Timeshare Consumers Association

If you can’t (or don’t want to)  pay your Management Fees

Most purchasers of a timeshare are not fully aware when they sign up for ownership that they are committing themselves to paying the annual fees – often with no control over the level of those fees – for the whole life of the project.   In many cases this is in perpetuity, but nearly always more than 50 years.

The only way out of this obligation is to sell the ownership on to someone else.  But, with demand for timeshare at an all time low,  this get-out it only for the tiny few who own in the very best weeks in the best resorts.

The obligation to pay fees for long after you have tried to get out of the obligation becomes a millstone around your neck for the rest of your life - and perhaps around the neck of your children also.

TCA advive:

Temporary financial problems.

If you believe that your inability to pay the Management Fee is only a temporary problem – perhaps only for one year and that you can catch up again within a few months or in a full year -   then there are a number of options:

Get credit from the Club

As soon as you realise that you are unable to pay, even if it is before you get your invoice, tell the Club or Management Company. Ask them if they would be willing to let you delay payment – perhaps making a number of smaller payments spread over a period .  This approach puts the onus on them to help you and can often be successful

Rent out your week

Attempt to rent out your week(s).  A successful rental  can usually  realise sufficient money to pay the management fees and,  possibly, leave a small profit.

Rental options:

• Club or Management Company.  Many resorts operate a rental scheme and this is usually the best and easiest way of getting a rental.  Don’t be too concerned that the Club may charge a fairly heavy commission – it’s what you get that actually matters.
• Friends or relatives.
• Club or association to which you belong, or perhaps another local club with specialist interests – see your local library for lists
• An advert in the local paper.
• Put it in the hands of a rental agency.  There are quite a  number of rental agencies on the internet. Typically  VillaRenters  or rent-accom.com

Don’t forget to write to the Club telling them the name of the person who will be using your week – and give the user a copy of this letter to take with them as their entry ticket.

Price guidance.  The lowest rental price should be the management  fee figure  – a high season week could get 100% on top of this with a low season week only 20% uplift
 

Permanent Financial Difficulties

Sell your week

See How to Sell.

But if you need to sell very quickly  you will have to treat this as a distress situation which may mean almost giving the week away unless you own a really good week in a really good resort.  But, if you cannot sell, you may have to "walk away" - see below.

WARNING. Many timeshare weeks are worthless and  un-saleable.

Walk away

WARNING:  A few clubs are taking defaulting owners to court.  If they win the case this means that you are stuck with having to pay the management fees for the rest of your life.   A millstone around your neck.  See "Legal Action" below

Great care should be taken if you are considering walking away – which includes returning the certificate to the Club or simply not paying the management fees and ignoring reminders etc. – as the position can be very complex and is dependent on:

• Whether the ownership is “deeded” (i.e.. Escritura) or “Right to Use” (i.e., a licence from a Trustee)
• What the Constitution says the Club must or may do in these circumstances
• The practice of the Club or Management Company in these circumstances

Our advice is to write to the Club asking what their action would be if you either stopped paying Management Fees or simply returned the Ownership Certificate to them.

If the answer is either unsatisfactory or unclear, then you should take legal advice – there is a great risk that you could be taken to court if you do not pay Management Fees.

You could take advantage of the 15 minute free interview with a solicitor which can be arranged through your local Citizens Advice Bureau.

UPDATE:  We have heard from a number of owners who have "walked away" that threats of legal action by the resort can be discouraged by telling the resort that you were told, when you originally bought, that it was "A good investment, you will get all your money back".  You now know that what you own is NOT a good investemnet and should the resort take you to court you will tell the judge/sherrif all the lies you were told.  This is misrepresentation.

Additionally we have heard of owners who have successfully made claims under the Consumer Credit Act - click here - for a return of all the money originally paid on the grounds of misrepresentation.

American timeshare owners report that a number of US based charities accept the gift of a timeshare, which they then auction to generate income for the charity.  However TCA has not been able to find any UK based charities interested in accepting the gift of a timeshare week.

Consumers should be aware that "debt collectors" have no power to enforce any payment without a Court Order. If a debt collector appaers at your door without a Court  Order they should be sent packing.

 

Legal Action

The following companies/clubs/resorts have threatened - or actually taken - legal action against owners/members for non-payment of annual fees:-

• Macdonald Resorts & Hotels Ltd - Europe
• Club Riza - Malta
• Clube Praia D'Oura, - Portugal
• Exclusive Club - Malta
• Los Molinos - Lanzarote
• Canaltime/Abacus - England
• RCI Points (Pure) - England
• Flexi-Club - England
• Classic Narrow Boats - England
• Jardines del Puerto - Spain
• Pueblo Evita - Spain
• Wimpen resorts - Spain
• Ethos/Stratford Court/Cruisers - England
• Kingswear Park - England
• Vistamar - Portugal
• Rhinefield House - England
• Las Rosas - Tenerife

If you have evidence of any names missing from this list, please contact us

Legal Issues

Excessive increases in management fees and/or additional charges may be either unconstitutional (if a Members Club) or a breach of the Unfair Terms in Consumer Contracts Regulations (if a Proprietary Club).     You may need to take legal advice on how to deal with this.

Update - May 2006

We have received reports from owners that most resorts/clubs who threaten legal action can be "dissuaded" from taking action if the owner threatens to enter a defence that they were told a pack of lies to get them to purchase the timeshare.  Owners who have been told, when they purchased, that "this is a good investment and you will get all your money  back when you sell" and now know that what they own is worthless, have used this (and other misrepresentations) in support of this defence.

We would appreciate any feed back from owners who are unable or unwilling to pay their annual fees.
 

The Limitations Act 1980

A resort or club cannot force you pay any debt that is more than six years old provided that:-

• they have not already obtained a Court Judgement for the debt. They could not get a judgement for a debt over 6 years old.
• you have not made any payment in respct of the calimed debt during the last six years
• you have not written to say that you admit the debt

If any demand for a debt over 6 years old is made say to the claimant that "no debt exists" and that you are relying on The Limitatioon Act and also report the demand to the Office of Fair Trading
 

Weeks in American resorts

A few US based charities will accept a US timeshare week as a gift  which they then auction to generate income for the charity.

The following may accept donations:-

    National Foundation for Cancer research, Montana.  Email: timeshare@nfcr.org
    Gifts for Sight.  Web:  www.giftsforsight.org/timeshare/
 
 

November  2007