odd (sort of) results from county auction of Timeshare intervals

[TUGBrian]

http://www.ocregister.com/2017/04/19/just-18-of-286-timeshares-sell-in-county-tax-auction/

apparently these intervals were auctioned off to pay delinquent property taxes....who can spot the "head scratching" facts in this story?

 

[scootr5]

"The top bid of $4,400 went for an off-season timeshare", so he paid $2000 more than a typical resale

 

[TUGBrian]

also said the same buyer bought another one for 3500 or so....

seems super odd to me that someone would willingly pay so much, especially given so few people even bidding.

 

[scootr5]

He apparently really wanted those particular weeks.

 

[dioxide45]

Perhaps a current owner(s) that had paid a lot of money before when bought developer and don't know about the resale market? I wonder though why they would have started the bidding so high? Was it just a blind auction?

 

[TUGBrian]

and im pretty sure this was the SECOND public auction they held for these...with the first one attracting no buyers at all.

IIRC the first auction had them set the minimum price at something outrageous...meaning whoever is running the county auction is also completely clueless as to the reality of the resale market.

 

[SmithOp]

I think they set the bid amount at back taxes owed. I looked them over and most were 5 or more years delinquent.


Sent from my iPad using Tapatalk

 

[Panina]

Not familiar with the resorts, Maybe they had magnificent views.

 

[TUGBrian]

even if they did, they could be picked up for far less on the resale market than the "auction" prices.

 

[x3 skier]

Wonder if the bidders actually delivered the cash.

 

[Saintsfanfl]

Perhaps a current owner(s) that had paid a lot of money before when bought developer and don't know about the resale market? I wonder though why they would have started the bidding so high? Was it just a blind auction?

I agree with dioxide here. There have been reports of auctions sometimes being posted at time the resort. Ordinary owners that see the notice are prone to bidding far more than the discount resale market will bear.

California would never have this problem if they just billed the timeshare instead of the owner. It is such a waste.

 

[Panina]

Owners do overbid. I own a week at a timeshare in south Florida where I was thinking of buying a second week. It was a studio, winter week, oceanfront, owned by the association and they were asking $3000. I was told I could get it for $2000. I chose not to get it. Our association had an auction for owners on weeks they owned. This unit went for almost $6000. There ended up being a bidding war that drove the price up. Most of the other units went for bargain prices of $150-$1000.

 

[T_R_Oglodyte]

I agree with dioxide here. There have been reports of auctions sometimes being posted at time the resort. Ordinary owners that see the notice are prone to bidding far more than the discount resale market will bear.

California would never have this problem if they just billed the timeshare instead of the owner. It is such a waste.

I believe they can't do it because of the Prop. 13 tax law. A tax basis is set for each property at the time of sale, and then there is a cap on the taxes can rise thereafter. The net effect is that two people owning identical properties get charged different tax rates, depending on when they bought.

Each deeded week at a resort is a separate property, with it's own tax burden assigned to the owner of that week.

 

[Saintsfanfl]

I believe they can't do it because of the Prop. 13 tax law. A tax basis is set for each property at the time of sale, and then there is a cap on the taxes can rise thereafter. The net effect is that two people owning identical properties get charged different tax rates, depending on when they bought.

Each deeded week at a resort is a separate property, with it's own tax burden assigned to the owner of that week.

I know but they should change the law for timeshares. They are losing millions because of the unpaid taxes. Places like Florida do not lose a penny because the entire bill is paid regardless of bad debt and defaults.

When a law has zero benefit while costing millions for tax payers it is time to change that law. It is not like Florida bills other HOA's for all the property taxes. It is just timeshares.

 

[T_R_Oglodyte]

I know but they should change the law for timeshares. They are losing millions because of the unpaid taxes. Places like Florida do not lose a penny because the entire bill is paid regardless of bad debt and defaults.

When a law has zero benefit while costing millions for tax payers it is time to change that law. It is not like Florida bills other HOA's for all the property taxes. It is just timeshares.

Prop. 13 is a popular initiative. Placed on the ballot by signature collection and enacted by vote of the people. The only way to change it is with another vote of the people.

Unless thinks have changed greatly since I left CA, proposing any kind of modification to Prop 13 in California is political suicide.

 

[SmithOp]

I believe they can't do it because of the Prop. 13 tax law. A tax basis is set for each property at the time of sale, and then there is a cap on the taxes can rise thereafter. The net effect is that two people owning identical properties get charged different tax rates, depending on when they bought.

Each deeded week at a resort is a separate property, with it's own tax burden assigned to the owner of that week.

I own at Seapointe in Carlsbad, my property taxes are billed with the annual fees, not separate by the county. Its been the same for the last four years - $75.87. It must be based on the original developer price because i paid $5 for it on eBay.


Sent from my iPad using Tapatalk

 

[klpca]

I own at Seapointe in Carlsbad, my property taxes are billed with the annual fees, not separate by the county. Its been the same for the last four years - $75.87. It must be based on the original developer price because i paid $5 for it on eBay.


Sent from my iPad using Tapatalk

Interestingly enough, I used to pay my Donatello (San Francisco) property taxes directly but two years ago +/- the resort had the billing for the property taxes changed to bill the resort directly. The resort then changed our maintenance fees to cover our pro-rata share of the property taxes. I believe that it was in response to a special tax that the city enacted that billed each property owner a fixed sum assessment ($79) for community colleges. The city had failed to consider timeshare owners when this tax was assessed and the action by the BOD at the Donatello prevented the city from assessing each property owner for that amount.

For the record, Donatello and Seapointe include property taxes in the annual maintenance fees. Coronado does not, nor do the CA Marriott timeshares.

 

[T_R_Oglodyte]

I own at Seapointe in Carlsbad, my property taxes are billed with the annual fees, not separate by the county. Its been the same for the last four years - $75.87. It must be based on the original developer price because i paid $5 for it on eBay.


Sent from my iPad using Tapatalk

I own at Winners Circle in Solana Beach (fixed unit, fixed week), and my property taxes are billed separately. Solana Beach treats me like any other deeded property owner, so I routinely get notices of changes in sewer assessments, street maintenance fees, etc.

 

[tomt73]

We own a batch of intervals at Lake Placid Club Lodges, in New York's Adirondack Mountains. When the project was built, property taxes were initially billed to the HOA/developer and included in the MF. When the developer was shut down by the State Attorney General, the project stopped at 35 built units. Long story cut short, the HOA's dire financial straits led to it breaking up the single tax parcel into separate parcels for each property. Owner who walked away forfeited their intervals to the County. At the first County tax foreclosure auction in 1996, the County set minimum bids at the amount of the accumulated back taxes, and sold only about 40% of the 575 units on offer. Their next auction, the following year, they dropped the minimum bid requirement, and sold off the rest for as little as $5 to $10 for off-season weeks. That cleared the vast majority of foreclosed weeks. After that, the County and the HOA made a deal whereby the County deeds over foreclosures to the HOA for the amount of back taxes, and the HOA auctions them off among owners and their friends. That process now results in between 3 and 12 weeks being auctioned annually. The foreclosures seem to happen when an owner dies, and the heirs have no idea there is a TS in the estate.

 

[VegasBella]

Laguna Surf is one of the few timeshares that I believe owning would actually be an asset, even an off week. This guy overpaid but not by all that much.
There's someone who owns many many weeks at Laguna Surf - maybe it's the same guy and he's trying to buy up a whole year so he can convert it into a condo for himself.

I think they set the bid amount at back taxes owed. I looked them over and most were 5 or more years delinquent.

I agree. I looked over the list and decided not to take part in that auction because min bids looked too high to me.

I believe they can't do it because of the Prop. 13 tax law. A tax basis is set for each property at the time of sale, and then there is a cap on the taxes can rise thereafter. The net effect is that two people owning identical properties get charged different tax rates, depending on when they bought.

Each deeded week at a resort is a separate property, with it's own tax burden assigned to the owner of that week.

I think you're right at least for some in the area. That's certainly the case with my Carlsbad Inn ownership. We pay way way way more in taxes than the people we bought it from. Our ownership taxes are based on their estimate of the value at the time of purchase. And it was NOT based on the actual price we paid.

I own at Seapointe in Carlsbad, my property taxes are billed with the annual fees, not separate by the county. Its been the same for the last four years - $75.87. It must be based on the original developer price because i paid $5 for it on eBay.

This auction was in Orange County and Carlsbad is in San Diego County.
I own in both counties. The way taxes are paid is up to the resort and the HOA - either included in your MF bill or not.

 

[SmithOp]

Maybe it's a deal for taxes but I'll bet they didn't pay maintenance fees either, who pays fees and skips the taxes? Wait until he tries to make a reservation.

Sent from my BLU R1 HD using Tapatalk

 

[SueDonJ]

Maybe it's a deal for taxes but I'll bet they didn't pay maintenance fees either, who pays fees and skips the taxes? Wait until he tries to make a reservation.

Sent from my BLU R1 HD using Tapatalk

There have been a few threads on the Marriott forum dealing with timeshare auctions. Most result in Marriott being the winning bidder for the lot but I remember at least two TUGgers picking up Weeks at Boston's Custom House auctions. This thread has info about an upcoming auction for Marriott Shadow Ridge, CA Weeks in mid-May.

I don't know if any Marriotts were included in this OP's lot but if/when Marriott auctions are held for tax liens, the winning bidders are not then hit for any unpaid mortgage or MF delinquencies. I don't know how that's all squared away, though. Maybe the minimum bid covers those, too?

For what it's worth property taxes at all Marriotts in CA are billed direct to the owners separately from the MF's and like Steve said above, all like intervals are not assessed uniformly. And it is possible to file a successful appeal.

 

[SmithOp]

There were some NCV units, Marriott probably scooped them up. Marriott may be able to absorb the cost of several years lost fees, not sure about a small independent like Laguna Surf.


Sent from my iPad using Tapatalk

 

[TUGBrian]

related thread in the US west forum

http://www.tugbbs.com/forums/index....ty-tax-timeshare-auction.255625/#post-2001995