Foreclosure or Judgement and Lien????

[JLB]

In our discussions about not paying maintenance fees, and deedbacks, and so forth, there is an assumption that if you don't pay your fees the association will foreclose on the week.

Is that really true?

If it is free and clear, no "mortgage" on the week, there can't be a foreclosure, can there?

So, would the legal recourse the association has be to sue for unpaid maintenance fees, and costs, get a judgment, and place a lien either on the week or on other property you own? (So that you still own the week and your default keeps increasing, so nothing was accomplished by "walking away".)

Just wondering.
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I might have found the answer here: http://www.nolo.com/legal-encycloped...sessments.html

that in the case of timeshares, once the association has obtained a lien on unpaid fees, they can foreclose on the lien.

I assume that by the time you tack on penalties and late fees and attorney fees and court costs, the lien will be much greater than the unpaid fee.

In any event, on a case by case basis, if a timeshare has no resale value and if the lien is placed on it, which is the only way it could foreclosed, wouldn't it be a lot less costly to the association just to accept a deedback, or a deedback and a reasonable fee?

[ronparise]

As you figured out in the second half of your post, Your first assumption is incorrect.. The HOA can foreclose for the past due maintenance fees

and yes you are absolutely right, it makes sense for an HOA to accept a deed in lieu of foreclosure rather than going through all the expense of a foreclosure......however there are cases where the HOA doesnt want the thing.

My own opinion is that once a HOA knows that the owner will never pay another dime in fees, they should willingly take it back. Doing this would in my opinion put the PCCs out of business immediately

[ConsumerProtectionLawyer]

If it is free and clear, no "mortgage" on the week, there can't be a foreclosure, can there?...

I might have found the answer here: http://www.nolo.com/legal-encycloped...sessments.html

that in the case of timeshares, once the association has obtained a lien on unpaid fees, they can foreclose on the lien.

I assume that by the time you tack on penalties and late fees and attorney fees and court costs, the lien will be much greater than the unpaid fee.

In any event, on a case by case basis, if a timeshare has no resale value and if the lien is placed on it, which is the only way it could foreclosed, wouldn't it be a lot less costly to the association just to accept a deedback, or a deedback and a reasonable fee?

Both the analysis here by JLB, and the answer by nolo law were informative, clear and concise. Thanks for the nolo law article, it's worth a close read on this precise subject (the title): "Can a Timeshare Be Foreclosed for Nonpayment of Fees or Assessments?"

As for the broader question about why timeshares that are absent any resale value are not being readily accepted back by resorts: it is fundamentally against their business model to circumvent their contractual rights to perpetually collect fees, and in smaller resorts particularly, it really can impact the Owners. I agree with ronparise overview too. Frequently we are reminded, by a resort granting a release, of the rarity of the exception by Billion Dollar entities to reach out to a consumer to grant goodwill and compassion. Make no mistake, any m/m & billion dollar companies can pretty much do as they chose when their contracts are air tight, but we live for the exceptions.

In my practice as a Consumer Protection Attorney we have found exceptions to get many consumers out (published statistics of negotiated settlement success rate: TheAbramsFirm.com, Homepage), but that doesn't mean that we don't have to screen heavily to find workable cases because resorts are heavily resistant.

So I guess the excellent selection by nolo law told us... pay your maintenance fees or consequences could potentially be harsh. The most direct resolution approach, we find, is best. So before bad things happen, we want to surface before a resort's corporate counsel or department head with an alternate resolution. This answers JLB's Deedback inquiry, because in this private forum with a general counsel for example, Deedback resolutions can be explored, where they may never be discussed publicly because this type of precedent would be diametrically opposed to their business model. So it really gets down to the individual case and how it is presented, and I think, by whom and to what level. For example, we are small and quite selective with our cases that are thoroughly prepared, and thus have built a reputation since 2001 of innate credibility, we trust. A solo owner out there or a big cookie-cutter, non-attorney outfit that does big volume is not likely to EVER get a meeting, much less any credibility or respect points with General Counsels, CEOs, VPs, etc. And these high-ranking executives & counsels learn to distinguish our credibility toward Consumers, where we have NO Upfront Fee, so the whole expense and burden of performance is on us--the way it should be for Consumers!

So in the end, getting a Deedback is truly an Art unto itself.

Thanks JLB for the thought provoking post.

[ace2000]

So in the end, getting a Deedback is truly an Art unto itself.

Can you provide us any clues as to what your fees are? Even ballpark estimates would be fine.

[tonyg]

Fore closure rules may vary from state to state and in some states it is a simple and inexpensive thing for the resort to do. You may have forgotten the part that not only can the resort foreclose, but the municipal tax collector can also foreclose. I wonder if in the case where the town/city foreclosed, could the resort then foreclose on the town/city who has taken ownership ?

[ConsumerProtectionLawyer]

Can you provide us any clues as to what your fees are? Even ballpark estimates would be fine.

There is no one answer for everybody, and we always deal with each matter individually by free consultation. Sometimes certain resort policies or conditions such as mortgages,etc. can effect things greatly. Timeshare Divestment can be accomplished when an owner sells a timeshare through our help, but either they go to TimeshareForums.com for free, or TUG for 15, or the brokers we know send them a check (NO Upfront fees). In any event we do not charge a fee at all, unless someone requests monitoring of the sales activity. If required however, how to cancel a timeshare contract is a much different thing, where the complexities and attendant costs involved are far more difficult to assess, and overriding any of this, for consumer protection reasons, we don't fell it's prudent to discuss fees online.

[Carolinian]

Actually, the member controlled associations at all three resorts I own at, in three different countries all accept deedbacks. Well run member controlled resorts are more likely to take a deedback than any other type from what I have seen, but they do not advertise that fact as they do not want to encourage it. You have to call and ask. When I was an HOA president on the OBX, most of the member controlled resorts there would take a deedback if a member called and asked and gave a decent reason.

[Marti]

RE: JLB Post

The legal recourse Ocean Time HOA has is to sue for unpaid maintenance fees, and costs, then get a judgment, and place a lien on both the week and on any other property the
default timeshare owner owns.

You still own the week and your default keeps inceasing, so nothing was accomplished by "walking away".)

Once the association has obtained a lien on unpaid fees, they can foreclose on the lien. Ocean Time will keep billing you every year until they decide to foreclose.

By the time they tack on penalties and late fees plus attorney fees and court costs, the lien is much greater than the unpaid fee or you decide to pay up.

If you decide to refinance or sell your home/property the unpaid judgment must be paid! The bank/title person will not let the refi or sale continue.

[tonyg]

Another interesting note is that in some states retirement income is not available for garnishing (other than IRS and student loan). So if you are old and do not have any income other than retirement, they can't collect from you.

I don't know if selling or transferring to such a person would definiety get you off the hook tho.

[JLB]

While researching my own question, I discovered that Florida enacted new timeshare foreclosure legislation which streamlines the process down to 90 days. Since that was not what I was googling for, I didn't dwell there, but I believe it said that was to benefit timeshare owners by saving them the expense of protracted litigation.

sure



A point I like us not to miss is that not only is getting a lien for non-payment of fees, and, then, foreclosing on that lien a cumbersome and expensive process, but that expense is burdened by the timeshare owner. So, and I'm sure I will be corrected if I'm wrong, the recent spate of loose talk about stopping payments and taking a hit on your credit score is not reality. You still owe the debt, plus all the extra stuff tacked on. And, if they don't foreclose, you still own the week, too, and the fees keep mounting.

People often settle lawsuits simply because the cost of litigation makes it the sensible thing to do.

Who could guess, for instance, when my deceased ex-neighbors' XSO refused to give some coffee mugs to the decedents' daughter that she would lose the house and hundreds of acres of land, and seven years later still be in court?

Searching for an amicable solution that benefits both sides is almost always best.