Do you own a vacation timeshare? Are you unhappy with the limitations on your timeshare ownership? Were you promised more than you received? Unfortunately, these issues are common among timeshare owners seeking an ideal vacation experience.
Overview of Timeshares
A timeshare is a type of shared property ownership where multiple owners have the right to utilize the property for a specified period. There are two different types of timeshare interests: (1) a deeded interest and (2) a right-to-use interest.
A deeded interest is when an owner has an actual share of ownership in the property. A right-to-use interest is when an owner is permitted to utilize the property, but the owner has no real ownership in the property (people usually refer to this as using/accumulating points).
Timeshare Payment Options
Typically, when you buy a timeshare, you have three payment options:
1. pay the purchase price in full;
2. finance the purchase through the property's timeshare company (or sister company); or,
3. apply for a traditional mortgage loan.
When you finance your purchase through a timeshare company (or its sister company), you're subject to their credit account rules, fees, and interest.
If you finance your purchase through a traditional mortgage loan, then you're obligated to make payments on the mortgage loan until you pay the debt in full.
Monthly or Annual Maintenance Fees, Special Assessments, Utilities, and Taxes
In addition to making the payments for the timeshare purchase, the owner may also be responsible for maintenance fees, special assessments, utilities, and taxes. These payments may become due on a monthly or annual basis.
Foreclosures of Mortgages
Failure to pay the mortgage allows the timeshare company to seek payment for damages (i.e., a deficiency judgment). Therefore, if an owner falls behind on the mortgage payments or stops making mortgage payments, the timeshare company may initiate a lawsuit.
Foreclosures of Assessment Liens
Even if the owner is current on the mortgage payments, the owner could face foreclosure for not paying the assessments. If an owner falls behind on or stops paying the annual or monthly maintenance fees, special assessments, utilities, or taxes, the timeshare company may file foreclose.
The Foreclosure Process
Chapter 721 of the Florida Statutes governs the foreclosure process for timeshare properties. Florida law also provides that foreclosures of mortgages and assessment liens related to timeshare properties are judicial.
The foreclosure process is the same for failure to make mortgage payments or monthly/yearly assessments. The timeshare company files a Complaint, the Clerk of Court issues a Summons, and a process server serves the Summons and Complaint on the owner.
The owner will have a certain amount of days to answer the Complaint or file a responsive motion to the Complaint. If the owner does not file an answer or responsive motion to the Complaint, the timeshare company may move for default and obtain a judgment from the Court.
Difference Between Residential and Timeshare Foreclosures
It's important to note that there's a difference between a residential foreclosure and a timeshare foreclosure.
Florida law prohibits a timeshare company from obtaining a deficiency judgment in a foreclosure action. A deficiency judgment is a difference between the sale price and the total debt owed. The deficiency judgment is a personal judgment against the owner for the amount of the deficiency. However, as stated above, the timeshare company (who the maintenance assessments are due) is not permitted to obtain a deficiency judgment against the owner.
If you have questions regarding your timeshare ownership rights or as a Defendant in pending litigation, please contact Kimberly M. Soto at 321.972.2279 so she can further advise you of the law. The Soto Law Office, P.A. is conveniently located in Altamonte Springs, Florida near I-4, and proudly serves Brevard, Lake, Orange, Osceola, Seminole, and Volusia Counties.