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Daniels Silverman

Maintenance Fees: To Pay or Not To Pay

One question Inside Timeshare receives on a regular basis is in regards to maintenance fees, “should we just stop paying them?”. Looking at many of the timeshare forums the general answer from posters is “yes, just ignore the bills, that is what I did, they won’t take you to court”.

It is also one of the main points that the so called relinquishment / cancellation / exit companies tell their clients, “once you sign up with us, don’t pay”.

Unfortunately, that is not quite true.

Many of the timeshare companies will chase for unpaid maintenance, at first through their own collections departments, but eventually they will pass these arrears to a debt collecting agency. Diamond along with other companies tend to use one of the biggest agencies in the UK, Daniels Silverman, based in Liverpool. MacDonald Resorts use Network Credit Services, based in Hamilton, Scotland.

The Ona Group based in Barcelona, Spain, actively chase unpaid maintenance fees, even for resorts they have taken over and the owner ended the contract with the original resort over 10 years ago. Ona Group say they have no record of the contract being cancelled and are taking those people through the Spanish Courts for upto 15 years unpaid fees. They use a law firm based in Barcelona called Punt Blau, who say they are are expert lawyers in the field of timeshare. The worst part of this will be the cost to the “debtor”, once the Spanish court has issued the judgement, it will be passed to a UK law firm and go through the County Courts for execution.

Once the debt has been passed to these agencies, you will be dealing with them not the resort, they will also incur huge amounts of interest and legal fees. You also then risk being issued with a County Court Judgement, commonly known as a CCJ. This will also have a very negative affect on your credit rating, preventing you from getting loans and even a mortgage.

Another question that arises from these enquiries is, “has anyone ever been taken to court, if so can you show us the judgements?”

Nobody has posted on any forum that they have been taken to court and lost”.

Well that is not surprising, would you publicise the fact that you have had a county court judgement made against you?

Agreed, it is not always taken to court, in most of the cases the person will give in to the threats of the debt collectors and pay. After all many of these owners are getting on in years and just want out, but they also have old views on debt, the stigma of being taken to court is a definite NO.

For the past few years Inside Timeshare has been highlighting the case of an elderly lady, now 90 years old, we called her Mrs B. She paid a company over £5000 to get her out of her MacDonalds timeshare at Dona Lola, this was in 2015. She was told the timeshare was no longer her responsibility and not to pay any further maintenance.

Her “debt” has been passed to Network Credit Services, this has now been handed over to a law firm Shepherd Wedderburn based in Edinburgh.

This firm is threatening to take her to court over the “debt”.

In their correspondence they even sent her copies of court judgements of MacDonald Resorts members who have been taken to court and had CCJs issued against them. They literally boast about it, which to an old lady is in our opinion a very serious threat.

They even place in their letter headed “Claims already issued in England and Scotland”, 4 cases along with which courts, case numbers and the names of the people involved, where MRL has won the claim.

  • Manchester County Court, Mr & Mrs S, case number C8QZ5392
  • Elgin Sheriff Court Scotland, Mr & Mrs C, case number ELG-SG24-18
  • Airdrie Sheriff Court Scotland, Mr & Mrs F, case number AIR-SG76-18
  • Gloucester & Cheltenham County Court, Mr & Mrs C, Case number E8QZ399H

These are genuine cases, these people have been ordered to pay and now have the dreaded CCJ on their credit files. All because they believed what they were told or read on various forums by idiots who have nothing better to do than give out bogus information on subjects they know nothing about.

There are ways of being rid of your timeshare, not paying your maintenance fees is not one of them. It may have been in the past when non-payment after 3 years the timeshare was repossessed, it may still hold true for the smaller independents, but for most of the big timeshare companies that is no longer the case.

If you have any questions on this subject and would like to know what your options are for relinquishing your timeshare, then use our contact page and we will point you in the right direction.

Start the Week: Exiting Timeshare and the False Promises from Exit Companies

At the end of last week we started our Letter from America with information provided by many of our readers on their attempts to exit or relinquish their timeshare, for many this has proved to be very costly. Many of these readers have given the same account, they paid a company many thousands of pounds to “exit or relinquish” the timeshare, only to find out that 3 years down the line they are not out and now owe thousands in maintenance arrears. Many are also facing court action by debt collection agencies.

In many cases it all starts with a cold call, in others the timeshare owner is seeking help and has either found the company on the internet or has been recommended by one of the so-called independent timeshare consumer advice sites. Many of these companies pose as law firms, paralegals and experts in timeshare exit, all to fool you the timeshare owner.

The initial offer is to get you “compensation” for being mis-sold, all on a no win no fee basis, but this is just the bait, before this can go ahead you first need to have the contract cancelled. Unfortunately this is what they are actually after and it does entail a payment upfront, in some cases upto £10,000!

So how is the “exit or relinquishment” processed?

Very simply it isn’t, the company will send a “unilateral letter of cancelation” or “exit notification letter”, all this means is that you have stated your intention to withdraw your membership. Along with this letter the owner is then told not to pay anymore maintenance, if the timeshare company sends an invoice for maintenance, just ignore it, you are out!

Eventually, as has happened to many of our readers who have sent in emails, they are now being bombarded with notices of huge sums in arrears, with the threat of being taken to county court for a debt. The timeshare company itself does not take the “debtor” to court, it is passed to a debt collection agency who do the legal stuff on behalf of their client, the timeshare company. One of the main companies that deal with this field is Daniels Silverman, who have a reputation for always getting paid.

As far as the timeshare company is concerned, you are still a member / owner and are liable for the maintenance, they have never accepted the letter of exit from the company that was paid to “exit” you from your timeshare. As we have stated in many previous articles, the timeshare companies do not accept or deal with theses “exit or relinquishment” companies, they will only deal with the member direct. They have their own systems in place for dealing with a cancellation, subject to certain conditions.

Have you paid a company for the cancellation of your timeshare and are now receiving demands for maintenance arrears with threats of legal action, if so use our contact page and we will get back to you.

If you answer yes to this question and want to know where you stand legally and what you can do about it, then contact Inside Timeshare and we will get back to you.

Remember, do your homework!

Friday’s Letter from America

Welcome to another Letter from America by our very own Irene Parker, this week we revisit our series on the 3 Rs and 1F of Timeshare, but first a word of caution brought about by some very disturbing emails received by Inside Timeshare.

These emails are all concerning companies our readers have paid to “relinquish” their timeshares, all being told that the “exit notification letter” being sent on their behalf is all that needs to be done and they are now timeshare and maintenance free. They are told they should not engage with the timeshare company or need to pay any further maintenance fee.

Unfortunately this is not the case, several of our readers have paid a certain company who shall remain nameless at present, but they know who they are, to exit their membership with Diamond, around three years ago. These readers are still getting demands for maintenance fees along with a surcharge for interest. They are also being threatened with court action and a debt collection agency.

The company concerned with these exits tells the clients that they are free of their timeshare  and to “DO NOTHING, PAY THEM NOTHING”. “That Diamond would not take court action because they knew they could lose given the dubious selling practices and the fact that no court would allow a company to insist on payments for a product the owner cannot use”.

We know that Diamond does chase unpaid maintenance, the debt is usually passed to Daniels Silverman a Market Leading Debt Recovery Agency, based in Liverpool. So it is not Diamond who take the “debtors” to court, but Daniels Silverman on behalf of their client Diamond.

If you are told to stop paying your maintenance fees until you have official notification from your timeshare company that your contract and membership has been cancelled, then failure to pay puts you in breach of contract.

It is also known that Diamond will not deal with these “exit” companies, they have their own system in place and will deal direct with the member. Remember no matter what these companies tell you, they are not “lawyers”, they do not know timeshare, all they know is how to take your money.

Now for this weeks Letter.

The 3 Rs or F of Timeshare Revisited (prior revision February 16, 2018)

Resolution
Relinquishment
Refund
Foreclosure

By Irene Parker

November 16, 2018

Our Timeshare Advocacy Group™ advocates brace for when timeshare companies hit the “send” button as millions of maintenance fee invoices hit inboxes.

February 16, 2018, when this article was previously published, we had heard from 300 readers since we began counting January 2017. As of November 14, 2018, we have heard from exactly 600 readers.  Not one of our readers was aware of the limited to no secondary market for a timeshare. This often triggers a complaint.

There is rarely a need to pay anyone money to get you out of your timeshare. Special circumstances, or if a member requests an attorney, we refer to one of the law firms we know and trust, if the timeshare company refuses to help. Seeking legal counsel is the right of every citizen if they feel they have been harmed, as is filing regulatory complaints.    

If you have a complaint, our “How to File a Complaint” form explains a process that takes time, determination and effort, but when it works, it costs nothing. We say when, because no one wins them all.

Timeshare companies cry, “Don’t call an exit company! We have your best interest at heart!” What the timeshare company means is:
Don’t call an exit company because it interferes with our recycled inventory process! Let us foreclose! We make collection calls to you no more than twelve times a day. (Six to each spouse, as has been reported)
When exist companies boast, “We can guarantee you release!” beware that that guarantee may include foreclosure. You don’t need to pay anyone to foreclose.  
Our complaint form: http://insidetimeshare.com/the-tuesday-slot-11/

Our goal:  Convert an angry, desperate, overwhelmed and confused member into an empowered member. Timeshare Advocacy Group™ has 44 core advocates, including a team of reporting advocates to answer questions about regulatory and, if needed, law enforcement filings. All of our Advocates are unpaid.  

The First R: Relinquishment

Some timeshare companies offer voluntary surrender programs, but relinquishments are not guaranteed and there cannot be an outstanding loan or delinquent maintenance fees.

Before relinquishing, check with a member of the Licensed Timeshare Resale Broker Association to find out if your timeshare can be listed with one of their members. http://www.licensedtimeshareresalebrokers.org/

LTRBA members charge nothing up front, so they don’t waste your time or money by listing a timeshare that, in all likelihood, will never sell.

The Second R:
A refund is not easy to come by, but in cases of serious and obvious fraud; a refund may be achieved. The complaint process begins with a petition to the resort, followed by the filing of regulatory and law enforcement complaints.

The timeshare lobby ARDA has a Code of Ethics. Not one of the 600 members who have contacted us could tell us what the letters ARDA ROC stand for, yet collectively give about $5 million a year to ARDA ROC. ARDA stands for American Resort Development Association and ROC Resort Owners Coalition. The money comes through “voluntary” opt-in or opt-out donations. This $3 to $10 amount, which varies depending on the resort, appears on all maintenance fee invoices purchased in the U.S. if the developer is an ARDA member. Despite our advocates and members forwarding approximately 200 complaints to ARDA, questioning ARDA’s Code of Ethics, there has been no response.

ARDA’s Code of Ethics:

The intent is that all member activities subject to the Code are designed to be honest and fair, and are conducted with integrity, dignity and propriety.  http://www.arda.org/ethics/

Litigation can take years and often the amount of money at stake doesn’t justify the time and expense litigation requires. Some developers have a class action ban, forcing arbitration. There are many critics of arbitration, including Minnesota AG Lori Swanson:  
“The right to have your dispute resolved before a jury of your peers is as American as it gets; it’s a fundamental core American democratic principle,” says Minnesota Attorney General Lori Swanson. “To think that millions upon millions of consumers are forfeiting their fundamental right to have their day in court because of fine print in a contract….”
Chris Parker, a reporter for City Pages writes: “Should a dispute arise, arbitration forces consumers out of the court system and into arbitration where appeals aren’t allowed, corporations historically wield a huge advantage—and details of misconduct are kept private,”

http://www.citypages.com/news/the-plot-to-kill-consumer-protection/451334393

Timeshare buyers should check immediately after signing a contract to see if they can opt out of the arbitration clause. Probably only a lawyer would think to do so.
http://insidetimeshare.com/tuesday-slot-arbitration/

According to the FBI agents and attorneys we spoke with, it is not legal for a company to hide behind fine print, providing sales agents the means to say anything they can come up with to sell points. With little enforcement in some states, deception prevails. Families after family have no option but foreclosure, if they have a loan outstanding. Most members contacting us do.        

The Third R

It doesn’t happen very often, but there is the possibility the member just doesn’t know how to use the booking system. Blanket statements like “You can always book online cheaper than using timeshare points” are not accurate. My husband and I are Diamond owners. We have often booked two weeks in Sedona or Orlando for less than it would cost booking online using our points.

I ALWAYS tell members when they say, “After we signed we read all these negative complaints!” that there are just as many and more who use and enjoy their timeshare.  

    Foreclosure

This is the least pleasant outcome, but foreclosure is not the end of the world. We’re working on a document for those who experience foreclosure to provide to credit rating agencies or lenders, detailing the patterns of complaints listed with the Better Business Bureau, Attorneys General, and lawsuits.

If you foreclose, there will be a hit to your credit score, but if you feel you are a victim of unfair and deceptive sales practices provide the credit rating agencies or your lenders with the reason why you refused to pay off a timeshare loan. Lenders are human. Many will take this into consideration.     

I asked timeshare attorney Mike Finn of the Finn Law Group some common questions we are often asked about the foreclosure process:
Will the timeshare company try to ruin my credit for non- payment of maintenance fees, loans or both?


Mike Finn: Generally no credit reporting on maintenance fees, yes they do on “mortgage” payments. Most timeshare property owner associations, which are separate non-profit entities, do not report non-payment of maintenance fees largely because they don’t maintain subscriber contracts with the credit reporting agencies. However, once referred to collection, those agencies do maintain subscriber relationships and that’s where the issue becomes relevant.

Can members be taken to court for non-payment of maintenance fees or loans?

Mike: Can yes, will, maybe not so much

Do they place liens for non-payment of loans?

Mike: Yes in the sense that they do pursue foreclosures, yes for maintenance fees as well.

Does the lien apply just to the timeshare, or does the lien apply to a member’s primary residence as well?  

Mike: The word ‘lien’ can be utilized in more than one way. In the timeshare world it typically means the security interest filed against the timeshare itself by virtue of nonpayment of maintenance fees. Only the timeshare interest itself is impacted by that kind of lien, not the owner’s property beyond the timeshare. A mortgage lien on the timeshare caused by non-payment of the initial purchase price can, under certain circumstances, become a judgment which could be satisfied by going after the defaulting party’s personal assets. This very rarely happens, but it has happened, so we can never, say never. A foreclosure on your credit report is quite damning, it will make refinancing or new residential purchases an issue for about five years. Rarely will they sue for deficiency balance.

http://www.finnlawgroup.com/learning-center/can-a-timeshare-hurt-my-credit-score

http://www.finnlawgroup.com/english/learning-center/page-12

Our Advocates, bringing experience and expertise from all walks of life, are here to help you put your timeshare in the rear view mirror, if that is your goal.

Our mission

We seek to provide timeshare members a way to proactively address membership concerns; to advocate for timeshare reform; to obtain greater disclosure from the company; to advocate for a viable secondary market; and to educate prospective buyers.
https://www.facebook.com/timeshareadvocategroup/

https://www.facebook.com/groups/DiamondResortsOwnersAdvocacy/

https://tug2.com/Home.aspx

https://everythingabouttimeshares.com/consider-exchange-options/

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

Thank you Irene, useful as always, in the Tuesday Slot next week, we will have another “Secret Shopper” report, edited by Pete Gibbes the Secret Shopper Coordinator, so join us for another insight into the murky world of a timeshare presentation.

Don’t forget the book by Wayne C Robinson, Everything About Timeshares, Before, During and After the Sale, with the forward by Irene Parker, you can obtain your copy from the link below.

https://www.barnesandnoble.com/w/everything-about-timeshares-wayne-c-robinson/1129749757?ean=2940161600962

Midweek Roundup and Another Dodgy Looking Setup

Important Update: Another reader has identified Lance Steer as one Lance Oakley, an ex-Diamond Sales Rep and also of ex-EZE Group.

Another name has come to the attention of Inside Time share from a worried reader:

Positive Outcome – Contractual Specialists

With the address:

Rural Innovation Center, 10 Street Avenue, Stoneleigh Park, Kenilworth, CV8 2RG

Which is a serviced office rental center where meeting and conference rooms can be hired by the hour.

They use the telephone number:  02476 960 735 which is a coventry code, when this number was called Inside Timeshare was told we had the wrong number. We have susquently found that the telephone number belongs to Coventry Creative, Advertising and Graphic Design , Rover Road, Coventry, CV1 3HT which is Coventry market, a completely different area.

The contacts are: LANCE STEER & JOANNE JOHNSON with the email address:

[email protected]

So far no company with this name has come up on any internet search, using the email address does not link to any website and no information about Lance Steer or Joanne Johnson appear on any search.

So what has concerned our reader?

Very simple, they have paid by bank transfer for a relinquishment of their Diamond membership, yet are still getting demands for maintenance arrears. So it looks like yet again money is paid and the relinquishment is not done.

According to the emails our reader has received, Lance says he has been helping timeshare owners for over 5 years, funny how we have not heard of him before. The other strange fact is that in his emails he goes on to say why he has not been in touch with his clients, listing his illnesses, bereavements and severely disabled Father. Even getting an assistant Joanne, to email clients and explain all his personal problems. (see PDF at the end). Not the sort of information one would normally give. (Looking for sympathy comes to mind).

His emails also go on at length about Spanish Supreme Court rulings, how he has studied many case files and come to the conclusion that all these contracts are illegal. (Which is not surprising considering he sold many of them).

In order to give credibility he mentions Canarian Legal Alliance and places links to their website, even including screenshots attached to his emails. All the details he puts in these emails look as though they have come directly from the CLA website, even using the same phrases.

Another part of his emails go on to tell the clients that Diamond and other timeshare companies have no right to chase for maintenance arrears, or that Daniels Silverman the debt recovery company has no right to chase the debt.

Unfortunately, all this information has convinced our reader to pay for a service which Lance cannot provide, after all we have stated on many occasions in these pages that Diamond, Club la Costa and many other timeshare companies and resorts will not deal with third parties for cancellation of contracts. They will only work with the members directly.

So just from the lack of information on the internet and the lengthy explanations on his illness and private life, plus the fact that Canarian Legal Alliance have never heard of Lance, does get the alarms bells ringing.

Sticking with Canarian Legal Alliance, this week they have announced the following:

Their lawyers have secured another 242,391.46€ on behalf of 6 clients, on the receiving end of this is Anfi Del Mar. These funds have been paid directly to the court of San Bartelomé de Tirajana in Maspalomas. The clients are: 2 from the United Kingdom, 2 from Norway and 2 from Germany.

This comes from the procedure put into place by CLA with a team of their senior lawyers Eva Guitierrez and Judith Diaz Pascual and Cristina Batista, enforcing provisional execution of sentence within 40 days of the judgement being issued. This means that once the judgement is issued the timeshare company must lodge the awarded amount with the court voluntarily or it will be enforced.

There is also another form of securing the funds which has just been enforced by the Court of First Instance No 4 in Maspalomas, which has placed an “Embargo” on Anfi accounts in respect of funds which are due to a German client. These embargoes allow the court to directly take the funds from those accounts and place them in the courts account ready to be paid out to the client.

These moves by CLA have been placed to ensure that funds due to clients are secured, even if the offending timeshare company is appealing. It also stops the timeshare companies from delaying the payouts, which has been the case in the past, now the clients know that their money is secure.

That’s it for today, if you have had any dealings with any company or individual such as Lance Steer, use our contact page and get in touch, we would love to hear from you. You can also contact Inside Timeshare if you require any information relating to your timeshare or any company that has contacted you.

Click below to read the two emails.

Lance Emails

The 3 R’s of Timeshare: Part 1

Today we start with the first of a three part article on what Irene calls the 3 R’s of Timeshare, although this first part begins with “F”.

In the US this is Foreclosure, which to those of us in Europe would just be Relinquishment or Surrender. What we have to remember in Europe is that for our American cousins, timeshare tends to be governed by Real Estate Law and financial agreements are usually associated with a mortgage rather than a personal loan or finance agreement. So foreclosure will be similar to repossession of your house for not keeping up with mortgage payments. Failure to keep up payment on a loan does not result in the timeshare being “repossessed”, as the finance is separate from the timeshare.

As for relinquishing or surrendering your timeshare in Europe, this very much depends on who you purchased with, some companies are better than others.

As a very good example of the bad, we only have to look at MacDonald Resorts, this particular company has been the subject of many press articles, including some published here on Inside Timeshare. This company is renowned for not allowing people out of their contracts even after death, so this means the children inherit the timeshare and the subsequent maintenance bills.

A very good case which Inside Timeshare has been working on is that of Mrs B, an 87 year old lady in ill health, who used a company to relinquish her contract. This was done by selling to a third party, MacDonalds refuse to accept this, stating they do not recognise the transfer, even though we have notary documents proving the transfer. Consequently they are pursuing Mrs B for arrears in maintenance, passing the debt onto a debt collecting agency who are threatening court action if it is not paid. Inside Timeshare is now lodging a formal complaint to the Financial Conduct Authority as the debt is “under dispute” and should not be chased by the agency.

This company also “offers” a limited number of members to hand in their timeshares every couple of years, but only on the payment of 4 years maintenance fees.

Another company that is renowned for being very difficult to get out of is Petchey Leisure, now owned by MGM Muthu. As far as they are concerned your contract is in perpetuity and that means never ending, so even your grandchildren will end up with the maintenance bills.

Diamond Resorts in Europe on the other hand seem to be getting their act together, for several years now they have allowed any member over 75 to hand back their membership. They also allow others to hand back in what they term as “exceptional circumstances”. These are the death of a partner, illness and financial difficulties. For those who do not fall into these categories they will allow surrender on payment of upto 3 years maintenance fees.

So now on with Irene’s Article.

The 3 Rs or F of Timeshare:

Part I Resolution, Relinquishment, Refund or Foreclosure

What will happen when you decide your timeshare decision was a mistake?

Part II: The 3Rs of Timeshare

Part III: 2 More Rs  – Timeshare Rentals and Resales

By Irene Parker March 28 

Contract picture

Except for failure to pay child support, there is no debtor’s prison. Anyone feeling desperate, angry, worried, ashamed or scared about their timeshare situation can rest assured they can put their timeshare troubles behind them through the 3 Rs or F of Timeshare.

The words I used above are how I describe timeshare members who have reached out to Inside Timeshare or to me through our Advocacy Facebook Page, burdened by high interest loan payments and rising maintenance fees. Our goal is to convert this owner into an informed and empowered owner.

https://www.facebook.com/timeshareadvocategroup/

https://www.facebook.com/groups/DiamondResortsOwnersAdvocacy/

Often, life without timeshare can be achieved without legal assistance, but we have a crew of able bodied lawyers there if you need them as a last resort. Advocacy works but has its limitations. All of our Advocates are unpaid, helping individual timeshare owners and members while working towards timeshare reform.

Last week we quoted Mr. Nusbaum’s feelings about the secondary market. Mr. Nusbaum is President and CEO of ARDA, the timeshare developer lobby.

“This is a legacy problem. People buying a timeshare today are buying it from multisite clubs that have management forever and sales teams forever, so the ability to recycle inventory will not be a problem in the future.”  June 2014 RedWeek

On the other hand, here is another Nusbaum quote from the same article sounding somewhat contradictory:

“The developer community is not without some dirt under their nails in this. We’ve created a business model that needs recycling. We want to help the secondary market. For self-perpetuity, it’s insane not to have a healthy secondary market.”

But most of all, according to Nusbaum, the long-term outlook is improving because the largest timeshare companies are developing programs that offer exit strategies for their owners. The complete RedWeek article:

https://www.redweek.com/resources/ask-redweek/timeshare-resales-arda-predictions

“Exit strategies” are voluntary surrender programs. Requests are evaluated case by case. It is difficult to determine how many requests are granted compared to the number of requests overall. Are these programs just media window dressing to make it look like the industry is responding?

Michael Kosor has worked with Nevada Senator Becky Harris in an effort to propose legislation that would allow better disclosure as to the limited, or sometimes non-existent, secondary market.  

“Actions by the timeshare industry, regulators, and legislators, are analogies to firefighters rescuing the elderly trapped in a burning building. Until the cause of the fire is identified, consumers will continue to be lured into these burning (defective) timeshare products that are not supported by a secondary market. While I applaud the rescue, we should not allow the industry and those responsible for consumer protection to hide behind said rescue efforts while they inexplicably fan the flames. Ambulance chasing fraudulent transfer agents is a back-ended solution – a Band-Aid reaction.”

Treating symptoms without studying the cause can be problematic for medicine or timeshare. The cause in the case of timeshare is the active destruction of the resale market for the benefit of immediate developer profits.

“Where are the association Boards we elected to represent our timeshare interests”?

“Owners clearly would like to see more done to advance and advocate for an improved resale market,” continues Michael. “Why is it our advocacy group is the only voice in this discussion? With the exception of a few legacy associations, virtually none of the industry affiliated associations have an active resale program available to owners to assist in exit and preclude foreclosure, if a voluntary surrender is denied”.

I approached my association a few years ago, the Wyndham Grand Desert, and was told “this was not their responsibility.” Instead, my (and most all) associations’ leaders throw owners wishing to exit (which we all do eventually) to the wolves of the current resale environment or transfer agents. They then enter into very lucrative repurchase contracts with and for the developers. These repurchase contracts provide the association pennies on the dollar of outstanding assessments, then give the developer very low cost inventory to sell as new to the next owner.

The real issue is not merely failing to fix the resale market. Worse, the industry is actively working to build the recycle model which requires the intentional undermining of the resale market. Advocate owners and members understand the cause and the fact the industry has no desire to fix the problem. It’s sad that we as advocates have to educate and walk the elderly, the ill and those burdened financially, through the foreclosure process when all else fails.

The developers consider themselves benevolent when they allow the surrender of a $25,000 to over $100,000 vacation plan in exchange for a surrender of zero value. As long as the vacation points or weeks stay in the hands of the developer, there is no free market system. Lenin would be proud.

Back to the 3Rs or F of Timeshare

We want to avoid the F for foreclosure, but for some owners there is no choice.

Let’s get this last and most unpleasant option out of the way so we can focus on more positive outcomes.

Where do we start? Pull out all those documents and start digging!

Magnify

I hear a lot of “I think” or “I’m not sure” when I ask the following questions:

  • When did you first buy your timeshare?
  • Where did you buy your timeshare?
  • How many points do you own?
  • What was the sales agent’s name?
  • What interest rate are you paying if you have a loan?
  • What do you want to happen?

We begin at the end – Foreclosure

If a member has an otherwise unblemished credit score, he or she can work to have the reason for foreclosure added to a credit report.  I asked timeshare attorney Mike Finn of the Finn Law Group some questions about the foreclosure process.  We use one unnamed resort as an example, but the procedure is similar to all timeshare companies. A common question is:

Will the timeshare company try to ruin my credit for non- payment of maintenance fees loans or both?

Mike Finn: Generally no credit reporting on maintenance fees, yes they do on “mortgage” payments. Most timeshare property owner associations, which are separate non-profit entities, do not report non-payment of maintenance fees largely because they don’t maintain subscriber contracts with the credit reporting agencies. However, once referred to collection, those agencies do maintain subscriber relationships and that’s where the issue becomes relevant.

Can or will members be taken to court for non-payment of maintenance fees loans or both?

Mike: Can yes, will, maybe not so much

Do they place liens for non-payment of loans?

Mike: Yes in the sense that they do pursue foreclosures, yes for maintenance fees as well.

Do they place the lien just on the timeshare? In other words, does the lien apply just to the timeshare, or does the lien apply to a member’s primary residence as well?

Mike: The word ‘lien’ can be utilized in more than one way. In the timeshare world it typically means the security interest filed against the timeshare itself by virtue of nonpayment of maintenance fees. Only the timeshare interest itself is impacted by that kind of lien, not the owner’s property beyond the timeshare. A mortgage lien on the timeshare caused by non-payment of the initial purchase price can, under certain circumstances, become a judgment which could be satisfied by going after the defaulting party’s personal assets. This very rarely happens, but it has happened, so we can never, say never.

Is it advisable to just stop paying fees without the aid of an attorney?

Mike: It really does depend on your ability to endure collection calls, letters threats, and a foreclosure on your credit report is quite damning, it will make refinancing or new residential purchases an issue for about 5 years. Rarely will they sue for deficiency balance.

http://www.finnlawgroup.com/learning-center/can-a-timeshare-hurt-my-credit-score

http://www.finnlawgroup.com/english/learning-center/page-12

According to Charles Thomas, here is how it works in Europe

This resort employs a debt collection agency, one they use is called Daniels Silverman, the debt is passed on to them (usually sold), they now own the debt and will threaten court action – whether they will is another matter. If this does occur, then yes credit rating will be affected as it will then be a County Court Judgement and failure to pay will result with the court bailiffs being sent in to recover either cash or goods to the value. Only they have the right of entry into the home.

As for a loan, if it is with a third party i.e. Barclays Partner Finance, any failure to keep up payments will result in County Court action as above and credit blacklisting.

It is advisable to seek advice from an attorney before just stopping any payments, as by doing this the debt cannot be passed on to an agency as under the Financial Conduct Authority regulations. The debt can be classified as “under dispute”.

According to the Canarian Legal Alliance CLA, when the firm takes on a relinquishment with a loan attached, they also try to have the loan agreement cancelled.

It is advisable to completely check any company that offers relinquishment services, as this is an area which is fraught with con artists.

Below is our Inside Timeshare article on debt collection with links to various authorities, it also includes a list of those resorts who employ debt collectors and a list of those who have taken people to court.

As Charles Thomas reported, Europe maintains a thriving timeshare foreclosure and collection industry as well.

http://insidetimeshare.com/maintenance-arrears-debt-collectors/

Our Advocates, relying on their experience and expertise, are here to evaluate and work together, each bringing a piece of the puzzle to help you find your answer.

Conference table

Next week we continue with Part II – The 3Rs of Timeshare:

Resolution, Relinquishment, Refund

Part III – The 2Rs of Timeshare – Rentals and Resales

Contact us today if you would like to share your story or work with us by becoming a Timeshare Advocate.

http://insidetimeshare.com/friday-letter-america/

Thanks to Irene, Mike Finn and Michael Kosor for their contribution.

As you already know as owners of timeshare, whether in Europe or across the “Great Lake” in the US, once you purchase timeshare, getting out of it is fraught with obstacles. It does depend on who you own with, some are better than others. In Europe, Spain is leading the way with timeshare law, it is giving “consumers” more protection, making it easier to get out.

Inside Timeshare hopes these articles are of benefit to you the owners, that only through coming together and sharing information can we hope for any change in the industry.

If you have any questions or want to share your experience contact Inside Timeshare or join the Advocacy FB page.