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Giving back timeshare without maintenance fee

chidado

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Hi. We're trying to exit our TMVC (Marriott Vacation Club). We bought Vistana a while back before they were acq by Marriott. The loan's paid off, and we now are dealing with some outstanding maintenance fees. Any advice on how to negotiate down the outstanding $? Ideally would like to pay nothing but would take any advice for any tactics to lower it. Thanks.
 

Hindsite

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Selling it on or giving it back to them when you are not up to days with maint fees won't work.
Depending on what you actually own it may have some resale value, check redweek, so it may be worth paying the MFs.
Depending on your financial position and how much you owe, you can just continue to avoid paying and let the foreclosure process play out, they may do deedback in lieu of foreclosure at some point, but probably after a lot of letters threatening legal action.

Whatever you do, don't use an exit company, they can't do anything that you can't do and will charge you a lot of money to have you end up in the foreclosure process anyway.
 

andre10056

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Hi. We're trying to exit our TMVC (Marriott Vacation Club). We bought Vistana a while back before they were acq by Marriott. The loan's paid off, and we now are dealing with some outstanding maintenance fees. Any advice on how to negotiate down the outstanding $? Ideally would like to pay nothing but would take any advice for any tactics to lower it. Thanks.

Assuming your Vistana is the only one that I know of, the one in Orlando, you may be in luck.

Here's an amazing review of timeshare laws that Grammarhero posted about five years ago:

tugbbs.com/forums/threads/links-to-official-state-timeshare-laws-and-guides-manuals.298554/

According to Grammarhero, an attorney and fellow timeshare owner, if the timeshare is in Florida:

"FL, inaction or non-objection results in estate, anti-deficiency foreclosure, but objection leads to judicial, deficiency action"

As I understand it, in Florida, if the timeshare entity wants to foreclose, its only option is to do a non-judicial foreclosure UNLESS YOU OBJECT. Since no judgment arises from a non-judicial foreclosure, and since Florida does not allow for recovery after such non-judicial foreclosure, you're off scot-free, baby! No deficiency judgment for non-payment of anything can ever be entered against you.

However, if you object to their prospective non-judicial foreclosure ("you crooks lied to me and I'll sue you back", "I don't owe as much as you say", etc.), then a judge needs to be called upon to review all aspects of the case. Judicial involvement means judgment and potential deficiency judgment for unpaid mortgage, unpaid maintenance fees, unpaid late and other administrative fees, attorney's fees, etc.

So, you can do what you like, but if it were me, I would call them and say "my financial situation has changed and I can't afford to pay my maintenance fees. I'd be willing to sign the deed back over to you". And see what they say. If they start threatening you, you might make them aware that you were told that all they can do in Florida is get the timeshare back, which you're willing to do without the resort having to go through legal proceedings.

They might be a tad negotiable at that point.

Of course, this all assumes that Grammarhero's research was spot on (as it appears to me to have been) and that the law hasn't changed from five years ago. Even if the law has changed, it shouldn't have changed for owners who bought prior to then. After all, you bought with the thorough knowledge of Florida timeshare law at the time, and that's why you bought in the first place. :)
 
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dioxide45

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Even if the law has changed, it shouldn't have changed for owners who bought prior to then. After all, you bought with the thorough knowledge of Florida timeshare law at the time, and that's why you bought in the first place.
It is also possible they bought before Florida went to non-judicial foreclosure laws. That said, it doesn't matter. It isn't what the law was when you bought, it is what it is at the time of foreclosure.
 

alwysonvac

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Oops.. missed the part of outstanding Maintenance Fees. That has to be paid first before giving it away

You can post your Vistana week for free on TUG's Free Timeshare Forum (link) asking the buyer to pay all closing cost.

1738247983300.png



Free listing examples

 
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andre10056

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It is also possible they bought before Florida went to non-judicial foreclosure laws. That said, it doesn't matter. It isn't what the law was when you bought, it is what it is at the time of foreclosure.
Under all circumstances of which I'm aware, parties who did something under a certain statutory regime are often "grandfathered in" so that new changes don't apply to them. And that's because you arguably took whatever action you took (like buying something or building or renovating something a certain way) because of those laws or whatever.
 
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Eric B

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All the legal advice you read on the internet should be taken with a grain of salt. It is entirely possible that the Florida State legislature approached things as described in either post above and there could be a provision that makes the current statue on non-judicial foreclosure inapplicable to purchase prior to a specified date. I haven't looked at the statute to see if that's the case and don't plan to unless I'm in a situation for which it actually matters. While I am a lawyer, I am not licensed to practice in Florida and won't pretend to be knowledgeable enough to provide any advice other than to consult someone who is if you have questions on this particular area. I'm not sure I actually follow the thought process that would rely on someone's understanding of the law at the time of purchase freezing that law in place without an express provision made in the law particularly in the area of real estate involving timeshares that is intended to simplify the foreclosure process. It might be just me, but the foreclosures contemplated by the law are to be accomplished by a creditor (the HOA) that wasn't involved in the original sale anyway, which would seem to make that thought somewhat less logical.
 

dioxide45

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Under all circumstances of which I'm aware, parties who did something under a certain statutory regime are always "grandfathered in" so that new changes don't apply to them. And that's because you arguably took whatever action you took (like buying something or building or renovating something a certain way) because of those laws or whatever.
I believe the Florida non-judicial foreclosure laws on timeshare liens came into being in 2010.
 

dioxide45

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It might be just me, but the foreclosures contemplated by the law are to be accomplished by a creditor (the HOA) that wasn't involved in the original sale anyway, which would seem to make that thought somewhat less logical.
I would also think it would be based on when the actual deficiency occurred, not necessarily when the person purchased.
 

Eric B

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I would start out by reading the actual law....
 

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I believe the Florida non-judicial foreclosure laws on timeshare liens came into being in 2010.
Then I guess the argument would be that the timeshare entity, having relied upon the laws at the time, should be allowed the full right of getting a deficiency judgment no matter what (assuming the prior law allowed them that right) as to pre-2010 sales.

But the wrinkle here is that the Florida state legislature, according to something I once read, responded to the complaints of timeshare owners by enacting the current law (assuming that Grammarhero's 2019 law is the current law) as a way to respond to the nightmare experiences of so many timeshare purchasers. So, maybe, the timeshare entities would NOT have been grandfathered in to enjoy the prior "baseball bat to the timeshare owners face" statute. It was made retroactive as a consumer protection mechanism.
 

andre10056

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consult someone who is if you have questions on this particular area.
You would be amazed if you saw the responses on this board to someone asking about what the timeshare entity may do to them if they "simply walked away".

"They can't do anything. You won't even get a credit hit".

"You might get a credit hit but it's something that everybody will ignore because it's a timeshare credit hit".

Etc., etc., etc.

So I have in the past recommended at the very least a consultation with an attorney in the appropriate jurisdiction so you can better understand the totality of the situation, what you might most likely encounter. Wow! Numerous people would then go straight for my jugular!

"A lawyer is just a waste of money".

"How dare you recommend talking to a lawyer".

People don't like people in your career field. :)

But I don't see any harm in talking to the timeshare entity and offering them your willingness to sign the deed back to them. In Florida in particular.
 

dioxide45

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Then I guess the argument would be that the timeshare entity, having relied upon the laws at the time, should be allowed the full right of getting a deficiency judgment no matter what (assuming the prior law allowed them that right) as to pre-2010 sales.

But the wrinkle here is that the Florida state legislature, according to something I once read, responded to the complaints of timeshare owners by enacting the current law (assuming that Grammarhero's 2019 law is the current law) as a way to respond to the nightmare experiences of so many timeshare purchasers. So, maybe, the timeshare entities would NOT have been grandfathered in to enjoy the prior "baseball bat to the timeshare owners face" statute. It was made retroactive as a consumer protection mechanism.
I don't think the law was championed for and by timeshare owners. I believe it was the developers and HOAs that were mostly behind the law to make the foreclosure process cheaper.
 

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I believe it was the developers and HOAs that were mostly behind the law to make the foreclosure process cheaper.
it 100% was...
 
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andre10056

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I don't think the law was championed for and by timeshare owners. I believe it was the developers and HOAs that were mostly behind the law to make the foreclosure process cheap

While it's certainly within the realm of possibility that "making the foreclosure process cheap" may have been done on behalf of developers and HOAs, the "not being able to sue for a dime" and, therefore, not being able to get a deficiency judgment, seems to be 100% a consumer protection mechanism. Whether or not that consumer protection mechanism existed prior to the 2010 "change", it was certainly part of the 2010 law.

Just look at Grammarhero's link to see all the jurisdictions that allow the timeshare entity to get a quick and easy non-judicial foreclosure, but then thereafter allows them to sue the former timeshare owner for everything allegedly still owed.

For example, Georgia:

GA, HOA pursues non-judicial foreclosure and judicial, deficiency judgment afterwards

As well as Hawaii, Maryland, Missouri, New Jersey, New York, and Virginia.

So if anything was done on behalf of developers or HOAs, it sure as heck didn't allow them to get a dime as they would in virtually all other jurisdictions except for California, Florida, or South Carolina.

And, as a timeshare owner, I could care less if they can or have to do a judicial foreclosure or a non-judicial foreclosure or a Rumpelstiltskin foreclosure. All I care about is whether they can collect and Florida apparently will not allow them to do so. So the 2010 law either continued the law or set out new law that is an extraordinary (and rarely encountered nationwide) consumer protection statute.
 
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TUGBrian

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sorry, that was something developers pushed for.
 

dioxide45

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While it's certainly within the realm of possibility that "making the foreclosure process cheap" may have been done on behalf of developers and HOAs, the "not being able to sue for a dime" and, therefore, not being able to get a deficiency judgment, seems to be 100% a consumer protection mechanism. Whether or not that consumer protection mechanism existed prior to the 2010 "change", it was certainly part of the 2010 law.

Just look at Grammarhero's link to see all the jurisdictions that allow the timeshare entity to get a quick and easy non-judicial foreclosure, but then thereafter allows them to sue the former timeshare owner for everything allegedly still owed.

For example, Georgia:

GA, HOA pursues non-judicial foreclosure and judicial, deficiency judgment afterwards

As well as Hawaii, Maryland, Missouri, New Jersey, New York, and Virginia.

So if anything was done on behalf of developers or HOAs, it sure as heck didn't allow them to get a dime as they would in virtually all other jurisdictions except for California, Florida, or South Carolina.

And, as a timeshare owner, I could care less if they can or have to do a judicial foreclosure or a non-judicial foreclosure or a Rumpelstiltskin foreclosure. All I care about is whether they can collect and Florida apparently will not allow them to do so. So the 2010 law either continued the law or set out new law that is an extraordinary (and rarely encountered nationwide) consumer protection statute.
While deficiency judgements were possible, their use was probably rarely used. Their claim to deficiency is also dubious at best. In many cases the developer tries to sell the timeshare at foreclosure auction and has no bidders. They then take the week back themselves. This proves the timeshare to be worth $0. They could perhaps have a claim that they lost tens of thousands on the defaulted timeshare loan, but when they turn around and resell it for tens of thousands of dollars again, is that timeshare really worth $0?

Unlike a car, there is no bank involved in a timeshare loan. With a car, the bank sells the car at auction to recover what they can. The bank is truly out the different of the car's value and the amount owed on the loan. It isn't really like that with timeshares. The timeshare entity turns around and sells that timeshare at full retail price.

In the case of the HOA, they are out the difference but going after a deficiency judgement for a few thousand dollars of unpaid maintenance fees isn't worth the time and cost.

The move to non-judicial foreclosure makes the foreclosure process faster and cheaper. They can flip that timeshare back to the sales team for less as they weren't trying to get a deficiency judgement anyway.
 

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Their claim to deficiency is also dubious at best.

I don't think their claim to deficiency is at all dubious. There's a signed contract. Did the timeshare owner make payments as agreed? If no, the "past dues" can be precisely computed.

In this case, the plaintiff HOA or developer doesn't have to prove the "real" value of the timeshare or anything else like that. Just has to prove that payments were not made according to the signed contract.

So a deficiency can definitely be computed and sought in court in most every jurisdiction. And likely will be sought If the creditors' pre-litigation research indicates the "deadbeat" (from their perspective) has assets that will allow for collection. How nice that they can't even be sought if the timeshare is located in California, Florida, or South Carolina.
 
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dioxide45

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I don't think their claim to deficiency is at all dubious. There's a signed contract. Did the timeshare owner make payments as agreed? If no, the "past dues" can be precisely computed.

In this case, the plaintiff HOA or developer doesn't have to prove the "real" value of the timeshare or anything else like that. Just has to prove that payments were not made according to the signed contract.

So a deficiency can definitely be computed and sought in court in most every jurisdiction. And likely will be sought If the creditors' pre-litigation research indicates the "deadbeat" (from their perspective) has assets that will allow for collection. How nice that they can't even be sought in California, Florida, or South Carolina.
Do you have any reported cases of deficiency judgements in those states that do allow them? I have yet to actually see one. They simply don't bother.

The other question though, is the timeshare worth $0 which it bought at foreclosure sale or worth $30,000 that it fetched when they sold it again? That is what is dubious about their claim to the value of the timeshare.
 
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andre10056

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Do you have any reported cases of deficiency judgements in those states that do allow them? I have yet to actually see one. They simply don't bother.

The other question though, is the timeshare worth $0 which it brought at foreclosure sale or worth $30,000 that it fetched when they sold it again? That is what is dubious about their claim to the value of the timeshare.
I don't know of any reported cases. But only because I (and presumably you) don't work for any HOA or developer.

Since the overwhelming number of timeshares in the US are Florida as well as California timeshares, I would imagine that it's not a high percentage occurrence simply because you can't get deficiency judgments for timeshares located in those states. And then there's the matter of elderly, Social Security-receiving timeshare owners not having any assets to go after such that the HOA or developer may not even attempt to get a deficiency judgment.

If a single family home is foreclosed upon, the amount received at auction will indeed reduce the amount of the bank's claimed deficiency. But if it theoretically got zero, then there would be no offset. The full deficiency would be attributable to the defaulting homeowner. Parties to a home contract are entitled to the benefit of their bargain without regard to how the future unfolded. Same with a timeshare.

The Grammarhero chart certainly indicates that, for timeshares outside of California, Florida, and South Carolina, a deficiency judgment most certainly CAN be obtained. To be dismissive of that possibility is wishful thinking.
 
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dioxide45

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If a single family home is foreclosed upon, the amount received at auction will indeed reduce the amount of the bank's claimed deficiency. But if it theoretically got zero, then there would be no offset. The full deficiency would be attributable to the defaulting homeowner. Parties to a home contract are entitled to the benefit of the their bargain. Same with a timeshare.
The difference between a timeshare and a home is that there is a third party lender involved. Timeshares don't have third party lenders. The developer is buying the timeshare at auction but then turning around and selling it again at full retail. Certainly in the eyes of the law they could perhaps claim some kind of deficiency, but is there really a deficiency when they resell the timeshare at full price?
 

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The difference between a timeshare and a home is that there is a third party lender involved. Timeshares don't have third party lenders. The developer is buying the timeshare at auction but then turning around and selling it again at full retail. Certainly in the eyes of the law they could perhaps claim some kind of deficiency, but is there really a deficiency when they resell the timeshare at full price?
A loan is a loan. The contractual terms of the loan are the contractual terms of the loan. You seem to believe that a "third party" lender somehow would make the situation different. I'm not sure why.

I also don't know if it's at all relevant what might or might not happen to a timeshare after the foreclosure action has completed. And for how long would we have to track what happens afterwards? Let's say the Banyan wasn't in Florida but some other state where deficiency judgments could be sought. Let's say they foreclosed upon a $30,000 sold timeshare and got zero at the foreclosure auction.

Now, four years later, they're selling multiple foreclosed timeshares on ebay as we just learned from someone's post on TUG. The resort, therefore, has lost four years' additional maintenance fees! Can they now go after the defaulting prior timeshare owner for their new maintenance fee "deficiency"? And then they sell on ebay for $1000. Can they now for the first time go after their deficiency of $29,000?

I don't know the answer to those questions. But I would expect that the deficiency might be at the time of the consummation of the original transaction which occurs as of the foreclosure action and simultaneous (or soon thereafter) deficiency judgment.
 

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You seem to believe that a "third party" lender somehow would make the situation different.
The difference is that a third party lender is truly out that money. The developer who takes it back at foreclosure auction at a $0 valuation then resells it for $30,000 isn't really out any money. In the end, they were still made whole. In the end, it doesn't really matter since there is no actual evidence of any deficiency judgments being filed on timeshare foreclosures. Hawaii has a lot of timeshares but also permits for deficiency judgements.
 

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The difference is that a third party lender is truly out that money. The developer who takes it back at foreclosure auction at a $0 valuation then resells it for $30,000 isn't really out any money. In the end, they were still made whole. In the end, it doesn't really matter since there is no actual evidence of any deficiency judgments being filed on timeshare foreclosures. Hawaii has a lot of timeshares but doesn't permit non-judicial foreclosure.

You do realize that you're making two "wishful thinking" assumptions, don't you?

1) that the developer successfully re-sells for $30,000

2) that "the law" sets out that deficiency judgments cannot be entered until we see what ultimately occurs to the underlying asset, even if years later and even after significant renovations and improvements to the property and/or resort

As to Hawaii, I don't really know what you're saying there but I'll reprint the Hawaii entry from Grammarhero's chart:

HI, developer has right to deficiency MF judgment for both judicial foreclosures or non-judicial power of sale (514-E29).
 
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