Defaulting on Maintenance Fees

[OldPantry]

Hi,
I'm just wondering what REALLY happens to owners who default on their Marriott timeshare maintenance fees. I know the obligation to pay is real, and that there are, at least theoretically, substantial penalties for failure to pay. But what is happening in reality? Are the HOAs actively pursuing these folks? Are they hiring collection agencies? Or do they just repossess the weeks eventually? Do they then give them back to Marriott, or sell them back?
I've seen a number of timeshare resales on Ebay that are the result of bankruptices; but how about the folks who just quit paying because they're tired of it?

 

[DeniseM]

They turn you over to collections, and report you to the credit bureaus which damages your credit. Eventually they will foreclose.

The HOA's take nonpayment of MF seriously - in this economy they can't afford to let it slide.

 

[winger]

If a person is at a part of their lives when they no longer can go TS traveling, or have no heirs willing to take the units, and nothing else major (e.g. home, car) to purchase, then just not paying the MF's would be a great way to unload your unit.

TS's are like vehicles, a means to get to your destination. If you don't pay the annual upkeep fees and just park it in the street, like a real car, eventually it will get 'towed' and out of your life.

 

[DeniseM]

just not paying the MF's would be a great way to unload your unit.

Great???? How so?

When someone defaults YOU and I pay their maintenance fees - not the developer and not the management company. So, before you just let it go into foreclosure, please make an earnest effort to give it away.

 

[winger]

Great???? How so?

When someone defaults YOU and I pay their maintenance fees - not the developer and not the management company. So, before you just let it go into foreclosure, please make an earnest effort to give it away.

Of course, out of courtesy/consideration, this is what one should do - I am just pointing out the obvious last alternative. Some people may not want to take the time/energy to find a recipient (purchased or gifted). LOL, the way Marriott is going (maybe it is an industry trend), when I am ready to no longer TS, maybe I would not even be able to GIVE AWAY the unit with a good conscious.

 

[timeos2]

Of course, out of courtesy/consideration, this is what one should do - I am just pointing out the obvious last alternative. Some people may not want to take the time/energy to find a recipient (purchased or gifted). LOL, the way Marriott is going (maybe it is an industry trend), when I am ready to no longer TS, maybe I would not even be able to GIVE AWAY the unit with a good conscious.

Taking a serious hit to your credit report - no matter how immune you may think you are from negative results - is a very serious risk to take. There are far better ways to handle transferring your obligations to a new taker than simply walki ng away. They start with offering to give it back to the resort - more and more resorts may take you up on this to save themselves avoidable expenses & a long period of having to deal with non-performing intervals. If they won't there are plenty of other, easy & inexpensive methods to find a new owner. Taking a hit on credit and simply ignoring your bills is seldom a "great" choice for anyone. It may end up being the ONLY choice in rare instances but never the first or primary one.

I would hesitate to make that recommendation as an answer to the vast majority of owners at any resort.

 

[larryallen]

Taking a serious hit to your credit report - no matter how immune you may think you are from negative results - is a very serious risk to take. There are far better ways to handle transferring your obligations to a new taker than simply walki ng away. They start with offering to give it back to the resort - more and more resorts may take you up on this to save themselves avoidable expenses & a long period of having to deal with non-performing intervals. If they won't there are plenty of other, easy & inexpensive methods to find a new owner. Taking a hit on credit and simply ignoring your bills is seldom a "great" choice for anyone. It may end up being the ONLY choice in rare instances but never the first or primary one.

I would hesitate to make that recommendation as an answer to the vast majority of owners at any resort.

Sadly there are Marriott weeks that go unsold for ONE DOLLAR on Ebay every week. People may have to buy their way out of the liability and thus for some, right or wrong, walking away may be the best choice for THEM.

 

[DeniseM]

Sadly there are Marriott weeks that go unsold for ONE DOLLAR on Ebay every week. People may have to buy their way out of the liability and thus for some, right or wrong, walking away may be the best choice for THEM.

Selling a timeshare on ebay for $1 + closing costs is a completely different proposition, than giving it away. Many people have had success giving away their "worthless" TS's on the TUG Bargain Deals Board. I encourage everyone to try that method first - it's free and painless.

 

[Mr. Vker]

I couldnt find the thread, but someone recently posted on TUG a panicked thread. They had lost their weeks to Marriott for missing 2 consecutive years of maintenance fees. (I think those facts are correct.)

He was looking for guidance. There really wasnt any available.

 

[larryallen]

Selling a timeshare on ebay for $1 + closing costs is a completely different proposition, than giving it away. Many people have had success giving away their "worthless" TS's on the TUG Bargain Deals Board. I encourage everyone to try that method first - it's free and painless.

I agree but if I were a "buyer" taking over a worthless timeshare I think I would want to go through escrow to make sure I didn't get any unexpected liens. I doubt they would transfer to the buyer but I don't know that for sure. Thus I think the closing costs are probably the same either way. Just because you are getting it for "free" doesn't mean there isn't a cost to it. In any event I agree with you that Ebay is not the only option for getting out of your timeshare.

 

[CMF]

So, what does the HOA do with the weeks? Does it vary by resort?

Charles

 

[DeniseM]

So, what does the HOA do with the weeks? Does it vary by resort?

Charles

Yes - the BOD makes that decision, but eventually, they are resold in some manner.

 

[BocaBoy]

I agree but if I were a "buyer" taking over a worthless timeshare I think I would want to go through escrow to make sure I didn't get any unexpected liens. I doubt they would transfer to the buyer but I don't know that for sure. Thus I think the closing costs are probably the same either way. Just because you are getting it for "free" doesn't mean there isn't a cost to it. In any event I agree with you that Ebay is not the only option for getting out of your timeshare.

Clearly the lien for unpaid maintenance fees does go with the title to the unit, the same as a lien for unpaid property taxes on a house.

 

[bogey21]

I couldnt find the thread, but someone recently posted on TUG a panicked thread. They had lost their weeks to Marriott for missing 2 consecutive years of maintenance fees. (I think those facts are correct.)

A couple of years ago, when Marriotts really had top dollar value I found out that my ex-wife had not paid the the last 2 MFs on the Week she got out of our divorce. On her behalf I checked with Marriott and the Week was in the process of foreclosure.

Fortunately this was back when Marriott had the old Rental and Sales Programs. After I paid the arrears Marriott rented it for her and later sold it for her netting her about $35,000 after commission.

Unfortunately, those programs are long gone.

George

 

[larryallen]

Clearly the lien for unpaid maintenance fees does go with the title to the unit, the same as a lien for unpaid property taxes on a house.

You are right. I wasn't really thinking it through when I posted. So ya, the point is whether someone gives you their timeshare for "free" or you pay a buck on Ebay there are closing costs that you SHOULD pay like title/escrow.

 

[Cathyb]

One more thing happens...

Hi,
I'm just wondering what REALLY happens to owners who default on their Marriott timeshare maintenance fees. I know the obligation to pay is real, and that there are, at least theoretically, substantial penalties for failure to pay. But what is happening in reality? Are the HOAs actively pursuing these folks? Are they hiring collection agencies? Or do they just repossess the weeks eventually? Do they then give them back to Marriott, or sell them back?
I've seen a number of timeshare resales on Ebay that are the result of bankruptices; but how about the folks who just quit paying because they're tired of it?

We have always paid our HOA fees on time. The last few years we are being hit by people who walked away from THEIR obligations :annoyed: . Marriott and Westin (and I suppose others) reallocate those lost fees to the innocent and bill paying owners; hence much larger HOA fees for us . Please find another way.

 

[dioxide45]

What seems to be happening now with Marriott and the new trust is that at least some of the weeks that are being foreclosed on are being placed in to the trust. I don't know if these are just mortgage foreclosures or if there are also some HOA MF foreclosures. If there are, then MVCI is picking up the tab on those past due MFs in order to put them in to the trust.

 

[MALC9990]

I couldnt find the thread, but someone recently posted on TUG a panicked thread. They had lost their weeks to Marriott for missing 2 consecutive years of maintenance fees. (I think those facts are correct.)

He was looking for guidance. There really wasnt any available.

He was an owner at one of the Marriott resorts in Europe. These are all RTU resorts and so there is no deed property ownership. Basically at these resorts if you miss two consecutive years MFs and remain in default MVCI will rescind your right to use and the week defaults back to MVCI ownership,

The week is then back in the unsold inventory and MVCI can sell it again. MVCI become responsible for all the MFs and the previous owner is no longer an owner of the Right to Use.

However if they still own finance on the purchase then they now have a debt that will be pursued by the finance house or bank from which they borrowed the money to but the week. Even if they financed the purchase through MVCI, they will still be in debt to a bank or finance company since MVCI do not finance this themselves.

Failing to keep up with the payments on the finance for a week they no longer own would have a significant credit rating impact.

 

[OldPantry]

We have always paid our HOA fees on time. The last few years we are being hit by people who walked away from THEIR obligations :annoyed: . Marriott and Westin (and I suppose others) reallocate those lost fees to the innocent and bill paying owners; hence much larger HOA fees for us . Please find another way.

Hey, don't read anything into my question. I'm curious, not plotting. In fact, the opposite. I've bought two timeshares in the last year, and may well expand the inventory later.

 

[Ridewithme38]

We have always paid our HOA fees on time. The last few years we are being hit by people who walked away from THEIR obligations :annoyed: . Marriott and Westin (and I suppose others) reallocate those lost fees to the innocent and bill paying owners; hence much larger HOA fees for us . Please find another way.

How do you know that your HOA fees went up because of people walking away from their obligations....i mean i don't doubt that it does...but, does the HOA put out some documentation that MF's aren't just going up because of increased maintenance costs, wage increases, needing more staff, upgrades, repairs, property taxes etc.?

 

[DeniseM]

How do you know that your HOA fees went up because of people walking away from their obligations....i mean i don't doubt that it does...but, does the HOA put out some documentation that MF's aren't just going up because of increased maintenance costs, wage increases, needing more staff, upgrades, repairs, property taxes etc.?

The board must itemize the MF bills, so it's specifically itemized in the budget as delinquent maintenance fees. The other items you mentioned are itemized too, so you always know exactly where the increases are.

When people complain about other owners defaulting, we aren't just speculating about it, we know exactly what it's costing us. One of my MF bills was $300 more... That's why I get hot when people casually suggest defaulting and putting the burden on others. I suspect that now that you are an owner, you will fill differently about it.

 

[Ridewithme38]

Yes - in our maintenance fee bill there was a line item of several hundred dollars for delinquent maintenance fees. HOA must itemize the MF bills.

cool...i didn't know maintenance fee bills were that detailed...is it weird i'm looking forward to getting my first one :whoopie:

 

[DeniseM]

Yes - the board must provide an itemized budget to owners.

 

[OldPantry]

The board must itemize the MF bills, so it's specifically itemized in the budget as delinquent maintenance fees. The other items you mentioned are itemized too, so you always know exactly where the increases are.

When people complain about other owners defaulting, we aren't just speculating about it, we know exactly what it's costing us. One of my MF bills was $300 more... That's why I get hot when people casually suggest defaulting and putting the burden on others. I suspect that now that you are an owner, you will fill differently about it.

Was that $300 a single line item, or $300 per owner? Again, just asking. I'm not gonna stiff the HOA!

 

[DeniseM]

Was that $300 a single line item, or $300 per owner? Again, just asking. I'm not gonna stiff the HOA!

It was $300 to each owner for one week of ownership!