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Original Message:
Estate Handling of a TS (by Carvan A.):
Mike asks:
1. Can a resort forclose on a property if they do not hold a mortgage on the property?
Answer: Absolutely yes. The developer files a declaration (comparable to a deed restriction) in the county deed records before the first timeshare is sold that allows the resort (owners assocation) to foreclose on a timeshare when the MFs are not paid.
2. Wouldn't it have been much easier for all, if upon the death of a TS owner, the resort took back the property?
Answer: Certainly if the MFs are not paid and the timeshare is essentially worthless. On the other hand, most heirs gladly claim and take possession of timeshares that are in prime locations and in desireable seasons with reasonable MFs. It is the dogs that end up in foreclosure.
3. If the resort doesn't in some manner take possession of the TS, what happens to it, does it go into a TS "Black Hole"?
Answer: Not really. If all heirs decline (disclaim is the legal term) the timeshare it will fall into the residue of the estate. In time the resort will attempt to collect the MFs by using a collection agency. The collection agency will learn that the time frame for filing a claim has passed and there is nothing they can do but foreclose. The resort may attempt to contact the executor or administrator and seek a quit claim deed in lieu of a foreclosure but ultimately there will be either a quit claim deed or a foreclosure. The timeshare will not remain in a "black hole".
It is important to remember that an heir is not automatically liable for any MFs (this point seems to confuse Jayjay) until the title is in the heir's name and the resort is notified and changes its records to reflect the heir as the new owner.
You may also wonder about situations where there is no will and no administration of the estate. This is call intestacy. The various states have statutes that govern how property passes in the event of an intestacy. A timeshare could pass to an heir by intestacy but the heir can just ignore the MF bills if he or she chooses. The title is not in his name nor is the title changed on the resort's records until and unless there is an administration. The heir will not open an administration (expensive) merely to claim title to a worthless timeshare. The resort could force the opening of an administration but this is costly and the legal requirements so cumbersome that most resorts would never go to this extreme. The resort in this situation will foreclose.