compare disclosure. And the pressure sales tactics.
 

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...

Over the years, I have been asked for broker price opinions of timeshare interests from elderly people and their families who were denied health care assistance due to their "timeshare assets". They had timeshares that they could not sell or give away, and had to fight in court for the government to accept that their timeshare ownership actually had little to no resale value in the current market.

Talk about adding insult to injury!
 

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I think at this point we are arguing which "wrong" is more "wrong" than the other "wrongs"

lies during sales presentations ....

hoas that dont accept deedbacks they should...

companies that exist to defraud HOAs by transferring weeks into fake entities for purposes of defaulting...

all are all part of the same big crappy bowl of soup placed in front of all Timeshare owners in one way or another.
 
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