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Maintenance fee debt
We hear from many owners at O-YOO who tell us that they have accumulated a debt for non-paid maintenance fees and worry that this could affect their right to claim. Although there are a couple of factors which could determine this including if the timeshare ownership has been used during the period of non-payment of maintenance fees, the general rule is that this will not affect your right to make a claim and can in some cases substantiate your case, if you have been in dispute with your timeshare company.
There are many reasons why owners would want to stop paying their maintenance fees including if they feel that they have been mis-sold to, or if their financial circumstances have changed meaning they can no longer afford to pay them. Many timeshare resorts employ heavy-handed debt collection techniques which primarily start with making threatening phone calls to the owner before in some cases, passing the debt over to a debt collector.
Debt collectors can employ bullish techniques, and in the circumstances that someone is being threatened by debt collectors, the experience can be frightening, especially for older more defenceless people. They can often imply that they have certain powers which would authorise them to remove goods from the owner’s home. This is not true, as only a bailiff would have this right, and then only after a court order.
If you are being harassed, especially if you are in vulnerable circumstances, there is advice on the Citizens Advice Bureau (CAB) here on how to deal with them. You should always take legal advice before negotiating into any new repayment contract with the company your debt is with.
Maintenance Fees in Perspective
One of the main problems we hear about from many timeshare owners is the escalation of maintenance fees. If you bought your timeshare some years ago, you will almost certainly have experienced an increase in your yearly fees.
But what is the money you pay each year spent on? And how much money are Timeshare resorts earning each year? To put things in perspective, we’ve created a list of the most common questions we are frequently asked.
Why do timeshare owners pay maintenance fees?
Maintenance fees are an unfortunate but very necessary expense and it is understandable that timeshare resorts charge them. Without the fees, your unit and resort would become old and shabby with the sheer volume of owners using the facilities throughout the year.
Your resort will have to pay insurance costs for the building and all of its contents for their full reinstatement cost and may have other insurance for the well-being of the club and it’s members.
Bills for electric, gas, water, cleaning, pool maintenance and gardening expenses need to be paid just for the upkeep of running costs. Then, your unit needs to be maintained to prevent wear and tear, on items such as furniture, electrical items, fixtures and fittings. Your resort will also have taxes, levies or fiscal impositions to pay which will also come out of your fees.
Also, if you have paid your maintenance fees in a foreign currency, any conversion rates will be incurred from your maintenance fees.
Why do fees increase every year?
We have had reports from many owners who tell us that the quality of their resort has not improved, even with the rise in their fees.
Owners may not be aware that they may be subject to special assessment fees, which are used for any unexpected events that have led to damage to the Resort such as an earthquake, or hurricane. It may be that the resort wants to add new facilities to site for the benefit of members and this again will come out of your maintenance fees. Also, if the resort feels that there is a shortfall in fees, owners may be subjected to a special assessment to recover any extra expense the resort feels is needed.
What if I don't agree with the figure I am being charged?
If you don’t agree with the rise in your maintenance fees you have the legal right to request a breakdown of accounts from the management company or trustee company that manages your resort’s accounts. Your resort should freely provide you with this but if not, then keep any correspondence documented as this will be proof in case you ever instigate legal action.
In some case, and only if there are enough owners who complain about the cost of maintenance fees, they can collectively request for an audit by external auditors who will go through the expenditure of the resort and compare this against the charge of maintenance fees. This is an unlikely event as there will not be enough people who complain, and resorts will not be likely to reveal the number of owners complaining.
What happens if I do not pay my maintenance fees?
When signing your contract, you are in effect signing a document that legally binds you to paying the yearly or bi-yearly maintenance fees. Failure to pay these fees can give the resort the legal right to exercise procedures to recover any sums outstanding. This may include employing debt collection agencies to chase you for any outstanding maintenance fees.
What if I've stopped paying my maintenance fees and want to pursue a claim?
In terms of pursing a claim for compensation, many owners are confused about whether it would affect their claim if they choose not to pay their maintenance fees or have not paid for many years. In past cases, there have been a few cases where the claim has not been upheld due to the resort counter-claiming that the owner is in breach of their contract through non-payment of maintenance fees. However, this is a very rare occurrence and would not be a reason for our legal representatives not to pursue a claim.
In our view, it is entirely up to the individual whether they choose to pay their fees if they are in dispute with their resort.
Are maintenance fees the same for everyone at my resort?
Maintenance fees depend on the size of your unit, type of ownership of number of points. The larger your unit or the more points or number of weeks you own will carry larger maintenance fees.
How do I know if sufficient work has been carried out on my timeshare resort?
This may sound quite obvious, but apart from seeing visual evidence yourself on your own unit and the general state of the resort, you still do not know if the pool of maintenance fees collected from all owners has been spent sufficiently on upgrading features. By requesting a copy of the annual expenditure and comparing this to work that has been carried out, you will be able to ascertain how and where money has been spent. One way of reminding yourself is to take pictures each year of your resort, unit and the facilities and to compare them year on year.
How much will I pay in fees over the course of my contract?
When signing the contract to buy a timeshare, owners should be made aware of the annual maintenance fees and how much they need to pay as well as being informed that fees may increase each year. However, not many timeshare owners stop to think about how much money they will pay out in maintenance fees over the duration of the timeshare contract.
Maintenance Fees in Perspective
The table below shows how much you will pay in maintenance fees of £600 depending on the duration of your contract and also how much a resort can earn based on 500 rooms.
You can see from the table above that is in a Resort’s best financial interests to collect maintenance fees from all of the owners, as the amount of money that they can generate far outweighs the cost of keeping the resort “maintained”.
If you feel that should stop paying your maintenance fees, start the process to relinquish your timeshare by contacting O-YOO by clicking the button below.