BUYER BEWARE

[jwalters2770]

We owned a Time share with Vistana/Marriott group. It was working out great for travel. Just before Covid hit our sales rep contacted us with a limited deal for current owners and that was to purchase more. We like to travel and had planned on doing much more. Well covid hit and as many our income was effected with job loss. We reached out to Vistana over and over again asking for help in lowering payments whatever we could do to keep it. They did not care and said it will go into foreclosure. We had to make a decision do we eat and pay our home mortgage and necessary bills. We had tried to rent using Redweek it helped to a point. Then nobody was travelling and we had maxed out credit cards trying to save the TS. We were at a loss have to turn to a debt consolidation company for the credit cards we could not get any help for the TS. It was foreclosed and then we received the 1099-C Cancellation of Debt. Our credit took a little hit but with making payments on our home and cars never being late we have managed to stay in the mid 600's. Our biggest issue is with the 1099-C the "Fair Market Value" was way too high considering they turn around and just sell it again over and over. We have an enormous tax bill due to this and trying to refi our home to pay for it. We will NEVER get involved with ANY TIMESHARES again!!

 

[DanCali]

So sorry to hear about your experience. At least it sounds like you are past it now and can move on.

We've owned for about 15 years and own multiple weeks with Vistana and Marriott, but purchased most of them on the resale market. The big difference is that when you buy at resale prices you actually do buy at "fair market value" and if you need to sell you will likely not lose as much. So I'd encourage anyone looking into timeshares to explore the resale marker first, especially with ownerships where the resale product retains much of the original functionality (like the handful of Vistana mandatory resorts, or the original 14 Disney resorts)

That said, the sharp (~30%) increase in maintenance fees over the past 2 years at Vistana/Marriott does impact resale prices as well. And the burden on maintenance fees impacts all owners.

We've recently attended an "Owner Update" (sales presentation) and were offered to buy MVC points. We said that we already own enough and we're not happy with the maintenance fee increases so we are not excited about buying more. The salesperson responded with "you knew the risks when you bought" which is kind of true, but I was still shocked at the lack of empathy, lack of responsibility from the company that manages it all (Disney's MF increases were much less at comparable resorts in the same counties than the MVC/Vistana aforementioned 30% increases) , and lack of reassurance that things are being done to make things better for owners. Leaving aside that the product they are selling is almost worthless if I ever try to sell it, why would I want to buy the product when they are not telling me that the fundamental issues I'm worried about are being addressed? We don't do these presentations often and when we go we're usually there for 90-120 minutes. We were out of there in about 35 minutes this time....

 

[jp10558]

Glad you're done. The issue here was IMO 99% the loan. Default on any loan and you'll have problems. And like you found, as people in 2008 with houses that were underwater or now with cars that have negative equity - you can end up owing more than something is worth later on, and that can cause a problem if you cannot pay it off. It is why so many people say to only buy used cars after most depreciation, and why we say to buy resale timeshares - that way you're way less likely to ever end up underwater, and if you do it's likely to be for a grand or so at most, not tens of thousands.

 

[klpca]

The 1099C was for cancellation of debt. They "pretend" that the lender gave you that amount of cash so that you could pay off the loan. It sucks but that was the unfortunate cost to get out from under that debt. I'm glad to hear that the credit hit was manageable.

 

[Luvtoride]

J, sorry to hear about your situation and it is a valid concern to let others beware of.

Dan, your advice on buying resale is certainly well stated. As to the increase in Maintenance Fees, I believe much of this is due to the high inflation rates we've experienced in general over the past couple of years. As prices of labor and all the things needed to upkeep and maintain a hospitality lodging increases, the owners (us) need to pay for it. Also, after the collapse of the Surfside building in Miami, the laws and requirements for beachfront properties to have fully funded reserves have also contributed to larger MF increases.
With that said, if "we" didn't own timeshares and had to book similar vacation accommodations at these resort locations, I'm certain that the nightly/ weekly rates would be much higher for our stays.

We've owned Marriott timeshare weeks (and points) going back 25 years to when our daughters were young. We bought most from Marriott paying the higher developer prices. I've always viewed that as our "buried cost" to be able to enjoy Timeshare type vacation accommodations each year. The maintenance fees we pay are the cost of our vacations vs. booking small (and multiple) hotel rooms in similar resort areas. We have rented our weeks at various times when we couldn't use them all within a year and have always received more than our maintenance fees.

 

[dioxide45]

There is some discussion in the Turbo Tax community forums about a 1099-C for discharge of a timeshare loan. I find this topic rather interesting and it would be good to get a definitive answer. It looks like it may also depend on if it was recourse or non recourse debt depending on the state.

Timeshare cancellation of debt

I cancelled a Disney time share and received a 1099-c "Cancellation of Debt" for 2019. The amount of debt "discharged" is approximately $15k. I did not receive any money/income from Disney as a part of the discharge. Do I have to pay income tax on the $15k that Disney has "cancelled" even...

ttlc.intuit.com

Treating any kind of secured debt being discharged as income just doesn't sit right. If they discharge debt on a house that they foreclose on, how is that income to the former homeowner? I can understand this for something like credit card or other unsecured debt where the taxpayer keeps the stuff they bought, but not something where they don't keep it.

 

[SmithOp]

I agree, if it's secured with property that can be sold to recoup some of the loan then the loss is just the difference not the full amount owed.

As far as the IRS is concerned, when a business writes off a loan they get a tax deduction, so that is recovered by the 1099COD transfer to the personal tax of the person receiving the cancellation.

 

[dioxide45]

I agree, if it's secured with property that can be sold to recoup some of the loan then the loss is just the difference not the full amount owed.

As far as the IRS is concerned, when a business writes off a loan they get a tax deduction, so that is recovered by the 1099COD transfer to the personal tax of the person receiving the cancellation.

The problem is, these timeshare companies foreclose and say it sold at foreclosure sale for $0 but then turn around and sell it again full retail for tens of thousands. They use the $0 sale to determine the amount of debt that was cancelled.

 

[DanCali]

I believe much of this is due to the high inflation rates we've experienced in general over the past couple of years. As prices of labor and all the things needed to upkeep and maintain a hospitality lodging increases, the owners (us) need to pay for it.

The inflation story is one that Marriott and Vistana salespeople love to use, because everyone feels the inflation. But I don't necessarily buy it because, as alluded to in my prior post, we can compare to other timeshare companies.

In particular Disney Vacation Club has resorts in several locations that MVC does as well...
- Of all the properties below, most are on the Orlando area - Orange County, FL (except Aulani, Vero Beach , Hilton Head, and the 2 California properties).
- The two California properties at Disneyland are in Orange County, CA. This is also where Marriott's Newport Coast Villas is located (about a 25 minute drive away)
- Aulani is on Oahu HI, and about a 10 minute walk from Marriott's Ko Olina Beach Club.

If inflation was indeed the main culprit (utilities, labor costs, insurance etc) then it's pretty hard to explain why the MVC timeshares experienced about a 30% average increase over 2 years and the DVC ones located in the same counties experienced about a 7%-15% increase over that same period. So what did MVC do that DVC didn't, or vice versa?? Something about the salespeople saying "it's just inflation, move on" seems off to me.

Take a look at your MF increases over the past 2 years and see how they compare to Disney Vacation Club in the tables I posted...

Marriott 2024 Maintenance Fees

* Please limit this thread to only the MF specifics and take discussions/commentary to the discussion boards. Thank you! (See 2024 Maintenance Fees DISCUSSION THREAD.) * Owners, please report your Weeks MF's as they are billed (NOT proposed/estimated) in this format: Resort Name/Unit Size...

tugbbs.com

Marriott 2023 Maintenance Fees

* Please limit this thread to only the MF specifics and take discussions/commentary to the discussion boards. (See 2023 MF's Discussion Thread.) Thank you! :) * Owners, please report your Weeks MF's as they are billed (NOT proposed/estimated) in this format: Resort Name/Unit Size (include...

tugbbs.com

vs Disney...

 

[alwysonvac]

We owned a Time share with Vistana/Marriott group. It was working out great for travel. Just before Covid hit our sales rep contacted us with a limited deal for current owners and that was to purchase more. We like to travel and had planned on doing much more. Well covid hit and as many our income was effected with job loss. We reached out to Vistana over and over again asking for help in lowering payments whatever we could do to keep it. They did not care and said it will go into foreclosure. We had to make a decision do we eat and pay our home mortgage and necessary bills. We had tried to rent using Redweek it helped to a point. Then nobody was travelling and we had maxed out credit cards trying to save the TS. We were at a loss have to turn to a debt consolidation company for the credit cards we could not get any help for the TS. It was foreclosed and then we received the 1099-C Cancellation of Debt. Our credit took a little hit but with making payments on our home and cars never being late we have managed to stay in the mid 600's. Our biggest issue is with the 1099-C the "Fair Market Value" was way too high considering they turn around and just sell it again over and over. We have an enormous tax bill due to this and trying to refi our home to pay for it. We will NEVER get involved with ANY TIMESHARES again!!

Thanks for coming back and sharing the latest update regarding your Westin Flex upgrade.
Sorry to hear about the 1099-C Cancellation of Debt issue .

https://tugbbs.com/forums/threads/j...-i-made-a-mistake….329179/page-2#post-2752379

 

[Luvtoride]

Take a look at your MF increases over the past 2 years and see how they compare to Disney Vacation Club in the tables I posted...

Marriott 2024 Maintenance Fees

* Please limit this thread to only the MF specifics and take discussions/commentary to the discussion boards. Thank you! (See 2024 Maintenance Fees DISCUSSION THREAD.) * Owners, please report your Weeks MF's as they are billed (NOT proposed/estimated) in this format: Resort Name/Unit Size...

tugbbs.com

Marriott 2023 Maintenance Fees

* Please limit this thread to only the MF specifics and take discussions/commentary to the discussion boards. (See 2023 MF's Discussion Thread.) Thank you! :) * Owners, please report your Weeks MF's as they are billed (NOT proposed/estimated) in this format: Resort Name/Unit Size (include...

tugbbs.com

vs Disney...

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Dan, Not sure it’s comparing apples to apples. I don’t own Disney and have never stayed at a Disney timeshare.


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[Ken555]

Something about the salespeople saying "it's just inflation, move on" seems off to me.

Corporate greed.