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Deedbacks make sense (by Carvan A.):

The latest issue of "Timesharing Today" has an editorial on page 3 titled "Deedbacks make sense". I suggest anyone interested in the topic or those who are unable to sale or give away their timeshare and feel burdened into infinity with maintenance fees to read the editorial. The point made is that a deedback is a win-win for both the resort and the timeshare owner because of the expense of the foreclosure process to the resort and the adverse impact of a foreclosure upon the credit of the timeshare owner.

The editorial points out that the resort may initially resist the deedback but that it is in their best interest to accept the deedback to save the owners money (foreclosure costs) and to quickly get the property into the hands of a new fee paying owner.

The editorial references a letter to the editor on page 5 from an owners association that complains of postcard companies who take title from timeshare owners for transfer fees of $2,500 or more and then default on the maintenance fee when unable to sell the timeshare. The writer said the owner's association is typically unable "to locate any representative from the business". Surprise! Surprise! The letter said the costs to the resort is typically $1,400 to go through a foreclosure. This is passed on to the owners in the form of higher maintenance fees. The only entity that profited from this series of transactions is the postcard company.

I agree with the points made in the editorial and will add a few thoughts of my own:

1. Maintenance fees are are not a personal liability because the timeshare buyer did not sign a promise to pay and the failure to pay these fees will not harm one's credit. The failure to pay will result in letters and phone calls but this action will not harm one's credit. Remember the failure to pay a maintenance fee is not related to a failure to pay the purchase money mortgage which is a personal debt. If you financed your purchase and fail to pay the mortgage your credit will be damaged because that is a personal liablity just like the mortgage on your home or car.

2. A failure to pay your maintenance fee will result in a foreclosure and that will definitely harm your credit and should be avoided by negotiating a deedback. A deedback will not harm your credit and is done to protect your credit.

3. The resort will initially resist a deedback because they "are not in the business of taking deedbacks" but ultimately most will for the reasons set out in the Timeshare Today editorial.

4. The comments above have no applicability to vacation clubs and those owners should check their contracts to determine whether they have a personal liability for annual fees. Most likely they do. One reason developers are trending to vacation clubs is to be able to sell more memberships per unit (timeshares can sell only a finite number - 50 to 52 per unit per year - but clubs can sell as many memberships per unit as they can get away with so long as they avoid out and out fraud) and to ensure personal liability.

5. Estates can be closed once assets are distributed and debts due at the date of death are paid. This would include maintenance fees due at death but not ongoing maintenance fees into the future. The executor has a legal obligation to publish a legal notice notifying creditors of the death of the timeshare owner but he/she is under no obligation to notify the resort of the death of an owner. It is the resort's obligation to timely file a claim with the executor/administrator within the time frame set by law. The failure to timely file causes a forfeiture of the claim. An heir can disclaim ownership of a worthless timeshare or any bequest for that matter within 9 months of the date of death.

A frequent poster on this site will vehemently disagree with what I have said here and will slice, dice, and distort what I have said. I will not engage her for reasons previously stated on this site. I suggest to her that she let the reader decide and that any reader who has doubts about what is written here should verify same with their personal attorney. I will not name this frequent poster but will say she by her own admission uses "dial up" to access the internet but she does know how to cut and paste and to use bold print.