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Timeshare Perpetuity Clause
When you need help with disputes about your vacation property, Timeshare Defense Attorneys can help. Learn more about Timeshare Perpetuity Clause here.
What Is a Timeshare Perpetuity Clause?
Forever is a long time. When you buy a timeshare property, one of the standard clauses will be that you will own the timeshare in perpetuity – this is known as a perpetuity clause.
Your timeshare agreement may provide for the insertion of beneficiary names so that the timeshare is passed onto them when you pass on.
What can you do if you benefit under a will and have inherited a timeshare from the owners? Are you forced to accept the deeded timeshare even if you do not want it? Will you be penalized if you refuse to accept ownership? What actions should you avoid if you have been endowed with an unwanted timeshare? These are all essential questions that almost everyone would ask.
If you have any timeshare-related queries and need some legal counsel or if you are considering legal recourse against a timeshare resort developer, consider calling Timeshare Defense Attorneys for your free consultation. We deal with timeshare contracts daily and have excellent reviews from clients.
How Does a Timeshare work?
Investing in a timeshare implies that you’re undertaking a lifelong timeshare obligation, where you essentially prepay or finance a significant sum to gain occupancy rights to a specific property. This financial commitment is operational for the rest of your life, as managed by the timeshare developer. Additionally, owning a timeshare typically involves recurring annual maintenance fees, contributing to the overall financial burden.
Most timeshare contracts also detail additional annual costs associated with property upkeep at timeshare resorts. While many owners find value in the timeshare arrangement, it’s crucial to be aware that the commitment extends beyond the purchase price and into the secondary market, potentially posing an ongoing financial responsibility.
Timeshare Risks
Timeshare resort developers often see value in the steady revenue flow from annual maintenance fees. For them, these fees are seemingly perpetual, bolstering their profit margins, especially when it comes to deeded timeshares. This perception of perpetuity is particularly pronounced as the annual maintenance fees typically escalate by 5 to 10% per annum, often noted explicitly in timeshare contracts under maintenance fee escalation clauses and timeshare perpetuity clauses.
As many timeshare owners contemplate the future, especially when they pass away, they often question the “end date” of these obligations. The burdensome high recurring maintenance costs and timeshare fees often lead many to seek exit strategies from their contracts. In some instances, these cumulative costs can exceed several thousand dollars, surpassing even the original mortgage amount invested to purchase the timeshare.
What Happens to Timeshares When You Die?
If your timeshare contract has a perpetuity clause, your timeshare becomes part of your estate. Inheritance laws and the probate process will determine whether it gets left to your next of kin or family members. Before bequeathing your timeshare, seeing an estate planning attorney is a good idea.
Are Timeshare Contracts Forever?
Nearly all timeshare contracts contain perpetuity clauses that state that the timeshare benefits and legal obligations attached to the contract will endure for the life of the timeshare holder. Upon the owner’s death, the rights and obligations will form part of the deceased estate assets as a timeshare deed. There is no termination clause in the agreement. In the absence of a termination clause, the contract carries on forever.
However, this may not prove to be the case. It depends on the facts.
Decide Whether You Wish to Inherit the Timeshare
If you have been left a timeshare as an inheritance under your parents’ estate, you can elect to accept the inheritance or decline the inheritance. So the first thing to do is weigh the pros and cons and then decide.
You should fully understand all rights and obligations (especially obligations) under the contract. A timeshare attorney California is here to help guide you.
If the timeshare still has a mortgage after the owner dies, you will be liable to pay it off. You will also be obliged to pay all annual maintenance fees, which can add up. However, you may have your reasons for accepting the inheritance.
If You Accept The Inheritance – What Happens?
If you do and your name is specified in the contract, you can probably take over immediately without requiring the property to go through probate. This varies in different states, so first check with your timeshare attorney in Florida.
If your name is not listed, you will need to wait for the probate court handling the matter to release the timeshare to you. While the property is waiting on the probate process, the probate officer is liable to make all payments from the deceased estate. Once accepted, you are liable for all costs involved.
What if You Reject the Inheritance?
Any heir can renounce an inheritance by declaring a disclaimer of interest, a legal document stating that they reject the inheritance. If you are considering filing a disclaimer of interest, it is beneficial that you do not:
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Draft the disclaimer document without the assistance of a professional attorney. These documents should meet specific legal requirements to be valid. Your attorney will carefully review the document.
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Allow the regulatory time limits to pass before you file your disclaimer. This usually is nine months from the deceased person’s death but can vary from state to state. Interestingly, if the heir was a minor at the time of the death, they are given nine months after their 21st birthday.
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Make any payments from your account to do with timeshare obligations. The estate should make payments. Where you have paid, such payments could make it difficult for you to succeed with your disclaimer notice.
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Use the timeshare in any way. It’s best not to visit it or rent it as this may be considered evidence of your intention to have accepted the inheritance.
Your disclaimer should be filed with the probate court.
If the probate court accepts your disclaimer, you will be released from the timeshare and not be liable for any costs or liabilities. In this circumstance, the timeshare resort developer will likely take the property back to sell it to another customer.
Can You Be Forced to Inherit a Timeshare?
Timeshare companies would have you believe that if you have been endowed with a timeshare, you are obliged to accept it. This is not generally the case. The disclaimer process can be used to reject the legacy.
How to Terminate a Timeshare Contract?
Timeshare contracts are notoriously difficult, though not impossible, to terminate. Timeshare is big business. You can terminate and get a full refund if you are still within the rescission period. However, getting rid of your timeshare ownership may be challenging once this window is closed.
Some people use timeshare exit companies to assist. However, this can come at a cost, and many companies act as third-party sellers who promise quick sales, demand upfront closing costs, and disappear. While trying to get rid of your timeshare, it’s not a good idea to stop making payments as you might then have to avoid penalties and may quickly accrue debt and suffer credit damage.
Some options you might consider are as follows:
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Sell your timeshare privately. Typically, you will not get your price and take a loss.
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Offer the timeshare back to the timeshare property developer.
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Appoint a qualified lawyer to assist you.
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Rent out the property – beware of scammers.
If you have any questions or are considering getting out of your contract, maybe you have been gifted a contract or left an inheritance. Before you sign the dotted line, it would be good to see Timeshare Defense Attorneys for a legal opinion.
We have seen it all and believe we can assist you and guide you in the right direction. Call us at (888) 565-8257. We fight for what is right.