DEAR BENNY: I recently read your suggestions on how to get rid of a time share. You suggested attempting to give your time share back to the company with a "deed in lieu," but said that it probably won’t work. You are right. It did not work. However, I found a broker who was willing to take the time share off my hands for $3,000. Is this the only other way to rid oneself of this burden? By paying money to give something away?
Also, is it true that this time share will follow my heirs and demand the maintenance fees on them after my death?
Have you any other suggestions of how to solve this problem? –Claire
DEAR CLAIRE: I receive a large number of email questions asking how to get rid of a time share. Unfortunately, there is no easy answer. Typically, the company that owns the time-share complex does not want to take back the time share, and there are a lot of "scam artists" who promise to sell but want a large amount of money — upfront — and then fail to perform.
Under no circumstances should you give any company (or person) any money upfront, regardless of the amount. You can sign an agreement that states, "If you are able to release me from all of my time-share obligations, I agree to pay you X dollars."
Yes, the time share will follow your heirs after your death. If you owe the company money and you die, your heirs will be legally obligated to continue making the payments.
I wish that the time-share industry would step up to the plate and arrange a legitimate procedure for those of you who no longer want (or use) that time share. Perhaps, however, this is only wishful thinking.
DEAR BENNY: Until recently, my wife and I had owned a time share in Kitty Hawk, N.C. We stopped paying the maintenance fee last year because we are scaling back our traveling.
I offered a deed-in-lieu but it was not accepted, so we gift-deeded the property to an individual hoping to avert any further billings of the maintenance fee.
Because we are senior citizens and own our home free and clear, we are not concerned about credit ratings.
Do you see a problem with this method of letting the time share go? –Marty
DEAR MARTY: The answer depends on what state law is applicable. Because your time share is located in North Carolina, the documents you signed may state that North Carolina law is applicable, even though you do not personally live there.
I do not know the laws in North Carolina. I do know, however, that in 36 states (and in Washington, D.C.) mortgage holders can pursue borrowers for what is known as a "deficiency judgment."
Example: You owe $100,000 on the project. The lender forecloses, and someone buys the time share for $60,000 (or alternatively the lender takes it back for $60,000 because no one bid at the foreclosure sale). The lender is out $60,000 (plus legal and auction fees), and this is called a deficiency.
If the law in the state allows lenders to sue for this deficiency, the lender can get a judgment against you for this difference. Once there is a judgment, the lender can then go to the state where you live and try to collect on that judgment. The law is very clear: Once there is a valid judgment in one state, the court in every state must give "full faith and credit" to that judgment.
So, depending on the laws of the applicable state, your personal assets may be in jeopardy. I suggest you talk with an attorney for more details.
Keep in mind that even if you live in a state that does not permit deficiency judgments (such as California), that may not protect you if some other state allows those judgments.
And to add insult to injury, you will most likely have to pay income tax on the amount of money that your lender did not get. I call this "phantom income."
DEAR BENNY: Our community association does not allow rentals unless the owner can demonstrate a hardship. A unit owner has apparently rented his unit without board approval. What are our options? Can the board fine the owner and start eviction procedures? –Elliot
DEAR ELLIOT: The authority of a board of directors is found in two places: first, your state law on community associations; and second, in the legal documents of your community. You and/or an attorney should read those documents carefully to determine what rights your board has.
Typically, before a board can fine an owner, it must hold a hearing. This is not a formal hearing — such as in a court of law — but an informal one. The board (or management) will send a notice of a potential infraction to the unit owner, and tell him/her that if there is disagreement (or if the allegation is incorrect) the unit owner has the right to a hearing before the board.
If the board determines that the unit owner has violated the rules and regulations of the association, then the board (again depending on any restrictions contained in your legal documents) can fine the unit owner on a day-to-day basis for every day that the violation continues.
Can the board evict the tenant? That answer depends on two things: First, do your state landlord-tenant laws permit such evictions? How difficult and how favorable are your laws for tenants?
Second, does the association have any relationship with the tenant? Has the tenant signed any documentation agreeing to be bound by the association legal documents, and giving the association standing (i.e., the right to take the tenant to court if the tenant is violating the rules)?
Typically, unless the tenant signs some kind of addendum to the lease stating that the tenant has read the rules and regulations and agrees to be bound by them, the association has no right to go after the tenant. We lawyers call this "lack of privity." That does not mean, however, that the association has no rights against the owner. Clearly, there is privity between the association and all unit owners.
My preference: If the owner has, in fact, violated the association rules, the board should fine him/her. But the board should not get involved in a landlord-tenant eviction.
DEAR BENNY: I know you usually deal with homeowner issues, but I hope you can at least give me an idea as to the feasibility of my proposal. I live in a church-owned, government-subsidized, senior housing building. Many residents smoke, but I don’t. I share a common bathroom wall and fan exhaust with my next-door neighbor, a smoker. Smoke comes into my bathroom and apartment.
I have an ionizer, but it’s not much help. Visitors have asked me if I had started smoking again. Other smokers will open their doors to allow smoke to escape into the halls, rather than open their windows.
I want to know if it is possible to turn the building into a no-smoking facility by having only nonsmokers admitted in the future. I love my building, but I hate the thought of having to move because of this problem. –Dolores
DEAR DOLORES: You used the magic words: "government subsidized." My suggestion is that you — and other nonsmokers in your building — contact the head of your housing complex and complain. There is no question that smoking is a health hazard, and many governments and businesses prohibit smoking except in specially designated areas.
If you do not get any satisfaction from the head of your complex, I would start a letter-writing campaign. Send letters to your federal and state senators and congressmen/congresswomen; send letters to your state and local health departments; send letters to your state attorney general. Copy the head of the housing complex on all letters.
While I cannot obviously guarantee success, the fact that your housing complex is government-subsidized may cause a change; I doubt that the head of your building wants to take a chance that the government subsidy will end.