Clients who own a timeshare or property in a resort association may find themselves with an asset that is really a liability. Like when a silicone implant starts leaking, Cruella finds out that what she bought from Dr. Bodmod is more than she bargained for. Getting rid of the thing is a lot harder than purchasing it.
Parcels of real estate can usually be abandoned by refusing to pay taxes, but timeshares and home sites in resort associations are more problematic. The association dues and management fees are in a contract signed at the point of purchase, separate from the deed or certificate of ownership. Under the contract, the purchaser may be personally liable to the timeshare or resort company for monthly or annual payments forever.
One client purchased a home site in a rural resort association, Lesion Fields, in 1980. Since then, the property has remained undeveloped, but he has been billed for water and sewerage, in addition to taxes and association dues for all these years. In 2010 he decided to abandon the property, but the association refused to allow him to surrender the deed and has been repeatedly suing him. A lawsuit of this type should be brought as “in rem,” i.e. against the property. However, the lawyer for Lesion Fields abuses the legal system by bringing the suit “in personam,” against the person.
Although my client is informed that the association will not pursue collection apart from claiming the property, the repeated civil complaints filed in his name personally are extremely stressful, as well as illegal. Despite this, there is not enough money involved to warrant hiring an attorney. The only advice I could give him is to ignore Lesion Fields and its lawyers.
Timeshares are a bigger problem, both from the amount of money demanded in association assessments and from the fact that the purchase contracts are personal in nature. The purchasers are legally liable for the assessments even if they abandon the property.
There are scammers that prey on timeshare owners, promising to take the timeshares over but not relieving the owner of liability for the annual assessments. One client paid $7,500 to a company to relieve him of three timeshares. The contract did not obligate the company to do anything about the assessments and was not signed by the company, anyway.
Timeshares and home sites in resort associations can be problematic. Consult a real estate professional or lawyer before committing to such purchases to be sure you understand what your obligations will be over the long term. Also, talk to a lawyer before signing a contract with an individual or company that is agreeing to take over such unwanted vacation property.
John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com ©2013 John B. Payne, Attorney