Whether you are considering vacation ownership or you are already an owner, it is important to understand your timeshare maintenance fees. It is best to learn about these costs before buying a timeshare, so you can make an educated decision about this major, long-term purchase. To owners looking for a better understanding of their maintenance fees—it’s never too late to learn! Below, we’ve answered essential questions regarding maintenance fees.
Resort operations costs are allocated among all owners at that resort by way of an annual maintenance fee. Most resorts schedule these fees to be due annually, but some may require them monthly, quarterly, or biannually. You can compare the cost of your timeshare maintenance fee to the costs of owning your home or car, both of which need regular maintenance and repairs. If you own a condo or have owned one in the past, you may also be familiar with homeowners’ association fees, which operate similarly to timeshare maintenance fees.
The resort typically uses funds from maintenance fees to cover:
While most of the items above will be covered by one maintenance fee, some homeowners’ associations may detail the costs of each individual expense in their billing. Regardless of how your bill breaks down each cost, these are the general areas your maintenance fee covers.
Maintenance fees vary greatly from resort to resort, depending on the location and the size and type of timeshare unit. According to this year’s State of the Vacation Timeshare Industry study by ARDA, the average maintenance fee price in 2013 was $845. Some fees are as low as a couple of hundred dollars, while others exceed $1,000. It is important to note that your maintenance fee is not a locked-in rate, and can increase over the course of your ownership.
When you purchase your timeshare, you agree to pay your maintenance fees for the duration of your ownership. Failure to pay timeshare maintenance fees will result in collection efforts by the management company or homeowners’ association. You could incur interest and late fees if your contract specifies it, which will then inflate the total amount due to make your account current.
If you continue to fail to pay your maintenance fees, the management company or homeowners’ association will send the bill to a collections agency. This can lead to a decrease in your credit score. You could also be taken to court by the timeshare management company to force you to pay your past-due bills. Finally, since deeded timeshares are a real estate property and maintenance fees are part of the purchase contract, failure to pay them could result in the resort foreclosing on the property and selling it at auction to recover the money.
There may be an instance when special assessment fees are added to maintenance fees to cover unexpected expenses. These assessments are passed by your homeowners’ association’s board of directors. A resort in Florida or the Caribbean, for example, may sustain severe storm damage during hurricane season that is not completely covered by insurance. Special assessment fees can also include one-time expenses such as a major improvement (e.g. new tennis courts). Even if you do not intend to use the facilities, you will be responsible for paying the assessment fee.
Those looking to buy a timeshare should be sure to take maintenance fees into account when budgeting for this large purchase.
Are you ready to find the perfect annual getaway? Learn more about buying a timeshare and you’ll be on your way to enjoying memorable vacations year after year.
If you’re an owner who has gone through financial changes and these maintenance fees no longer fit your budget, we can help. Learn more about selling your timeshare today.