Are Owner Complaints about Maintenance Fees Valid?

Sometimes it's difficult for even the most seasoned timeshare owners to figure out where their maintenance fees are going. Maintenance fees are a necessary part of owning a timeshare. The fee cost is determined by the HOA or the developer, depending on who owns the resort. Part of the fee is the owner's share of the cost of operating the resort. Another part of the fee is put into a reserve fund to pay for necessities that keep the resort looking good and help to maintain the value of the timeshare. Landscaping, external upgrades, furniture and appliance replacements are some of the items paid for by fees. In certain areas, there may be special assessments added to the fees to cover unexpected expenses such as damage from hurricanes... or as we recently saw, sinkholes!  Timeshare owners need to understand that there is no guarantee that locks in cost of the maintenance fee for the term of their ownership. It can go up or down depending on the circumstances.

Maintenance Fees for HOA Resorts Lower Than all other Resorts

A 2010 study for ARDA on HOA controlled resorts suggests that overall HOA controlled resorts are in pretty good shape. Maintenance fees were not reported as significant for most of the resorts. In fact, in the 2011 State of the Industry Report, the maintenance fees for HOA controlled resorts were lower than maintenance fees for all resorts. For purposes of the study, all of the three legal types of owner associations (HOA, property owners association, and condominium associations) were included under the term HOA.

Concern -Timeshare Foreclosure

The main concern found by the study was the number of timeshares in foreclosure because of unpaid maintenance fees.  According to the study, there are several factors contributing to the delinquency in maintenance fee payments.  The number of timeshares that were vacant in 2010 is higher than reported for all resorts across the past five years. HOAs may need to provide owners help with rental and resale programs to help fill vacancies and help keep maintenance fee payments current.  There's a need for resorts to keep owners aware of exchange opportunities, and to re-educate those owners experiencing financial or personal problems, of ways to help overcome problems and rekindle more interest in their timeshare.

Club Tesoro in Cabo San Lucas came up with an interesting solution for dealing with unpaid fees. They let their owners, if needed, put the maintenance fee payment on hiatus. Of course, owners can't use the timeshare or other benefits until the fee is paid, but if they choose this option and keep their other obligations, they are not in arrears and can reactivate when they want to use their timeshare.

Owner Complaints

A number of reports reveal there are some timeshare owners very unhappy about maintenance fees. According to the New York Post, owners at New York's Manhattan Club are complaining they've been beset with rising maintenance costs and are not getting anything in return. They say it's nearly impossible to book rooms or sell their shares.  One owner, Irene Smalls, said she paid $20,580 in 2002 for one week at the hotel/timeshare, and at the time thought it was a good deal. Now she says yearly maintenance fees have shot up to $2,200 and she can rarely book the week she wants. The developer of the Manhattan Club, Bruce Eichner is facing a New York State Supreme Court lawsuit in which timeshare owners allege he sold more than 18,000 ownerships for 286 rooms resulting in a minimum shortage of 69 rooms every week according to the New York Post

In a recent TripAdvisor forum, owners at St. John's Sunset Ridge voiced concerns about the high cost of their maintenance fee of $1,400.  About 5 years ago owners took over control of the property from the developers who had let the resort fall into disrepair. Now that the HOA's restoration work is almost complete Sunset Ridge owners are hopeful they will soon be able to lower the fees.

And, in a RedWeek forum, owners shared their concerns about continually rising maintenance fees at Arizona's Diamond Resorts. Owners claim that their fees have increased an average of 20% per year in the past 3 years. One owner stated that he had been contacted by a board member of Diamond Resorts to expect an increase in fees for was 44.5% over what he paid in 2013.

On, an owner asked this question,"I own two timeshares where the maintenance fees are getting too much to pay. Can I just walk away from these timeshares by not paying the yearly fees or will they pursue me?  What to do?  "Kathy Graham, president/CEO of the Better Business Bureau of Coastal Carolina answered, "The fast answer is no--you can't walk away--especially if it is a "deeded" timeshare. Graham went on to compare it to walking away from a mortgage. She advised that the best thing to do to be free of the fees would be to sign over the deed.

What's an Owner to Do?

Maintenance fees are not going to go away. They are necessary part of owning a timeshare and needed for the upkeep of the property and maintaining the value of your investment.  As a buyer, educating yourself on the many issues (especially legal issues) surrounding a purchase of a timeshare is one of the best things you can do to protect yourself, and to insure you make a wise purchase. Legal issues on timeshares vary from state to state and country to country, so be aware of the laws of the area  where you purchase your timeshare.

As an owner, it's smart to keep current on all issues relating to timeshare ownership. If owners want to have more input into the decisions made by the HOA, they could serve on the board, or at least attend all board meetings. Make your voice heard and your vote count. Think of your timeshare the same way that you think of your home or car.  Both need repairs and replacement items on a regular basis to maintain their value, and to enhance your personal comfort, safety and pride in ownership. All of the same conditions should apply to your timeshare.

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