Anyone who’s spent much time in vacation ownership knows the true cost of a timeshare all too well. What they might not understand is that there are special legal entities, known as homeowners associations (HOAs), that not only make those expenses real but are also responsible for collecting those fees.
Understanding timeshare owners associations and their role in timeshare exit strategies is key for any timeshare owner seeking to escape the high costs and challenges of vacation ownership.
In the most basic sense, an HOA is a non-profit organization that is formed to collect fees related to the maintenance of property that is shared by several people. Though they are sometimes used in gated communities of detached homes, one often sees them in the context of timeshares as well.
This is because timeshares are based upon the idea of shared ownership and responsibility of large common areas. Think of swimming pools, landscaping, and other parts of a condominium or timeshare resort that don’t belong to any one person, even though everybody uses them. An HOA is supposed to take money to pay for those features.
Unfortunately, in this context, an HOA is almost always just another face for the timeshare developer. In this article, we’ll discuss the nature of HOAs, how they’re formed, and what role they might play in a timeshare exit.
As the entities that are responsible for maintaining the amenities and common elements of a community or timeshare resort, HOAs wield a great deal of power. You may be wondering, then, who put them in charge. You likely won’t care for the answer to that question: the one that created your HOA is likely none other than your timeshare developer.
When a developer buys land for a timeshare resort, they have to set up the legal characteristics of the land. They obtain proper land zoning from local governments and embed HOA structures into timeshare contracts, securing control over timeshare maintenance fees and assessments.
As they prepare to build, though, resort developers have to make sure that they have a way to control the resort even after the land has been carved up and sold to timeshare owners. That is where an HOA comes in.
Developers draft deeds to the property that require all later owners to submit to the authority of an HOA, which will collect special assessments, maintenance fees, and other costs from owners. In this way, HOA control is legally baked into your timeshare ownership — there’s literally no way out.
The H in HOA may lead you to believe that the people sending the bills are actually other owners. In reality, though, timeshare developers often have a majority of ownership interest in an HOA, making that entity just a timeshare company by another name.
Concerned about rising HOA fees? Speak with our experts for a free consultation on how to exit your timeshare.
To gain an even better understanding of the role timeshare owners associations play in vacation ownership and in exiting a timeshare, check out these commonly asked questions and answers.
An HOA — usually run through a management company that is either hired by the developer or is a subsidiary — is critical in deciding and collecting annual fees, special assessments for repairs, and more.
The management company generally decides the details, and though it presents those details to owners, the timeshare community does not usually have much say in the matter, rather the HOA board does.
While timeshare owners run the HOA board in theory, the problem is that the developer owns most of the units, which means they essentially elect the board. Many board members are simply timeshare employees who are there to do the bidding of the developer (their employer).
Also note, if you do not pay the fees billed by your HOA, they have the legal right to start foreclosure proceedings against you and take the money they say you owe.
As a result of that relationship, timeshare owners and HOAs often find themselves at odds. Again, this is by design. Recall that, above all else, a timeshare developer needs owners to stay and keep paying their fees to ensure a constant stream of income.
Keep in mind that the HOA is the management company and is paid a cut of the fees collected, so the more fees the developer gets, the more the management company is paid. HOAs are therefore an important part of the timeshare moneymaking scheme.
No, a timeshare owners association probably won’t help you exit your timeshare contract. Given the close relationship between your real estate developer and an HOA, the entity is focused on making you pay your fees, not helping you get out of them.
HOA management companies are generally charged with the job of fee collection and aren’t going to be a good resource when you find yourself suffering financially.
Remember that the management company is, in all likelihood, beholden to the same timeshare company from which you are trying to obtain an exit. It’s not in their interest to make the process easier for you.
Despite the fact that an HOA probably can’t help you get out of your timeshare, that doesn’t mean they are worthless. An HOA can be a good source of numbers and information about the fees you pay and how they are used.
As an owner, you are entitled to obtain full and transparent information about the workings of your HOA. The management company may not want to turn this over, so it may require an expert or legal help to get everything you need.
If you notice that an HOA’s budget is inflated or that it is otherwise being mismanaged, that information may help you to negotiate with your timeshare company regarding fees or even an exit.
It’s important to understand the role of your timeshare owners association and how they can affect your exit strategy. While an HOA sounds like something that should be a friendly force, in practice, it often is not. The fact that HOAs are often just developer subsidiaries is another reason that attempting a timeshare exit without expert help can feel frustrating and endless.
As the premier timeshare exit company, Centerstone Group’s team has the decades of experience necessary to understand the situation with your HOA and get the information you need for your exit. We understand the complexities of timeshare exit strategies, including how to navigate the challenges posed by HOAs, and we can help you achieve a hassle-free exit.
As an A+-rated, accredited company with the Better Business Bureau (BBB), Centerstone Group enjoys a customer satisfaction rating of 4.79-out-of-5 stars. We have earned our reputation by being a trusted, knowledgeable resource that gets results for timeshare owners seeking an exit.
If you are looking for a way out, we can help. Please contact us today for a free consultation and case evaluation.
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