Timeshare Investment Blog Post Provided by Aaronson Law Group:

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Timeshare Investment and how to know if you’re being ripped off. In our previous blog, we discussed the concept of annual dues for maintenance as ‘trust’ funds. However characterized, these funds must be handled by the responsible party as a fiduciary. The concept of a “fiduciary” simply means that the one responsible must handle the fiduciary asset(s) in the best interests of the beneficiary or owner, as the case may be. In  the case of a timeshare or vacation plan, that owner is you.
Regrettably, the chances are that your developer is not handling your annual dues in the fashion of a fiduciary. How do we know this? First, see the previous blog in which we did some fundamental arithmetic. But perhaps even more fundamentally, ask yourself who is actually managing your resort(s). Remember that the resort is essentially a condominium. Each owner is entitled to vote in a board of directors to manage the owner’s association. The directors in turn shop around and hire a management company to conduct routine maintenance and handle the collection of funds for annual dues.
In the case of a timeshare investment or ‘vacation club’, however, this legal abstract breaks down – not for legal reasons. In fact, the directors of the owner’s association still has the same fiduciary obligation to manage the resort(s) in the best interest of the owners. But as a practical matter, only the developer has the information necessary to steer the policy of the association. Specifically, information pertaining to the identity and contact information of individual timeshare or vacation club owners, which are  held closely guarded to the vest of the unscrupulous developer.
In this fashion, the developer, which may own a handful of units in any given resort, is able to circulate proxies to individual owners which nominate certain board members, subject to ‘opposition’. But individual unit owners, without access to ownership contact information,  are not able to galvanize meaningful opposition to the developer’s nominees.
Can you guess who these nominees are? They are stooges of the developer – insiders – bought and paid for. And once elected, do you think that they commence to shop around for the best proposal to manage the facilities? Think again. And can you guess whom they might hire to manage the condominium? The developer, of course.
Has it occurred to you yet that this might be a conflict of interest? Board members controlled by an entity that hires itself to manage your resort condominium.  And yet this arrangement is perpetuated in every single resort in every facility run by your timeshare or vacation ownership developer, for reasons outlined.
If this troubles you, it should. On the other hand, this patent conflict of interest is the single most compelling point of vulnerability that your developer has when confronted legally. It may well give you just the leverage that you need to get out from under this oppressive arrangement. Please feel free to call us, free of charge, to discuss this more fully, together with all of your legal options regarding your timeshare investment.

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