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Promises, promises

Buyers sometimes wind up with something completely unexpected

When Rick Johnson of Sandy stayed two nights at Marriott's MountainSide resort in Park City to hear a timeshare sales pitch, he was truly impressed with the room quality. He bought there expecting luxury vacations every year.

But when he returned, the rooms he was given "were a real step down. They were just worn looking and kind of beat up. I was expecting something like a Marriott hotel and instead had something like an older Best Western. The furniture had nicks. There was a little smell. It had been wet. It wasn't what they gave to prospective buyers."

Many timeshare owners often find they own something different from what had been promised by high-pressure salesmen. Many belatedly discover fine print that drains money from their wallet in surprising ways as they try to use timeshares.

This series looks at different traps that timeshare buyers may face as they buy, own and sell. Major findings in today's focus on potential traps during ownership include:

Promises made by salesmen are not always included in written contracts, leaving buyers with lesser products, unable to use units when they intended, with unexpected fees or unable to cover their costs through renting as promised.

Annual maintenance fees often increase more than buyers were led to believe was likely. Owners are often at the mercy of developers, who in some circumstances may impose whatever fee hikes they like that buyers by contract must pay.

Promises that timeshares can be easily exchanged for travel elsewhere in exotic places are often misleading. Many owners complain some companies make it nearly impossible to make such exchanges — unless trips are planned years in advance.

Broken promises

Paul Larsen of Salt Lake City, a timeshare owner at the Westgate Park City Resort and Spa, has several examples of broken or misleading promises. "The conditions keep changing — and not in our favor," he said recently.

For example, the first year he stayed as an owner was during Thanksgiving week. But when he attempted to use the same week the next year, he found that "week was removed from our season." He says by complaining every year about that change, his family can usually manage to obtain that week anyway.

Another problem, he says, is "they have tried to get us to pay fees for banking a room (for use in another year), but we have so far been able to work around those."

Despite those and other problems, Larsen said he enjoys the Westgate so much that his family just bought a bigger unit there. Because of previous experiences, he insisted on promises in writing as he bought that bigger unit.

"I came across several discrepancies between what we were promised and what we were signing," he said. "I send each of the incorrect documents back."

Tim Dawson of Florida, an owner at Marriott's Summit Watch in Park City, said Marriott sold him a second week there with a promise that it would allow him to book his exact stays 13 months in advance, instead of 12 — giving him a better shot than most owners for the exact time he sought within his season.

"But then I found out that you can't book that month ahead unless you have two weeks of the same value that are consecutive," he said. "They didn't tell me that. The whole point of buying that second week was so that I could book in advance."

Juan Bosco Marti-Iturbide of Mexico even sued Marriott after he said it changed the availability of his weeks. He said in court documents that he spent $90,880 in 1999 to purchase annual Christmas and New Year weeks at Marriott's MountainSide in Park City.

His suit claimed he was told in 2005 that he would no longer be able to use the resort for two consecutive weeks during the holiday season. He sued seeking a refund of his purchase price.

Don Collier, a Westgate owner, said he bought a timeshare in Park City that officially sleeps six. After sales presentations, he expected he could make exchanges within Westgate's own resort system for other units that also sleep six. But that didn't work when he tried to exchange for a Westgate unit in Orlando, Fla.

"We found out that our unit in Park City, called a one-bedroom grand that could officially sleep six, was worth a one-bedroom Westgate unit in Florida. ... These only sleep four. We had four kids and a baby," he said.

So he had to buy a membership in a company that arranges exchanges between timeshare firms for about $130, and then pay an exchange fee for about that much again to obtain an acceptable two-bedroom unit in Orlando from another timeshare development (while giving up his week in Park City in the trade).

He said, "I would not buy a timeshare again. There are just too many good, cheaper alternatives."

LaRee Miller, a Westgate owner from Salt Lake, noted she was told by salesmen that "if we did not use our week, we could rent it out at a huge price. We have not had any luck doing that. We are not allowed to rent it out during the holidays as Westgate uses the holidays for a money-making business for themselves."

Sonja Clarke, a Marriott MountainSide owner, like many owners, said management companies will help rent her timeshare, but it keeps half the money. She said this helps defray her costs for weeks she cannot use but does not cover all of them.

Thomas Wood of Oregon, a Marriott owner in Park City, said, however, that he has found he can indeed make money on rentals — if he can obtain the proper weeks. "If I get the week of the (Sundance) film festival, I can rent it for $1,000 a night," for example, he said.

Because of broken-promise horror stories, Utah includes a warning sheet that those who purchase timeshares from developers must read and sign. It warns, in part, "All terms of purchase and other promises should be in writing."

Howard Nussbaum, president of the American Resort Development Association, the voice of the timeshare industry, said, "I would be disingenuous if I said every single salesman is honest and followed the law. But most companies have zero tolerance" for making promises that are not included in contracts.

Maintenance fees

Many owners report that they become hostage to whatever increases in annual maintenance fees that their developers or management companies care to impose.

That often depends largely on what type of timeshare they buy — and whether buyers end up owning units with recorded deeds or the developer retains ownership.

Some timeshares are sold as "right to use" vacation intervals. Companies such as Trendwest, Disney and others sell points or credits. They can be redeemed for weeks or days at units for amounts that vary depending upon their size, desirability and time of year.

While that offers a lot of flexibility on how vacations may be taken, the ownership of such developments remains with the developer.

"Since they own it, they can charge what they want" in annual maintenance fees, and contracts force buyers to pay it, said Byron Wiegand, a former timeshare developer who is now president of the California-based Timeshare Resale Alliance.

He said that may be all right if a developer is benevolent or is a big national hotel chain worried about its long-term public reputation. "But for others, they can just fleece people forever with special assessments and dues," Wiegand says.

Nussbaum with ARDA also warns that the potential exists that a points-only vacation club developer could walk away from the business or go bankrupt, leaving clients with nothing.

"It has happened," Wiegand said. And, he added, such companies could lower service levels or sell to other companies that offer poor service with little recourse for points-only owners.

Utah government writes on warning sheets to timeshare purchasers, "Do not purchase any timeshare just for the benefits derived from use exchange programs. There is no guarantee of the continuance, permanency or site availability of such programs."

Besides points-only systems, other types of timeshares are sold with deeds — and are recorded with county governments showing, for example, that the owner has a one-fiftieth share of a condominium at a resort.

Such deeded owners usually elect board members to operate a timeshare-owners association. The board sets budgets, and may choose whatever company it wants to manage the property (once individual owners have title to more units than the developer).

However, Wiegand warns that abuses can still happen if owners are not active in their associations. He said some developers urge employees who are also timeshare owners to run for boards to ensure the developer is always hired to manage the property.

He said he has seen instances in such situations of companies overcharging for maintenance and even doing such things as charging owners to pay for the developer's sales office phones or the developer's attorneys.

Wiegand said having developer employees on boards "is a total conflict of interest. I would ask owners anywhere, is your timeshare association conflicted?" He said all resorts in a given area should have maintenance fees that are roughly the same. A sign of problems, he said, is when one tends to be much higher than others nearby.

Owners contacted by the Morning News often bemoan how much they pay in maintenance fees, and how much they increase. Many say it has led them to try to sell units, or (as discussed in Sunday's stories) even auction them on eBay for as little as $1 to escape those constant fees.

Collier, a Westgate owner, said, "I do feel I was suckered in somewhat because our initial maintenance fee was only about $400. ... Our timeshare was only every other year, so imagine my surprise and consternation two years later when I was hit with a $540 bill. (It) really took away a lot of the joy of ownership."

"A real frustration is the maintenance fees," said Johnson, a Marriott owner. When he bought, he was told the fees would be about $800 a year. But with some other usage fees that were added that same year, "before we knew it were were spending $1,000 to $1,100 to use our weeks. ... We could probably do a lot of vacationing for that elsewhere."

Susan Foss, who owns a timeshare at Snowbird, said that when she bought nine years ago, "The maintenance fees were $680 a year. Now they are $1,050."

Jin Fugate, an owner at the Park Regency in Park City, said, "Did maintenance fees go up a lot? Yes. Much faster than other tax rates or inflation."

Ron West of Texas, who owns at several resorts nationwide, including in Park City, said salesmen told him to expect increases "of about 2 to 3 percent a year, when in reality, fees and taxes appear to be increasing at a 5 percent-plus rate."

He added, "Delinquent maintenance fees can incur abusive late charges, plus you cannot bank your week for trading until the fees for the year are paid."

ARDA says average maintenance fees nationally in 2004 were $479, but most local owners contacted by the Morning News said they pay hundreds more than that.

The new Henley Manor development in Cedar City has an interesting alternative to maintenance fees. It sells "peerages," or leases (for $9,975 to $19,900), good for 10 years of resort use. It says it charges no maintenance or other fees beyond that — and includes tickets each year to either the Utah Shakespearean Festival or Brian Head ski resort.

Bad exchanges

Salesmen often promise that timeshares can be easily exchanged for similar accommodations and periods around the world with other owners banking their weeks through companies like Interval International or Resort Condominiums International.

Timeshare owners report the process is actually complicated and frustrating, and a class-action lawsuit against RCI even claims it is near impossible to obtain fair trades for timeshare units put into its overall pool.

"It's absolutely ludicrous," said Ed Solomon, a Philadelphia dentist who is an owner at Westgate Park City. "If you want to go anywhere in the Caribbean, no way. It you want to go to Vail, you can, but in August" — which is not ski season. "Last year I tracked it. There were no winter openings (at ski resorts) for up to two years."

West said, "We owned several good weeks that only traded with RCI. After banking them, we were totally unable to trade for anything. They seemed to never have availability anywhere. I would not buy another timeshare that traded through RCI for any price."

Fugate, a Park Regency owner, said, "I thought I could trade via RCI, but it is rather a joke. It's a one-way street: (a traded week) only goes in and you cannot get it out."

Companies like Interval and RCI require timeshare traders to buy an annual membership, which costs about $100, and then pay exchange fees when trades are made (around $160 for domestic exchanges and around $200 for international trades). All maintenance fees must be prepaid on weeks put into the trading pool.

Miller, a Westgate owner, said, "It's difficult to get the exact dates and locations unless you plan a year or more in advance. ... Example: I just booked a Hawaii vacation through RCI. The exchange fee is $169. The one-year membership is $89. We will get a two-bedroom condo next November (13 months away). That was the closest date available."

A class-action lawsuit filed against RCI in federal court in New Jersey claims many have trouble finding trades because RCI skims "a large percentage of timeshares from the system, including many prime timeshares, and renting them to the general public for profit or selling them to vendors who then rent them to the general public."

The suit also claims RCI uses them for promotional purposes and as fringe benefits to employees. Attorneys for RCI have denied those claims in court filings.

Many owners report that it is easier to make trades among resorts within a chain that developed their timeshare, such as among Marriott resorts worldwide. But even then they often warn that it is not as easy as salesmen make it sound.

Wood, a Marriott owner, said, "I used to be able to call six months ahead and get a reservation anytime. Not any more." He said if reservations are available a year in advance, "You better be on the phone one minute after it is available. If you wait a few weeks, prime times will be gone."

Clarke said, "We were able to get the locations that we wanted but not the weeks that we wanted unless we did the reservations 1 1/2 years in advance. How many people know that far in advance where and when they want to visit?"

Another problem that Clarke has noticed, as have many other owners, is that they sometimes give up a week at a luxurious resort and end up with a nightmare elsewhere in return.

Clarke said she traded a week at her Marriott MountainSide timeshare in Park City, and "the quality of the resort where we stayed in Florida (for it) was not as nice ..., which was dis- appointing. The vacations were enjoyable, but not because of the quality — or lack thereof — of the timeshare."

Several Web sites offer reviews of resorts to help traders avoid such disappointments and provide information beyond glowing information written by resorts themselves.

Bill Rogers, the founder of one such site operated by the Timeshare Users Group, writes there that he started it after he traded a week at a luxury resort for "what can only be described as a run-down converted motel."

He wrote that its picture in the directory looked great. "But when we got there the condo was probably WWII vintage and still had the original furniture. I have seen better thrown away on the street." He said he looked for the advertised tennis court and found it overgrown with weeds and without a net.

"So much for resort directory pictures and write-ups! We vowed we would never be ripped off again," he wrote.

Tuesday: Selling problems