Real Estate Matters: Timeshare owner feels niece, nephew took advantage of their kindness

Q: My parents purchased a timeshare with a floating week in a nearby town many years ago. One of the nicer aspects of the timeshare was that if your name was on the deed, you and your guests could use the facilities year round at the resort.

My parents often took my young niece and nephew to the resort during the summers. But there came a point where my parents could no longer afford the annual timeshare fees, and they decided to deed the timeshare over to me.

My niece and nephew were roughly ages 15 and 16 at the time. When they heard that my parents were going to deed the timeshare to me, they insisted their names be on the deed as well. I assumed this was so they could use the beach if they wanted to. There was no discussion about who would pay for the annual timeshare fee. I assumed that that was my responsibility, as my niece and nephew were underage, and I was OK with that.

Fast-forward a few years, and I was paying the yearly timeshare fee myself. My niece and nephew were both now over the age of 18 but never once used the timeshare or made use of the resort since that time.

I decided I wanted to sell the floating week. I asked my niece and nephew to quitclaim their interest in the property to me so I could sell the floating week and purchase a fixed week. They said they would agree to it only if they each got a third of the money from the sale.

Up until this point I had always had a good relationship with my niece and nephew, but I was taken aback by their demands. After some back and forth, I simply gave in and paid them a sum of money to get them to transfer their interest in the timeshare to me.

Since this happened, I have tried to forgive and forget. But what occurred still bothers me. Since they were minors when they were included on the deed, did they have any right to the proceeds of the sale?

A: How unfortunate that your niece and nephew turned out to be so money-grubbing. It reminds us of the adage, “No good deed goes unpunished.” As you unfortunately learned, family and money rarely mix well.

You thought that you were doing something nice for your niece and nephew. And you did. But when something isn’t put in writing, it will often come back to haunt everyone. That’s what happened here. You never put in place the paperwork to make sure everyone knew exactly what was going on or what everyone’s financial responsibilities or expectations were if and when the time came to sell. (As an aside, we wonder where their parents were in this story.)

We don’t know whether it was a misunderstanding or an intentional money grab by your niece and nephew. Based on your side of the story, they should have simply given their interest in the property back to you, thanked you for letting them use or have the opportunity to use the property, and left it at that.

They didn’t, and we think you missed a great opportunity to teach them a lesson about the true costs, as well as the opportunities, of real property ownership.

Let’s start with when you received the property from your parents. You could have become the sole owner. As sole owner, you’d have controlled the property. You would have decided who could have access and what should be done with the timeshare. But, once you added your niece and nephew on the title to the timeshare, they also became owners.

As owners of the timeshare, they got all the benefits of that ownership. They should have also shouldered the burdens. They should have paid their share of the assessments, real estate taxes and special assessments that came with the property. As co-owners, they’d be entitled to their share of the profits after paying their share of the closing expenses.

You mentioned that your niece and nephew were minors when they became owners of the timeshare with you. At that time, if they had any decisions to make regarding the timeshare, their parents, as their guardians, would have made those decisions for them. Once they became of age — in most states the age of majority is 18 and in some states 19 or 21 — they could make their own decisions and sign legal documents on their own.

Before you make a financial decision of this type next time, make sure to carefully consider all options and possible ramifications. You could have kept the property in your name and not added them. You could have given them only a tiny percentage of the timeshare. For example, unless the timeshare rules don’t permit it, you could have been a 98% owner and your niece and nephew could have been a one percent owner each.

There are other legal solutions that you could have employed. For example, you could have put the timeshare in a trust. The trust documents would stipulate who gets to make decisions regarding the sale and disposition of the timeshare.

Your decision to pay off your niece and nephew wasn’t wrong. It’s just unfortunate they forced your hand in that way. But selling it and moving on was certainly the right decision. We hope you are able to rebuild your relationship with them going forward.

(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, a financial wellness technology company. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)