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Everything You Need to Know About Timeshare Maintenance Fees
If you have a timeshare, you are familiar with its maintenance fees. These are fees that are collected either monthly or annually to maintain the resort property. They go towards paying for insurance, utilities, upgrading the resort, or enhancing amenities for the resort. They may also be used for employee wages. Put simply, the maintenance fees are what ensure that the property is in mint condition whenever you pop in for your vacation. A good analogy would be that of servicing a car to keep it running smoothly. Let us expound more on what you need to know about timeshare maintenance fees.
The Fees are not Fixed
Timeshare maintenance fees are not fixed. They differ from one resort to the next. They will tend to vary depending on the size and type of the resort property. The maintenance charges are usually divided among the different owners of a particular timeshare.
According to a report issued by the American Resort Development Authority in 2019, the average maintenance fee per interval was $1000 in 2018 although the amount people were charged was dependent on the size of the property. The report also showed that maintenance fees are on the rise.
Here are some of the factors that contribute to the increased maintenance fees are:
- In some cases, the management fees can start on the lower side as a way to attract potential buyers. The timeshare resort then gradually increases the prices once more people have acquired timeshares. You could look at it as a form of an introductory discount to you.
- The resort may have underestimated how much it would cost to run the property. They increase the fees to cover some costs that they may have failed to inculcate earlier.
- In some instances, there is an element of greed; some may take advantage of the owners’ legal obligation to pay the maintenance fees.
Can you make money from timeshares?
Timeshares are not investments. They are certainly not something that you buy with the hope of making money from them. They are a product that you buy to use. Nevertheless, there are some avenues that you could employ to lighten the load of maintenance fees. One such thing is renting out the timeshare. With timeshares, there are times when you are not in a position to use them. What better way to offset the maintenance fees than rent it out? You could use an agency that will help you advertise, manage the guests and also process the transactions.
Do timeshare maintenance fees vary depending on the week and the season you have the timeshare for?
All the timeshare owners of property pay the same maintenance fees. The fees are then pooled together to cover all the necessary costs. The time or season in which you have bought the timeshare; be it a high demand season or a low demand season, is not a factor in how much you pay in maintenance fees. Your fees will always be similar to other timeshare owners of the same unit.
Timeshare Inheritance
After many beautiful and memorable vacations, you may be considering giving your kids the timeshare so that they can continue to make more memories. But in many cases, the kids or any other heirs are not willing to take on the responsibility of paying the maintenance fees. Your children may have very different lifestyles and therefore not want to inherit your timeshare and the associated maintenance fees. So, how do you ensure that you do not transfer the unwanted timeshare maintenance fees to them? Timeshare contracts normally have a perpetuity clause that states that the timeshare is only valid if the original owner is alive but once they are deceased, the timeshare will be passed to the deceased estate. This way, the inheritors of the estate will be liable for the annual maintenance fees.
This passes the financial burden to the inheritors of the deceased’s estate. In such a case, if the inheritors do not wish to take the responsibility of timeshare ownership, they could consider declining the timeshare inheritance. They could do this by sending a letter to the timeshare resort to notify them that the owner is deceased and will no longer be needing the timeshare. However, the estate is relieved of the timeshare liabilities only if all the pending maintenance fees are paid.
What Happens When You Can’t Afford to Pay the Maintenance Fees?
When you purchase a timeshare, you enter a legally binding contract in which you agree to pay the maintenance fees for the duration of the timeshare ownership. When you stop paying, you generally default on the ownership of the timeshare. You will not be able to use the vacation destination plus defaulting on maintenance fees could also damage your credit score. The timeshare company could also charge you late fees and interests. Some resorts also go the extra mile of taking timeshare owners to court to compel them to pay bills that are past due.
When the maintenance fees become cumbersome, your safest option is to forfeit responsibly.
You could gift the timeshare to a friend or family member if you can. You could also use the services of a well-established and trusted timeshare cancellation company to help you sell. You can look into the reviews covering top companies like Lonestar Transfer to evaluate if this is the right option for you. Take your time to check on the costs, services, and what other customers are saying. By forfeiting your timeshare responsibly, you will prevent legal and financial issues in the future.
Can Timeshare maintenance Fees be Claimed on Taxes?
Timeshare maintenance fees are generally not tax-deductible but there are some other costs you can write off. Talk to your accountant as there could be other elements of timeshare and tax options. There are elements such as interest expenses that you could claim.
Wrap up
In conclusion, it is vital to understand timeshare maintenance fees before you buy one. It will help you avoid getting stuck with a property that will bloat your finances. You should always seek legal help before you sign any timeshare contract. It is also good to seek help if you are looking for a timeshare exit.
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It really helped when you explained timeshares and their maintenance fees. Recently, my sister mentioned she’s interested in investing in a vacation property. She says timeshares could be a good option, so I’ll be sure to share this article with her, and I’d like to look into it as well. Thanks for the tips on how to get the most out of your timeshare property.