Terminating & Selling a timeshare resort - Not so easy

In the Sept/Oct. Timesharing Today is an excellent front page article regarding a timeshare resort in Florida, with only 1800 weeks/owners, and the troubles they have had terminating the timeshare & selling the now vacant property.

How often have we seen posts here declaring that "If a timeshare can't collect then close and sell it"? It just isn't that easy folks! We saw a similar issue when the former Summer Bay in Las Vegas got a tremendous buy out offer to greatly improve their situation & give them a Gold Crown resort that came dangerously close to being scuttled by owners who felt they could/should get far more. It just isn't easy to get 100% agreement from owners - required for most total sales.

5 years and counting owners have a $3 million buy out unavailable to them & being depleted by ongoing legal costs and taxes. Saying "sell it" and doing it are very different things. And this case has a relative low number of owners - most resorts of new ilk average 10,000 or more. Finding them, getting the titles cleared (a MAJOR and costly undertaking) and getting them all to agree is a virtual impossibility. It will be a nightmare when those days start to come up for resorts.

Very valid point.

Of course the TS could go bankrupt, then owner 100% participation is not required.

ps. It don't take 100% to make that happen!

The timeshare management company can go bankrupt (example: Carnival). I'm not sure it is possible for the timeshare to go bankrupt. It's sort of the Dracula of legal entaties.

That being said, I would guess the big players (Hilton, Hyatt, etc.) and the take-over stars (Festiva, etc.) have ensured they will not be in that position. Does anyone know how? Retain 51% interest? Or??! The points plans seem one way to do it.

e.bram said:

Of course the TS could go bankrupt, then owner 100% participation is not required.

ps. It don't take 100% to make that happen!

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Wouldn't all of the owners still have their deeds? I don't see how bankruptcy of the timeshare operation is going to help facilitate the sale of the property since no developer is going to want to deal with individual deedholders.

Don't pay you RE taxes and insurance. See what happens.

sorry ebram, but that won't work. While the resort often makes the payment to the county for the real estate taxes, the ultimate responsibility belongs to the owner of record. If lien were filed against the property, all of the individual deed holders would be notified, and have the opportunity to pay the county directly.

Once that happens, the management company or HOA could be sued for breeching their fiduciary responsibility. That will just build up even more legal fees.

If 100% is needed (and it is not always the case), someone needs to address whether the issue is holdouts, or people who just don't respond. For those who don't respond, if the maintenance isn't paid, they need to foreclose. For those who are too lazy to provide a proxy, and the holdouts, someone needs to personally call them, and discuss the situation. If the holdouts want more, it might be in the interest of all the other owners to sell 1 or 2 units of HOA inventory to them for $1 each, so they get a bigger share of the buyout. Maybe it sounds unfair to everyone else, but if it would facilitate the process, it still benefits everyone. It would benefit everyone to find out what the specific objections are, and deal with them.

Also, once that's done, that HOA inventory should be sold to someone in some fashion, because in most cases the proceeds from those units can only be used to settle HOA obligations; the balance has to be donated to charity. The other owners don't lose anything by giving them away to those who need to be placated.