Timeshare Collection Laws
When the owner of a timeshare interest decides that they no longer want to keep up with their oft-costly and cumbersome obligation and decides to attempt to exit or cancel their contract, can the resort developer or any of its associated organizations take action against that owner?
The short answer? Yes. Resort developers can and do take financial and legal action against timeshare owners attempting to leave their interest. However, they may not pursue these strategies as aggressively as some consumers may think.
One of the most prevalent tactics used by resorts is to pursue the consumer for any debts that may be incurred when the consumer stops making their payments, which can occur for any number of reasons.
Many timeshare interest owners stop making their payments when they begin the process of attempting to sell or exchange their timeshare with a third party; often, these owners are completely unaware that they are even responsible for keeping up with the financial obligation of their timeshare interest, due to poor communication on the part of their “relief” or “redemption” company.
In other cases, a consumer may have stopped payments out of a conscious attempt at a “strategic default,” a tactic that may encourage the resort developer to come to the negotiating table.
In both of these cases, debt collection can become a major issue for consumers – but retaining an attorney can help to stop it, even midway! You see, a licensed attorney is in the unique legal position of being able to insulate his or her clients from third party debt collection activities, thanks to a stipulation of the Fair Debt Collection Practices Act, or FDCPA.
Under FDCPA, third party debt collectors are legally prohibited from directly contacting a debtor (such as a timeshare owner withholding a resort payment) if that debtor has retained an attorney. Instead, the debt collector must contact the debtor’s attorney; they may only continue to contact the consumer if granted permission, or if the “attorney fails to respond to the debt collector within a reasonable period of time,” as the Consumer Financial Protection Bureau (CFPB) explains.
Because of these standards, it is only an attorney who is lawfully able to present “strategic default” as a tactic to the client; a consumer attempting this method of dispute on their own or with a non-attorney advocacy group will not be shielded against debt collection.
The ability to delay debt collection and thereby create leverage in a negotiation is one of the factors that makes attorneys so uniquely helpful when it comes to assisting consumers in matters of timeshare contract cancellation. Another element that positions legal professionals above non-lawyer based advocates is our singular ability to, as our own Michael Finn once put it,
“review and dispute contract clauses and/or advance legal principles and/or theories to enhance their ability to engage resort developers, and utilize persuasion, and/or litigation effectively.”
What’s more, having a qualified legal team on your side will help protect you should another party take any of these actions, including litigation, against you.
While not terribly common at all, it is not entirely unheard of for some small associations to file small claim suits for maintenance fees, for instance. Developers, too, certainly can and do file foreclosure cases against owners; most are not going for deficiency balances against owners, but some are. And it’s easy to see why foreclosure cases can be so worrisome to many consumers, as such matters typically end up on the debtor’s credit report, which could cost him or her the opportunity to secure a mortgage for a number of years.
Having a qualified attorney with knowledge and experience of the law on your side may not protect you from the machinations of your resort developer and their debt collection and legal apparatuses entirely, but it is certainly a first step toward attaining greater peace of mind in the short term, and a more lasting legal solution in the long.
Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.