It’s usually around Christmas time that the maintenance fee bill hits timeshare owners’ doormats. Perhaps choosing this notoriously financially challenging time of year to issue their invoices is not the best of ideas, but it’s usual practice, nonetheless. No one likes a big bill hovering over their head while they’re trying to enjoy their Christmas break. Maybe your timeshare resort doesn’t issue its invoices at Christmas, but either way, it can be a big shock – especially when the amount has drastically risen since last year.
We are often contacted by stressed timeshare owners who’ve just received an enormous timeshare maintenance fee bill. Most of the time, they tell us, the amount has soared since they first took out the timeshare contract. And where this rise is above the rate of inflation, there is a clear problem that needs addressing. If this sounds familiar, get in touch – if maintenance fees become unreasonably high, it could be grounds to nullify the contract and perhaps even for compensation of sums taken in the past.
It can be tempting to take desperate measures when you discover that your timeshare fees are no longer affordable. Finding that the cost seems suddenly completely unreasonable, some people consider stopping paying maintenance fees in protest. However, this is not a good move. Remember, you have probably already agreed to these rising fees in your timeshare contract. By stopping paying timeshare maintenance fees, you could put yourself in a difficult situation.
That’s not to say that those fees are necessarily above board. We are well-acquainted with situations where timeshare companies have worded their contracts unclearly or in violation of the law. That’s why it’s important to put your case before a timeshare expert, who will be able to look at the individual circumstances of your case and ascertain what the problem is.
What are maintenance fees for?
Maintenance fees are annual payments that are made by all owners of a timeshare property to pay for the day to day running of the resort. This money goes towards the upkeep of the property such as furniture, electricals and any updates made to the resort itself. It also pays the gardeners, housekeeping staff and those who maintain the amenities at the resort, such as the pool, gym, or any other facilities.
The sum that you are charged is calculated by the timeshare resort for the total cost of resort maintenance, then divided between the timeshare owners. Usually, this is an equal amount between all owners, though sometimes those with larger or more expensive units will pay a higher fee than those with a smaller or lower standard accommodation.
When you signed up for the timeshare, your contract will have stated the amount that the maintenance fees would cost, so by signing the contract, you have agreed to pay the fees for the duration of your ownership. It is also usually stated in the contract that the resort reserves the right to increase maintenance fees without prior notice.
If you have a suspicion that the rise in your maintenance fees is unfounded or dubious in any way, there are things you can do.
Write to your timeshare company (by post or email – not over the phone) to request a full breakdown of how the sum was calculated and the costs of which it was comprised. You are legally entitled to access to information about what you are paying for and they are obliged to provide this information. If possible, also request the previous year’s breakdown so that you can compare how funds were spent. We often find that some sneaky costs have been added to the bill (things like ‘admin fees’ without explanation of what these were for). Take this information to your timeshare contract expert, who will be able to work with you to investigate further as to the veracity and legitimacy of these charges.
A New Management Company Has Taken Over
If your timeshare resort developer has sold the resort to a new owner, they will probably employ a new management company to handle the running of the resort, or your existing developer may decide to change management company for one reason or another. This commonly leads to a sudden rise in maintenance fees that can be quite staggering.
Find out more about what happens when a new management company takes over your timeshare here.
If you stop paying maintenance fees, the company will contact you requesting payment. Most likely you will get a payment demand in the post with a notice of the missed payment bill. As you have missed a payment, there is a chance of incurring a late fee if it is stated in your contract. Sometimes the longer it takes to pay the bill, the higher the interest they’ll charge, so you will end up with an even higher fee, should you eventually decide to pay it.
If you still refuse to pay maintenance fees, even after the first payment demand, the timeshare management company will then send the bill to a collections agency, either in-house or third party. Debt collection agencies have the power to force payment and often do so by consistent phone calls and letters demanding the payment. They may also offer a deal to settle the debt, which can include monthly instalments with a view to decreasing the debt over time. They will request a breakdown of your income and outgoings in order to ascertain what you are able to afford to pay.
Having the involvement of a collections agency will make a negative entry on your credit report meaning your credit score will drop and even if you pay the bill, this negative entry will stay on your report for seven years.
The final action that can be taken against you if you still refuse to pay maintenance fees is civil action. The management company may file a lawsuit against you where you will have to go to court to defend your failure to pay the fee. If the judge awards the case to the timeshare management company, you could face a levy in which the creditor freezes your financial account and then takes the money in that account to cover your debt, or a garnish in which the creditor obtains an order to force your employer to seize a portion of your wage which will then be put towards repaying the debt. A judgment will also appear on your credit report for seven years and will negatively affect your credit score.
What If I Stop Paying Maintenance Fees Because Of A Dispute?
If you have become dissatisfied with your timeshare, concerned that the law has been broken, are raising a case for timeshare compensation or release from your timeshare contract, the same holds true.
In the majority of cases, we advise all our clients to continue paying their maintenance fees until the case is finalised. If wrongdoing is proven, you may be awarded the sum of those fees back in timeshare compensation. In any case, showing that you are willing to uphold your obligations throughout the case puts you in a stronger position; in a legal battle, the timeshare company will use any ammunition they can get to try and place you in the wrong. Do not provide them with this ammunition by stopping payment of maintenance fees.
A lot of timeshare owners took out a loan through an external company to fund the initial purchase of their timeshare, often under duress by the timeshare salesperson. When you are seriously considering leaving your timeshare, raising a case for timeshare compensation, or are disputing any aspect of the contract or fees you are being charged, you must not stop paying back your timeshare loan. This can be as, if not more, damaging than stopping paying maintenance fees, and particularly where the loan was taken out against your home.
If the loan is against your home, like a second mortgage, then you could also be putting that at risk by refusing to pay. The situation will escalate in the same way, with letters, phone calls and debt collectors – and could ultimately end in your property being repossessed.
There have been numerous cases of timeshare loans being issued without proper due diligence being carried out by the loan provider, which has landed some providers in deep water. Along with any malpractice by your timeshare company, legal action can be taken against the loan provider when wrongdoing can be proven. Consult our team of timeshare experts to find out more about what to do about mis-sold timeshare loans.
Seek legal advice
Maintenance fees are part of the contract that you signed when you purchased the timeshare. The decision to stop paying timeshare maintenance fees without legal advice can be a messy situation and will end up costing you a lot more than just the fee alone and it still won’t get you out of your timeshare contract. If you don’t want to pay your maintenance fee, seeking legal advice will help you get out of your timeshare contract the right way.
If you are looking for legal advice in relation to your timeshare, get in touch with us. We’ll be able to help you proceed in the right direction, and offer you all the facts and advice you’ll need to get the result you are looking for. Find out more about claiming with a chat with one of our friendly advisors. Just fill in the form below: