# What happens to timeshare dues when timeshares cannot be sold?



## bobh (Sep 30, 2007)

I am a relative novice to the positive and negative aspects of timeshare ownership. I thought I studied the questions of ownership carefully before purchasing an ownership interest in DVC, but with all the recent changes at DVC I now realize I never considered what could happen at the end of a timeshare ownership.I am an owner at the Disney Vacation Club at Old Key West and Disney is going to offer a 15 year extension to the Old Key West memberships that expire in 2042. I suspect that the people that do not choose to extend their memberships will have contracts that are worth significantly less in the long run. I don't expect the contract's value to decline to zero but I am trying to figure out what would happen if that did occur at some point, or what would happen in the event someone's financial situation changed to the point they could no longer afford the annual maintenance dues - could they just surrender the timeshare to someone and stop their responsibility to pay the dues? Or would it be likely that the owner's credit would be further damaged by liens put against their ownership interest for the unpaid dues? Any information would be greatly appreciated. Thanks


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## Dave M (Sep 30, 2007)

Once you purchase a timeshare and are recognized as the owner by the resort developer/manager (DVC in this case), you have a legally enforceable obligation to make maintenance fee payments. Most timeshare documents provide that if you are sued for the fees, you'll wind up paying legal, court and collection costs _in addition_ to the maintenance fees. That obligation continues until you find a new owner for the timeshare. See this thread from yesterday for more on the topic.


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## ROCKJenkins (Sep 30, 2007)

*For heaven sakes the man owns a DVC*

Bobh,

If you ever do purchase a DVC, and your DVC's mortgage is paid-up, I for one would gladly take over your DVC timeshare and MF if you felt it was worthless.  

I don't think Disney Vacation Club would ever allow any DVC member to get so far be-hind in their Maintence Fees as to render that  particular     (if the morgages paid)     membership  worthless.

And if Disney has anything to say about it .... Your future Disney Contract will probably still be worth something in 2042.   

Rock


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## bobh (Sep 30, 2007)

*Thanks a great deal*

Thank you for the link regarding MF - DaveM. That information was what I expected to hear but was not certain about.

ROCKJenkins - the good thing about my contract was that I paid cash for it and have used enough vacations that I now feel like I have gotten a lot of the value out of it. However, I am old enough now that I know I won't get the value out of extending my contract from 2042 to 2057 when I will be 105 years old (HA!). I want to make sure I understand everything before I make a decision that will leave me responsible for paying maintenance dues past age 90 or my kids paying dues for something that they may not want or even be able to afford.

Thank you both very much. This information is a lot more objective than the information I have found on one of the unofficial DVC Boards. I have joined the TUG Board now all I have to do is figure out why I am showing up as a "guest" on the BBS.


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## Karen G (Sep 30, 2007)

bobh said:


> I have joined the TUG Board now all I have to do is figure out why I am showing up as a "guest" on the BBS.



Here is the answer to that question.


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## bobh (Sep 30, 2007)

*Thanks & 1 more question*

Thanks KarenG. I'll use the link you provided to try to sort out the problem.

Everytime I think I have the answers I uncover another question. Can I assume that because the owner has an obligation to keep up with the maintenance dues that the owner's estate would be responsible as well? For example if the owner dies with 30 years left on the contract what would happen to the remaining dues? Would these dues become the responsibility of the owner's heirs until the contract expired? I got into the whole timeshare world to provide my family some lower cost vacations. I never dreamed that I might be signing my kids up for financial obligations that none of us expected.


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## Karen G (Sep 30, 2007)

Your heirs would inherit the timeshare like they would inherit any other property you left to them, along with the rights and responsibilities that you have. Just like you could do now, the heirs could continue to pay the maintenance fees and enjoy the usage of the property, or they could sell it, or they could give it away.  They wouldn't be bound to paying the fees for 30 years anymore than you are.


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## bobh (Sep 30, 2007)

*Thanks again*

I appreciate the replies. Thank you.


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## CharlesS (Oct 1, 2007)

*What if you can't give it away?*



Karen G said:


> Your heirs would inherit the timeshare like they would inherit any other property you left to them, along with the rights and responsibilities that you have. Just like you could do now, the heirs could continue to pay the maintenance fees and enjoy the usage of the property, or they could sell it, or they could give it away.  They wouldn't be bound to paying the fees for 30 years anymore than you are.


What happens if the heirs do not want the timeshare and the estate executor cannot sell it or give it away?  You can't force people to take on responsibilities.

Charles


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## JudyS (Oct 1, 2007)

CharlesS said:


> What happens if the heirs do not want the timeshare and the estate executor cannot sell it or give it away?  You can't force people to take on responsibilities.


There are other people here who know this better than me, but I believe that you are correct, heirs can not be forced to inherit property.  However, the estate would still have the responsibility of paying.

Really, this situation is no different than with any other piece of real estate.  One legally is responsible for taxes and upkeep until you find a new owner. One thing that does differ with timeshares, though, is that some of them are off-season weeks, which can make them less desirable. But, if you avoid buying off-season weeks, I think the risk of being stuck long-term with an unwanted timeshare is pretty low.  If the whole timeshare (year-round) became undesirable for some reason, probably the timeshare association would be dissolved and the property sold for some other purpose.  

One does also need to be careful with non-hotel timeshares that are controlled by the developer -- legally, the developer shouldn't be able to keep forcing owners to keep paying fees instead of dissolving a worthless timeshare, but they still might try. 

Stick to desirable weeks at owner-controlled (or name brand) timeshares, and I don't think there will be a problem.  

Bobh, you own something very desirable.  Sure, it comes with upkeep responsibility, but so does a house.


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## Bill4728 (Oct 1, 2007)

ROCKJenkins said:


> And if Disney has anything to say about it .... Your future Disney Contract will probably still be worth something in 2042.



If you do not extend your right to use (RTU) DVC contract, it will expire in 2042. When RTU contracts expire they are valued by the terms of the contract. Some expire and the TS property is sold and all the owners receive some money (many mexican TS do this) but most just expire and are then worthless.  I'm not sure what the DVC contract call for.


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## bobh (Oct 1, 2007)

Bobh, you own something very desirable.  Sure, it comes with upkeep responsibility, but so does a house.[/QUOTE]


Thanks - I realize that fact. I am a compulsive planner and wondered about what debts my kids might incur if I accepted Disney's current offer to extend my membership by another 15 years. That led me to wonder what debts they might inherit if I do not dispose of my DVC ownership before my wife & I head for that "magic kingdom in the sky."  I sincerely hope it is not run by DVC. Ha. Its not that I dislike Disney it just that I am growing tired of the sales propaganda and spin they put on things. Thanks for all the answers. I am learning a great deal.


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## timeos2 (Oct 1, 2007)

Bill4728 said:


> If you do not extend your right to use (RTU) DVC contract, it will expire in 2042. When RTU contracts expire they are valued by the terms of the contract. Some expire and the TS property is sold and all the owners receive some money (many mexican TS do this) but most just expire and are then worthless.  I'm not sure what the DVC contract call for.



Worthless is the plan with DVC.  But the fees will be due on schedule that final year.  Now the water is being muddied a little with some contracts that may be extended (you pay more to keep the lease but will that translate into higher value longer? For an old resort? Who knows?) so some will end, some will be extended - there may be a fire sale of the extension time not purchased by the current lessors.  Like every other timeshare DVC is starting to become fractured and the value a bigger question mark.  ROFR also is in the mix and appears to be dropping as the resorts age and remaining time is reduced as you would expect.   At some point it will most likely just go away and the market will set the price. 

DVC is like any other timeshare - buy it because thats what you want.  Used like that and if it's in your price/value range you'll be very happy.  Plan to make money or figure out where it's headed to beat the system and you'll likely get burned. Thats true for almost any timeshare as well.


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## dtarbox (Feb 26, 2008)

*When timeshares can't be sold...*

I purchased in England.  Now the dollar has gotten so bad that my MF exceed $2000 per year for 2 weeks, 2BR.  We are also considering giving it away, or selling, although I think that might be rather difficult in view of the above.  If we decided to quit paying, what recourse does a company in England have on us? Any comments please..


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## Bill4728 (Feb 26, 2008)

dtarbox said:


> I purchased in England.  Now the dollar has gotten so bad that my MF exceed $2000 per year for 2 weeks, 2BR.  We are also considering giving it away, or selling, although I think that might be rather difficult in view of the above.  If we decided to quit paying, what recourse does a company in England have on us? Any comments please..



Just because the MF are high doesn't mean the TS is worthless.

Please read the "How to sell your TS" thread at the top of the Buying and Sell board.


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## littlestar (Feb 26, 2008)

Your  DVC timeshare is definitely not worthless. Here's some reputable DVC resale sites to get an idea of what you could sell it for. We have sold 3 different contracts over the last two years and we sold for anywhere from $80 to $87 a point. If you're thinking of giving it away, you'll probably be bombarded with e-mails from people *glad to take it off your hands* (laughter). And they could turn around and sell it and make probably anywhere from $15,000 to $25,000 (depending on how many points you own). 


http://www.dvc-resales.com/dvclisting.cfm

http://www.atimeshare.com/disney/buy-disney.html

http://www.dvcbyresale.com/

Most of these sites charge a flat 10% when they sell a DVC package. And they only charge you the 10% *when they sell it*. So if you sell for $10,000, they'll charge you $1,000 to sell it. 

I wouldn't extend an OKW membership if you're not going to need the extra years. I don't think the price difference per point will be that great until there's only 15 to 20 years left on the 2042's (my personal opinion).

Something that we have done is downsize our DVC points as we get nearer to retirement. We initially bought 150 from Disney and added on various 50 to 60 point contracts. We're now down to 110 (two 55 point contracts). We'll leave one of these each to our two kids. 55 points in dues won't kill a budget and with banking and borrowing, the kids can still do a Disney onsite trip every couple of years. We've thought about adding a small amount of DVC points on at the Contemporary resort when it goes on sale, but we're not sure. Small contracts are definitely easier to sell than large contracts are. 

We also own two EOY's (every other year) 2 bedroom lock off units - one with Marriott and a VRI managed mountain timeshare. Whether we keep those others or not as we get nearer to retirement, I don't know yet. I'm playing it by ear. 

It is a lot to think about on that OKW extension. I wonder if Disney realized when they sent out that extension offer that it would stop and make people think carefuly about the RTU aspect of the ownership.


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## johnmfaeth (Feb 26, 2008)

A DVC, even with a year of life left, should always be worth something. But to answer the question for situations where that is the case, it depends on the estate settlement laws of the state where the deceased was a resident at the time of their demise.

In rare cases, someone will pass with no apparent relatives (heirs) or a will. After some searching to find heirs, the person's assets are turned over to the state. The state will attempt to sell or liquidate those assets, if it can't or won't. The unit is usually turned back to the Owner's Association of the resort to resell or otherwise swallow.

If an estate had negative net worth, the heirs will disclaim it and the same results.

But in an estate with positive net worth, the executor is legal bound to "fund" the obligation until is is eliminated, refusing the timeshare by heirs does not limit the burden on the estate to meet it's obligations.

That is one positive function of Pay Me to Take It Firms. Especially since estate attorneys almost always see any timeshare as an unusual burden for them to deal with, most don't even really understand them.

There is one gentleman in TUG who has transferred all his timeshares his heirs want into their ownership already. Same with all other valuable assets. When he passes, hopefully a long time in the future - he is a truly nice guy, he will leave a "unwanted" estate which the government will get. 

He will enjoy them while alive. Somewhat unusual estate planning but brilliant.

The key word is "planning". We all want to live forever, none will succeed. Now is a good time to sit with a pro (attorney and/or accountant) just in case tomorrow is your last sunset. And don't take too much advice from anywhere on the internet, it is guaranteed to be worth every cent it costs... 

John

PS. I will not live forever either, but I plan on putting up a heck of a fight on the way out....

PPS. One thing to discuss with a pro is how things will be transferred when you go. Leave an out of state timeshare in your will, and your executor will be forced to also "probate" your estate in that state. A second lawyer will be hired and your estate will spend an extra $1,000 or $2,000 just to get that transferred. That can be avoided with good planning up front. Out of state assets are no fun to handle when transferred via a will.


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## DeniseM (Feb 26, 2008)

Just so you know, this is a old thread that was pulled out of moth balls with post #14.  The DVC question was posted back in Sept.  

The _current_ questions is about a TS in England.


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## johnmfaeth (Feb 26, 2008)

Simple,

The English timeshare will just destroy your credit over here. The world is small these days.


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