Timeshare Property Tax Lawsuit Favors Resorts in Maui County

Timeshare Property Tax Lawsuit Favors Resorts in Maui County

Over the past few weeks, we’ve been shedding some light on timeshare assessments and how they come into fruition. For the most part, these annual fees catch fractional owners off guard and the resort does little to prepare them for the bill. But assessments aren’t always induced because of expansion efforts, reparation or the greed of property management. While many buyers end up fearing what the resort will charge them for, local governments can be the culprit for unexpected fees.

Maui Government Sued After Assessing Resorts 10 Years Later.

Last year in Hawaii, the County of Maui [legally] went after a handful of timeshare projects in Kaanapali after the associations initially sued them for a timeshare property classification they rolled out back in 2004. The initial $10 million assessment was premised on market data for 2006-2008 for multiple Hawaiian resorts. In a nutshell, the County realized they didn’t assess each timeshare interval that was managed by certain properties in the region and decided to request payments in full.

Although the timeshare associations were able to cover the costs by charging owners, they weren’t very happy about it. Ironically, they now know how their own timeshare owners feel when the unexpected occurs. Nonetheless, Maui County apparently believed that since the property taxes were omitted, they should be able to request them whenever they felt the need to. But since county officials acknowledged that the taxes were paid in full on the assessed properties, there wasn’t much basis behind their prerogative.

Although Maui County left money on the table by assessing the resorts improperly, timeshare companies weren’t going to let it be their problem. Since the taxes were taken care of, they wanted to toss out the counterclaim altogether. “There’s a process for assessing tax and you didn’t follow it,” they said. Timeshare companies felt as though they had a right to sue the County. It seems like Maui officials simply wanted them to pay for their mistake. Looking at this from the outside in, it seems pretty chaotic doesn’t it?

The timeshare industry goes through scenarios like this all the time because of the amount of money involved with the purchase. Most buyers never expect to be on the hook for thousands of dollars in annual assessments – but they are. The perpetuity of the agreement basically guarantees the resort income whenever they want it. Luckily for them they’re able to leverage users for unexpected expenses of their own. Buyers aren’t so lucky.

What Really Resulted From the Tax Assessments in Hawaii?

After a multitude of court filing fees and hypothetical assumptions, the judge of the case finally ruled in favor of the timeshare companies. He agreed that the way Maui went about it was wrong and they shouldn’t be able to penalize someone else for their mistake – let alone a high number of innocent fractional owners. Since the tax obligations for the Maui properties came a decade later, he labeled them “unlawful” and, in the end, voided all of the supplemental assessments.

Moreover, the court mentioned that constitutional rights were violated because the Hawaiian County was attempting to sue timeshare companies simply as a method of retaliation. Because they were called out for their mistake, they wanted to financially punish specific resorts for their pursuit of restitution.

While retaliation may have seemed like a good idea at the time, civil laws forced the Maui Government to repay timeshare companies for attorney fees and compensate them for the damages they incurred along the way. They idea to collect assessment fees also forced them to refund $30 million in overpaid taxes.

Here’s what the judge had to say about the whole ordeal. “If the County can retroactively assess already-assessed real property to change the valuation and impose additional taxes, even many years later as it argues it can here, property owners can never have confidence that they have satisfied their tax obligation for any previous years. Potential buyers can never have confidence that a purchased property will not later be burdened by a hefty ‘amended assessment’ for some year long before their purchase.”

Up to this point, all has worked out in the fractional owner’s favor as they weren’t exactly liable for the unexpected fees. However, future assessments are pretty much guaranteed to be on the horizon. Random expenses like these are eventually passed down to the owners who are perpetually obligated to pay their share on the vacation property. The lack of clarity amongst these mandatory costs is disappointing to say the least. If you’re looking for a way to get out of a timeshare agreement, feel free to read another blog to learn more.

Are Owners Required to Pay Annual Timeshare Fees for Special Assessments?

Are Owners Required to Pay Annual Timeshare Fees for Special Assessments?

Over the past few weeks, we’ve been discussing the financial impact of timeshare ownership. Thousands of buyers struggle to completely understand the purchase and the amount of value it brings them. To consumers, the fluctuation of costs is frustrating because they expect a specific experience that was sold at a distinct price. While it is the buyer’s responsibility to know what the loan and contract terms entail before signing, you can’t fault them for being deceived

Nonetheless, the unexpected typically forces many to go over budget or into hardship. But a higher monthly obligation (due to interest, tax or travel expenses) isn’t the only thing that’s concerning. Annual timeshare fees for maintenance and special assessments can really add to the constrained burden of fractional ownership. Receiving unforeseen charges that weren’t even included in the contract can be maddening. Especially when these invoices arrive in owner’s mailboxes during the holiday season.

Fees for Special Assessments Aren’t Always in Writing.

For most timeshare owners, annual fees are most certainly included in their contracts. The salesmen at the presentation just do a great job of avoiding the pertinent details of the perpetual agreement while overhyping the possibilities of the travel purchase. But not all timeshares include this type of language in their agreements. The problem is, they’re still charging for annual timeshare fees based on “industry standards” and conformity by a majority of owners. 

At first glance, the emergence of improved travel seemingly threatens the outlook of timesharing. Today, the general population is well aware of their timeshare sales tactics more than ever before. But resorts continue to find ways to manipulate potential buyers and hold them liable for certain obligations by threatening penalties. Knowing that potential buyers can confirm that annual timeshare fees are not included in the contract and still be charged for them is concerning to say the least.

Vague Reasoning for Annual Timeshare Fees.

Back in 2015, Eric Jordan of the Conde Nast Traveler published a story that detailed how timeshare companies justify their demands on owners. After growing tired of non-contractual, annual timeshare fees for special assessments, Tim (previous owner) and his wife reached out to the website for advice. So Eric reviewed their situation and attempted to reach out to Marriott for answers. He quickly realized the only thing that was justifiable was the buyer’s sense of hopelessness

What astounded him the most was the amount of effort required just to garner clarity. When he finally spoke to the director of operations at Seaport Development, N.V., the justification set him back even more. Mr. Trivedi stated, “Over 99 percent of our timeshare members have paid their share of the special assessment.” We’re not exactly sure what this has to do with the simple fact the annual timeshare fees weren’t included in Tim’s contract. Neither did Eric.

Either way, Trivedi went on to say that they have the right to limit the usage of those who don’t adhere to payment requirements and that all buyers are held to the same standard. When Eric pressed the same concerns, Trivedi simply reiterated his stance. “Special assessments for extraordinary renovations are a standard industry practice and upwards of 99 percent of our members have paid in full.” So, if owners decide to jump off a bridge, everyone else should be required to do the same? The argument seems a little dry if you ask us.

The resort’s leader even suggested that Tim and his wife were being disingenuous because they’ve paid for annual timeshare fees for special assessments in the past. Eric went on to combat the resort’s ambiguous responses by insisting the contract needed to include these details in order to be upheld. In the long run, Tim and his wife’s refusal to pay for the assessments cost them their ownership rights.

How to Avoid Unexpected Timeshare Expenses.

While it’s nearly impossible to avoid this type of misconduct, there are ways to avoid the unexpected when signing up for a timeshare. But this requires extensive knowledge of the purchase itself. If you’re attending a timeshare presentation for the first time, it’s imperative that you know what you could be getting yourself into. Studying the details of timeshare contracts helps you know what to look for and understand what needs to be in writing. 

If Tim and his wife would have noticed that annual timeshare fees for special assessment costs weren’t included in the agreement, they could have taken the proper steps to ensure they weren’t charged. It’s not out of the ordinary to require certain details in writing before signing anything. If all else fails, at least you can walk away confidently. The last thing you should want is a perpetual burden that can set you back financially.

Massanutten Property Owners Might Have to Pay Special Assessments.

Massanutten Property Owners Might Have to Pay Special Assessments.

Ever since the 1960’s, the timeshare industry has been humming along. The development of new properties and the intriguing sale of vague opportunity has kept the business booming for a while now. But the growth of ideal travel arrangements has resulted in more consumers losing interest in and become less gullible for fractional ownership. Moreover, resorts themselves have begun to look into other booking sources to fill their rooms throughout the year.

Why Would Resorts Move on From Timesharing?

If you’re unaware of the actualities of timeshare travel, you have to understand why owners want to get out of timeshare contracts in the first place. Aside from the cost being more than anticipated, many are unable to book during ideal times of year. Resorts intentionally limit the availability because they make far more from retail customers during peak seasons. Although timeshare salesmen tell buyers they can book during certain dates, it’s rarely true.

When owners are tired of paying for something that doesn’t benefit them, the resort suffers as well. Unhappy buyers that cancel their agreements not only hurt vacancy, but the reputation of the resort as well. Although the complaints of timeshare owners tend to create more headlines, resort owners are beginning to grow tired of bait and switch sales tactics too. The problem is, their decision to withdraw timeshare units has its drawbacks as well.

Cutting Ties With Timesharing Impacts VA Community.

Earlier this year, the Massanutten Property Owners Association (MPOA) was notified by the Great Eastern Resort Management team that some weekly intervals would be terminated from their offering by the end of 2019. Since the MPOA expects to incur revenue loss from the removal of the Shenandoah Villas and Summit Eagle Trace Timeshare Owners Associations, current property owners are worried.

When it comes to operating a timeshare destination, a constant flow of new sales is required to keep the enterprise afloat. Instead of investing in the experience to retain customers, they like to invest in sales strategies that trap them. They then count on their annual payments to cover general costs and these extravagant sales campaigns. Sometimes, costs are parlayed to the community when the unexpected occurs.

If a timeshare company loses a large base of expected revenue streams (fractional owners), the amount of money they set aside to charge for “special assessments” is normally spread out amongst remaining owners. So, you can imagine why property owners surrounding the Kettle area ski resort are hoping for the best. They don’t know what to expect because annual assessment fees aren’t always exactly clear to begin with.

Regardless, the MPOA was expecting Great Eastern to cover $337K for this year’s annual special assessments and another $80K for the local police department and road maintenance. One property owner has already spoke up on everyone’s behalf by simply stating, “We don’t want to pay more money.” It’s easy to presume they’d sing a different tune if there was any sense of community at the resort. But that’s just not the norm. Many timeshare owners struggle to afford the purchase and the local community tends to be negatively impacted as a result.

The property owner went on to say, “There are many families here who are able [to pay but] there are many working families here who live check-to-check and can’t afford a huge increase.”  Either way, it’s not exactly fair to punish those who’ve paid their dues because of a failed business opportunity. Especially when timeshares are failing because of a poor overall experience and the liabilities that come with the purchase.

Finding Resolve in Massanutten, Virginia.

Over the past few months, the board of directors in the Rockingham County, Virginia town have been trying to find a viable solution. They even invited property owners to meetings to discuss the special assessments and share their opinions. Another property owner went on record saying, “We need to do what’s best for this community and we need to look at every option before making any decisions.”

While suggestions have ranged from charging more for events and attractions to eliminating the police department altogether, the board of directors is in no hurry to make a decision. Since the initial meetings took place, they’ve formulated a task force consisting of volunteers and legal teams to discuss all options. While finances were discussed on August 13th, they’ve yet to come to a definitive solution.

Canadian Government Issues Timeshare Travel Warnings for Mexican Properties

Canadian Government Issues Timeshare Travel Warnings for Mexican Properties

When people hear of timeshare travel warnings, most immediately think of the obvious scams. But that’s not always the case. A few weeks ago, we talked in length about how timeshare companies do their best to create doubt around canceling fractional ownership while discrediting the exit industry as a whole. Since most timeshare contracts are perpetual, they’ve been known to say a lot of things to keep owners from seeking relief. What’s ironic about this is the simple fact they’re ignoring the reason why buyers want to cancel in the first place. Instead of improving the product, they’d rather attack a solution that’s been proven fruitful. 

Amongst other things, prominent resorts work extremely hard to deflect the reality of the purchase. But when you take the time to assess the buyer’s remorse, nearly every frustration stems from an expectation not being met. While resort upgrades and so-called solutions are deceiving in themselves, nothing causes poor experiences more than the sale itself. Far too often, consumers make the purchase based on promises that aren’t entirely true. 

Once buyers are under contractual agreement, the real sales cycle begins. It’s why salesmen will say anything to persuade someone to sign up. Resorts know that fractional owners provide them with endless revenue opportunities. What throws a wrench in their master plan is the growing knowledge of companies that actually know how to get out of timeshare contracts legally. While the market is flooded with an abundance of misconduct, they can’t be too happy about our 100% satisfaction ratings.

Canada Warns Those Considering a Timeshare Purchase.

Although we wouldn’t quite call it a panic, timeshare companies are beginning to take additional measures to keep buyers from canceling their agreements. The Canadian Government has taken notice of the deceit and has issued timeshare travel warnings for those considering a property in Mexico. Apparently, certain resorts have been requiring buyers to sign an additional contract that permits them from ever terminating their purchase agreement. Who would’ve thought the latest ploy to mislead potential buyers is occurring during the initial sales presentation.

shocked-younger-canadian-woman-learning-how-cunning-timeshare-companies-are-down-in-mexico-resorts-destinations

A majority of people that attend these seminars are seldomly ever aspiring travelers. They’ve been lured in by free gifts, vouchers and even alcohol. Those persuaded to make the purchase rarely know what they’re actually signing up for and how much it really costs. This makes the attempt to impede on their ability to escape a potentially bad decision even more bothersome. Many owners are left reeling from the cost of the timeshare without knowing where to turn for help. It can be a tough road to navigate when you’re led to believe cancellation services are a sham.

What This Warning Says About Timesharing.

The timeshare travel warnings from Canada make it very clear that these kinds of tactics won’t be tolerated anymore. “It’s illegal for timeshare companies to require you to sign a waiver that prevents a contract from being canceled,” was posted to the Mexican travel advisory shortly after a statement was made. 

Like us, they also stressed the importance of reviewing all documents before making a decision. No matter what you sign, every buyer should have an ability to legally cancel a timeshare contract within five days. But just know the refund process isn’t that simple. Be prepared for a fight and don’t wait until the last minute if you have cold feet.

Researching the actualities and ignoring the pitched possibilities typically helps consumers avoid disappointment altogether. Since many Canadians trek down to Mexico during the winter months, they should take note of the increased remorse of those who bought a property south of the border. While fractional ownership can be rewarding, it’s always worth making sure before you sign any dotted lines. 

Timeshare Company Defeated in Court by Tennessee Couple.

Timeshare Company Defeated in Court by Tennessee Couple.

Like we mentioned in last week’s article, regulatory agencies are beginning to hold timeshare companies accountable for persuading potential buyers in misleading ways. Although owners of older timeshare contracts haven’t been able to find much restitution, today’s buyers have a reason to be hopeful. Aside from the growing number of settlements being reached, lawsuits are beginning to rule in the consumer’s favor. A Tennessee couple can attest to this as they left a timeshare company defeated after suing for defrauding them.

How the Tennessee Buyers Were Deceived.

In July of 2011, the Overtons were looking for a family cabin in Gatlinburg when they were persuaded to attend a brief timeshare presentation for Westgate Resorts. After accepting a few gifted bribes and enduring sales pitches for more than eight hours, the couple agreed to pay nearly $40K for a unit at the resort.

In order to make the “deal” too good to pass up, the sales rep assured the Overtons that they’d have access to their timeshare the same week every December and that they could stay at any Westgate resort for $49-69 per night. They even threw in a “free” foosball table and promised to refund $1,500 in commissions if the Overtons would just sign the dotted line.

Although many buyers fail to properly document the transaction, the Overtons did not. After getting everything in writing, they felt pretty good about the purchase. The problem was, the contract they signed wasn’t for a fixed week, it was for a floating unit. So they were never actually guaranteed the same week or unit every December. Because of this, they also found out that the unlimited owner’s rates weren’t valid either.

Unfortunately for Westgate, their sales team didn’t think twice about the ramifications of their assurance. They probably didn’t think a few lies could leave the timeshare company defeated in court someday. The perpetuity of a timeshare contract usually forces buyers to feel trapped. So they must have assumed the Overtons would follow suit. But when the experience unfolded, the couple ended up filing a suit instead.

How the Fractional Owners Won the Timeshare lawsuit.

After reviewing documents from the purchase with an attorney, the couple was informed that Westgate did not comply with Tennessee law by providing them with an up-to-date copy of their public offering statement. Even CD-ROMs that were given to the Overtons were deemed illegal because of accessibility concerns and outdated information.

The unhappy buyers finally decided to formally request a rescission with Westgate after four months of further documentation. But the Overton’s letter wasn’t taken seriously and the resort denied their request – daring the couple to file a lawsuit. So the Overtons did and in June of 2013, Westgate went on trial for fraud.

Disclosure, False Promises Left Timeshare Company Defeated.

As the case concluded, the court determined that Westgate had trained salespeople to break fair disclosure laws throughout the entirety of the sale. In addition to violating the Consumer Protection Act, the ruling stated, “The defendant had violated the respective statutory provisions [of Tennessee’s Timeshare Law] and was guilty of fraud and misrepresentation.” Because of this, Westgate was ordered to refund the Overtons and rescind the contract altogether.

Aside from inadequate documentation of the purchase, the court was especially troubled by Westgate’s refusal to make things right with the Overtons “despite overwhelming evidence” against them. The timeshare company’s profit margins were a focal point during the trial and a big reason why the claimants were awarded maximum punitive damages. The entire lawsuit could have been avoided had Westgate taken responsibility for their actions.

While the initial punitive amount was for $600K, Westgate was able to win an appeal to drop the total by $100K. In the end, the court decided it was important to financially “punish” the timeshare conglomerate for their greedy tactics at the consumer’s expense. The couple also received $136K for legal fees. The Overtons provide everyone with a blueprint on how to avoid being taken advantage of by a timeshare.

Westgate’s Track Record of Misconduct Continues.

Although it’s hard to tell why Westgate challenged the claim, one thing is clear: the timeshare company defeated themselves throughout the process. Shooting yourself in the foot isn’t a good look when you’re trying to acquire new owners. Westgate has yet to acknowledge they’ve done anything wrong as their CEO has only spoken in the form of excuses.

If you feel as though you’ve been misled by a timeshare salesman and are unable to get out of your timeshare agreement, we’d be more than happy to help. Sometimes, you don’t even need to invest in a termination service or lawsuit to be relieved of your obligation.

Fractional Owners Are Starting to Win Timeshare Sales Lawsuits

Fractional Owners Are Starting to Win Timeshare Sales Lawsuits

Today, tens of thousands of fractional owners feel trapped in their agreements and developers want owners to believe that getting out of timeshare contracts is next to impossible. Whether resorts dismantle and discredit exit services or intimidate their users with misleading statements and expensive legal teams, their goal is to create fear. While it has been rather difficult for buyers to win timeshare sales lawsuits in the past, the tide is beginning to turn.

Recently, Wyndham has been taking a lot of heat for complaints regarding deceitful sales practices. The unexpected contract terms and total costs have caused many buyers to regret their timeshare purchase. Momentum really started building in the consumer’s favor when they lost a lawsuit with a former employee that claimed they were trained to prey on the elderly. But the last 3 years have been especially telling.

What Drew a Red Flag on Wyndham?

Regulation and consumer protection agencies started to investigate the timeshare giant after nearly 2,000 complaints were filed with the BBB. What’s truly concerning is Wyndham’s refusal to learn from mistakes and alter the aggressive nature of their presentations. Because of this continued disdain for buyers, almost 600 new complaints have been filed over the last year against the travel conglomerate. 

While a majority of grievances pertain to unethical advertising and sales tactics, the experience itself has been in question as of late. Hundreds of buyers have had consistent objections with the timeshare product they purchased (problems with availability and upkeep) while others feel they’ve been harassed to pay an amount they never agreed to. The increasing number of complaints has really aided the consumer’s ability to win timeshare sales lawsuits over time.

Owners in Wisconsin Got to Cancel With Restitution.

Although Wyndham remains in complete denial, new allegations have resulted in further losses for the timeshare corporation. On May 29th in Wisconsin, Wyndham reached a $665K settlement with 29 owners that felt as though they’d been taken advantage of by unfair trade practices. This came after the state’s regulatory branches investigated complaints made by timeshare owners who purchased intervals from 2008-2013.

The last thing Wyndham wanted to do was to let even more unhappy owners win timeshare sales lawsuits. Although Wyndham denied any wrongdoing to protect themselves from future allegations, the DOA and DATCP successfully created enough pressure for Wyndham to agree to resolved through settling to prevent further legal prosecution from Wisconsin regulators. The settlement pertained to misleading statements made by sales representatives and high pressure sales.

Payments ranged from $3,259 to nearly $85k per claimant. Aside from complying with the restitution amount, Wyndham was also required to clear the credit records of these owners and rescind their timeshare contracts altogether. After it was all said and done, the timeshare giants was fined almost $100k by the state while racking up over $62K in legal fees. 

What’s This Say About Wyndham’s Sales Practices?

While most timeshare companies will never admit they were involved in misconduct, they’ll typically settle to avoid legal prosecution. In both of these instances, it’s exactly what Wyndham did. Unfortunately, not many buyers are equipped to win timeshare sales lawsuits with major corporations. Nobody makes the purchase expecting a court battle. 

This is why we’ve committed to sharing news articles like these. Consumers deserve to know the importance of documenting the purchase. Timeshare companies want you to attend their presentations blindly so you can’t prove you’ve been lied to – if the need arises. While salesman may seem trustworthy, in most cases, they’re far from it.

By the looks of things, it doesn’t look like Wyndham is going to make drastic changes anytime soon. Mainly because they don’t believe they’re breaking the rules. In a recent statement made, they reiterated, “We are committed to ensuring our sales practices are compliant with all regulatory requirements while striving to meet the highest standards of fairness and transparency, and continually look for ways to make the buying process more consumer-friendly.” 

It’s almost as if they think the settlement is an anomaly. They’re even trying to make the losses seem like some sort of positive outcome for their hospitality chain. A spokesman mentioned, “Businesses and regulatory agencies working together is good for our industry and good for consumers – and we are pleased to have a strong record in this regard.” 

Although it appears they aren’t taking ongoing allegations seriously, they’re very well aware of what’s going on. Despite their determination backed by greed, consumers can rest easy knowing that pride usually comes before the fall.

If You Don’t Think You Can Win Timeshare Sales Lawsuits…

If you’re concerned with your timeshare agreement and want to know how we go about legally canceling vacation ownership, we’d be more than happy to go over your options with you. While termination can help you move on for good, there are always ways to work things out with the resort. You can always learn more by scheduling a free consultation with VOC. 

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