What Happens When You Don’t Pay Timeshare Maintenance Fees?

In the timeshare industry, maintenance fees are an essential part of vacation ownership. From landscaping to paying staff, to fixing a leak after a bad storm, these fees go toward the regular upkeep of your favorite timeshare resorts so that you can keep enjoying them year after year. And though the cost of your maintenance fees should be considered when calculating your timeshare budget, you may find that the cost of these annual dues rises each year. Now, you may be rethinking your timeshare ownership and the extra costs. But what happens when you don’t pay timeshare maintenance fees? In this blog, we’ll answer the question, “What happens if I stop paying timeshare maintenance fees?” as well as discuss alternative options to free you from these fees.

What Are Timeshare Maintenance Fees?

Before we explain happens when you don’t pay timeshare maintenance fees, it’s important to understand what these fees are. Annual timeshare maintenance fees are payments that timeshare owners must make periodically to their timeshare developer. These payments are made annually, monthly, or quarterly, depending on the developer. Maintenance fees are subject to change, and your timeshare management company should provide a report of the costs its owners should expect to pay every year.

Why Do Owners Pay Annual Maintenance Fees?

As the name implies, these fees are very important for maintaining a timeshare. Timeshare maintenance fees cover updates to the amenities, unit upgrades, upkeep for the resort, and compensation for everyone who works to keep your timeshare beautiful. This includes regular maintenance of the property and employee wages. Property taxes and insurance are also within the umbrella of timeshare fees.

Think of annual maintenance fees the way you would fees to service your car. A car may run well for a while, but if it’s never serviced, it will quickly fall apart. Timeshares work the same way, if you want them to keep working right, you’ll have to spend some money. This is exactly why owners pay annual maintenance fees. It takes a lot of work and money to maintain a timeshare resort!

How Much Do Timeshare Maintenance Fees Cost?

How much timeshare owners will pay in annual fees depends on a handful of factors. Of course, the timeshare company itself has an affect on the pricing, but the rate of the fees is also directly affected by the individual resort in the brand’s portfolio and varies by property. For example, a top-tier resort in Hawaii may have higher fees than a quaint resort in North Carolina. This may be due to one having more amenities, nicer upgrades, a better location, a bigger staff, etc.

Additionally, each unit within a specific timeshare property may have different annual maintenance fees depending on the size of the unit and time of year of your visit. For example, maintenance fees for a three-bedroom ownership may be more expensive than fees for a studio. Moreover, for those with ownerships in a points-based system, some developers, such as Club Wyndham, calculate the cost of maintenance fees based on the number of points you own. Oftentimes, points can be redeemed to pay maintenance fees as well.

According to ARDA‘s State of the Industry Report, the average cost of maintenance fees in 2022 was $1,120. Keep in mind that your maintenance fees will typically go up every year, as seen across the timeshare industry. So, what you pay in fees next year will likely not be the same as what you paid this year.

What Happens When You Don’t Pay Timeshare Maintenance Fees?

So, it should be clear now why paying your maintenance fees is important. However, what happens when you don’t pay timeshare maintenance fees? Hypothetically, if you stopped paying the fees and consistently miss the payment’s due date, you’ll default on your ownership. Not to mention, even just missing a payment will result in late fees and penalties, which costs you even more money. You will likely get many phone calls and letters from your timeshare developer, and eventually, you will take a huge hit to your credit, as we’ll discuss below.

“What Happens if I Stop Paying Timeshare Maintenance Fees? Will It Affect My Credit?”

Good credit can take a while to build and a moment to ruin. And having multiple unpaid fees will do just that. These unpaid annual maintenance fees can be sent to collection agencies and ruin credit reports. It’s important to note that defaulting on your ownership will show up on your credit score, and these penalties can be very harmful in the long run.

Many big purchases, like a house or car, require a credit check, and seeing these issues on your report will make those purchases much more difficult. And though timeshare foreclosure may not stay on credit scores forever, it can certainly have negative impacts on your future.

Depending on the timeshare company, it may be written in your timeshare contract that the developer has the right to take legal action against owners who don’t pay maintenance fees. In this case, your timeshare may go into foreclosure, and you will no longer be able to use your ownership. The resort then takes ownership of the timeshare and sends what money you owe to a collection agency, leaving your credit report in disarray.

Be Wary of Timeshare Cancellation Companies & Scams

There are countless resale scams and unreliable companies out there who may make selling your timeshare, and effectively getting rid of those pesky maintenance fees, difficult. Timeshare exit companies often claim that they can get you out of paying your maintenance fees. However, they’re usually unsuccessful. In many cases, their goal is to have the resort or developer foreclose on the timeshare, which will then negatively impact your credit score.

Proceed with caution when working with companies who tell you to stop paying your annual fees. This is a common timeshare resale scam, and unfortunately, many owners fall for it each year. Not to mention, these companies may require expensive upfront fees, and if you’re not in a position to afford maintenance fees, these extra expenses could heed disastrous results. Sadly, there are many instances where owners drain their bank account or use up their emergency funds to pay these companies, only to never hear from them again and still be left with fees.

Overall, the best thing you can do is keep paying your maintenance fees, speak to your timeshare company directly to find a solution, or head to the resale market.

What to Do When You Don’t Want to Pay Timeshare Maintenance Fees?

People can be tempted to stop paying maintenance fees for various reasons. Maybe you don’t feel like the fees are worth the resorts in your club’s portfolio. If this is you, we would suggest a vacation exchange program like RCI or Interval International (II). This way, you can explore thousands of new resorts all over world and really feel like you’re getting the most out of your money.

On the other hand, if the cost of your annual due payment goes up each year, you might not have originally budgeted for spending as much money. Paying these yearly fees might cause financial strain for some. But unfortunately, you are legally obligated to pay according to your timeshare agreement. So, what happens when you don’t pay timeshare maintenance fees but want to get rid of them safely without harming your credit report? Fortunately, there are two solutions.

Contact Your Resort Developer

First, you should contact your developer or timeshare company. Many resorts and developers have in-house options to help you get rid of your timeshare if you don’t want it. What’s more, if you find you are still within the rescission period, which is the small window of time after purchase that you can return the timeshare back to your resort developer, then escaping timeshare maintenance fees is simple. However, even if this time period has passed, you still have options. In fact, some timeshare companies will buy the timeshare contract back from you directly! Other timeshare owners may have to sell their ownership on the resale marketplace if the timeshare resort developer cannot buy their timeshare back. But not to worry, there are many eager buyers to be found on the resale market.

Consider Selling Your Timeshare

If none of the in-house options work for you, you might want to consider the timeshare resale market. The secondary market gives you plenty of control over how to handle your timeshare. You can decide the price to sell your timeshare for, set the terms, and ultimately choose who the timeshare goes to. Instead of paying an exit company to try to get rid of your timeshare maintenance fees, you can sell it to be free from maintenance fees and keep your credit safe. So, stop asking, “What happens if I stop paying timeshare maintenance fees?” and take action with the resale market!

How to Sell a Timeshare on the Resale Market

Reselling your timeshare may seem intimidating at first, but it’s actually pretty simple! Partnering with a credible reseller like Fidelity Real Estate means you’ll be working with a licensed real estate agent with a skill for timeshares. They can help guide you through the process and efficiently navigate the resale marketplace. Whether you have a Hilton, Marriott, Wyndham, Disney, or a timeshare from any other top vacation club brand, we can help you!

To start, all you need to do is create a listing. We can work with you to set the price and make sure you’re happy with the resale process. However, it’s important to keep your expectations in check when it comes to price. Like a car, timeshares aren’t an investment. So, it’s unlikely you’ll get back what you paid for it. Yet, selling your timeshare is the best thing to do if you find yourself wanting to stop paying your annual maintenance fee. Consider researching what timeshares similar to yours are selling for on the secondary market, and start from there. Once your listing is complete, one of our licensed agents will walk you through selling your timeshare.

Once You Get an Offer . . .

When a buyer makes an offer on your timeshare ownership, our agent will handle the behind-the-scenes detail, including drafting up the contracts between the seller and the buyer. Then, once you go through the Right of First Refusal (ROFR) stage, where the developer gets one last chance to accept the timeshare back, you will transfer the title out of your name. The buyer will become the new owner, and you will be free from paying your yearly maintenance fees! Please note: Do not stop paying maintenance fees until you have confirmation that the title is officially out of your name and in the new owner’s name. If you stop payments prematurely, your credit report may still be negatively affected.

Sell Your Timeshare with Fidelity Real Estate

So, what happens when you don’t pay timeshare maintenance fees? With Fidelity Real Estate’s resale market, you’ll never have to worry about the answer to this question! Avoid late fees, penalties, and even foreclosure by trusting in our licensed real estate agents to guide you through the selling process. Fidelity has been in the timeshare resale industry for over 20 years, so we have the experience needed to help you through the whole process.

Fidelity’s licensed agents are experts in all of the major resort developers, so whether you’re selling a Marriott timeshare or Margaritaville Vacation Club, we can help you. Not to mention, we have an A+ rating with the Better Business Bureau, so we’re a trustworthy, credible authority in the secondary market. What’s more, Fidelity charges zero upfront fees! That’s right; we don’t get paid until you do. So, if you’re a timeshare owner and would like a free consultation or have questions about selling your timeshare, feel free to call us at 1-800-410-8326 or email us at [email protected].