Legal position of not paying annual fee

[Bob]

I am curious to know what the situation is if I simply stopped paying the annual maintenance fee on my Tenerife timeshare and ignored any further correspondence. What legal action can they take against me? Surely the chances of them being successful in the UK courts are low considering the reputation of timeshare.

[Keitht]

If they do decide to take you to court in the UK I don't think you would be able to hide behind the reputation of timeshare as a defence.  You entered into a binding agreement with a company which you would have broken if you simply stop paying, and that is what the court would be looking at.  Unless you could prove that you were lied to your case would be extremely weak.

[daviday]

I'm not thinking about stopping paying my maintenance fees but, having bought resale, I don't ever recall having signed ANY contract whatsoever, let alone one that says I agree to pay the maintenance fees until I can dispose of the week. I wonder what the legal position would be in my case.

[LorieO]

daviday,
I've bought and sold resales also.  If you received a Deed/Certificate of ownership there is wording similar to a contract on a new purchase, binding you to the Annual maintenance fees until the end of time.

lorieO

[daviday]

Certainly, one of my holiday certificates says "...subject to the observance by the Member of the said Constitution and the Trust Deed... including... the provisions relating to payment of the management charges."

The other ones just say "...the assignee(s)... accepts the whole obligations of the time owner in terms of said Holiday Certificate."

God knows what a judge would make of that.

[coolcymru]

We bought a time share in Tenerife in 2000(under duress!) and used it quite a few times but not to our advantage really. We never could get an exchange that we wanted and so, every other year we ended up going back there by banking our week one year and going there for two weeks the year after. {banned word/phrase} were relentless in chqasing us to buy more and more and when I asked them if they could sell it for us, they said that they would only do this IF we bought another week!!! Fees keep on rising and this year we were not in the position to pay due to redundancy etc. I spoke to someone a few months ago when {banned word/phrase} called to offer us bonus weeks. I explained our position and asked her advice. I was told if I couldn't pay that all they would do is withdraw the week from us. I have received demands for the fees several times but have done nothing. The last letter received stated that if the unpaid fees remained unpaid by XXX they would be sold and would no longer belong to us. That's OK by me. I can't pay anyway. The only thing that troubles me is that my credit rating will most probably be hit for six! I'm keeping my fingers crossed that this is all that will happen.

[daviday]

Coolcymru, as far as I'm aware, your credit rating would only be affected if you were to have a UK county court judgement entered against you. That is to say, you would have to lose a case brought before the said court first and fail to pay the amount successfully claimed by the plaintiff. Banks and other credit providers may share information about their credit transactions with you but I would not have thought that would have applied to other organisations.  I couldn't just write to a credit reference agency and say "so-and-so owes me money" and debt collection agencies are not allowed to do so either.  

I would be really interested to know if any timeshare operator has successfully sued a client for unpaid maintenance fees, something that they might have to repeat in every subsequent year if the debtor continually failed to pay.

[coolcymru]

Thank you for your quick reply! The reason that I thought that this might happen is that someone on Trip Advisor said that this would happen to another person in the same position as myself. I can see exactly what you mean though. To be honest it feels like a weight off my shoulders to unburden myself of this week. Our holidays were ALWAYS spoilt by the resales team until I refused to go to the office point blank one year. We have spent hours and hours there with sales people pushing pieces of paper towards us on the desk, with figures showing what we "could" get if we bought more weeks and then sold etc. or invested with them etc. On several occasions I ended up in tears and one time it was SO bad that the sales person must have felt so bad about the way we were spoken to by the "closer" who comes along at the end when you think that you can't take any more, and is so rude and aggresive, that he actually came to say sorry the next day. Is this "a first?" We only bought it anyway as we were conned in 1999 by a company calling themselves R&S Marketing, working out of one of RCI properties in Tenerife where we went for a package holiday.They went "bust" very conveniently the week before we took a holiday at the B.H.C. arranged via R&S Mareting. We stood to lose our money but they very nicely and VERY cleverly offered us the timeshare with the £3000 paid to R&S "off" the cost of our week at the Beverly Hills Club, to safeguard thier good name they told us! I have often asked myself WHY did RCI allow this so called company to use one of their properties as a base to sell these holiday weeks anyway? There were scores of people there that R&S had brought over from the UK to stay at this place and purchase the holiday weeks (unlike us who were there for a two week holiday with the kids, bought via a travel agent!) We were there in the office for approx. 7 hours hard sell....and signed just to get out of there. As I said, we've had some OK holidays there but I'll be glad to know that this all behind us and we can move on! If it wasn't for the fact that our circumstances have changed dramatically, no doubt we would have kept it and used it very occasionally. Thank you once again for your reply.

[coolcymru]

OOPS, didn't realise that I coudn't use certain names. Sorry![:I]

[Keitht]

quote:Originally posted by coolcymru

OOPS, didn't realise that I coudn't use certain names. Sorry![:I]

Don't worry.  The software does the work to protect the identity of said company.  The fact that they forced this site to remove their name should speak volumes!

[daviday]

Is it for the same reason that the previous owner of what are now Diamond Resorts is always referred to as "The Former Company"?

[Bob]

From the replies it appears that the route any timeshare organisation will take is to withdraw the weeks availablity. I am trying to find out through a few legal contacts if any case (successful or not) has been brought to any EU court.

[Simoncc]

quote:Originally posted by daviday

Is it for the same reason that the previous owner of what are now Diamond Resorts is always referred to as "The Former Company"?

No, that is an attempt to draw a line under the activities of 'The Former Company' and the decision for that was made by the modarators of the DRI forum.

[Homer Share]

quote:Originally posted by Bob

From the replies it appears that the route any timeshare organisation will take is to withdraw the weeks availablity. I am trying to find out through a few legal contacts if any case (successful or not) has been brought to any EU court.

I think many owners are wanting to know the answer to that.

If there had been cases brought to court I am sure they would be known on this forum and in the media.

Timeshare companies used pressure selling to sell their timeshares and they are using similar pressure tactics to threaten people who don't pay the maintenance fees.

[Homer Share]

This thread has been running for nearly a month now and no one has posted any evidence of cases brought by timeshare companies. Surely some would have come to light by now if there were any?

The evidence seems to suggest that the worst that will happen is repossession which, for many, would be no more than a relief.

Furthermore with the present economic climate and the now widely known problems of timeshare I cannot see the timeshare companies reselling repossessed timeshare weeks easily, if at all. Good.

[56johnmc]

Have you looked at the constitution for your timeshare? Are there any sections dealing with the non payment of management fees? I own at Loch Rannoch and when Macdonald's was the management company, they were required to sell the defaulting units by auction. Any Macdonald owners want to check their constitutions to see if their timeshares have similar requirements (non Macdonald sites should do the same).

If such a section exists, then you have your answer as to probably why no case has ever come to court. Any judge worth his salt would ask if an attempt had been made to sell the unit and if not why not

You should also consider the fact that if the default unit has been rented out by the management company, who has received the rent? How much has used to reduce the amount outstanding, how much has been kept by the management company and how much is still shown as outstanding in the accounts?

John

[Homer Share]

quote:Originally posted by j.mcfarlane

Have you looked at the constitution for your timeshare? Are there any sections dealing with the non payment of management fees? I own at Loch Rannoch and when Macdonald's was the management company, they were required to sell the defaulting units by auction. Any Macdonald owners want to check their constitutions to see if their timeshares have similar requirements (non Macdonald sites should do the same).

If such a section exists, then you have your answer as to probably why no case has ever come to court. Any judge worth his salt would ask if an attempt had been made to sell the unit and if not why not

You should also consider the fact that if the default unit has been rented out by the management company, who has received the rent? How much has used to reduce the amount outstanding, how much has been kept by the management company and how much is still shown as outstanding in the accounts?

John

That is pure speculation. You refer to a particular company in one particular location and what might happen. Bob was refering to any case brought worldwide regardless of outcome. So far there is no evidence of any case being brought to a judge anywhere in the world, let alone what decision any judge would make if one might be brought.

[56johnmc]

Your comment is illogical because if it is pure speculation then I cannot refer to a particular company in particular location. I quoted fact, not speculation, relating to a particular situation that I am aware of and making a suggestion as to why no cases have been brought.

It might be helpful if you explain what you refer to by the "what might happen" as I am not clear what you mean by that statement.

People or organisations who are owed money take action in the courts to recover the sums involved. The question is why are there no such cases that I, and apparently no one else, are aware of. Why are these timeshares not taking action to recover the debt when they hold the stronger hand against the defaulting owners? For what reason would they be willing to forego all that money?

Because it is in their interests to do so. I know from a posting on the internet that Macdonald have been renting out a timeshare in default while at the same time allowing the debt to increase continually each year for the owner in default and have done nothing about it in the courts. The case in question was finally settled without the courts involvement but I recall at a cost less than the debt.

Timeshares will take the actions that benefit them and I don't see how not taking action to recover a debt benefits any timeshare company unless there is a situation that benefits them more.

[Homer Share]

Again you speculate as to why timeshare companies may not take action. The facts, so far, are that they have not taken action, whatever the reason might be. There would surely be some cases worldwide if they had reason to bring a case? I think their pressure selling tactics have made it difficult for them to bring cases. Yes that is also speculation but the pressure selling is not. That is a fact.

[56johnmc]

Sorry you are very wrong. After getting rid of Macdonald, I remember being told by either privately by one of the management company of Loch Rannoch or it was mentioned at an Annual General Meeting that writs were issued against owners who defaulted on their management fees. I do not believe any cases went to court as the owners paid up.

The only owner who could not be issued with a writ was Macdonald because of the court case between them and the Loch Rannoch Highland Club. I am prepared to inform you without prejudice that I was informed by a member of the Loch Rannoch committee that Macdonald were renting out units of defaulting owners without declaring how much they had gained, kept for themselves or used to reduce the debts of defaulters in the annual accounts. At a meeting of the club I manage to get the representives of Macdonald to admit they were doing what I just described. So there is obviously a pretty strong incentive for no action being taken by the management companies, the owner cannot use their timeshare, the outstanding debts keep increasing on the balance sheet(against the requirements of accounting regs SSAP2/FRS1) and the management company can earn money from the rental fees.
In the case of Loch Rannoch this is fact.

You are leading a sterile debate without offering any advice to anyone. I have suggested that people look at the constitution of their timeshare and see what action the management company should be taking when an owner defaults - this particularly applies to Macdonald managed timeshares. If the unit should be put up for auction within a set timeframe and it has not then the management company is in breech and the owner would have a strong case for arguing that their debt should be limited to that period of time.

Oh and just a final thought. Do you know how the value of timeshares could be increased quite easily. Allow owners the right to hand their timeshares back when they no longer want it for whatever reason. People are put off timeshare because they fear a millstone round their neck in later life. Without that fear people would be more willing to buy timeshare and the timeshares would earn income from sales of the units handed back.

Think about it