Reader Question: My mother decided that she does not want to pay the $2500 maintenance fee on her resort timeshare. She told me she gets letters and phone calls and she does not care. She does not care if she forfeits the points because she never uses them. She told me she paid $1000 to various people to get rid of it and they did not get results. How can my mother give it away? I do not think anyone wants to buy a timeshare. Maybe I am wrong. She probably has so many points that someone could spend a week on the moon if the timeshare had a condo there! F.K.
Answer: This is a tough one. Lots of people have purchased timeshare units who no longer use them and want to be rid of them. As I’ve tried to research this question, what has become clear is that there is no simple answer. From my research, it appears that most timeshares are difficult to sell and that the companies that promote themselves as sellers are often little more than scam artist. In a typical real estate sale, you list your property with an agent and if the agent sells your property, the agent then receives a commission. If they don’t sell it, they receive nothing. With a typical timeshare sale, the ‘agent’ requests a non-refundable upfront fee that can be several hundred dollars. In what appears to be the vast majority of cases, you lose your fee but don’t sell your timeshare. One possibility is to just stop paying the annual timeshare fees and allow your timeshare ownership to revert back to the timeshare company. However most timeshare agreements provide the timeshare company a legal remedy that allows them to sue and get a financial judgment against you. This judgment could be in the tens of thousands of dollars. Your best bet is to have a lawyer review your timeshare agreement to determine your options.
A senior executive with 35 years of experience in the timeshare business had these additional tips:
- If selling, never pay an upfront fee.
- Best source for sellers is the Internet. www.RedWeek.comallows you to list your timeshare for rent or sale with no upfront fees and proclaims to have over 2 million registered users. They make money by charging a small annual fee…$59.99 if you are listing your timeshare for sale. www.TimeshareMarketplace.com offers free listings of timeshares for sale. www.TUG2.com is a chat room where you can find out lots of “how to” for sellers or renters. www.Vacatia.com only receives a fee (based on the sales price) after the timeshare is sold.
- Most timeshare companies today will allow you to ‘give back’ your timeshare for a small fee…typically equal to about one year’s maintenance fee. Talk to them rather than engaging in a long expensive legal battle.
Sounds like good advice to me. Consider listing your Timeshare on multiple sites.
Reader Question: I have transferred a 401k to an IRA annuity in 2012 and have not taken any money out of it. I am 70-1/2 years old as of April 13 of this year and am still employed full time. I understand that if you are employed full time you do not have to take any money out of your 401k. Will I have to take any money out of the IRA annuity? N.M.
Answer: While the rules do allow you to postpone Required Minimum Distributions (RMDs) from your 401k plan if you are still working at age 70 ½ (participants who own 5% or more of company must take RMDs even if working), you must take RMDs from any IRA plans including your IRA annuity. Because this is your first RMD, you can choose to take your 2014 distribution either by December 31st of this year or wait until next year. If you wait until next year, you’ll have to take two distributions…your 2014 distribution must be taken by April 1, 2015 and your 2015 distribution must be taken by December 31st, 2015. Failure to do so triggers a 50% penalty on the RMD.