Timeshares face foreclosure problem

Timeshares, seen as the affordable way to own a vacation getaway, are facing their own foreclosure problems, with owners defaulting on maintenance assessments.

Associations, formed to look out for all the owners’ interests, including property maintenance, are left to foreclose on those who are delinquent in payments. For some associations, how the property’s title is recorded can make the process extremely expensive.

Signed by Gov. Mark Dayton April 18 and sponsored by Rep. Torrey Westrom (R-Elbow Lake) and Sen. Warren Limmer (R-Maple Grove), a new law could provide some relief and eliminate a barrier to timeshare resale. It is effective Aug. 1, 2012.

Carrie Ruud, a governmental lobbying consultant from Breezy Point, told a House committee that there are 12,000 timeshare owners in Breezy Point represented by 14 timeshare associations. Because the county uses a Torrens recording system, the legal costs can be prohibitive for associations.

Timeshare values average between $200 to $600 a week. The cost to foreclose can average $2,000 to $2,500, she said; however, in a Torrens situation, the costs can double.

The law, while protecting due process, would allow associations to secure new certificates of title after the completion of property conducted foreclosures.

HF2763/ SF2184*/CH178