Ask RedWeek / December, 2016

What happens if I don't pay my maintenance fees?

I own a timeshare at the Manhattan Club in New York, which is a wonderful place, but I am extremely frustrated because I cannot easily make reservations to use my unit. I also know the Club is being investigated for possible civil and criminal fraud by the New York Attorney General's Office. In light of what has happened, I am seriously considering NOT paying my maintenance fees for next year. What will happen if I decline to pay my fees?

To answer this question, Redweek interviewed lawyers familiar with the Manhattan Club case, as well as HOA Board members at legacy resorts who see rising numbers of delinquencies from owners who cannot keep up with (or refuse to pay) their maintenance fee obligations. We also consulted with collection companies that pursue owners for payments when their accounts go delinquent. Here is what we found.

Happy Holidays and Hello Maintenance Fees

Maintenance fee bills for 2017 started hitting mailboxes around Thanksgiving, welcoming timeshare owners to another year of usage, endless vacations — and increasing fees for the right to make reservations. With maintenance fees (and taxes) ranging from $500 per week at a legacy beachside timeshare to $3,000 per week at a new brand-name timeshare on Maui, the choices are daunting. Multiply that financial choice by two or more for multiple-week owners (an estimated 50 percent of all owners own more than one timeshare interval).

As a matter of policy and ethics, RedWeek recommends that all owners pay their maintenance fees if they intend to continue using their timeshares. However, every year during the holidays, a growing number of timeshare owners reconsider their options when confronted with a bill that pits their vacation issues against their pocketbooks. This year, most maintenance fees are expected to increase two percent or more (and higher, for some Hawaii owners). For those who choose NOT to pay, here are the likely consequences of failing to keep your account current:

  • Your resort will refuse to process reservations going forward until all fees are paid. Failing to pay maintenance fees is a violation of the purchase contract.
  • Your developer and/or resort may pursue you, aggressively, with phone calls and letters, to pressure you to pay maintenance fees. Alternatively, after a few months or more, they may turn your account over to a third-party collection agency to handle the phone calls. The major threat, typically, is that the resort or developer will report your delinquency to a credit-reporting agency, a move that could hurt your credit score (and, perhaps, impair your ability to get a future mortgage or car loan). Some companies are much more aggressive about pursuing this tactic, but all of them reserve it as an option to scare owners into paying. It works, too, since many timeshare owners — even those in their 70s — would rather keep paying maintenance fees than risk hurting their credit.
  • Your developer, or HOA board, will eventually pursue foreclosure against your ownership. This is a process that typically takes many months, if not years. Some legacy HOAs don't pursue foreclosure actions for years, hoping, instead, that a delinquent owner will eventually bring his or her account up to date. Foreclosure proceedings can be expensive, which is one of the reasons that formal foreclosure proceedings sometimes lag many months behind a delinquency.

If You Don't Pay, Other Owners Will

Beyond the personal ramifications, the most damaging consequence of a default on maintenance fees is its impact on other others. Because of the basic economics of running a resort, when an owner fails to pay his or her maintenance fees, the resort absorbs the loss, then passes it along to other owners who are in good standing. This process also takes time, but is inevitable. Big developers, with many resorts, resources and relentless sales organizations, can absorb these losses better than smaller companies. They just write off bad-debt, foreclose, and move on. Stand-alone legacy resorts, in contrast, survive year to year on their maintenance fees. They rarely have a reserve cushion to cover losses, or a resale organization to recycle delinquent units. (Legacy resorts strapped with double-digit delinquencies, in fact, are resorts on the verge of insolvency.)

Here are some statistics about collections that owners at legacy resorts should consider. For every month that a resort postpones pursuing a late-paying owner, the resort loses money. If the resort turns an account over to collections after three months, the chances of making a recovery are 70 percent. At six months, the recovery rate is 55 percent; at nine months, 40 percent; at two years, 15 percent.

(These statistics were presented to the Timeshare Board Members Association, by collections companies, in October.)

The Manhattan Club is a Special Case

While maintenance fees can irritate any owner — especially if they seem to go up, drastically, year after year, or are linked to a special tax assessment — they are particularly galling for owners at the Manhattan Club, which has been embroiled in legal controversy for three years. A partial result of that controversy, which we have covered extensively in other RedWeek forums, is that owners don't know whether they should continue paying maintenance fees that average $2,500 per one-week interval. Many of these owners, meanwhile, say they've been unable to use their timeshares for years, so why pay maintenance fees?

"This is the number one question I get all the time," said Douglas Wasser, a New York attorney who works on behalf of several dozen Manhattan Club owners as a liaison with the Attorney General's office.

"The answer is, it all depends on their tolerance for risk. I think Manhattan Club owners would have a very good defense to justify non-payment. Some are so adamant about not getting any benefits, for years, that they refuse to pay. That's a reasonable position to take."

To date, Wasser has not heard of any instances where the Manhattan Club (which is now barred by court order from selling timeshares) filed negative credit reports against owners who are behind in payments. The Club has, however, aggressively contacted owners about late payments.

To Pay or Not to Pay...?

"I tell folks that they may have a good faith defense against the payment of dues," Wasser said. "The timeshare agreements imply that if a TMC unit owner pays their dues, then he is entitled to membership benefits. But many TMC unit owners who have paid dues loyally, for years, and been denied their benefits. That's a good faith defense against the payment of those dues."

The dues-paying questions at the Manhattan Club will be resolved, presumably, when the NY Attorney General concludes its investigation of allegedly fraudulent business practices at the club. For now, though, many owners who have contacted RedWeek plan to continue paying, hoping the AG's case will somehow conclude with some rulings that benefit longtime owners. Others are just walking away, happy NOT to contribute to the club's finances one day more.

"The Attorney General is investigating the manner in which TMC skewed and subverted the market to its own benefit, thereby depriving TMC unit owners of a fair shot at redeeming their benefits," Wasser said. "If the Attorney General wins, hands down, and finds a fraudulent scheme at TMC, then I would expect there to be little penalty in withholding annual maintenance fee payments. However, should TMC win, there could be the possibility of late payment penalties for nonpayment."

Maintenance fee payments for Manhattan Club owners also include property tax payments to the city. According to Wasser's count of units owned by his member clients, the club's tax payments to the city may be behind by as much as a year. This unpaid tax issue will have to be resolved, down the road, when and if owners try to sell their units. New buyers will have to pay off all back taxes to secure clean title to any Manhattan Club timeshare. Not an issue for the moment, however, since the legal complications hovering over TMC have all but killed all resale activity for the once mighty Manhattan Club. Rental activity at the club, according to postings on RedWeek, continue to be robust.

About the author

This answer was provided by RedWeek contributor, Jeff Weir. Jeff is a California-based journalist who has covered California, Congress, and the White House. He also has roots in Silicon Valley, where he directed public relations and marketing programs for high-tech companies. He is also a timeshare owner and member of

Comments (18)

    Avatar for Michael J.
    Michael J.
    Dec 13, 2016

    Does a forclosuer against an owner usually include a settlement to the owner of some part of the original owner cost to buy into the resort?

    Avatar for Scott N.
    Scott N.
    Dec 13, 2016

    Give us any examples of a Mexican based resort pursuing collection in the States or Canada. Affirmative defenses would be available...fraud, duress, they showed tequilas down me etc.

    Avatar for Elton D.
    Elton D.
    Dec 13, 2016

    What happens if I don't pay the maintenance fee, then I die. Who will be responsible to pay or does it cease at my death? RED1141

    Avatar for Leroy M T.
    Leroy M T.
    Dec 13, 2016

    Contact your developer or their representative and ask if they have a cancellation policy. Usually they charge a fee and you will lose your initial charge but will not have to pay continuing yearly maintenance fees.

    Avatar for James J.
    James J.
    Dec 14, 2016

    It is virtually impossible to sell timeshares. There is no market for them. We are physically impaired from taking vacations due to our age. Secondly, our income limits our paying maintenance fees. Finally When we pass what happens to the timeshare? Thank you. Looking forward to your answers.

    Avatar for Sal R.
    Sal R.
    Dec 15, 2016

    I inherited a timeshare I do not want!! What is my recourse?

    Avatar for Susan H.
    Susan H.
    Feb 28, 2017

    The manhattan club is not what if was cut out to be. They get you to buy a room for a week then they raise the common charges until it's so impossible to stay there. You can rent a room somewhere else in the city for a cheaper amout. What understand that there are so many people in this same situation , while this club is underr investigation for fraud. So Why SHOULD We Want To Own IN A Place THAT Has A C Class ACTION Suit !YOU JUST DON'T NO Weather paying the Legal Fees really goes to repairs ., or helps they oay there lawyer. I am so afraid what might happen ,bad enough to loose what you paid for but now to loose the common charges and you can't even get a room, snd they are renting to outsiders.

    Avatar for Jack K.
    Jack K.
    Jul 13, 2017

    Hi, we own a timeshare in Florida, which is fully paid and we live outside the US. We have not been able to travel for the last 3 years. The maintenance fee has been paid every year and up to date. We have realised that we will not be able to sell it; many companies have tried to assist us but with a huge fee up front. We have no intention to use our timeshare anymore. My question is if we stop paying the maintenance fee, what are some of the consequences?

    Avatar for Paula R.
    Paula R.
    Jan 09, 2018

    WE own both Marriott and Starwood timeshare. They are paid for in full. We are tired of the fees going up every year and we are finding we no longer need them. Selling is not an option resales just don't happen and if they do they are worth nothing. We are thinking of not paying the fees and just let them foreclose. Has anyone out there done that>. What were the ramifications?

    Avatar for Tiffany
    Jan 30, 2018

    This was posted on another Forum on Redweek about Marriott Maintenance Fees:

    Hello, I'm am writing this to help other people who were in my situation and I will NOT respond to anyone here. I am only writing this to help others in my situation. I would have added to the other forums about this subject but they were closed. I owned a few weeks at Marriott Summit Watch they were completely paid for & they were Mud weeks but I had used them for years and was happy with my exchanges. Marriott added a points program to their ownership years ago and I started having a hard time exchanging for anything because alot of owners went to that points program and I was still exchanging a week for a week and nothing was available. Inventory dwindled and maintenance fees kept going up every year - they were going up ALOT. I continued this for a few years and when I got my bill last year in Oct 2016 due Jan 2017 I decided not to pay. I had logged in to my Marriott online account and changed my phone # to my fax line just in case they tried to harass me and I just didn't pay my bill. While reading the other forums about this topic a person by the name of "Carvana" gave great advise and I followed that advise. I received a few letters saying I was over due and I ignored them and then this month (May 2017) I received an offer to do a Deed in Lieu of Foreclosure and Marriott will handle all the fees. I was told the lien goes on the property in Salt Lake and not myself so my credit will not be affected. I have checked my credit report twice in the last couple months just to make sure and nothing. As Carvana said .. I did not sign anything saying I would pay maintenance for eternity and this is a "in rem" obligation (maintenance fee) NOT a "personal obligation" (home loan, car loan). Marriott is sending me the paper work to hand my Timeshare back over to them and paying for everything. Again, My timeshares are paid in full and this will not be the case if you have a loan. That is a debt that will need to be paid or if you don't I do believe that will affect your credit as you did sign and receive a loan. I wish everyone the best of luck & don't let the crazy's tell you that not paying will RUIN YOUR LIFE and Thank you again Carvana with the advice - I took your advice and it worked out.

    Avatar for Stan C.
    Stan C.
    Mar 07, 2018

    I own a lot in a place named Canadian Lakes in Stanwood, Mi. This lot has associated yearly maintenance fees of over $600 and we no longer travel to Canadian Lakes to use any of their facilities. I have tried to sell this lot and even tried to donate it to no avail. What are my options here. If I walk away from the lot will my credit suffer? Can I deed the lot over to the firm that collects the yearly fees and tell them we are no longer going to pay the maintenance fees. I am retired and on a fixed budget. Ant hel you can give me would be greatly appreciated.

    Avatar for Verlie B.
    Verlie B.
    Mar 21, 2018

    My husband and I purchased and paid our shell time share out. We are and unable to use the property any more. Out health is failing and now unable to maintain these skyrocketing maintenance fee. How can we rid ourselves of this problem.

    Avatar for Melissa H.
    Melissa H.
    Mar 31, 2018

    My question is we have a timeshare that we got from premiere vacations in Las Vegas in 2002 stop paying maintenance fee. It has been 16 years and now got a letter from them saying we owe them 9000.00. We have never used the timeshare and won’t be using it. How do we get out of this.

    Avatar for John C.
    John C.
    Nov 09, 2018

    Here is the latest letter content sent to delinquent Manhattan Club owners. Note that foreclosure will be undertaken if the delinquent members opt not to take advantage of the other options to get relief

    Manhattan Club Offer Letter to Delinquent Members

    ' We believe it is important for the financial health of The Manhattan Club Timeshare Association (the "TSA") to address those Owners who are or have become delinquent in the payment of Timeshare Charges and/or Real Estate Taxes (the "Charges"). We are pleased to now offer options to delinquent Owners who would like to relinquish their Manhattan Club Ownership or return as an Owner in good standing.. OPTION ONE (1) – RELINQUISH OWNERSHIP To execute this choice, an Owner would deed their interval to Bluegreen Vacations Unlimited Inc. ("Bluegreen") with whom the TSA has a relationship. Bluegreen, once it has acquired your interval, would begin making scheduled payments of the Charges to the TSA. If you were to agree to such a deeding, we would provide you with documents (which of course can be reviewed by an attorney, if so desired) for your execution. When we receive the documents back from you (a) we will send you a settlement check for the amount of $100.00 and (b) you will then be relieved of all existing and future financial obligations owed by you to the TSA and former Sponsor under your mortgage, if applicable, preventing a foreclosure lawsuit being filed against you. Moreover, your deeding of your interval to Bluegreen will have no impact on your receipt of restitution payments, if applicable. We are pleased to be able to offer this once again as some Owners have requested it. OPTION TWO (2) RETURN TO OWNER IN GOOD STANDING STATUS Alternatively, option two (2) allows you to remain an Owner at The Manhattan Club. As an Owner in good standing, you will be able to utilize and enjoy the amenities and services offered at the Club. After selecting option two (2), you will then be contacted by a Financial Services Representative to discuss how to return to an Owner in good standing status. NEITHER OPTION In the absence of deeding your property to Bluegreen or paying your delinquent amounts, we have no choice except to resume the process whereby the TSA’s lawyers will commence a foreclosure lawsuit due to your delinquent Charges. We are sure that you have reasons for not keeping up with your financial obligations at The Manhattan Club, and, as fellow Owners, we are distressed that we find ourselves, as Members of the Board of Directors, in the position of having to recommend moving forward with a foreclosure. However, other Owners are bearing the burden of your delinquency by paying for your share of Charges. As Owner representatives, we are obligated to do our best for the overall health of the TSA and its constituent membership. We are grateful we have found options to avoid a foreclosure lawsuit being filed against you with all of the related negative consequences to your credit standing. Please respond to this email within seven (7) days to resolve this matter by selecting Option 1 or 2. Sincerely,'

    Avatar for Robin R.
    Robin R.
    Jul 08, 2019

    Because of divorce and disabled my maintenance fees are not being paid and they have already demanaged my credit . My ? Is can I go back and ask for their nightly rental records to see if they actually have rented my unit the week I was suppose to have it.if they have I don’t u derstand how that is not counted toward the maintence fee

    Avatar for Suzanne M.
    Suzanne M.
    Sep 19, 2019

    I called Shell Timeshare Jan 2017 and explained that my husband had died and I could no longer use the Timeshare. They sent me a document to sign and send back. That was it I was so surprised after all the comments I had heard about getting out of Timeshares. However I also have a Diamond Timeshare and have been told I own it forever and when I die my children will get the maintenance bill. I hope some of the helpful hints will work.

    Avatar for Patrick L.
    Patrick L.
    Apr 01, 2020

    Hello im from canada im in the same situation my time share are in usa what can happen

    Avatar for Faye G.
    Faye G.
    Nov 15, 2020

    I own at summer bay resort in Kissimmee Florida for every odd year to stay without paying an exchange fee to RCI. I have been losing out on my stays because I have to book my resents year in advance. When I try earlier to book it I’m denied and told its too early. I then forget and 6, 9, or whenever down the road I remember before my odd date I’m told I’m too late for my week that I have paid over $900 for two years in maintenance and real estate fees. Then they rent my week a d make money off it. I have a paid in full deeded document for ownership of my weekly odd year. Is it lawful for them to do this when I pay my fees every year and just don’t book a whole year in advance?