Why Are My Timeshare Resort Fees So High?

Why Are My Timeshare Resort Fees So High?

Annual maintenance fees are part and parcel of timeshare ownership, yet they are also one of the primary factors driving people away from the industry. Indeed, according to the AIF Owner’s Study 2016, a survey of timeshare owners, 66% of consumers cited high maintenance fees as a reasons for wanting to exit their timeshare obligation; 46% of surveyed owners listed it as their “most important” reason for wanting to walk away.

The frustration with maintenance fees is really two-fold. On the one hand, many timeshare owners feel exasperated with having to pay these fees in the first place, particularly considering that most only use their timeshare interest once a year (if they take advantage of it at all), and plenty of others exchange their timeshare points to travel to different resorts, rather than using the “home” resort for which they ostensibly bought their interest and continue to pay fees.

What’s more, many question where these fees go. Who are you paying them to, and to what end? And why do they tend to increase, year after year?

Timeshare Relief for the Non-American

Timeshare Relief for the Non-American

Did you know that there are timeshares all over the world? It’s true!

While many in the U.S. hear the term “timeshare” and immediately think “Florida” or “Hawaii,” there are actually timeshare resorts – both independent and owned by major developers – around the globe. Plenty of Americans own “right-to-use” contracts for timeshares in Mexico and Canada, for instance; there is also certainly a timeshare market in Europe – we were struck, not too long ago, by an article detailing how Brexit would send shockwaves through the timeshare industry in the U.K. and the E.U.

With all of this in mind, it is also not unheard of for non-citizens to own timeshare points or contracts in the U.S.; remember, after all, that it is entirely legal for foreign nationals to buy and sell deeded property in our country, and many do, using that real estate as a vacation home or development property. Why not own timeshare points, as well?

All of this is a long way of saying that foreign visitors to the United States are just as likely to get caught up in a timeshare sales presentation as American tourists at the same resort. Both groups are susceptible to being roped in by the promise of a free gift, and are equally liable to be worn down by an endless barrage of (seeming) discounts and deals. The thrall of the “vacation mindset” – which makes consumers far more willing to sign on the dotted line and which timeshare marketers have long exploited, for just this reason – knows no national boundaries.

Today’s Timeshare Board Director: Community Leader or Sitting Duck?

Today's Timeshare Board Director: Community Leader or Sitting Duck? (Source: pixabay.com - used as royalty free image)

State law in Florida, as in several other states with a significant timeshare resort presence, confers ‘managing entity’ status on two completely separate and disparate entities, each with completely differing corporate structures and business models. Yet, both of these entities share identical legal responsibilities to the timeshare unit owners within the timeshare plan. Each entity, by state statute, owes fiduciary duties and has legal responsibility to spend owners’ maintenance fees prudently while using the highest standard of care imposed by law on a third party holding and disbursing funds on behalf of others with whom they are contractually pledged to serve.

Florida statute 721.13(2) imposes identical legal responsibilities on each of the two managing entities that ostensibly share functions in operating the resort, the association and the management company, by defining both as ‘management entities’. This statute elevates the money collecting, handling, and disbursement activities required in operating a resort, and thereby the entities entrusted to handle those duties, to a fiduciary standard – the same lofty level that other professional financial institutions, including banks, law firms, and stock brokerage houses, are required by law to maintain. Black’s Law Dictionary defines “fiduciary" as “the character analogous to that of a trustee in respect to the trust and confidence included in it and the scrupulous good faith and candor which it requires.” Further, Black’s defines the "fiduciary relationship" as “the trust between the agent and the principal care and responsibility must be taken for the best interest of the principal.”

The Psychology of a Timeshare Sale

The Psychology of a Timeshare Sale (Source: pixabay.com - used as royalty free image)

As an attorney (and former CPA) whose law practice has focused nearly exclusively upon the timeshare industry for almost six years, one issue in particular continues to perplex and confound me. What is it exactly that compels people to continue to buy timeshare interests? This discretionary and rather costly consumer product involves purchasing, with today's dollars, future vacation possibilities. You may think that this fact alone might make potential buyers hesitate, given all of the present day demands on our existing discretionary budgets. Aren't we supposed to fund future getaways with the means available to us when the desire and ability to take a vacation is nearly upon us? Clearly in this internet age there are lots of vacation options and travel packages to choose from on the multitude of internet travel sites and resources accessible to us. We can book our chosen location, airline, and car reservations at the same time with the click of a mouse.

Why then the continuing popularity of a product that becomes an annual and uncontrollable cost upon purchase, regardless of how often you end up using it in the future?

Further, a timeshare purchase represents delayed gratification in the sense that you don't, immediately upon purchase, commence your timeshare vacation in your chosen resort. It requires a future booking through an as-yet-untried reservation system – one that you've contractually obliged yourself to use for all future bookings and whose dates are subject to availability! Compare this roll of the dice reservation option with booking a vacation via Expedia or Hotels.com!

I Feel I'm Being Bullied by My Timeshare Resort. What Can I Do?

I Feel I'm Being Bullied by My Timeshare Resort. What Can I Do?

Timeshare companies often seem like enormous, faceless monoliths. After the initial same-day “see and sell” transaction – in which you’re likely to speak to not one but a whole team of smiling, smooth-talking, and very insistent sales personnel – it sometimes seems as though people disappear from the process altogether, replaced by telephone numbers, web portals, and letters printed on official company stationery.

So where can consumers turn when they have real complaints, fears, or concerns about their steadily rising maintenance fees; their opportunities to use or exchange points within an often-confusing system; or their ability to resell their timeshare on the secondary market, or even just to somehow cancel or exit their obligation without getting the runaround?

In other words, many major resort developers have adopted practices that put lots of burdensome financial and social weight on “the little guy,” without giving him or her adequate recourse to address those issues in turn. When you feel silenced, minimized, or even bullied, where do you go for help?

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