||Ask Dr. Don
Dear Dr. Don,
I have a time share in Florida that we have never used.
It was purchased in 2000. I was lied to about the taxes and the
upkeep. I have use of the time share every other year. How bad would
it hurt me if I let them foreclose on this property? I own my house
in Texas and I do not foresee needing to borrow money within the
next few years.
You need to hire a Florida real estate attorney to help
you make this decision. I'm not an attorney and can't provide you
with legal advice, but I can refer you to Florida
Statutes F.S. 721.80 time share Lien Foreclosure Act to give
you an idea of what you're up against. What's key are the legal
remedies available to the lender and the association in collecting
any deficiencies remaining after foreclosure.
Turning in your keys won't make the financial pain
go away and will ruin your credit rating to boot. Your notion that
you can outwait the negative information on your credit report to
get out from under this obligation doesn't consider the lender's
and the association's ability to pursue these claims in court.
As long as you're not judgment proof, meaning you
have a high enough income and net worth that the lender is likely
to collect when it wins a judgment against you, you're likely to
take a financial hit for the lender's lost equity and legal fees.
The association will seek to collect the outstanding maintenance
income, property taxes and legal fees.
The attorney can also review the sales contract to
see if you have a claim against the association for breach of contract,
or for its sales practices in selling you the time share. This,
however, is a bit of a long shot three years after the sale.
Filing complaints with the Better
Business Bureau and the Federal
Trade Commission may not provide any financial relief, but it
could stop other consumers from believing a salesperson's pitch
about taxes and maintenance.
-- Posted: June 11, 2003