Timeshares: A Losing Proposition
Introduction
A few days after 9/11 the mayor of New York advised those interested in helping the city getting back on track to come to the city and spend some money. My wife and I responded by purchasing a timeshare for $26000. Normally, we would activate all sorts of controls in purchasing real estate including research, attorneys, banks, and so on. None were activated in this case simply because we were supplying blood to a dying patient. At first we paid our maintenance fees each year months ahead and hardly had any problems obtaining the days we wanted. Sometime around the 3rd anniversary of our ownership problems began to emerge.
Accessing the Site
In order to secure time it was necessary to call the membership line to request the days needed. The line was always busy all the time. It became a matter of luck to reach an operator to secure your days. When you did reach an operator the days requested were never available even if you called three months ahead.
Removing the Amenities
When the purchase was originally made a large club room was available. This was removed and replaced by a hole in the wall windowless room. At this point we were told that renovations made it necessary to close the clubroom. At the same time, elevator service was so bad that it was necessary to take the freight elevator. It became so bad that the cookies in the lounge were no longer provided to waiting guests. Touted as a world class resort originally, the timeshare was becoming more of a one star hotel.
Maintenance Fees
As service and accommodations deteriorated significantly to the point that stays became dissatisfying maintenance fees were going up dramatically. Timeshare owners were now shelling out more than $2000 per year for a product which had more negatives than positives. More importantly world class hotels in the area were looking more attractive because their room rates were going down to the point that the $2000 per year spent for 7 days would provide 10 days at a 4 star hotel with aggravation not included.
The New Website
Over the last few years the timeshare created a website for reservations. This website was not for members. What became evident was that rooms not available to timeshare owners were available to anyone else. This strange happening was due to the fact that the management of the timeshare, or sponsor had the right to provide rooms as necessary. It began to become clear that the organization running the timeshare was taking my maintenance fees and not providing rooms to the timeshare owners. It was time to unload.
Selling the Beast
The Internet provided a big surprise to what my $26000 timeshare was worth after 8 years: there were over 300 units for sale with prices as low as $2500. No I did not miss a zero. It seems that many others who bought were also trying to get out even for 10 cents on the dollar. I listed my unit and engaged one party who was interested but failed to follow through. Many units were for sale in a bad economy with little chance of selling. If I did not sell my unit I was doomed to pay $2000 per year for nothing provided or of little satisfaction. I also tried to sell the unit back to the developer for a little more than 10 cents on the dollar. The developer was not interested.
Pursuing Legal Action
Some attorneys are advising that filing complaints with governmental agencies for fraud often go unheeded due to missing low dollar amounts of the fraud, manpower shortages, and stupidity and indifference. In point, filing a complaint is a waste of time. It was noted on the Internet that suing the timeshare sponsor would possibly bring the timeshare owner back to a state of wholeness but at a cost of about $25000. $51000 to obtain $26000 would amount to an exercise in throwing $25000 out the window. A sunken cost approach was not the way to go.
Charitable Donation
For some reasons unknown legitimate charities have an interest in timeshare donations. Charities accept worthy ones and the only cost to the person donating is having the documents transferring the timeshare notarized. I completed mine without a hitch. The benefits of the transfer to the owner are that the escalating maintenance fees are gone, the estate will not be responsible for payments, and the IRS allows a tax deduction for the loss/donation. I have just completed mine and look forward to spending the money on anything other than the timeshare.
Summary
Researchers have noted that buying a timeshare amounts to buying a nightmare. I should have picked that up when the book or rules and regulations were provided upon signing the contract. A 400 page book of what the seller is providing constitutes a cloak of protective mechanisms allowing the seller to do whatever is in the seller’s interest. The seller wants your payment to buy and your maintenance fees to maintain his, her, or their profits or revenue. They have you the buyer on a hook with their hands in your pocket to insure that their continuing benefits are constant.
The seller or sponsor controls the system and there is little an individual owner may do to secure what has been paid for and not provided. In point, once you buy you are their subject and under their control. As deemed necessary means whatever the seller group defines as necessary. Your right to challenge this is absent since you have given that right to the group controlling the timeshare organization when you signed the contract and accepted the rules identified via the book. What should consumers be aware of in terms of timeshare ownership?
Consumer Protection Points
1. It is a widely held conclusion that timeshares are not the best deal in town. You will not get your money paid to purchase when and if you sell. Timeshare sale prices rather than going up tend to move downward as a function of time.
2. Timeshare sponsors will not buy back the unit they sold to you. More than anything they want your maintenance fees.
3. Basically you have few or no rights.
4. If you are contemplating a purchase check the Web for current offerings.
5. Know that rules and regulations associated with the sale are designed to protect the sponsor, and not the buyer.
6. Check to see if there are complaints against the sponsor.
7. Check the quantity of donations of the timeshare to charities.
8. Know full well that the sponsor controls the operation of the building or complex and may change anything under the as deemed necessary clause.
9. Filing complaints or bringing suit for alleged wrongs may be an exercise in futility or costly mistake.
10. Know that some timeshares are deeded meaning that when leave this world your children may inherit a nightmare.
11. When all else fails and you cannot unload consider a donation to a charity. You will keep your maintenance money and use it to secure the days you want and not what the timeshare wants to give you if and when they do. You may also recoup some of the original cost via tax write-offs.
12. Note that charities will only take your donation if you do not have any mortgage and your maintenance is paid for the contract year.