If you’re a vacationer or real estate investor, timeshares are options that you’ll regularly hear about. Timeshare occupancy rates are at approximately 78% today, which shows that they are still viable and popular options.
When you’d like to make the right decision on whether to own a timeshare and how to manage it, you need to have a handle on the fees that you’ll owe. Maintenance fees are some of the most common that you’ll need to learn about.
Here are some things that you should know about timeshare maintenance fees, what they are, and what you can do about them.
What Are Timeshare Maintenance Fees?
Learning all about timeshare agreements starts with having an understanding of the fees. Maintenance fees are issued by the homeowner’s association (HOA) to people that own timeshares.
These fees cover a lot of general upkeep of the timeshare and are laid out upfront when you sign the contract. They are in place to manage the upkeep of the property and may cost as much as $1,000 or more per year.
If you sign up for a timeshare, it’s imperative that you study the fees and understand how this plays a role in your ownership.
Maintenance Fees Are Issued Annually
For starters, understand when and how your maintenance fees are levied. Timeshare maintenance fees are assessed and issued each year. These fees are laid out by the homeowners association or the resort property managers.
Working with the best timeshare exit companies begins with an assessment of the fees so that you know where you stand and how much you owe.
Learn How Fees Are Calculated
Your HOA fees are typically calculated in two different ways — two of the main factors include the size of your time share property and the number of points that you have accumulated.
In most cases, the size of the timeshare is differentiated based on the number of bedrooms you have or the amount of square footage. The larger the timeshare unit, the more you are likely to pay in maintenance fees.
When you own a timeshare, it’s often a vacation property. Many of these timeshares are bundled as part of a vacation club offering. Vacation clubs often let people accumulate points which they can use for vacation days at multiple properties that the resort owns. These points may also affect how much you pay in fees, and are issues that a timeshare exit company will need to address.
Know What Maintenance Fees Cover
It’s also important that you get an understanding of what the maintenance fees will cover. These are often catch-all timeshare fees that manage the general care of the property. This includes details such as:
- The upkeep of plumbing fixtures and Heating Ventilation and Air Conditioning (HVAC) systems
- Maintaining the lighting and electrical systems
- Repairing any appliances or other fixtures
- Taking care of the landscaping and grounds
- Painting and general cosmetic improvements
Always get a list of some of the things that your maintenance fees will cover. This lets you know what to expect and provides the transparency needed as a property owner.
Expect Costs to Keep Going Up
In general, you can expect your fees to go up rather than stay the same. It’s similar to how generally once rent starts to increase in your city, you’re not likely to see a significant decline anytime soon.
Once your HOA assesses fees for this year, they are more than likely to steadily rise over the course of the next several years. This is one of the many reasons that people decide to cancel timeshare opportunities or look into clauses that allow them to get out of the contract.
The HOA fees can get rather pricey, and not all owners are willing to fork over this money with no relief in sight.
Fees Are Due Whether or Not You Use the Property
Keep in mind also that you owe timesahre maintenance fees whether you use the property that year or not. This is typically written into the contract, and is an obligation that you will need to keep track of over the years.
Read the agreement to know whether this is the case with your timeshare arrangement so that you aren’t caught off guard.
How to Handle Your Maintenance Fees
Now that you know a bit more about timeshare maintenance fees, what they are, and what you’re signing up for, there are some points you must follow as the owner. By remaining diligent about your maintenance fees, you’ll be a good steward of your property and won’t incur penalties.
Here are some tips to consider:
Get the Fees in Writing
If you’re going to handle your maintenance fees correctly, it begins by first getting them in writing. Never sign a timeshare contract without the current maintenance fee explicitly explained. When there is a fee increase, the HOA will also notify you of this in advance of the new year.
Consider whether these fees will be levied by the month or in an annual lump sum. Many homeowners associations provide options on which you can choose. Once you have your maintenance fees in writing, you will be better able to exercise options and figure out how an attorney might be able to assist you.
Know the Due Date
As you study your HOA contract, make sure that you also know the due date for your maintenance fees.
This should include late charges and what other penalties will be incurred if your maintenance fees are late. By knowing the due date, it keeps you ahead of the curve and in a good standing with your HOA.
Determine Whether the Fees Are Worth It
In figuring out whether timeshare fees are worth it, get an itemized list of everything included. This lets you go down the list and get a clear idea of what will be covered.
Compare the cost of the maintenance fees with the total that you’re paying in timeshare fees. You should also compare the maintenance fees levied by other timeshares or vacation properties.
Understanding how much these companies charge will let you know what the market holds and whether you’re overpaying. This will let you know whether it’s a cost-effective decision and if you’d like to enter the agreement.
Know What Is and Isn’t Tax Deductible
It’s also important for you to learn all about how tax issues come into play when managing a timeshare. By understanding this, you’ll be able to handle your tax deductions correctly and will lighten your tax bill.
You can’t currently write maintenance fees off on your taxes, according to Internal Revenue Service (IRS) code. There might be some other details that you can write off on your taxes, such as revenue that you bring in from renting it out and any interest that it generates.
Hire a Certified Public Accountant (CPA)
Getting the help of a certified public accountant (CPA) is one of the most ideal steps that you can take.
These financial professionals are licensed, trained, and versatile in their knowledge and understand how timeshare accounting should be handled.
They will assist you in your own ownership obligations and can also assist you if you intend to rent the timeshare out to tenants. They can provide you with detailed records of the maintenance fee fees that you paid throughout the years and can create spreadsheets and other documents that you might find useful.
When you hire the help of a timeshare exit company, they’ll often have financial pros on staff that can help you. The help of a good CPA, along with an attorney can assist you in getting out of a bad contract.
Understand How Your Points Might Work for You
Keep in mind that you need to also understand how timeshare point systems work. For most timeshare agreements, points are every bit as useful as dollars. Once you rack them up, you will be able to vacation at a variety of places that are owned by the resort.
One of the most notable vacation clubs that people sign up for is the Disney Vacation Club (DVC). It has one of the best point systems that you will find, in addition to several property options that you can look into.
This includes stays at Disney World in Orlando and Disneyland in Anaheim. Once you go through your timeshare paperwork, read through the point systems to understand how to accumulate them and the best ways to capitalize.
Make Sure That the HOA Is Diligent
You owe it to yourself to work with a homeowners association that will put your maintenance fees to the best use. It’s one thing to pay maintenance fees, but you should also see the results of where your money is going.
Attend some HOA meetings or stream them virtually. Get your hands on as many documents as possible to see the line items of where the fees go. Many timeshare owners neglect to do this since it’s not a property that they live in year-round
However, since you’re paying the fees, you have the right to know that they’re being handled in a diligent manner. Don’t hesitate to call up board members as well to have your questions answered.
Keep Track of Your Payments
You also need to be sure that you’re keeping tabs on every dime that you spend in maintenance fees. If you end up having any litigation and need proof, you will be glad that you had access to these documents.
It will let you recoup the cost of maintenance fees so that you are properly compensated.
Learn About Any Timeshare Outclauses
It’s also helpful to get some eyes on your timeshare contract so that you can learn your legal grounds. This will let you know any outclauses that you are signing up for.
You can then exit the contract without any hang ups, since you have your legal rights ironed out. Many of these contracts are ironclad to prevent people from easily getting out of them.
It is sometimes possible to have custom clauses included in the contract as long as you have sound legal counsel advocating for you. Take these matters seriously so that this is never in question and so that it is a flexible enough situation for you to do what’s best for you and your finances.
Consider Hiring a Timeshare Exit Company
If timeshare cancellation is your best bet, working with a timeshare exit company might be worthwhile. These companies have legal professionals on staff that are dedicated to helping people like you get out of their timeshare contracts.
It’s a common area of law that people turn to, largely because many people sign up for timeshares without understanding what they’re doing. This often happens since vacation timeshares are pushed to vacationers with aggressive sales tactics, and people sign up for them without having any real estate or business savvy.
Understand How They Can Help You
So, how can a timeshare exit company help you out? It depends on your circumstances, but in many cases, their help can go a long way. For some people, this could just mean getting some fees waived or reduced. Other owners are able to get excused from their contracts entirely.
By keeping tabs on the types of specialties that these professionals handle, you’ll know which company to hire and will be able to get the results that you need.
Know Your Timeshare Exit Goals
There are a variety of timeshare transfer strategies you can also use. Always have your goals outlined so that you’re able to manage the situation accordingly.
The professionals will answer any questions that you have, starting with figuring out the main outcome you’re trying to achieve. When you’re trying to cut out fees, have them reduced, or make sure that you’re being charged fairly, lay out goals out upfront and then speak to a professional that can help you.
Schedule a Consultation
Take the time to sit down with a company that can help you through your timeshare maintenance fee situation. They’ll be able to answer your questions so that you’re clear on your legal rights and the best strategies to put into place.
When you get a consultation, you can lay out the factors related to your maintenance fees, why you feel that you’re overcharged, and what recourse you might have. Book this consultation to also learn which legal professionals are on staff. You can look up their background and make sure that you’re hiring attorneys that are skilled and seasoned.
Find Out if You Can Negotiate the Fees
When you’re signing up for a timeshare or looking to modify it, there may be wiggle room for negotiation that you were not aware of. In many cases, details of the contract are set in stone. However, getting legal help could open you up to the ability to negotiate and potentially get some fees excused or otherwise handled.
In speaking to these legal professionals, you’ll know what leverage you have and how you can use it. Your timeshare professionals will let you know what you can expect and can exercise options on your behalf.
Study the Fees of the Company
Once you speak to a timeshare exit company, learn what you are signing up for by retaining their services. Ask them about the fees they charge and whether they require an upfront fee. Get the legal fees in writing as well so that you can take full advantage of this agreement.
Once you study the fees of the company, compare and contrast these costs with a variety of other companies that offer the same services. You’ll get a feel for what these companies charge and can determine how they fit into your budget.
Also consider the costs that you were trying to recoup in your case and whether the attorneys fee is worth it in the end. For instance, if you are trying to reduce your maintenance fees, it won’t make sense to also pay inordinate legal fees to accomplish this result. Measure these costs so that you get the results that you need without the fees becoming a burden.
Learn What Strategy They Will Employ
Once you have locked into a contract with a timeshare exit company, you will be able to learn what strategies are best for your situation. Find out what strategy they suggest for your particular situation and compare this advice with that of others in your industry.
Several companies specialize in timeshare selling and legal services. When you’re able to understand the steps that these professionals will take, you will have more confidence in entering the agreement. You need the backing up the best lawyer you can find, since the timeshare company will also have a team of lawyers representing their interests.
This requires an understanding of the law and a clear vision of the outcomes on the table for you.
In many cases, the best thing to do is to sell or transfer the property and cut your losses. A timeshare exit company can help you with this by first letting you know what you are entitled to do, and then processing the deal for you. Sometimes this is as simple as marketing and listing the property so that you can find a buyer.
Explore all of the options on the table so that you can choose the option that gets you the ideal results.
Be Mindful of Timeshare Scams and Bad Deals
If you are currently shopping around for timeshares, you’ll want to make certain that you aren’t falling prey to any sort of scams. There are a wide variety of timeshare scams that people fall into each day, which is why these properties are so notorious. One of the main scams that people fall into is having to pay fees upfront for the property.
Scammers will often charge exorbitant fees to get the process going, only to be nowhere to be found once it’s time to process the paperwork. They also add a variety of meaningless fees disguised as essential ones. This is why it’s so crucial to read the contract and have a legal professional that can also do a bit of research for you.
Always research the property with organizations like the Federal Trade Commission (FTC) and the Better Business Bureau (BBB) to make sure that they work legally and ethically. Research their previous practices and find out if they have recently been sued or if they have any pending litigation.
Scams aside, sometimes a timeshare is just flat out a bad deal. Make sure that the amount of money that you pay is reasonable when considering the state of the property, its value, and how much access you have to it. You should also be free to sell or transfer the property when it no longer serves you without being harshly penalized.
Mitigating Your Timeshare Maintenance Fees
Timeshare maintenance fees come with the territory, but it doesn’t mean that you have no recourse. When you have the help and service of professionals that specialize in timeshares, you’ll always have a good chance of rectifying the situation. Safe yourself time and money by using a professional timeshare cancellation company that considers all options to remove you from the burden of timeshare maintenance fees.
We would be happy to serve you when this is what you’re looking for. Lonestar Transfer can assist you with all of your legal timeshare needs. If you have questions or need to learn more, contact us online or by calling 855-722-3166.