A special assessment can be quite the shock for timeshare owners. The full extent of your financial obligations as a timeshare owner are not always realized when signing on the dotted line.
It is not unless you read “The Resort Documents and Declarations” that you would be aware that the HOA has the legal right to charge fees that are over and above the normal operating expenses that maintenance fees don’t cover.
How much over you may be asking? Well, it is not at all unusual for these special assessment fees to be several thousands of dollars. In fact, the unfortunate owners at Point of Poipu Resort in Hawaii were nailed with one of the largest special assessments in timeshare history having to shell out nearly $6,000 per payment in special assessments over and above their normal maintenance fees.
The majority of timeshare agreements outline terms for maintenance fee payments, which are usually levied annually to the timeshare owner. The timeshare maintenance fees are determined and collected by the Homeowners Association or Resort Management Company based on the location, the type and the size of the unit.
The maintenance fees cover routine expenses such as insurance, utilities, taxes and refurbishing. These fees also include additional funds so there is a reserve to pay for non-recurring costs like appliances and furniture that need replacement periodically, as well as other capital costs such as normal physical wear and tear that occurs at the resort.
Special Assessment Fees
Meanwhile, a special assessment fee is a payment to the owner´s association that is meant to offset an expense incurred by the resort. This special assessment is in addition to the ordinary maintenance fees.
A special assessment is usually unanticipated and typically arises after the resort is damaged by weather or undergoes renovations. The board of directors can pass an assessment at any time and for any amount.
Unfortunately, timeshare owners almost never factor in special assessments into their financial responsibilities and often times find it difficult to come up with the extra cash to pay the special assessment when it arises.
Another unfortunate occurrence of late is that special assessments are being imposed to cover the increasing number of timeshare owners who are foreclosing or defaulting on their timeshare properties, leaving the remaining timeshare owners to support the entire timeshare development. The fewer the timeshare owners, the higher the fees for the ones who have stuck around. If you do not actively follow your timeshare HOA, you probably won’t know a special assessment is coming your way.
You Have Rights and Options
If the anxiety of when a special assessment bill might be headed your way has you reconsidering keeping your timeshare, or you’ve already been hit by a special assessment and have finally decided it is time to get rid of your timeshare once and for all, contact the Timeshare Freedom Group today.
Are You Ready to Get Out of Your Timeshare?
Schedule a free consultation with one of our timeshare cancellation experts today to get started.