Specials assessment?

I purchased two resale summer weeks at Meadow Ridge in Door county WI, and just received two letters from the resort today. I thought the envelopes contained the title transfer paperwork for each week, but instead I received a notice of a $1445 special assessment due for each week by May 15th. If I don't pay the special assessments by then there are additional late payment penalties. I am wondering if this is legal since the units were purchased resale and the management is giving so little time to pay the almost $2900. The letter also states that if you do not pay the assessments the Association will take legal steps to have the units returned to the association. Any feedback on this would be appreciated. Steve

rubydog said:

I purchased two resale summer weeks at Meadow Ridge in Door county WI, and just received two letters from the resort today. I thought the envelopes contained the title transfer paperwork for each week, but instead I received a notice of a $1445 special assessment due for each week by May 15th. If I don't pay the special assessments by then there are additional late payment penalties. I am wondering if this is legal since the units were purchased resale and the management is giving so little time to pay the almost $2900. The letter also states that if you do not pay the assessments the Association will take legal steps to have the units returned to the association. Any feedback on this would be appreciated. Steve

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When did you purchase these weeks? Did you get an estoppel certificate at the time of purchase (which may have disclosed the special assessment)? Was the special assessment otherwise disclosed?

It's possible that the seller knew of an upcoming SA and sold those 2 weeks to dodge it. If the SA was known to them and not disclosed to you, I think you'd have a pretty good case of shoving the weeks back to the seller- assuming you don't have a spare $3,000 to pay in the next 3 weeks. The HOA should be able to say when the announcement was made (of the SA). If that's the case, it may require a lawsuit to give them back- and force him to pay for the transfers to leave you whole. Could get ugly. Otoh, if you really want the 2 Door County weeks, is it worth it to you to add $3,000 to what you've already spent?

It sucks, but now the ball is in your court. SA's are like that.

Jim

I purchased the weeks in early February of this year from a seller on EBAY. There was no estoppel certificate, and no mention of a special assessment. So no disclosure. I am wondering how it is legal to charge me the special assessment fees when I did not sign a contract with the developer stipulating that I would pay special assessments.

You have no choice. Special Assessments go to ALL owners of the property on a certain date. It isn't something you consent to. It is likely that an SA would have been disclosed in an estoppel if it had been requested. Which apparently you didn't.

Sorry to hear about your situation, sounds like a no win situation.

I would advise contacting a TS / Resort direct prior to any purchase, asking questions about the financial health of the resort and any special assessments pending or on the horizon.

I would go back to the seller and ask why they didn't disclose the Special Assessment - that is unethical, at the very least.

You should examine your contract with a fine tooth comb to see if there are any statements in the contract that apply to the Special Assessment.

OH NO! Sorry

rubydog said:

I purchased the weeks in early February of this year from a seller on EBAY. There was no estoppel certificate, and no mention of a special assessment. So no disclosure. I am wondering how it is legal to charge me the special assessment fees when I did not sign a contract with the developer stipulating that I would pay special assessments.

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We outed these guys back in February here on TUG. Sorry they got you in their special assessment clutches.

DeniseM said:

I would go back to the seller and ask why they didn't disclose the Special Assessment - that is unethical, at the very least.

You should examine your contract with a fine tooth comb to see if there are any statements in the contract that apply to the Special Assessment.

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I agree that you should contact the seller and get an explanation.

Another option you have is to tell the resort that you just bought these and you do not intend to pay the SA so they can save themselves the trouble of "legal steps to have the property returned" by just taking the deeds from you and washing the slate clean.

You will lose anything you paid the seller of course but it may be better than dishing out the SA money.

I contacted the resort before buying the two weeks and ask all the questions about the resort because I had heard they were going through a change of ownership. Nothing was mentioned about Special assessments.

rubydog said:

I purchased two resale summer weeks at Meadow Ridge in Door county WI, and just received two letters from the resort today. I thought the envelopes contained the title transfer paperwork for each week, but instead I received a notice of a $1445 special assessment due for each week by May 15th. If I don't pay the special assessments by then there are additional late payment penalties. I am wondering if this is legal since the units were purchased resale and the management is giving so little time to pay the almost $2900. The letter also states that if you do not pay the assessments the Association will take legal steps to have the units returned to the association. Any feedback on this would be appreciated. Steve

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Special assessments are most certainly legal, even if always also certainly unwelcome. They are an unfortunate and (hopefully) infrequent fact of life on Planet Timeshare. Special assessments are the result of one or more of the following; inept (or worse, dishonest / embezzling) management, inadequate financial reserves, too-long deferred maintenance, or heavy storm or other natural disaster damage repairs not being adequately covered and / or reimbursed by insurance.

The fact that you bought "resale" means nothing at all in regard to your being subject to imposed special assessments; all current owners of record will share the hit. Vulnerability to special assessments "comes with the turf" of ownership and does not require your approval or prior "consent", informed or otherwise.

I assume that your purchase has long since closed (i.e., deed recorded in your name), since the resort is now contacting you directly for the SA. I'd certainly be wondering (indeed, asking outright and pointedly) whether your seller knew that these special assessments were on the immediate horizon. Then again, PCC resellers generally know (and / or care) little or nothing at all about goings on at the resort(s) whose weeks they peddle on eBay --- as quickly as possible and for next to nothing, if necessary.

In any case, $1445 per week is certainly a hefty SA, assuming that that your regular annual maintenance fee is not also somehow included within that figure. Being given only two weeks to pay it is both unreasonable and a real slap across the face. As CSXJohn has mentioned previously, depending on what you paid for the purchase and the level of your actual interest in using the facility, you might want to consider just telling them to "go pound sand" (i.e., go right ahead and foreclose and take the whole shebang back, unwelcome and unpaid special assessment and all). There may be credit reporting consequences to that choice, so that's solely your decision to make.

rubydog said:

I contacted the resort before buying the two weeks and ask all the questions about the resort because I had heard they were going through a change of ownership. Nothing was mentioned about Special assessments.

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In fairness to whomever you spoke with at the resort (most likely just a staff employee or desk clerk --- and most likley well before the actual change in ownership), the "old guard" personnel at the facility would likely have no advance knowledge or inkling or information of any kind about the plans or intentions of the "new guard".

I have always felt that SAs were a result of poor money management by whoever is running the joint. It's a blank check to the outfit. All they have to do is say that we need more money so let's extract extra money from the owners. The come up with stuff like, " we need a new roof." A clever way to collect deadbeat owner fees who don't pay from the ones that do (and always do) pay.
Salesmen never talk about SAs when you are in that little pressure cooker hot room for 3 hours or more !

Too broad a brush...

1950bing said:

I have always felt that SAs were a result of poor money management by whoever is running the joint. It's a blank check to the outfit. All they have to do is say that we need more money so let's extract extra money from the owners. The come up with stuff like, " we need a new roof." A clever way to collect deadbeat owner fees who don't pay from the ones that do (and always do) pay.
Salesmen never talk about SAs when you are in that little pressure cooker hot room for 3 hours or more !

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I don't necessarily disagree in toto with your very broad theories and observations as quoted above, but I would merely point out that in many instances the inadequacy of financial reserves is actually a knowing and willful choice and decision by developers (and even by some HOA's, after the developer is gone), in order to keep maintenance fees attractively (and also artificially) low.

This approach is of course "penny wise and pound foolish" in the long term, since when repairs and replacements ultimately become necessary, the money just ain't there.

After reading this thread, and the one from February that was referenced upthread, it seems the resort is recently under new ownership. I have no inside knowledge, but it seems possible that a previous owner/HOA may have been keeping MFs artificially low, or (heaven forbid) re-routing funds for uses other than maintenance.

Perhaps the new owner took over and found some deficiencies that needed immediate attention. The repair season in that locale isn't all that long.

That doesn't help the OP, but explains a sudden SA.

I'll join the chorus that it's time for the OP to do some soul-searching about just how badly they want these summer Door County weeks. Or if calling the paper bluff (of foreclosure) from the HOA and voluntarily forfeiting the deed would be the best move.

IMHO it all depends on when owners were notified of the SA, if it's before the purchase date the seller had an obligation to disclose and that is a material issue in your suit to get the sale overturned. If it was after you signed the contract then you owe the SA if you want the units

IMHO you will probably spend more than $ 3000 in court, travel and attorney costs getting the sale(s) overturned. In some states this type of dispute would be outside of the scope of small claims, most likely suit would need to be filed where the reseller is licensed :rofl I mean located). He or the seller (through a POA, so still him) who was obligated to disclose, if the SA was known.

YMMV

Good one...

Rent_Share said:

...most likely suit would need to be filed where the reseller is licensed :rofl I mean located).

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I appreciate your sense of humor, David --- "licensed" PCC eBay reseller, indeed. :rofl: A drivers' license, maybe --- but certainly nothing more than that.

I also agree that the legal costs and associated processes to attempt to reverse the resale purchase would not likely be cost effective for our intrepid buyer / new owner.

There is definitely a question as to whether seller knew about. In my experience HOAs generally give several months notice and often allow a payment plan.

Other the other hand, if new "Developer" took over right after OPs purchase and a new BOD was elected and found major building code violations, roofs leaking, boilers repaired with duct tape, etc. then had to act fast.

In any case when one does not get an estoppal they are taking an un necessary risk.

Due to diversity of citizenship this would have to go to District Court or similar and most attorneys would advise not to do as would cost more than recovery and client would be mad at them!

Putting $3K up is tough, but one also has to consider what the resort might do and possible hit on credit. If a new gung ho Board may well retain an attorney and go after non-payers.

Doesn't the estoppel only speak to the sellers account, are they current on maintenance fees and any outstanding loans, if owed to the same entity, the assessment wouldn't be disclosed until the assessment was billed and not paid