When Timeshares Transfer Without HOA Approval
In recent years, an increasing number of timeshare owners have attempted to sell or transfer their properties on the secondary market. This trend offers a potential exit strategy for owners burdened by ever-rising maintenance fees or wanting to liquidate their real estate assets.
However, as demonstrated by a story featured on Atlanta News First, selling a timeshare can become complicated if the Homeowners Association (HOA) or resort management does not formally accept the new owner—even after the deed has been recorded and transferred.
Below are the key issues and potential problems timeshare owners might face if an HOA denies or fails to recognize a transfer of ownership:
1. Continued Liability for Maintenance Fees
One of the most striking points in many owners’ stories, including the one cited by Atlanta News First, is that the seller can continue to receive bills for maintenance fees despite believing they have sold their timeshare through a timeshare resale company.
This occurs because HOAs typically require formal acceptance of a new owner, including:
- Proper documentation signed by both parties
- Agreement from the new owner to abide by the timeshare bylaws
- Agreement to assume responsibility for maintenance fees going forward
If this acceptance never takes place, the original owner’s name often remains on the HOA’s record as responsible for payment. Consequently, the original owner may still face collection attempts—even if a new deed is recorded elsewhere.
2. Bylaws and Transfer Restrictions
In most timeshare agreements, the bylaws spell out explicit transfer procedures. They may require:
- Approval of any transfer documents
- Payment of a transfer fee
- A legally binding contract that the new owner will uphold all obligations
If sellers bypass or fail to complete these requirements, the HOA or resort management can argue that they never consented to the transfer, legally keeping the former owner in the billing loop.
3. Potential for Legal Disputes
When an HOA refuses to acknowledge the new owner:
- Original Owner’s Risk: They could be pursued by the HOA for outstanding fees, late charges, and potentially legal expenses.
- New Owner’s Risk: They might hold a recorded deed but may not be able to access the property, schedule stays, or utilize timeshare benefits. In some cases, the new owner may also lose out on any investments made to acquire the timeshare.
This stalemate can escalate into drawn-out legal challenges, with each party citing different sets of documents and interpretations of the bylaws.
4. Credit Implications
When timeshare maintenance fees remain unpaid, the HOA or resort has the right to send delinquent accounts to collections or initiate foreclosure. This can have significant consequences for the original owner’s credit score—even after they believe they have transferred ownership. If they are not recognized as officially released from the contract, they may remain the responsible party.
5. Best Practices for a Smooth Timeshare Transfer
To avoid the pitfalls illustrated by stories like the one in the ANF investigates article, timeshare owners should take these steps:
- Review the Timeshare Agreement and Bylaws: Before listing the unit for sale, thoroughly read the resort’s bylaws or contact the HOA directly to understand what’s needed to successfully transfer ownership.
- Obtain HOA/Resort Approval in Writing: Most timeshare contracts require official documentation—both parties (seller and buyer) should sign documents that confirm the new owner’s acceptance of the timeshare obligations, and the HOA or resort must countersign.
- Use a Reputable Closing Company or Attorney: A specialized timeshare closing firm or real estate attorney can guide you through the correct transfer process. They will ensure that all necessary signatures, fees, and paperwork are filed according to the resort’s policies.
- Confirm HOA’s Confirmation of New Owner: Even after the sale, do not assume you are free and clear until you have written communication from the HOA stating that they have updated the ownership in their records.
- Follow Up on Billing Statements: Monitor your billing statements after the transfer. If you continue to receive statements, reach out to the HOA immediately for resolution. Prompt attention can prevent unpaid fees from piling up.
Final Thoughts
Although recording a deed transfer in public records is an important step in selling a deeded timeshare, it is only one aspect of the process. For a timeshare sale to be recognized and for the new owner to be fully responsible for ongoing fees, the HOA or resort management must accept the transfer according to the resort bylaws. Without this acceptance, as illustrated by the case reported by Atlanta News First, the original owner may continue to face financial liabilities, and the new owner might not be able to enjoy the property.
Prospective timeshare sellers should exercise caution, secure professional assistance, and ensure the necessary paperwork is executed properly to avoid continuing bills and potential legal or credit repercussions.
Disclosure: This article is for information purposes only and is not intended as legal advice.
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Led by timeshare attorneys J. Andrew Meyer and Michael D. Finn with over 75 years of combined legal experience. The Finn Law Group is a national consumer protection firm that specializes in Timeshare Law. If you feel you need the services of a timeshare attorney, call Finn Law Group at 855-FINN-LAW. Learn more about timeshare transfer issues on our Twitter X page.
