A second reader asked why the time-share owner couldn’t just let the time-share go into foreclosure and let it get sold on the courthouse steps. While that idea is generally good, some time-share documents are personal in nature, and if you finance the time-share, the lender could go after you personally for any money still owed on the time-share property.
Some time-share owners might no longer owe any money on their time-share loan, but rather owe the annual assessments, taxes and other fees associated with the time-share ownership. Here again, the payment of those fees is typically a personal obligation made by the owner to the time-share company.
It’s a different ball of wax from owning a condominium. When you own a condominium and stop paying the condominium association its dues and fees, that association can file a lien against the unit, foreclose on the unit and get paid from the sales proceeds from the auction or other disposition of the condominium.
Given the way the time-share market operates, the amount received by the time-share company from the sale of the time-share unit might not be sufficient to pay off the debt owed by the owner. At that point, the time-share company can go after the former owner personally or send the debt to collections.
If they send the amount owed to a debt collector, that debt will almost certainly be reported to the credit reporting agencies, which will cause your credit score to go down. And then you’ll have to deal with the debt collection agency going after you for the amount owed. Trust us: This won’t be fun.
Another reader suggested donating a timeshare to a charity. She was thinking of donating her time-share located in Park City to a local ballet company in Salt Lake City.
That’s a great idea, so long as the charity is willing to accept the donation. There’s not much difference between selling the time-share or donating it, other than our reader would not get any money from the sale and might have to pay some closing costs to transfer the ownership of the time-share to the charity.
If you think this might be the answer to your time-share prayers, talk to the charity first to make sure they’re interested in receiving this gift. Not all charities are set up to handle a time-share; and while they may be happy to have a time-share week donated that can be auctioned off during a fundraising event, it’s quite a different matter for them to want to own it, manage it, and become responsible for the annual payments.
But, if they do, your next step is to contact the time-share company to request information on the requirements to transfer ownership of the time-share. From there, you can decide how to proceed with the transfer of ownership.
Thanks for the questions and comments. Keep them coming.
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them through her website, ThinkGlink.com.
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