Ellsworth, Maine, Foreclose

Timeshare Real Estate Taxes – An Unusual Tax Situation

ELLSWORTH, Maine — The city of Ellsworth has been thrust into the vacation timeshare sales business after a resort developer and some timeshare owners have fallen far behind on taxes for dozens of units.Beginning in April, Ellsworth officials began foreclosure sale proceedings on 66 timeshare units located in Acadia Village Resort, with each unit representing one week’s use of the specific property. In a timeshare system, owners typically purchase a share allowing them one week’s use of the property each year. At some timeshare resorts, a legal trust that owns the resort or the homeowners association collects property taxes from each owner as part of a “maintenance fee” package and, therefore, mops up when owners fail to pay.But in the case of Acadia Village, city officials are responsible for collecting one week’s worth of property taxes from the more than 2,000 partial owners because of the way the resort was incorporated. Timeshare owners represent about one-quarter of the city’s roughly 8,000 property tax payers.And when owners fall three years behind on their taxes, their shares are put up for public sale on a first-come, first-served basis — under a process laid out in state law — even though the total due to the city is typically only a few hundred dollars.“It is just as complicated as if we were to foreclose on somebody’s land or second home,” said Leann Beal, deputy treasurer and tax collector for Ellsworth. “We have to go through all of the steps as we would for foreclosure on a $100,000 house.”Rather than seeking the assessed value of the timeshares — likely a hard sell during an economic downturn — the city is attempting to recoup the unpaid taxes plus legal and administrative costs, totaling between $296 and more than $636 per unit. Almost all of the units in foreclosure are off-season weeks in winter, making them more difficult to sell.The new owners will be responsible for the annual maintenance fees at the resort — which range from over $300 to roughly $500, depending on the unit — plus the property taxes and any additional fees.“It is a sign of the times,” Jim Killam, manager of Acadia Village Resort, said in reference to the depressed market for vacation timeshares. “I’m pretty sure everybody is suffering from the same thing.”Beal said that in the past either the owner or the developer would often pay the back taxes before foreclosure. But this year, it’s the resort developer, Acadia Village Resort Inc., that owes back taxes on more than 40 of the shares.

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Ellsworth, Maine, Foreclose
Ellsworth, Maine, Foreclose
Ellsworth, Maine, Foreclose

Ellsworth, Maine, Foreclose

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