Timeshare Inheritance: Legacy or Liability?

Cancel Your Timeshare Contract to Avoid Timeshare Perpetuity

timeshare inheritance liability

Timeshare inheritance has been used as a marketing strategy by timeshare salespeople for decades.

Convincing potential timeshare buyers that timeshare ownership is a “gift that keeps on giving” when transferred to their heirs, has been a timeshare sales tactic since the creation of deeded vacation ownership.

While this may have been the case a decade ago when timeshares still held some resale value, it is rarely the case today. Timeshares now sell for pennies online, by owners who are desperate to find a way out.

In light of the economic downturn, few of us wish to inherit another bill from our parents. By definition, an asset is something that will increase in value. The modern timeshare has no chance of becoming an asset, only a financial drain siphoning off dollars that could be used more wisely.

The unpredictable and ever-rising financial responsibilities accompanying timeshare ownership are no longer reasonable to the generation so well acquainted with finding the great vacation deals now available on the Internet.

prevent timeshare inheritance

In essence, timeshare inheritance is little more than a burden passed from parent to child. Failing to cancel your timeshare contract prior to your death is akin to leaving behind another confusing responsibility to be handled during a time of grief.

Importance of Timeshare Inheritance Prevention

How do you ensure that you will not be leaving your family with an additional financial and emotional albatross? Should it be as much of a priority as drafting a will or securing your burial arrangements?

When you consider the true cost of timeshare ownership, it is no small issue. The annual timeshare maintenance fees can range from $500 to $1,000, and an increase of as much as 20% per year is common. This does not even take into consideration the possible “special assessments” that timeshare owners are charged with in the case of weather damage or physical upgrades to the property.

“In our 80′s now, more difficult to travel and no one wanted it.”

–Elliot E from Pikeville, North Carolina
(Liquidated Timeshare)

Few families currently have that kind of disposable income that could not be better spent or invested, than on the right to vacation at a specific resort year after year.

Considering that even booking the weeks that are typically necessary for families to take a holiday can be next to impossible, your heirs will likely find that they would be wise to liquidate the timeshare you’ve left them.

Additionally, one in four Americans do not even get a paid vacation from their employers and those who do frequently cannot or do not take vacations at all due to financial reasons.

Timeshare Inheritance Refusal UK

Timeshare Inheritance Time Share in Perpetuity

Timeshare Inheritance UK – Timeshare in Perpetuity Examined by BBC Radio

The timeshare inheritance dilemma is not unique to the United States. In their report, “Timeshare in Perpetuity” BBC Radio covered issue of  the story of sisters who found themselves as reticent new timeshare owners in the event of the deaths of their parents. Saddled with two timeshares, the sisters were in need of a way out from under the exorbitant timeshare maintenance fees they became responsible to pay.

Click Here to Read the Timeshare in Perpetuity Video Transcription
Reporter: What can you do to get out of a contract that lasts, not just for your lifetime, but beyond? That’s what a lot of people who bought timeshares are wondering. Last week we reported on how some timeshare owners had agreed to pay maintenance fees in perpetuity. They were people who no longer used their timeshare weeks, and they were worried that when they died, their liability for the maintenance fees would pass to their children. Liz Dicksonspane from Lincolnshire is in that very situation. She and her sister inherited timeshare weeks and the maintenance fees that went with them when their parents died.

Liz: We inherited two timeshare weeks with MacDonald’s in 2000. One was in Spain, and one was in the UK.

Reporter: How much are they costing you now?

Liz: They’re costing 500-550 in maintenance each year.

Reporter: For each timeshare?

Liz: Yep.

Reporter: Gosh. When they were passed onto you did you realize that you would have to pay these maintenance charges on them?

Liz: We did, but we weren’t very au fait with the whole situation. My parents loved doing it.

Reporter: Have you been able, at least, to use the holidays?

Liz: We used the Spanish one a couple of times.

Reporter: Only a couple of times since 2000?

Liz: Yes.

Reporter: Gosh, why haven’t you gone more?

Liz: It’s not quite where we’d choose to go on holiday, to be honest.

Reporter: It was your parents’ choice.

Liz: It was, absolutely. They loved it.

Reporter: And what about the other one in the UK?

Liz: My sister’s used that a few times, which suited her for a while. I’ve only been there once.

Reporter: So, you’ve been paying this money since the year 2000. Have you ever tried to rid yourself of this responsibility?

Liz: Yeah. We put it up for sale in, I think, about 2007, the one in Spain anyway, and have had no luck at all. The thing we’re worried about now is this in perpetuity thing.

Reporter: Because you’re worried about passing it on to your own children?

Liz: Absolutely. Well, I’ve got four boys. My sister’s got two kids, and two of them have been and came back and said, well, it’s okay, Mum, but–and they just don’t want the liability. I mean, most kids now are up to their necks with debt anyway.

Reporter: So, you have tried to sell, certainly the Spanish one. Have you tried to get out of the obligation of paying to have these properties maintained?

Liz: Well, if you do that, which I sort of tried to do this year, they send you a nasty letter saying they’ll take you to court if you don’t pay the fees.

Reporter: So who sent you the letter?

Liz: MacDonalds, who act on behalf of the owners’ committee at the Spanish resort.

Reporter: We spoke to the organization of timeshare owners on the program last week, and they said that often it isn’t the companies that own the properties. It is the other residents who are really, really against anybody being able to stop paying maintenance, for reasons that you can understand.

Liz: That’s right. Yep.

Reporter: But you have never taken it further? You’ve never thought, well, I’ll go to the court? I mean, if you think about it, you’re spending 1,000£ a year for life. It might be well worth seeing them in court, mightn’t it?

Liz: It might, and I know when I talked to Harry, who was on your program, he said that nobody’s actually tested it. The trouble is that most people don’t want to go down that sort of alleyway, do they really?

Reporter: Tell me what you think, then, should be done about the rules around timeshares and these perpetuity clauses in particular.

Liz: Well, I definitely think they should relax them, change them somehow. I do know that Diamond Resorts, they are giving people an option of handing back when they get to 75 years old.

Reporter: One of our listeners e-mailed to say, why didn’t people who own these things bequeath them back to the company, and then the liability would revert to them?

Liz: That’s a very good idea. I don’t know whether you can do that.

Reporter: Liz Dicksonspane. Well, we had lots of e-mails with questions about timeshares, so we brought together a couple of people who can try to answer them. Paul Gardner Bougard is a former barrister and the chief executive of the RDO. That’s the body that represents the timeshare companies. And John Hughes is from Shakespeare Solicitors. He works with the association of timeshare owners. So that’s the companies and the people who own timeshares.
And, Paul, let’s look at the idea that came to us first in an e-mail. Joy Barnard suggested that people leave their timeshares to the people they bought them from. Could you just do that?

Paul: Hi. I think that’d be somewhat difficult. The problem is that, if we go back in history, a lot of these longer-term timeshares were sold back in the 1980s and 1990s. Well, let’s be clear, and indeed the lady that was just speaking said her parents really enjoyed that timeshare. At that time, people did want a longer term product, because they saw it as a form of ownership for holiday ownership, and surveys and reports of that time showed that that was indeed what people wanted. So what’s, of course now has happened indeed, and as Liz Dicksonspane said, her children want much shorter term products. They want the experience, want the holidays, but they don’t want the longer term commitment, which the industry’s now moving towards, but we do have to solve this longer term issue.
I’m not sure the practicality, and John Hughes will be able to help me on this, in terms of trying to bequeath it to the resort because, as you’ve pointed out, often the resorts, like those MacDonald ones, are actually run by the owners or the owners committee who run on behalf of the owners. MacDonalds are in there as the managing company only. You’d have to go back and look at the contract and see who made the sale, and you’d probably find it was the sale or marketing company that’s long since disappeared. So I’m not sure it’s a hugely practical idea.
What I would say is, obviously we don’t know the circumstances of her attempts to resell the–There is an active resale market. We have two very good quality active resale companies who are in ARDA membership, and there are also, now, one or two, what they’re calling exit clubs. You can cede your week to the club for a fee. You do have to pay an entrance fee, but after two or five years, depending on the terms of the club, you can then leave it, if you want. So you take the advantage of your holidays for two or five years, and after that, if you do want out, then that’s it. You’re out with no strings. And there’s two ARDA member clubs who are, in fact, operating that system now.

Reporter: But would you have had to buy your timeshare from them, and if you didn’t it’s hard luck?

Paul: No.

Reporter: No?

Paul: No, you wouldn’t. It all depends on the–I mean, they obviously have the right of first refusal. They would look at the quality of the week, and where it is, and etc., etc. But if they decide to take it, then you can go into that club, and then after two or five years, one club has two years, one club has five years, you can then go and leave your timeshare completely. But what we are finding, in fact, is that when people know they’ve got that certainty, and we’re talking about the older owners here, they hang on, say, well, I’ll go keep having my holidays for another five years, or ten years, whatever.
Also, sorry, just to finish, what Liz Dicksonspane didn’t say is whether or not she’d used the exchange system. So, her resorts will be linked to one of two big exchange companies. And if her children aren’t happy with the resort they’re going to in Spain, they have a vast choice of locations around the world they can go to. They just have to lodge their weeks and then choose something else.

Reporter: Let’s bring John Hughes into the conversation because he represents the timeshare owners. The Consumer Minister told us that the people who inherit timeshares wouldn’t have to adhere to the original terms and should get legal advice. So if you inherit a timeshare, are you bound by a contract that your parents signed.

John: Well, yes, you are, because in most cases you become a member of a club when you buy a timeshare, and the club rules set out, here are the terms upon which you hold the timeshare, and in a lot of cases, that timeshare lasts for 80 years. In Scotland, it can be in perpetuity, forever, and that was part of the deal.
In my experience, timeshare developers are reluctant to push this too far because they don’t want a test case whether timeshare owners can surrender their timeshare, because if there is a right to surrender your timeshare, then of course the gates would be open, and a lot of people would surrender their timeshare, which creates enormous pressure on those remaining in the timeshare club. They would be paying increased maintenance fees.

Reporter: It’s interesting you should say that because we’ve had an e-mail from Simon Calder Brown, and he thinks the contracts aren’t enforceable. He had one, stopped paying annual fees. He says he was threatened with legal action, but nothing ever happened. But another e-mail of Felix Chris, he sent his contract to his solicitor who told him that the perpetuity clause was legally binding until he dies only, though. So, again, some confusion, isn’t there?

John: Well, exactly. Until we have a test case, we are slightly in the dark, but I’ve been to leading counsel on this point, and the advice we’ve had is that they are binding. It’s rather like, I suppose, having a lease with a service charge. You can’t just walk away from a lease because you don’t like the level of service charge. That’s what you signed up to originally. So, I think we do need a test case, but in my experience, timeshare developers, as I say, do try and avoid this and either arbitrate or mediate or agree to some arrangement with the timeshare owner to avoid it going to court.

Reporter: Paul Gardner Bougard, there has been no test case that you know of, I take it?

Paul: My understanding, there have been a couple of county court cases, which have been ruled in favor of the developer.

Reporter: Really?

Paul: Well, so I believe. We’re all struggling about trying to find it.

Reporter: Yes, we certainly couldn’t find it.

Paul: Well, in the county court it wouldn’t be reported, but talking to my legal colleagues on our list of counsel, we understand there have been a couple of cases where the courts have upheld the contracts. But let’s be clear about this, I mean, all audio members have signed up to the fact that they will help people in genuine difficulties, who need to abandon–not abandon their timeshares, but can’t use that timeshare any more through death or ill health, bankruptcy, and reasons such as this. And all our members are signed up to that. But as John points out, if you had a–let’s be clear about this, and I don’t agree with Simon Calder Brown on this, because if you had a holiday apartment in Spain at the moment, which you bought as a holiday home, you will have seen the value plummet over the last 5-6 years. And if for some reason you don’t want to use it any more, you’re going to have to dispose of it. So it is a very similar analogy. The difference is that there are people that timeshare owners can go to, our audio members at the Tea Talk who will try and help them when they are in genuine difficulties, and that’s the difference.

Reporter: Okay, we must leave it there. Paul Gardner Bougard, John Hughes, thanks both.

Timeshare Redemption to Avoid Unwanted Inherited Timeshare Ownership

Even though your timeshare contract may include a perpetuity clause making your children or heirs responsible to continue paying your timeshare maintenance fees and special assessments, there is a way out.

The best way to legally and permanently divest your timeshare interests and become timeshare free is by enrolling in the Timeshare Redemption program offered by Redemption and Release, LLC. Featuring two 100% guarantees, the Timeshare Redemption method of timeshare contract cancellation is a quick way to ensure that you do not leave a complicated timeshare inheritance situation behind you.

Your children will appreciate the consideration you’ve shown them by absolving this financial obligation prior to your passing. Call Toll Free today to receive a free personal consultation at 888-743-9051 or fill out our short online questionnaire and one of our friendly and knowledgeable Timeshare Redemption experts will contact you as soon as possible.

prevent timeshare inheritance

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