Time Share paid in full but cannot afford to pay the Assessment.
 

We bought a time share in Florida The Palms Country Club and Resort back in 2002 and we paid in full in 2004 more than $14K. We were paying the Assessment fee $400+ and start increasing every year and this year the statement came with $1500+ and cannot afford to pay anymore. The total we owe as of today is $1578.16. Now, the Title company sent us a mail with "Re: Notice of Intent to File a Lien - Contract No: XXXXXXX." The latter sent on 09/30 and we have till the end of this month to send a respond back to First American Title Company Las Vegas, NV. We need help and please tell us what we need/should do.

Thank you and God bless All!!

Beth

Laws can vary from state to state but generally speaking if you are in arrears for not paying your Assessment you WILL NOT be able reserve "time" the resort and, as you've already found out a lien will be placed against your ownership interest in the property. The lien holder also has the right to file a lawsuit against you in small claims court seeking payment from you and, if they prevail and the debt remains unpaid they can start foreclosure proceeding against your property. If this happens you'll also get a "black mark" on your credit record.

Basically, if you don't pay the assessment the worst case scenario is you will lose title to your timeshare and end up with a lower credit score. If you try to sell the timeshare before foreclosure you'll have to pay off any liens before title can pass to the buyer.

So, to protect your investment you should pay the assessment. If you can't afford to pay you are going to end up in foreclosure.

Thank you so much for your suggestions. I really appreciate your help.

I am not a lawyer, nor a timeshare expert, but based on what I know as a condo owner in Florida, RoamsAround is right. No, a condo is not the same as a time share, but the scenarios RA lays out are exactly what would happen if it were a condo in question.

Read your paperwork right away! Go over it with a fine toothed comb. Google for information.

But I strongly suspect that you have few options. Throw more money at it, or prepare to lose it, and your original investment, and get a hit on your credit rating to boot.

I'm very sorry you are in this situation!

If you are not or cannot pay, then get a real estate lawyer who knows time share law. The first question is why would you get involved in something you cannot afford or understand how it works - yearly assessments, etc. Second, you have few to no options other than to pay. If you don't, then, as previous described, the ultimate solution is foreclosure and lost of the property. Now that will take some time - maybe a year or more. But a foreclosure on your credit report will put you in the risky credit ranks for up to seven years.

The other option is to sell. But time shares are difficult to sell and you could be lucky to net half your outlay.

A final option would be title in lieu of foreclosure. In other words, give the title back to the company and you walk away. If you do that, make sure you get a signed statement from the property owner releasing you for all liability. Again, a lawyer is critical if you decide to go that route.

Consulting a lawyer is a good idea. Don't just write back saying you can't pay. The title company doesn't care, believe me. Foreclosing on time shares whose owners can no longer afford them is big business in Florida, and the people who handle it are good at their jobs.

I'm sorry you got suckered into a time share. This is not an unusual problem. My suggestion is that if it is no longer worth increased fees, let it go!

A complex of 20 year old time shares near me in Florida did a total "clean out" a couple years ago. Although most people had bought a "lifetime" of one week usage for an average of something like $15,000, the developers decided to assess every weekly owner something like $25,000 -- to totally refurnish and remodel, and do a complete exterior change on the development. Most owners walked away and now the developers could resell individual weeks in those units all over again at prices four or five times what they had originally sold for.

But I am curious. This is for a one week use? The annual "maintenance fee" of $1500 is now more than $200 a day to use the unit you supposedly bought the right to use "forever"?

The scenario Neo describes is not uncommon. I met a lawyer in FL who specializes in representing companies that pursue the "clean out" approach. It happens when land values increase and the developer realizes there's more money to be made on the property.

Sorry this is happening to you, but there's a lesson here for prospective buyers.

This is just one of the reasons time shares are a really bad idea.

Just as with co-ops and condos the maintenance fees generally increase every year as all the costs of maintenance, taxes, etc do. But this large an increase sounds more like they are having a major upgrade of the entire facility - which could make our property more valuable if you can afford to pay it.

Not paying - without making specific arrangements to turn it back - can have major financial consequences - so the last thing to do is just refuse to pay.

I would vote to pay and then try to sell for what you can get - if anything - to avoid future large fees.

Just for the record, of course, you shouldn't just walk away. But I'd be very, very surprised if the developers (or management company) won't quickly produce a form that allows you to do that without harming your credit score or anything else. To be blunt, that's what they'd LOVE you to do -- turn it back in to them to resell at a huge profit. So they will probably make it very easy for you to do just that.

I'm sorry this has happened to you. It is one of the things that give time shares a bad name. There are good ones. We've owned a time share for almost 25 years. Our maintenance fees are locked and only allowed (by contract) to increase a certain percentage each year. It was easy for us to figure the increases over the life of the contract. Our contract also states that we are not liable for major upgrade assessments. Frankly, we wouldn't have purchased if it were any other way. After a hurricane flattened our building, we were only asked to VOLUNTARILY donate a couple hundred dollars to a fund to help out the staff until the resort could recover and open again.

My warning to all.....read the fine print before you sign.

We also have one timeshare property in the Caribbean. I would try and sell it and save your credit. I am sorry this has happened to you. It sounds like s scam and probably a legal scam. As suggested, I would really seek a good timeshare lawyer. It would end up being your best interests all around then ruin your credit. Good luck.

OP is in a difficult situation and if they don't pay the assessment they very well might need the services of a good "time share" attorney. Trouble is, since they can't afford to pay the assessment ($1,500) they probably can't afford to pay the attorney's fee which will probably be around the same amount. Either way, they are going to have to come up with "money" or suffer the consequences of foreclosure and a bad credit rating.

To make matters worse, reselling timeshares is almost always problematic and they'll probably end up either not selling or selling for much less then they paid. But, if they are successful at least they will be out from the burden of paying future assessments.

My advice.....just walk away if you can't afford the assessment. It isn't going to get cheaper as the years go by. Why pay a lawyer to fight for something that you will regret having? If its $1500 this year, what will it be next year and the year after and so on and so on?

I used to be a credit banker. Here's what I know.....if the rest of your credit is good, one time share dump will not ruin it. Everyone is aware of these issues. Save the paperwork and explain the situation. Its not a big deal.

I thank everyone of you for giving us your suggestion and I really appreciate sharing your thoughts. I regret what I put ourselves in to by pushing my husband to buy it :-( I know he forgives me but I still blame myself. oh yeah I learn my lesson and since then I bring my thoughts but not pushing him to do such a thing and let him decide. God bless you all and please keep give us your suggestion. Thank you All!!!

There was a movie on Netflix called "The Queen of Versailles", about a family whose fortune was build on time shares. Quite an eyeopener...

Yes. You can build a complex of a couple hundred condos worth $150,000 each and "sell them" by the week for a total of something like $800,000 each. Hard to argue with that kind of profit -- if you're the seller.

This thread is an eye opener! I had never heard of the "clean-out approach" Neo describes, but it makes perfect sense.

OP, don't beat yourself up. There wouldn't be so many timeshares if an awful lot of people weren't happy to buy them!

Which makes me wonder, do you know any other owners at your complex that you can contact? I'm not sure what good it would do, but maybe one of them has an idea of how best to get out from under the timeshare without spending more money AND without damaging your credit (as Neo suggests)?

Is this $1500 a one-time fee for maintenance, or do you anticipate that the yearly assessment will $1500+ from now on? If the latter and you can't afford it, I would consider selling the timeshare for practically nothing as soon as you can. Selling it for a very low amount might be the only way you will be able to get rid of it. Don't look at it as a loss; remind yourself that you got twelve years of vacations for $14000, which is probably less than you would have spent renting vacation places. Remind any potential buyers that they will be getting the timeshare for nothing more than the yearly assessment - a dubious investment imo but another person may see it as a great bargain.

Thank you All for continuing your advise and tips. This is really very helpful for us. God bless you All!!