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A.steve

Timeshares...

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I had a discussion yesterday in the real world... it was about a time-share. It had been sold during the boom on the basis that there was a market to resell managed by the time-share company, and (of course) that the time-share would appreciate over the long term and that it would be far cheaper to use it to go on holiday than to rent somewhere to stay. Baloney of course, but I know someone who was suckered in.

What's happened recently - now the time-share debt is fully paid for - is that the nominal fee for managing the scheme has shot up - and the offer to re-sell the time-share has evaporated... and the time-share company has become unresponsive. So, at present, there's a time-share sitting idle and generating bills for 'upkeep' in excess of the price of staying in rented accommodation - ignoring invested (wasted) capital.

So, on this particular sorry story, it is obvious that the buyer has been deceived and conned - this is recognised - but... I wonder... what would be the best way to proceed in these circumstances? A share in the ownership of a property should represent a capital asset - but it is now recognised as representing a liability. If this were a BTL disaster, it would be obvious what should be done: auction the property (without reserve) to get rid and accept whatever loss that implies. It isn't so clear how to proceed with a time-share... especially as the time share company itself is being uncooperative. Any ideas (other than the obvious: don't be a prat - don't buy a time-share... I'm too late to offer that bit of advice!)

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I had a discussion yesterday in the real world... it was about a time-share. It had been sold during the boom on the basis that there was a market to resell managed by the time-share company, and (of course) that the time-share would appreciate over the long term and that it would be far cheaper to use it to go on holiday than to rent somewhere to stay. Baloney of course, but I know someone who was suckered in.

What's happened recently - now the time-share debt is fully paid for - is that the nominal fee for managing the scheme has shot up - and the offer to re-sell the time-share has evaporated... and the time-share company has become unresponsive. So, at present, there's a time-share sitting idle and generating bills for 'upkeep' in excess of the price of staying in rented accommodation - ignoring invested (wasted) capital.

So, on this particular sorry story, it is obvious that the buyer has been deceived and conned - this is recognised - but... I wonder... what would be the best way to proceed in these circumstances? A share in the ownership of a property should represent a capital asset - but it is now recognised as representing a liability. If this were a BTL disaster, it would be obvious what should be done: auction the property (without reserve) to get rid and accept whatever loss that implies. It isn't so clear how to proceed with a time-share... especially as the time share company itself is being uncooperative. Any ideas (other than the obvious: don't be a prat - don't buy a time-share... I'm too late to offer that bit of advice!)

Can't offer you any advice other than burning it down, but this will happen to many new-build city centre flats before too long. ie ridiculous management charge.

Maybe you can get together as an owners co-operative.

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Can't offer you any advice other than burning it down, but this will happen to many new-build city centre flats before too long. ie ridiculous management charge.

Maybe you can get together as an owners co-operative.

As far as I'm aware, even a bout of arson won't help... As I understand it, the scheme is structured so as to allow the time-share buyer to choose from a number of properties using a system of 'points'. It's got many of the hallmarks of the stock-scams of the days of the enlightenment.

An owners' co-operative is tricky, and I'm not sure it would have a firm legal footing. A bit of a problem is that (while I'm not sure what this cost) I'm guessing < £10K... which - if we accept a 50% loss as being optimistic... means that it's not worth spending more than £5K in time... (from a purely pragmatic perspective, you understand.) It certainly looks like a nightmare mess - rather like that of leasehold co-operatives, but with the added difficulty that there are likely dozens of stakeholders for each of dozens of residences... the details of all of whom, of course, is confidential.

My hunch (after the real-world conversation) was that there had to be wealth of knowledge about this 'out there' - since time-share is hardly a new phenomenon. It's not a "credit crunch" precipitated problem - but I'm wondering if there might be a "credit crunch" inspired solution... All I'm really after is to establish a suggestion for a way to draw a line under the matter... preferably without throwing lots of good money after bad.

Edited by A.steve

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Can't offer you any advice other than burning it down, but this will happen to many new-build city centre flats before too long. ie ridiculous management charge.

Maybe you can get together as an owners co-operative.

At least with a flat you have the right to vote out the Management Company and appoint your own. You can't do that with timeshare.

tim

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At least with a flat you have the right to vote out the Management Company and appoint your own. You can't do that with timeshare.

Yes. Of course, this leaves the question... what can the owner of a time-share do? Are they beholden to pay whatever charges the time-share company chooses to charge them in perpetuity? Surely not?

Edited by A.steve

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I had a discussion yesterday in the real world... it was about a time-share. It had been sold during the boom on the basis that there was a market to resell managed by the time-share company, and (of course) that the time-share would appreciate over the long term and that it would be far cheaper to use it to go on holiday than to rent somewhere to stay. Baloney of course, but I know someone who was suckered in.

What's happened recently - now the time-share debt is fully paid for - is that the nominal fee for managing the scheme has shot up - and the offer to re-sell the time-share has evaporated... and the time-share company has become unresponsive. So, at present, there's a time-share sitting idle and generating bills for 'upkeep' in excess of the price of staying in rented accommodation - ignoring invested (wasted) capital.

So, on this particular sorry story, it is obvious that the buyer has been deceived and conned - this is recognised - but... I wonder... what would be the best way to proceed in these circumstances? A share in the ownership of a property should represent a capital asset - but it is now recognised as representing a liability. If this were a BTL disaster, it would be obvious what should be done: auction the property (without reserve) to get rid and accept whatever loss that implies. It isn't so clear how to proceed with a time-share... especially as the time share company itself is being uncooperative. Any ideas (other than the obvious: don't be a prat - don't buy a time-share... I'm too late to offer that bit of advice!)

There was a Holiday Hell programme a few days ago about timeshares: people trying to get shot being scammed by 'companies' offering to find buyers for them - after a hefty upfront fee, after which precisely nothing would happen and suddenly nobody was answering the phone, surprise surprise. One poor old bugger was conned twice - first by the original lot, then by a firm of 'solicitors' offering to chase it up - after another hefty upfront fee. He and his wee biddy wife had been talked into the timeshare in the first place after being given a scratchcard on hols (Tenerife I think) and then having to attend a presentation to get their prize - the usual shark-infested thing.

Funnily enough I've seen 2 ads in the property pages today for companies offering to find buyers for timeshares.

Back in the early 80s my folks (retired) were sent some timeshare bumf offering some gift or other if they attended a presentation in London - this was before these sharks all shifted out of the UK. My old man decided he fancied the clock-radio or whatever it was, and off they went on their senior railcards, told the organisers straight off they had no interest in the timeshare, had only come for the free coffees/biscuits/clock radio.

They sat through the entire thing, vastly entertained by all the 47 ways the sharks tried to break them.

Last resort was, 'Well, if you really can't afford it...'

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One possibility that has been suggested is to go somehwere remote and leaglly transfer the timeshare, plus a few quid tip, to someone like an Indian street beggar.

The transfer is fully legal, and your liability is gone. Then you sit back and enjoy the thought of the management company attempting to find and pursue a transient with no assets for the annual management charge.

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There was a Tonight Programme covering this on Friday.

It seems people simply need to admit they've been scammed and don't send good money after bad.

Thanks for the link. The admission has been made... and no more money will be voluntarily spent on it.

I found this:

http://www.timeshare.org.uk/getout.html

Increasingly owners are choosing to stop paying the annual fees and ask the resort to take back (repossess) their ownership. Whilst this does work in a limited number of cases, it is getting more difficult as many resorts are unable to sell their own un-sold weeks, let alone those of existing owners.

WARNING. Many clubs are taking management fee defaulters to court.

Now, I'm suspicious that this "Timeshare Consumers Association" might not have consumers' best interests at heart... but the material seems fairly balanced. I think a court case could be won by the consumer... in this instance, at least - but that would have a cost associated with it, in all likelihood... since solicitors to dot the i's and cross the t's won't likely come both cheap and competent. The timeshare company, likely, has solicitors up-to-speed already... as they have many victims and one scam for multiple court cases. It would be desirable to attack rather than defend... but it seems remarkably difficult to see how to go about this in a cost-effective manner.

Frank... I like your lateral thinking - and I'd already had this thought... but it sits outside my ethics... I'd like this resolved without resorting to exploiting someone who is destitute. Transferring ownership to someone who is homeless, however, would be an amusing "up yours"... especially if they turned out not to be particularly co-operative when asked to leave.

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The huge management fees, obviously no-one wants the liability of those..

People can't give them away.

People planning to live in full time leasehold accommodation should also take note.

There's nowt to stop the management cos in UK city centres pulling the same trick.

Always buy freehold.

I had a discussion yesterday in the real world... it was about a time-share. It had been sold during the boom on the basis that there was a market to resell managed by the time-share company, and (of course) that the time-share would appreciate over the long term and that it would be far cheaper to use it to go on holiday than to rent somewhere to stay. Baloney of course, but I know someone who was suckered in.

What's happened recently - now the time-share debt is fully paid for - is that the nominal fee for managing the scheme has shot up - and the offer to re-sell the time-share has evaporated... and the time-share company has become unresponsive. So, at present, there's a time-share sitting idle and generating bills for 'upkeep' in excess of the price of staying in rented accommodation - ignoring invested (wasted) capital.

So, on this particular sorry story, it is obvious that the buyer has been deceived and conned - this is recognised - but... I wonder... what would be the best way to proceed in these circumstances? A share in the ownership of a property should represent a capital asset - but it is now recognised as representing a liability. If this were a BTL disaster, it would be obvious what should be done: auction the property (without reserve) to get rid and accept whatever loss that implies. It isn't so clear how to proceed with a time-share... especially as the time share company itself is being uncooperative. Any ideas (other than the obvious: don't be a prat - don't buy a time-share... I'm too late to offer that bit of advice!)

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The huge management fees, obviously no-one wants the liability of those..

People can't give them away.

People planning to live in full time leasehold accommodation should also take note.

There's nowt to stop the management cos in UK city centres pulling the same trick.

Yes there is.

On a simple majority the leaseholders can vote to "sack" the freeholder appointed MC and appoint one that reports to them (or they can elect to do the management themselves)

tim

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hi

interesting thread - I would agree with Frank Hovis. Something similar was recommended by the Mail on Sunday - the only way is to sell to a non-existant person - or an off-the-shelf company.

This is a FOAF story, told to me and I believe it. The FOAF was involved in property and was offered 300 weeks or so of a Spanish timeshare (perhaps 10 flats, with 30 weeks each) to sell, on commission.

His commission was ANYTHING HE SOLD THE FLATS FOR! That;s right, the vendor took none of the capital. Which begged the question, what was in it for the vendor? yes, the annual mgmt fee. If it was £100pa, on 300 weeks... And it goes up with inflation, and the only way to gain control of the mgmt company is to have a majority of the weeks and the vendor will always have that...

Timeshare is a scam, and can get messy...

http://www.guardian.co.uk/uk/2006/jan/26/spain.ukcrime

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hi

interesting thread - I would agree with Frank Hovis. Something similar was recommended by the Mail on Sunday - the only way is to sell to a non-existant person - or an off-the-shelf company.

Bad form replying to own posts(?), but here's the Mail On Sunday link. And I was very naive suggesting the maintenance fee was £100. It's often closer to £1000... (many such stories on forums). Often the maintenace fee is more than the cost of a renting the property...

http://www.thisismoney.co.uk/news/columnis...;in_author_id=5

B. S. writes: My wife and I own three weeks of timeshare at the Macdonald resort at Plas Talgarth in Powys, Mid Wales. Like the reader whose letter about Macdonald you published last November, we bought in the Eighties and because of our age we have been trying to sell for several years. Macdonald Resorts says it cannot sell at any price, so we are trapped. Even a 20-year-old car has scrap value, but apparently a Macdonald timeshare week does not. It is an ongoing liability.

The couple whose letter we printed in November own a one-week timeshare at Elmers Court, at Lymington, Hampshire. Since they bought it, management fees have risen from £148 a year to £500 and ten years into their retirement this is a major burden.

Others are in the same boat. Mr and Mrs T, who own a Macdonald timeshare at the company's Scottish resort, Forest Hills Trossachs in Stirlingshire, told me: 'This is a huge problem. The commitment to perpetual annual fees is not made clear at the time of sale'. Their bill is £473, and every year since the Nineties has seen an increase in the amount owed by Forest Hills timeshare owners who cannot, or will not, pay the rising annual management fees. And Mr C, who with his wife has a two-week Macdonald timeshare at the Villacana Club on Spain's Costa del Sol, said: 'We have been unable to use the timeshare for the past few years, due to health reasons and being 14 years into retirement.' His annual bill from Macdonald is now £754, but he says the company's lettingsand resale service has produced no offers and he accuses Macdonald of refusing to handle resales at giveaway prices because this would undermine its own sales. Macdonald Resorts managing director Simon Jackson says his company is not to blame if Mr C was misled about charges, since he bought his timeshare privately on the open market.

And he denies that he would refuse to resell a timeshare at a peppercorn price. He told me: 'It is complete nonsense to suggest that we would refuse to handle resales that might undercut new sales.'

Well, that is clear enough, so if any owner has trouble getting him to offer their unwanted timeshare for sale for a quid, do let me know. I did suggest last November that owners might actually give their timeshare away to someone abroad and let Macdonald worry about chasing the new owner, who could simply dump the deeds in the bin.

This made Jackson very unhappy. The timeshare boss accused me of encouraging fraud by suggesting owners could sidestep his fees. He explained: 'The vast majority of our members are happy with their timeshare interests at our resorts. I can confirm that we will recommend to the respective club committees that action be taken to prevent transfers of interests made in bad faith for the purpose of avoiding future management charges.'

So it seems you were right when you said you were trapped. Timeshares bought decades ago for a hefty price are now virtually worthless - and you face rising management charges at a time of your life when your income has fallen. I repeatedly asked Jackson to suggest a solution, but he could not come up with one.

Edited by dryrot

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I'm rather worried for one of my friends now, having read this.

She has a time share which she took on when her husband was alive. When he passed away she tried to sell it and used one of these companies. She has now lost quite a bit of money from it. She offered it to us but it was only for accomodation for 4 people so we didn't take it on.

She has since stopped paying the mgmt fee, as far as I'm aware, and I think she wishes to wash her hands of it.

She is retired and I'm worried she will find herself saddled with a back payment even though she no longer uses the facility. She'd previously said she would will it to us, but I don't want it and don't want to get lumbered.

Does anyone know what advice I should give her?

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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