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There are many different types of Timeshare contract, but the Fees are generally charged on the premise that all the “Members” of a particular resort or scheme are collectively contributing to the ongoing upkeep and management of the resort/scheme.
The problem is that most Timeshare Groups/Resorts became greedy over the years and simply couldn’t resist taking advantage of this, so they have kept finding reasons to increase the Fees they charge their (literally) “captive audience” of customers, who are usually locked in to long-term contracts and have no option but to just accept these increases.
Unfortunately, because you have signed a contract agreeing to this and, whether you realised it or not at the time, you are legally obliged to pay these fees throughout the full term of your agreement.
This situation is all too tempting for many timeshare groups/resorts, who have become used to simply pushing the Fees up year on year – and this habit shows no signs of stopping. There are exceptions of course but, as a general rule of thumb, it is estimated that timeshare maintenance fees double every 10 years. Therefore, if your Fees were £400 per year in 2006, they are likely to be around £800 per year in 2017 and would be £3200 per year in 20 years’ time.
This is likely to include an escalating sequence of events, starting with reminder letters/phone calls and sometimes additional charges and/or interest for late payment. You may also suffer restrictions in terms of using, exchanging or renting out your Timeshare while you remain in arrears.
Fees will usually continue to accrue and the recovery procedures may escalate, with threats of legal action, damage to your credit rating and the use of Debt Collectors – For example, Daniels Silverman are known to act on behalf of some Timeshare Groups/Resorts in this way.
The whole process can be a very stressful and unpleasant experience and ultimately, the Timeshare Group/Resort has a signed contract and they can enforce this as they see fit, so we would not recommend this course of action.
The relentless sales drives of these organisations over time means that many Resorts & Point Schemes are hugely oversubscribed, which means that only a very small proportion of the members are ever lucky enough to be able to book their first choice accommodation & dates.
This is exacerbated by the fact that some resorts, groups and exchange networks are known to hold back some of the most desirable accommodation and dates for sale on the open holiday-maker market, rather than sharing the full allocation fairly across their fee-paying membership.
On top of this, there is often a further allocation of the best units/dates held back for new potential customers, who are flown in for a few days so the sales teams can try and sell them into the prevailing special Timeshare scheme of the moment.
It all means that the actual fee-paying members/owners, who have bought into their Timeshares and dutifully paid their Maintenance Fees, are often pushed to the back of the queue and generally find themselves having to choose from what’s left over.
The salesman’s promise that Timeshare was a great asset that may even increase in value over time, has proven to be entirely false – especially since the recent global economic downturn.
Timeshares are frequently advertised on eBay for £0.99p, but even then, no-one wants to buy them for the obvious reason that the purchase price is of no consequence when compared with the associated fee commitments over the term of the contract. Rather than buying something for next to nothing, any buyer would therefore have to take on the future liabilities for increasing fees over many years to come – which represents a commitment of tens or even hundreds of thousands of pounds, depending on the contract term.
Some Timeshare Groups insist that any attempt at reselling a timeshare is conducted through a specific resale company (e.g. Diamond Resorts insist that you use Travel and Leisure), but these companies generally charge open-ended “listing” or advertising fees. With virtually nil chance of success, it’s just another fee to add to the list – and we have customers coming to us every day who have spent years, and sometimes a lot of money, unsuccessfully trying to sell their Timeshares.
It is of course heart-breaking to come to the realisation that your timeshare is not only worthless, but a growing financial burden. However, in the vast majority of cases, this is the sad reality – and you need to think about how you can get out of your contract to avoid further fees, as well as looking at other ways in which you might reclaim money.
It is also important to remember that Timeshare is an abstract concept, and is now even more so than it was in the past, as many people have been moved over to points schemes, fractional ownership, floating weeks and similar variants. This means that, to create a new Timeshare contract to sell to a new member is purely a matter of raising some paperwork, as the Timeshare Group/Resort do not need to have a timeshare that they have taken back from you or another member “in stock”. They can just sell a package of points to the new member and add to the over-subscription.
This means that, if your Timeshare contract was sold “in perpetuity”, the intention is that it would stay in your ownership for the whole of your life, then pass on to your children, then your children’s children and so on.
It is likely that this was put forward as a benefit when the salesman was presenting the timeshare opportunity to you – but you will no doubt be fully aware of the downside now that you and your family face the prospect of relentlessly escalating fees liabilities, for ever.
There are some intricate legal and technical considerations around perpetuity which we would be impossible to fully explain in a few lines on the website so, if you have concerns or questions, please contact us.
Were you passing on a valuable asset, such as a house that you owned, this would normally be considered a good thing of course – but your Timeshare contract is almost certain to be a liability, due to the increasing Maintenance Fees attached to it over the course of the contract term.
We are frequently contacted by customers for whom this is a key consideration and for whom it is important to be released from their Timeshare contract precisely to prevent it passing on their children. Similarly, we frequently hear from people who have inherited Timeshares and have only more recently come to understand the associated fee obligations.