Timeshare Stress and What to Do About It
Guides, Tips, and Hacks, Timeshare Impact on Credit Score
3 min read
Although timeshare contracts vary greatly from one to another, one thing is certain: maintenance fees. Maintenance fees are the annual fees all timeshare owners are contractually bound to pay for the duration of their contract. Since everyone pays them, you might think they’re routine and nothing to worry about. However, there are some dark truths that you should know about before you sign that contract.
Maintenance fees typically cover general upkeep of the resort as well as minor repairs. And most resorts also use them to build up reserve funds in case of unexpected expenses or damages. Other uses include things like payroll or administrative overhead. In many ways, maintenance fees are similar to what you would pay to maintain your home. However, while you can do your own budgeting and decision making for your own home, your timeshare maintenance fees are determined by the resort or HOA. And while you hope they are making good decisions about where to spend your money, they still make the decisions. Unfortunately, they are under no obligation to take your needs into account when they levy fees.
You can count on maintenance fees increasing over time. We guess it’s nice to be able to count on something. Unfortunately, you can’t predict the amount of the increases and they can vary greatly from year to year. According to the ARDA, maintenance fees in 2005 averaged $471 per year. In 2017, they averaged $980 per year. So, fees doubled in 12 years—Ouch! Plus, the rate of increase was erratic. The increase between 2016 and 2017 was relatively flat at 0.9%. However, 2005 to 2006 saw at 17.8% increase. We doubt owners saw their incomes increase that quickly!
So how can you take control of your finances? You can request a history of fees from your HOA to help you get a sense of what has happened in the past. However, that’s no guarantee of future costs. And although it would be great if your contract protected you, it most likely does not. When you signed your contract, you signed up for all the fees as well.
But what if you see at 17% increase that you can’t afford? We wish we had better news but, unfortunately, there isn’t much you can do. According to your contract, must pay your fees, no matter how much they are, no matter what your financial situation might be. You can contact your resort or HOA to see if they will work with you on alternative payment plans. However, your timeshare access will probably be limited until you catch up. If you don’t pay, your resort or HOA will probably take steps to try to collect the fees from you. And some will report you to the credit bureaus, which will result in damage to your credit score. Continued non-payment may result in foreclosure, which can be very stressful.
What if you can’t use your timeshare this year because of scheduling? Or worse, what if your resort is damaged in a hurricane or other disaster and becomes uninhabitable for an extended period of time? Surely you won’t have to pay fees for something you can’t use! Unfortunately, you still have to pay your fees even if you don’t use or can’t use your timeshare. And in the case of damage, you may also be looking at a special assessment to cover repairs.
Did the truth about timeshare maintenance fees come too late for you? We can help. Contact us for a free consultation to see how we can help you get out of your timeshare contract legally and forever.
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