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Timeshares: Easy vacations or money pits?

Service members should think hard before they buy

Aug. 6, 2013 - 10:06AM   |  
Army Master Sgt. Patrick McCormick and his wife, Mary, at a 2011 departure ceremony before McCormick left for training to deploy to Afghanistan. Not only could McCormick not sell his timeshares for any amount of money, he ended up paying around $7,000 just to unload them.
Army Master Sgt. Patrick McCormick and his wife, Mary, at a 2011 departure ceremony before McCormick left for training to deploy to Afghanistan. Not only could McCormick not sell his timeshares for any amount of money, he ended up paying around $7,000 just to unload them. (Courtesy of Master Sgt. Patrick McCormick)
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A Navy petty officer stationed in Florida bought a timeshare earlier this year with the Disney Vacation Club. She’s happy with the flexibility of the contract, which will allow her family to vacation in a variety of places, including major fleet areas overseas, such as Japan.

But an Army master sergeant’s experience has been less rewarding. He bought a timeshare 22 years ago in French Lick, Ind., and has been able to use it for ski vacations only about five times because of deployments and assignments that are far away.

Burdened with ever-increasing yearly maintenance fees, he tried unsuccessfully to sell it, give it away and get the resort to take it back. He finally hired a company to unload it for him — whereupon the resort property owners challenged the transfer and sued him.

Nationwide, timeshare ownership in the U.S. has more than doubled from 4 million owners in 2005 to 8.1 million in 2012, according to the American Resort Development Association, a trade association for the timeshares industry. The average price to buy into that yearly, weeklong vacation is $18,723, along with average yearly maintenance fees of $822.

Experts — including troops and retirees who have owned timeshares — advise that if you’re in uniform, you should carefully consider the requirements of the military lifestyle, such as deployments and permanent change-of-station moves, before buying in.

The basics

For many people, timeshares are an affordable alternative to costly hotel bills or home mortgages at their favorite vacation spots. You either own the timeshare for the rest of your life, or for a period spelled out in a contract. Some timeshares automatically transfer to heirs, who become responsible for the yearly maintenance fees.

Prices vary based on unit size, resort amenities, location and time of year. Some timeshares offer the right to use a vacation unit at a resort at a specific time each year. Others offer “interval options,” where you purchase the right to use the unit during a certain week or certain season. More flexible options have evolved that allow you to buy a certain number of points in a vacation plan and exchange them for the right to use a unit at one or more resorts.

Timeshares combine “the comforts and privacy of home with the experience of travel,” said Howard Nusbaum, president and chief executive officer of ARDA.

A timeshare “is great if you use it,” said John Cully, a retired Army colonel and vice president of government and sponsored sales for International Cruise and Excursions, which partners with the military exchanges and morale, welfare and recreation activities to provide discount travel to the military community.

“People should buy what they want to use. It comes down to location, location, location,” said Cully, who owns two timeshares himself.

His parents bought a timeshare in Hawaii in the early 1980s, which he later bought from them.

“We pay $1,000 for a week in February that would normally cost $3,000,” he said.

That yearly $1,000 fee covers taxes, utilities and maintenance. His family likes Hawaii and they use the timeshare most years. But they also can exchange it for vacations in other desirable locations.

Pros and cons

There are pluses and minuses to owning timeshares, service members say.

“I have a nice place to stay during vacation at many locations in the U.S. and some outside the country,” said an Air Force major who has owned a timeshare for more than five years, in an email response to a Military Times request for timeshare experiences.

He said he’s more likely to take his vacation each year to use what he pays for. “Timeshare locations are great, rooms are great, service is great.”

On the other hand, he’s “continually hounded” by timeshare managers at the resorts to buy more ownership.

Other possible minuses: Maintenance fees can increase at any time and timeshares can be tough to sell.

More than 1,500 timeshares are for sale on eBay, some going for under a dollar. Some owners have been so desperate to sell that a cottage industry of con artists has sprung up to take advantage of them. The Federal Trade Commission recently filed complaints in federal court against three such companies.

Army Master Sgt. Pat “Mack” McCormick knows all too well how hard it is to unload a timeshare. Not only could he not sell his timeshares for any amount of money, he ended up paying around $7,000 just to unload them.

He bought one in 1991 for about $2,000 at a resort in French Lick, Ind., and used it for a few ski vacations while living in Frankfort, Ky., before moving seven hours away to Missouri. Maintenance fees, initially about $175 a year, eventually rose to about $350.

He bought a second timeshare in 1998 in Delray Beach, Fla., for about $5,000. Maintenance fees were about $600 a year, but eventually rose to about $1,200.

“It was a good deal for a while, but the problem was the maintenance fees were eating us alive, and there was no way out,” McCormick said.

He kept paying the fees for both properties, knowing that the resort companies would slam his credit if he didn’t.

The resort companies refused to take the properties back or to help sell them. McCormick tried to donate them to charity, but charities didn’t want them. He paid an online broker a nonrefundable fee of $2,000 to try to sell them — without success.

Finally, in 2010 he found Timeshare Relief, a transfer company, and hired it to help get out of the contracts, paying about $2,500 upfront for each one.

Timeshare Relief successfully arranged for the Delray Beach timeshare to be transferred to another owner. But the French Lick resort owners association sued McCormick.

The lawsuit, filed in 2011, alleged that McCormick engaged in a “sham transaction” to avoid paying maintenance fees. If the transaction was allowed, the association contended, it would cause it unnecessary foreclosure expenses.

Timeshare Relief paid for McCormick’s defense. On March 1, the resort owners association agreed to confidentially settle the lawsuit, said Panda Kroll, an attorney representing McCormick for Timeshare Relief.

A number of service members, including McCormick, who are unhappy with their timeshares said they felt sucked into buying when they went to the sales pitches.

“The sales employees are really good. They could most likely sell you the shirt off your own back,” said a retired Navy commander who paid $35,000 for a timeshare in Cabo San Lucas. The problem is, when his family uses the timeshare, it costs them about $4,000 to fly there. “I would not do it again and do not recommend it for anyone,” he said.

Some service members also have found it difficult to get the time to use the vacations. “I purchased a timeshare before going active duty and I loved it,” one Marine wrote. “Once I went in the Corps, it was a lot harder to use. Leave wasn’t always approved in time, or training would come up. It was a hassle. Now that I’m retired it’s easier to get my money’s worth and use it every year. I would only suggest purchasing one if you’re a [senior NCO] or about to retire.”

It may be difficult to sell a timeshare on eBay, but buying it there has worked out for one Navy retiree and his wife. “Our experience has been mostly very positive,” said retired Radioman 1st Class Jerry Fleming. “We bought two on eBay nearly 10 years ago ... one at Stowe, Vt., and a week in Kissimmeee, Fla. We have stayed at both, and have traded for cruises and stays at a number of different places. We’ve had a ball.”

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