Division of Florida Condominiums, Timeshares, and Mobile Homes

Frequently Asked Questions - After Purchase Issues

1. Is the managing entity or association allowed to collect real estate taxes in advance?
Per sections 192.037 and 721.13(3)(i), Florida Statutes, for the purposes of ad valorem taxation and special assessments, the managing entity is responsible for operating and maintaining fee timeshare real property and is considered the taxpayer, as agent of the timeshare-period titleholder. The Florida Vacation Plan and Timesharing Act does not specifically address the issue of collecting real estate taxes in advance. An argument could be made that in order to take advantage of tax payment discounts, or to prevent late tax payment penalties, a managing entity needs to estimate the real estate taxes and collect them in advance. Since all real estate tax collections must be placed in a special tax escrow account, this practice would not appear to be prohibited.

2. How can you determine whether managing entity or association practices are illegal?
Aside from specific statutory or criminal violations, one must look to see if the managing entity has failed to act in the capacity of a fiduciary to the purchasers of the timeshare plan.

3. I cannot afford my timeshare mortgage or maintenance fee payments anymore. Is there anything I can do?
Florida law states that a purchaser, regardless of how the timeshare estate or license has been acquired, is personally liable for all lawful assessments that come due while owner of the timeshare interest. Additionally, delinquent assessments may bear interest at the highest rate permitted by law. In addition to such interest, the managing entity may charge an administrative late fee in an amount not to exceed $25 for each delinquent assessment. You may be held liable for accrued interest charges and per diem charges on any unpaid balance at the highest rate permitted by law, calculating from the day of delinquency. If a lien is applied, or if the action goes to foreclosure, more costs can be incurred.

If the matter is turned over to a collection agency, the purchaser may be liable for the costs and fees of the collection agency plus reasonable attorney’s fees. As with any financial obligation, failure to pay may result in loss of the period and potential damage to your credit. Check with the resort for information on renting the period (this may at least cover your maintenance fees for the year), or if they offer a resale program. You may be able to quit claim your interest back to the developer, or even to the association, but, if so, make sure that any mortgage liability is transferred simultaneously. Check with either the developer, or the association, for more information on quit-claim deeding.

4. My resort requires me to call in and make a reservation. How can that be when I bought a week there already?
There are different types of ownership involved in timeshare plans. You need to review your documents to determine what you have purchased and the rules and regulations for using your week. If you have bought a “fixed” week, chances are you have a deed for a particular week in a particular unit, and you will use the same week every year without any reservation required. If you have bought a “floating” week, you probably have to make a reservation each year and are thereby able to visit the resort at different times of the year.

5. I purchased my timeshare interest because I was told that I could exchange it to stay at resorts all around the world. Why can’t I get the reservations I need to do that?
If you decide to join one of the many exchange companies that make it possible for you to vacation in different locations, you need to carefully review the material that the exchange company provides to you. This material gives a description of the procedure to qualify for, and effectuate, exchanges, as well as a description of all limitations, restrictions, or priorities used in the operation of the exchange program (i.e., seasonality, unit size, and/or occupancy level).

6. As an owner, am I entitled to access to the financial records of the timeshare plan?
Yes. Florida law provides that the managing entity provide to you a copy of the annual budget each year and make the annual audit available to you upon request. Additionally, as an owner you have a right to inspect the books and records of the timeshare plan at any reasonable time, under reasonable conditions, and under the supervision of the custodian of records. Your request for access should be made to the managing entity or association.

7. My assessments keep getting higher each year. Can I just give my timeshare interest back to the resort?
The concept of “giving” the timeshare back is not necessarily a valid option, nor is it necessarily an option without ramifications. The acquisition of a timeshare interest is too often viewed singularly, and not as several separate agreements or obligations. The purchase of a timeshare interest often consists of two primary obligations: (1) loan payments to the developer, or to the entity providing the financing (if there are monthly loan payments); and (2) the annual assessments to the managing entity of the timeshare project.

If annual assessments become such a financial burden that payment cannot be made, the result will be that the managing entity can deny your use rights until the delinquency is paid. Additionally, the delinquency creates a lien on the timeshare interest in favor of the managing entity. If the delinquency remains unpaid, the managing entity, after proper notification, may turn the matter over to a collection agency and eventually seek foreclosure action.

At no time is the managing entity obligated to “take back” the timeshare interest. A foreclosure action would relieve you of your obligation to pay the annual assessments. However, the action would not relieve you of your purchase financing obligation. The net result could be that you would still be obligated to pay on a timeshare interest that you no longer have.

8. Is the timeshare association or managing entity required to give me a list of all owners of timeshare weeks in my resort?
Section 721.13(3)(d)4., F.S., states that the managing entity may not publish the owner list or provide a copy of it to any purchaser or to any third party other than the division, unless the purchaser whose name and address are requested first approves the disclosure in writing.

9. The developer or managing entity keeps increasing the maintenance fees every year. How can they do this?
As with everything else, costs never stay the same. The managing entity is required to collect annual assessments in an amount sufficient to meet all anticipated and unpaid past expenses.

10. How can the developer maintain control of the managing entity or association even after the developer has sold a majority of the timeshare interests?
The association or managing entity is the collective owner membership in the project. For various reasons, timeshare owners often fail to participate in the management of the resort. It is for this reason that it is possible for a developer to have sold a majority of the timeshare interests and still have control of a sufficient enough number of timeshare interests to control the association's board of administration, which is an elected body.

11. What is the difference between the developer and the association?
The developer is the entity that creates the project. The association is the collective representative owner membership in the project. The association is the governing body that is responsible for operation of the timeshare project.

12. Does the developer have to pay the same maintenance fees on the timeshare interests that he owns that I have to pay on my timeshare week?
Yes. No owner of a timeshare period may be excused from the payment of his share of the common expenses unless all unit owners are likewise excused from payment, except that the developer may be excused from the payment of its share of the common expenses which would have been assessed against its timeshare periods during a stated period of time during which it has guaranteed to each purchaser in the timeshare instrument documents, or by agreement between the developer and a majority of the owners of timeshare periods, that the assessment for common expenses imposed upon the owners would not increase over a stated dollar amount. In the event of such a guarantee, the developer is obligated to pay all common expenses incurred during the guarantee period in excess of the total revenues of the timeshare plan.

13. Why do I have to pay maintenance fees to upkeep the pool, playground, and tennis courts when I personally do not use these facilities?
The pool, playground, and tennis courts are common elements created for the benefit of all owners. Regardless of whether you use these facilities or not, you are obligated by your timeshare documents to contribute to their maintenance and possible replacement in the same manner as everyone else.

14. When I bought my timeshare interest last year, the salesperson told me that my building would be finished by now, but it is not. How can I use my timeshare week in an unfinished building? Can I cancel my contract?
A developer may not offer any number of timeshare estates or timeshare licenses that would cause the total number of estates or licenses offered to exceed a one-to-one, purchaser-to-accommodation ratio. Therefore, if the developer cannot offer you comparable accommodations at the resort in a completed building, you may have cause to cancel your purchase contract.

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