City launches new round of foreclosures on timeshares whose owners walked out

ELLSWORTH — Once a way for vacationers to book a guaranteed spot in a desirable destination, the timeshare has been a tough sell in recent years.

An increasing number of owners have walked away from their units, leaving municipalities with years of unpaid taxes and, in some cases, forcing city officials to act as real estate agents.

This is what has happened in Ellsworth, with officials announcing this week that the city is set to foreclose on another set of units at Acadia Village Resort. If no bids come in, the units will join a list of hundreds of timeshares owned by the city.

The Acadia Village Resort is structured so that each week in each unit is its own individual property with a deed and tax bill, meaning there are more than 2,000 deeds at the 39-unit resort.

This time around, the city is taking bids for 37 timeshares at the resort, just a few of the hundreds that have been reclaimed for nonpayment of taxes and offered for sale over the past several years.

Under state statute, timeshare units are put up for sale under a first-come, first-served basis once owners fall three years behind on taxes.

Bids for the properties must be enough to cover back taxes which, in this batch, range from around $200 to $500. (All told, the back taxes owed on the 37 properties up for sale are $11,745.)

If no bids come in, said Tax Collector Kelly Herrick, the city will likely offer the units for sale for $100 each, if the City Council approves.

Several years ago, when the city first began offering units for sale for $100, Deputy Tax Collector Ginny Derise said, bids “were coming in like crazy because $100 was very attractive.”

But sales have slowed lately, leaving city officials with a long list of shares that aren’t selling.

“A lot of people end up getting them and they don’t use them so they just walk away from them,” Derise said.

“It’s a lot of work on our end. If they’re not sold they just sit on this list,” she continued.

“We add to it every year and the list just keeps growing.”

As of Feb. 19, there were 230 properties on the list, some acquired by the city as far back as 2011. Most are for weeks between October and April and have an assessed value of between $1,800 and $5,600, depending on the date and size of the unit.

Owners who buy a timeshare from the city are still responsible to pay yearly maintenance fees to Acadia Village Resort — between $420 and $608 — and subsequent taxes on the property, although they are not required to pay back taxes.

Resort manager Jim Killam said the homeowners association that manages the shares offers an option to deed the property back to Acadia Village Resorts.

“A lot of the people who are being foreclosed on also owe the resort money,” Killam said. “We offer them a very clean way out. They pay fees and deed the week back to the resort. They would have to pay one year maintenance fees and an additional $50 and we do all the paperwork.”

City officials have long been frustrated with taxpayers who walk away from their timeshares. At a council meeting in 2011, according to reporting in The American, then-City Council Chairman Gary Fortier told those present: “My concern is having our staff act as a real estate agent for Acadia Village Resort.”

“I think timeshare gets a bad name because of the scams,” Killam said. “If you don’t use it, it’s like anything else; it’s just not worth it.”

Killam said more than 90 percent of the 39 units at Acadia Village Resort are filled and that the organization has more than 2,300 owners.

Although a winter week in Ellsworth may be a hard sell, timeshares have been making somewhat of a comeback in recent years. Sales have increased around 25 percent since 2010, according to an industry publication, the American Resort Development Association.

That growth comes despite competition from peer-to-peer rental sites such as Airbnb, according to the industry publication. For his part, Killam said that the rise of home rental sites “has affected our rentals.”

About 9.6 million American households own a timeshare. Sales volume in the industry increased 7 percent, to $9.2 billion, between 2015 and 2016, according to the latest numbers publicly available.

“I’m convinced that it’s the best way to travel,” said Killam, who owns two weeks and often trades them for units elsewhere, he said. For a $99 yearly membership fee and a $209 exchange fee paid to Interval International, you can “give up your week here and go to Hawaii,” Killam said.

Kate Cough

Kate Cough

Digital Media Strategist
Kate is the paper's Digital Media Strategist, responsible for all things social, and the occasional story too! She's a former reporter for the paper and can be reached at: [email protected]
Kate Cough

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