How To Survive Timeshare Ownership During Economic Crisis
December 4th, 2008 by Bobby Kip Hernandez, under Vacations. No Comments
With the global economy in crisis, timeshare developers are facing a credit crunch that reduces the number of timeshare buyers. With a reduction in overall sales, timeshare companies must tap another source of revenue for some relief to these tough financial times. Timeshare owners have already started receiving notices of abnormally large special assessment fees.
Many timeshare contracts allow the timeshare companies to charge special assessment fees for repairs, emergencies and extenuating circumstances regarding the timeshare resort. Moreover, those fees may have no cap, and many owners do not know their obligations until it is too late.
Recently, timeshare owners have opened up their mailboxes to find bills ranging from $500 upwards of $3,000. It’s a crushing blow to those who may have lost jobs, experienced cuts in pay and/or work hours, and seen their stock portfolios plummet in value. Owners are truly understanding where they fit in the financial pecking order of the timeshare industry.
You would think that the millions in upfront cost and annual maintenance fees would be able to keep afloat all timeshare resorts. Unfortunately, many corporations leverage what they have to build more timeshare units in different locales. This strategy works well in good economic times but tragically multiplies the draining effect when credit is scarce and when revenue decreases.
And what if the special assessment fees are not paid? Not surprisingly, many timeshare contracts are skewed in favor of the developer. They charge non-payment penalties, garner wages, and put liens on real property like the homes of timeshare owners. What’s worse, default judgments can impose these penalties immediately following the payment due date.
With the timeshare resales market already saturated, there is little left to do but to pay the bills and keep the timeshare. Many charities don’t even want the liabilities. For some relief, owners can try to rent their units to recoup some cost. But, they need to realize that their resorts are probably doing the same thing, yet at lower rental rates.
