Nearly a decade ago, Raintree resorts (primarily located in Kona Reef, Mexico and Canada), notified their buyers that they’d be required to pay timeshare assessment costs for upgraded amenities that included better internet access. But because they didn’t provide a lot of notice, many weren’t financially prepared to cover new annual resort fees. This resulted in buyers refusing to pay even though it meant sacrificing membership rights and dealing with looming credit consequences. While most forked over the cash to avoid repercussions, a battle presumed in court.

We mention this scenario because a settlement was eventually reached between 11 owners in California. The outcome was the basis for a similar situation in Koloa, Hawaii for water intrusion repairs. Since owners were able to escape timeshare assessment costs and penalties in the past, members of Diamond’s (DRI) Hawaii Collection and owners at the Point at Poipu resort figured they could too.

At the same time, the real news here is the simple fact that timeshare developers can bill their users high amounts at any time they please. The perpetual agreements that buyers do sign hold them liable for these amounts. Whether timeshare assessment costs are due immediately or spread out over time, it’s something not many owners anticipate or appreciate. Even an additional $900 per year can be tough to cover for mosts.

Timeshare Assessment Costs Can Devastate Buyers

Fractional owners are commonly blamed for their own financial hardships. But it’s the responsibility of the resort to prepare them for these types of occurrences. A majority can’t really afford the travel purchase to begin with. When interest and extra fees overwhelm them, they normally realize they’ve made a mistake. The problem is, resort solutions focus on getting them to spend more instead of helping them find relief.

So, you can imagine how frustrated people were when they heard DRI was billing owners in Point at Poipu for $41.5 million and Hawaii Collection members for $22.9 million over five years. Although some contracts carried more dues than others, the average fees were close to $5.5K+ for owners and nearly $2K for points holders. Hardly any buyer was prepared to pay even though timeshare assessment costs were a part of their contract. 

Some owners went on the record saying their annual resort fees for maintenance rose from $1,353 to $3,353. Over five years, that’s nearly $10K more than what they were used to paying – on top of the mortgage itself. Those owning multiple weekly intervals were said to experience “five-digit tabs” from Diamond. One distraught buyer, who made the purchase in 1997, claimed the resort promised that fees would never increase. “Now I got a $5,800 bill, plus more because we bought a second week!”

Special Assessments Aren’t Just An Isolated Issue.

Sadly, many fractional owners are never able to find a way out and get stuck with exceedingly high timeshare assessment costs every year. But timeshare companies have no remorse and seek pity for their decision to upgrade at any given time. The senior VP of DRI, Frank Goeckel, made sure this was clear. “Diamond is also an owner.. We don’t want to write a $7.3 million check, either,” he said. 

At the same time, they’re making their contribution by collecting more fees from customers. You would think with all of the problems that timeshare companies have with retention, they’d stop preying on the middle class. Higher income consumers would seem more suited for fractional ownership. An increase in annual resort fees is a disaster waiting to happen when people already struggle to afford the condo. What did they think would happen?

Although the disgruntled owners faced an uphill legal battle from the get-go, they were able to raise enough funds to file an injunction so they could further assess the situation. Nearly a thousand owners eventually joined the Concerned Owners of the Point at Poipu, to fight the timeshare assessment costs.

One of the letters on the website says, “I purchased the Timeshare weeks for a vacation spot, not a lawsuit. I feel I’m being held hostage by the Resort and Diamond Resort (the Management Company) with no fair way out.” Another chimed in by saying, “We’re in a recession and we got kids in college. Sure, we’ve enjoyed a nice week in Poipu every year, but for God’s sake, we’re normal people, we’re not Bill Gates.”

Tensions Are Still High Regarding Annual Resort Fees. 

Although concerned owners ended up settling with Diamond a few years ago, by the looks of it, they’re still trying to regain “control” at the resort. Needless to say, DRI hasn’t been too helpful throughout. While most buyers were bothered by the cost itself, the main problem stemmed from the urgency of payments and the financial ramifications that came with an inability to pay

Kieth Paulsen, a residential developer who helped spearhead litigation, claimed the impact of the timeshare assessment costs forced many to “surrender their deeds back to the developer.” Not only was the resort in Point at Poipu able to collect multiple payments from previous owners, but they resold the weekly intervals to new customers

For the sake of travelers everywhere, we hope they change course soon. If you’ve found yourself in an unrewarding agreement, there’s no need to let the resort dictate your finances. You can always learn how to get out of timeshare contracts by scheduling a free consultation with VOC today.

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