Let’s answer the direct question first then move on to reasons. The simple answer is NO! Just because you either can’t afford the fee or are attempting to use non payment as a way of being thrown out believe us this is a) not a good idea and b) it won’t work. Much like anything in life where a contract is involved there are terms and conditions that must be abided by, timeshare is no exception. Contained within the myriad of clauses will be a section that stipulates that whilst you are an owner you are contractually liable to make annual payments to cover resort maintenance, and pay you will.
Potential problems
Back in time when time share was at its peak, a developer would be delighted to throw you out for non payment of maintenance fees. This action would be highly profitable given that you already paid a not inconsiderable sum that is non returnable and by taking back your weeks the developer could sell it all over again. We mention weeks, nowadays hardly any developers sell weeks, points are the new norm currency for timeshare. Points are valueless and are created out of thin air as and when required, so the idea of the developer taking back points with open arms and glee won’t happen, so now we look at the problems.
We have stated on numerous occasions that new timeshare sales are dwindling, in Europe they have all but dried up, so if sales profit cannot be relied upon how do resorts and developers fund the business? Answer, maintenance fees. The days of developers terminating contracts for non payment have long gone; failure to pay is now likely to bring action of a kind nobody wants.
The action we refer to is the developer engaging the services of debt collection companies. Should such companies be involved then they will send demands for payment normally with additional fees attached. Failure to act on these demands may well escalate to a County Court summons, which with continued non payment will result in a County Court judgement with all the associated future credit problems that entails.
The reality is you have no defence, you can never get the holidays or dates you want, you don’t like timeshare anymore, you can’t afford the payments, none of these work. Remember you were the one that signed a contract committing yourself to paying annual fees, clear, simple, cut and dried.
What about co related loans?
For those who purchased their timeshare with a finance loan, basically the same scenario exists. Timeshare lending is simple unsecured lending, much like borrowing money to buy a car. There is often a popular misconception that the timeshare and finance go hand in hand, this is completely inaccurate. Should you consider disposing of your timeshare, this will in no way cancel the finance so it follows that if you stop repayments there will be serious repercussions exactly as described above.
Avoiding maintenance fees
Put simply, there is no legal way to avoid payment of maintenance fees, that is whilst you still own your timeshare. The only legal way to get out of maintenance fees is to get out of the timeshare, that said it may be harder than you think. Buried in the myriad of clauses in the sales contract there is a surprising lack of any reference to formalised exit strategies. Perhaps that’s understandable, why in a new sales contract would there be a section referring to exit? But here timeshare seems to be out of step, in most contracts there is reference to termination but not so with timeshare. The fact of the matter is that getting in is all too easy but getting out is an undocumented walk into complete darkness.
There are a couple of European developers who have taken the initiative to publish exit strategies but they are so restrictive and draconian that they dismiss most owners as not qualifying. If you are dead or dying, over 80 or bankrupt you may be allowed out, even then a thumping fee will need to be paid. Healthy, young, financially solvent and it may be difficult to get out.
TCA Comment
With maintenance season just around the corner and the current global financial crisis we would hazard a guess the last thing most people want is yet another bill popping through the letterbox, unfortunately that for timeshare owners this is unavoidable. Our best guess is that the bills for 2023 will be a considerably higher than those for 2022, we could be wrong but the pointers are there for all to see. Sterling weakness, energy costs, Covid recovery costs, Ukraine Russia conflict, these plus others would indicate increased costs across the board, such increases as may be, will of course be passed on to owners.
It must be remembered that maintenance fees have no regulatory limits; if a developer wishes to increase fees by any amount they can do so. Caveats such as 5% or the rate of inflation whichever is the lesser have bypassed timeshare and when you factor in the importance of maintenance fees to the corporate bottom line it’s easy to see that these fees are a cash cow to the developers.
We are not suggesting that every owner rushes to terminate their contract but return to the title of this article. If you want out, get out but don’t simply stop paying maintenance fees as your planned strategy to exit. It won’t work and at the end of the day will cost a lot more and also potentially bring unwanted further action.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk