# Starwood exercises ROFR at WKORN



## Fredm (Mar 26, 2010)

Starwood has just today exercised its ROFR on an eoy IV at North.
Price was $8,000, with buyer paying 2010 fees.

Thought you all would like to know.


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## DeniseM (Mar 26, 2010)

Hmmmm....interesting.  That hasn't happened for a long time, has it?


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## Ken555 (Mar 26, 2010)

GREAT news! I guess they need more inventory after all... and now we may know where it's coming from.


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## Fredm (Mar 26, 2010)

DeniseM said:


> Hmmmm....interesting.  That hasn't happened for a long time, has it?



No, it has not.
And, this is a first for me with KOR.

Frankly, I was shocked. The last thing on my mind was an exercise at this price.


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## vacationtime1 (Mar 26, 2010)

Fredm said:


> Starwood has just today exercised its ROFR on an eoy IV at North.
> Price was $8,000, with buyer paying 2010 fees.
> 
> Thought you all would like to know.



Bizarre and irrational.  But we expect no less from Starwood.  An eBay auction just closed on an identical unit for $4,850:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=360244472225

Why is Starwood grabbing a relatively undesirable unit at a relatively high price?  It recently let an annual ocean front at WKORV go for $22,100 (unless someone tells us Starwood exercised ROFR on that as well, which actually would make sense):

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=350319390896&ssPageName=STRK:MEWAX:IT


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## DanCali (Mar 26, 2010)

vacationtime1 said:


> Bizarre and irrational.  But we expect no less from Starwood.  An eBay auction just closed on an identical unit for $4,850:
> 
> http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=360244472225



This auction was for a biennial also, but we don't really know if ROFR was exercised here too.


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## jarta (Mar 26, 2010)

A 2-br unit EOY Desert Willow week was advertised on eBay and pulled a few hours later.  My bid of $1 was cancelled.  I was the only bidder.

Maybe Starwood has decided to buy up units and re-sell them.  I thought that was what everybody here wanted Starwood to do.  Isn't the exercising a ROFR a good thing?

Or, is it good only until Starwood does it?   ...   eom


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## DavidnRobin (Mar 26, 2010)

Typical...

What does a retracted WDW bid have to do with this? {complete non sequitur}

...and btw - only SVO can exercise a ROFR on a SVO VOI...so what is the your purpose to somehow attempt to turn this report of a ROFR around and make it sound like 'typical' SVO bashing by SVO Tuggers?

It was an just an occurance that FredM wanted to report because it is rare for a ROFR to be reported on TUG - nothing more or less.  It doesn't mean that SVO has (or hasn't) been exercising their ROFR on other sales, or will continue (or not) to do so in the future?


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## Cathyb (Mar 26, 2010)

*jarta - question*



jarta said:


> A 2-br unit EOY Desert Willow week was advertised on eBay and pulled a few hours later.  My bid of $1 was cancelled.  I was the only bidder.
> 
> Maybe Starwood has decided to buy up units and re-sell them.  I thought that was what everybody here wanted Starwood to do.  Isn't the exercising a ROFR a good thing?
> 
> Or, is it good only until Starwood does it?   ...   eom



You mean the brand new Westin timeshare in Palm Desert?


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## jarta (Mar 26, 2010)

Cayhyb,   ...   "You mean the brand new Westin timeshare in Palm Desert?

Yes (but I hear it's irrelevant).

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=390174394177&ssPageName=STRK:MEWAX:IT

...   eom


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## LisaRex (Mar 26, 2010)

You'd think with all the foreclosures that Starwood has begun processing, there'd be plenty of units that the HOA could sell them for just the cost of MFs...


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## jarta (Mar 26, 2010)

Dream on!   ...   eom


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## DeniseM (Mar 26, 2010)

LisaRex said:


> You'd think with all the foreclosures that Starwood has begun processing, there'd be plenty of units that the HOA could sell them for just the cost of MFs...



Hi Lisa -

Was that a joke, or do you really think they have begun processing foreclosures?


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## vacationtime1 (Mar 26, 2010)

LisaRex said:


> You'd think with all the foreclosures that Starwood has begun processing, there'd be plenty of units that the HOA could sell them for just the cost of MFs...



If the HOA actually went through with foreclosing on units for unpaid maintenance fees, the HOA would own the units.  If Starwood exercises ROFR, Starwood would own the units.

But it would be an interesting situation if the HOA foreclosed on some units at the same time as Starwood grabbed some units via ROFR.  Starwood would want to sell its units at full retail price. To the extent Starwood-controlled people are on the HOA board, they will have a conflict of interest between their responsibility as Starwood people to maintain retail pricing vs. their responsibility as board members to foreclose and sell units at fair market value (i.e. 25% as much).


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## rudy (Mar 26, 2010)

*OH NO! >>>Say It AIn't SO*



Fredm said:


> Starwood has just today exercised its ROFR on an eoy IV at North.
> Price was $8,000, with buyer paying 2010 fees.
> 
> Thought you all would like to know.





I just won an Ebay auction at a great price at WKORV_N .  Just as I was feeling pretty good having confirmed all the details in the listing with the resort and having received an estoppel letter,  I see this post indicating Starwood is now exercising ROFR. 

WHile I am glad to see Starwood's renewed faith in the economy (as indicated by exercising ROFR), I am confused as to what to do?  Should I go forward and take the risk of having my money tied up for several months just to have ROFR exercised?   More importantly what it is the risk that the funds would never be refunded?   (Has this happenned to anyone?) 

Some background... the EBay seller is SeizetheDayVacations and the title transfer is handled by Trajesto Title Transfer.  My biggest concern is that the terms of the sale were to send full payment to Trejesto Title  and it would be held in a separate account until closing...they state that no EscrowCOmpany will be used but should ROFR be exerci.sed the buyer will receive a full refund.  (I am not sure how I am protected only by the integrity of the  company I presume.)


Therefore, I am seeking TUG insight into:

1) Experiences with Trejesto Title Transfer

2) experiences with Ebay Seller:  SeizetheDayVacations

3) to what extent is ROFR being exercised by Starwood



Thanks for all your comments/advice


Best regards,

rudy


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## alexadeparis (Mar 26, 2010)

*Take the Chance*

Take the Chance on the ROFR, if they exercise it, you are no worse off than if you decided not to go forward with the purchase. If they don't you get a great unit at a great price.


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## sb2313 (Mar 26, 2010)

How long does starwood have to excercise/decline rofr?is it 30 days like dvc? I too have a cheap eoy 1 bedroom ocean view I recently picked up on eBay, but at the south property, so I will update when I hear back either way.


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## rudy (Mar 27, 2010)

*ROFR 30-60 days*



sb2313 said:


> How long does starwood have to excercise/decline rofr?is it 30 days like dvc? I too have a cheap eoy 1 bedroom ocean view I recently picked up on eBay, but at the south property, so I will update when I hear back either way.



I don't know the mandatory time frame, but I was told by the title agency that it takes 30-60 days after Starwood receives the paperwork to get an answer.  After which it takes about 8weeks for Hawaii property to complete the transaction.


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## Fredm (Mar 27, 2010)

*They did it AGAIN!*

Starwood just exercised ROFR on an annual 1 bedroom OV at KOR. $5,000.


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## Fredm (Mar 27, 2010)

sb2313 said:


> How long does starwood have to excercise/decline rofr?is it 30 days like dvc? I too have a cheap eoy 1 bedroom ocean view I recently picked up on eBay, but at the south property, so I will update when I hear back either way.



Starwood has 15 days from date the transaction is submitted to exercise ROFR. This is true for Hawaii,and is specified in the Governing Documents. Check the docs for individual resorts.

Not all resorts have an ROFR. Kierland does not, for example.


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## Fredm (Mar 27, 2010)

alexadeparis said:


> Take the Chance on the ROFR, if they exercise it, you are no worse off than if you decided not to go forward with the purchase. If they don't you get a great unit at a great price.



I agree. ROFR is an opportunistic exercise. One may be exercised today, and another at a lower price may not, tomorrow.


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## Fredm (Mar 27, 2010)

rudy said:


> WHile I am glad to see Starwood's renewed faith in the economy (as indicated by exercising ROFR), I am confused as to what to do?  Should I go forward and take the risk of having my money tied up for several months just to have ROFR exercised?   More importantly what it is the risk that the funds would never be refunded?   (Has this happenned to anyone?)
> 
> Some background... the EBay seller is SeizetheDayVacations and the title transfer is handled by Trajesto Title Transfer.  My biggest concern is that the terms of the sale were to send full payment to Trejesto Title  and it would be held in a separate account until closing...they state that no EscrowCOmpany will be used but should ROFR be exerci.sed the buyer will receive a full refund.  (I am not sure how I am protected only by the integrity of the  company I presume.)



Never send money directly to an ebay seller. Funds should be held by an independent escrow/closing agent.


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## jarta (Mar 27, 2010)

Fred,   ...   "Starwood just exercised ROFR on an annual 1 bedroom OV at KOR. $5,000. (doing it again)"

2 ROFRs in 2 days?  I guess it is no longer an isolated incident.  Maybe there actually is intrinsic value in those WKORV and WKORV-N units above the panic-driven eBay prices.  I could speculate on why that may be so.  But, I won't.

TUG members make buys on eBay at cheap prices to visit, rent out and trade.  What's wrong with Starwood making buys at cheap prices to resell or rent?  From the WKORV and WKORV-N HOA point of view, there probably is no more reliable entity to pay MF than Starwood.

Plus just the threat of Starwood exercising its ROFR can prop up the prices of all weeks.  Isn't that a good thing for all WKORV and WKORV-N owners?   ...   eom


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## Fredm (Mar 27, 2010)

jarta said:


> Fred,   ...   "Starwood just exercised ROFR on an annual 1 bedroom OV at KOR. $5,000. (doing it again)"
> 
> 2 ROFRs in 2 days?  I guess it is no longer an isolated incident.  Maybe there actually is intrinsic value in those WKORV and WKORV-N units above the panic-driven eBay prices.  I could speculate on why that may be so.  But, I won't.
> 
> ...



Actually Starwood exercised twice in the same day. I didn't receive notification of the second until early this am.

The question of how a preemption right affects market values has been debated on TUG and elsewhere for a long time. 

Intuitively, one assumes that it has a firming effect.
However, it is hard to know. The effect on the marketplace is an abstraction that can only be dealt with (for discussion purposes) theoretically.

The best discussion I have been able to find is:
http://lsr.nellco.org/cgi/viewcontent.cgi?article=1049&context=harvard_olin

If not inclined to read the 81 pages, Professor Walker, and others, conclude that ROFR has the effect of damaging prices.

Now that Starwood seems to be getting more active in exercising its preemption right, this discussion is unavoidable. 
Caution to all: it will never be resolved.


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## LisaRex (Mar 27, 2010)

DeniseM said:


> Hi Lisa -
> 
> Was that a joke, or do you really think they have begun processing foreclosures?



Just a few months ago, a poster reported that the President of the HOA promised that foreclosures were imminent. 

:hysterical:


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## rudy (Mar 27, 2010)

*THANKS FRED ... other thoughts?*



Fredm said:


> Never send money directly to an ebay seller. Funds should be held by an independent escrow/closing agent.



The funds are being sent to Trejesto Title Transfer Agency... they are handling the closing and title transfer.  Their website states they set-up separate accounts to hold the funds and the funds will be fully refunded if ROFR is exercised.  However when I asked specifically if they were setting up an Escrow Account.. they replied NO ... we always have setup a separate account to handle the transfer after ROFR is waived.  I am not sure I understand the difference between setting up an Escrow and setting up a separate account for each transaction????  

I further checked Better Business Bureau and they have no complaints and  a BBB rating of B+...  Also they deal specifically with transferred properties for a charity.  My inclination is to trust them since they are a 3rd party, deal with charitable donated property, and had a good BBB rating.... any other opinions out there? 

thanks for your help!

rudy


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## jarta (Mar 27, 2010)

rudy,   ...   "My inclination is to trust them since they are a 3rd party ..."

You do not know who the owners of the selling agent are. You do not know who owns Trijesto (a Croatian pastry word), the closing company you must use.  You do not know if there is any overlap of ownership or control.

Do you know if Trijesto is licensed or bonded?  Have you seen an estoppel letter signed by Starwood which certifies that there are no delinquent assessments, what the owner's name is and what unit that person actually owns?  Do you know that without escrow instructions you have no control over when the distribution of your funds will occur and no practical recourse against the seller or the closing company for violating any oral agreement?  Is this a resale of a foreclosed unit?  If so, what happens if the foreclosure proceeding was flawed or the period of any redemption that might exist has not yet expired?

I backed out of an eBay deal with greatamericantimeshares a few months ago because it refused to use a closing company and an escrow.  Now, it seems to have associated itself with (created?) a closing company that says it will issue "title insurance" (but at above market rates) and will hold your funds separate (but not in an actual escrow).

greatamericantimeshares is, IMO, a front for selling foreclosures acquired by a company called Callahan & Zalinsky Associates, LLC (there is no Callahan and there is no Zalinsky, IMO - http://www.tugbbs.com/forums/showthread.php?p=878429#post878429) and maybe others.  Jessica Miltier is just a very sweet employee.

I raise these questions just to make you realiize the risk you are taking.  It may all work out OK.  If it does, the prices greatamericantimeshares gets are affected by the pennies on the dollar foreclosures go for.  They are very low resale prices.  Just be careful and weigh your risk carefully.   ...   eom


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## rudy (Mar 27, 2010)

*JARTA ... I'm Still confused*

Jarta,

Thanks for your post. ...    I do want to take all the precautions possible.  How do I know/check if they are licensed/bonded?   

I have received an Estoppel letter that states unit number and all maintenance fees, etc are paid ..it was signed by  an Ingrid Muelman, agent for the  Ocean Resort Villas Master Association and dated 1/26/2010.  However, it also provides the villa number and week but does not provide the previous owner's name.  Everything else in terms of it stating Starwood  Network disclosure statement including options for SVN but not StaR points is consistent with the listing and my understanding of a Starwood resale.   It specifically states total fees due for outstanding maintenance and assessment fees and taxes is $0.00.  Everything in this letter is consistent with the EBAY Lisitng.  I even called the resort and they verifed the villa number is legitiimate and consistent with the view category specified. 

Has anyone  bought a resale for WKORV-N and have their  Estoppel letter come from Ocean Resort Villas Master Association, 9002 San Marco Court, Orlando Fl 32819?  It seems legit... but who knows now-a-days?


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## gregb (Mar 27, 2010)

vacationtime1 said:


> If the HOA actually went through with foreclosing on units for unpaid maintenance fees, the HOA would own the units.  If Starwood exercises ROFR, Starwood would own the units.
> 
> But it would be an interesting situation if the HOA foreclosed on some units at the same time as Starwood grabbed some units via ROFR.  Starwood would want to sell its units at full retail price. To the extent Starwood-controlled people are on the HOA board, they will have a conflict of interest between their responsibility as Starwood people to maintain retail pricing vs. their responsibility as board members to foreclose and sell units at fair market value (i.e. 25% as much).



I believe it has been well established that there are no "Starwood-controlled people" on the WKORV HOA board.  None of the board members has any financial ties to Starwood, other than owning weeks at the time share.

Greg


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## DeniseM (Mar 27, 2010)

Greg - isn't at least one of the board members a Starwood employee?  I haven't see the update since the last election, but previous to that it was true.


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## gregb (Mar 27, 2010)

Denise,

Oops.  You are right.  I forgot about the one board member that Starwood gets to appoint.  The other 4 members are not affiliated with Starwood.

Greg


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## LisaRex (Mar 28, 2010)

gregb said:


> I believe it has been well established that there are no "Starwood-controlled people" on the WKORV HOA board.  None of the board members has any financial ties to Starwood, other than owning weeks at the time share.Greg



I don't believe this has been established at all.  Starwood still controls what names go on the ballot, no?


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## jarta (Mar 28, 2010)

LisaRex,   ...   "I don't believe this has been established at all. Starwood still controls what names go on the ballot, no?

*No.  Your statement is just not true*.  Starwood does not control which names go on the ballot in Hawaii.  Hawaii statutes control which names go on the ballot.  Starwood must comply with the law.

TUG member, j4sharks - Jeff Hyman, had his name put on the ballot/proxy and his statement distributed free of charge to all owners receiving a proxy in the most recent WKORV election.  j4sharks followed the simple steps of making a timely request and sending in his written statement.

We had a TUG thread all about Jeff's candidacy.  See the last 3 posts of this thread, 157 and 159 by you earlier this month and 158 by Jeff saying there is no need to sue to get a list of WKORV owners.  He said just ask.

http://www.tugbbs.com/forums/showthread.php?p=875128#post875128 

Getting on the ballot/proxy is merely the first step to getting elected.  After all who comply with the law are put on the ballot/proxy, the person who gets the most votes wins.  There is no entitlement of any candidate or group to a contested HOA board seat.

Given what happened in the February WKORV election, why do you continue to insist that Starwood still controls what names go on the ballot?   ...   eom


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## dr.debs (Mar 28, 2010)

DeniseM said:


> Hi Lisa -
> 
> Was that a joke, or do you really think they have begun processing foreclosures?



Last week, at SDO, our salesperson stated that recent inventory at SDO they were selling, was available due to forclosures. Not sure how to confirm/refute this, but she said it.


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## Fredm (Mar 28, 2010)

*ROFR considerations*

Thought I would pass on a couple of issues for buyers and sellers to consider when faced with a ROFR exercise.

If you are the seller, it's no big deal. All that happens is that you have a different buyer. Price and terms must be the same as you originally agreed to. 
Starwood will mail new documents which should reflect these same terms of sale. If they do not, don't sign them. Get it straight first.

If you are the buyer, all is not lost.
You can offer the seller a higher price. 
Nothing requires the seller to sell to the developer under the previous terms, if presented with a higher legitimate offer (unless the seller has already signed the developers replacement contract).
The developer can then review the new terms for exercise consideration.

Both buyer and seller should understand the ROFR review period (usually 15 days from notice to Starwood).
It is not uncommon for a developer to declare the exercise of its preemption right after the review term has expired. 
The seller may not care. Again, the only change is the name of the buyer. However, the buyer may care. At this point the buyer can claim the developer is unlawfully interfering with a valid contract.

Most often, a ROFR simply goes off without a hitch. 
The seller gets what they want. The buyer is not inclined to chase the deal, or spend the additional effort. 

Sellers and buyers should just keep in mind that a higher offer is possible, if the seller has not signed the developer replacement contract.

Broker perspective. 
It is often assumed that timeshare brokers hate ROFR's. 
Not true. From a business perspective, I love them.
The sale occurs, and a commission is paid. However, I still have a buyer who has already placed money on the table to sell another interval, if the ROFR is exercised.


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## DeniseM (Mar 28, 2010)

LisaRex said:


> I don't believe this has been established at all.  Starwood still controls what names go on the ballot, no?



Hi Lisa - In the last election, there were 2 candidates on the ballot who were screened and chosen by Starwood, plus, Tugger j4sharks.  j4sharks looked up the local election laws and discovered that he had the right to place himself on the ballot, without Starwood's approval.  Previous to that, ALL candidates were hand selected by Starwood.

This is the interesting part - now that it's been revealed that in the past Starwood was breaking local law, by denying owners the right to nominate themselves, will they continue to screen applicants, or will they allow all interested owners to be on the ballot?

Starwood - we will be watching...


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## Ken555 (Mar 28, 2010)

DeniseM said:


> This is the interesting part - now that it's been revealed that in the past Starwood was breaking local law, by denying owners the right to nominate themselves, will they continue to screen applicants, or will they allow all interested owners to be on the ballot?
> 
> Starwood - we will be watching...



Well... this gets tricky. The "interview" process Starwood performs for their elections may not have broken local law. Starwood may simply not be assisting any interested party in getting on the ballot. If they like you, then perhaps they will. And if not, you have the right to get listed on the ballot as Jeff did (though they may not tell you about this option). I'm not sure the developer has any obligation to assist any owner in getting listed on the ballot. We've already established they're not a disinterested party. And, if you list yourself in this manner, you should expect the current board not be impartial toward your selection, assuming the majority votes are performed via proxy and voted by the board.

I'm not a lawyer, but that's how I see it now.


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## DeniseM (Mar 28, 2010)

Ken - I see what you are saying, but the process used in the past, seems intentionally misleading to me.  Completing an application obviously indicates an owner's desire to be placed on the ballot.  It is duplicitous for Starwood to say, "Yes, we send out applications, but that's not how you get on the ballot, and we aren't going to tell you that."  

After all THEY WORK FOR US - what right do they have to manipulate the election process?   WKORV is sold out - and the resort and elections should be in the hands of the BOD - not the developer.

BTW - a Starwood employee manages the elections, and should know the local election laws.  
YMMV


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## LisaRex (Mar 28, 2010)

DeniseM said:


> Hi Lisa - In the last election, there were 2 candidates on the ballot who were screened and chosen by Starwood, plus, Tugger j4sharks.  j4sharks looked up the local election laws and discovered that he had the right to place himself on the ballot, without Starwood's approval.  Previous to that, ALL candidates were hand selected by Starwood.



Of course you are correct.  I retract what I said.  What I SHOULD have said was that the current proxy system completely favors whomever the current board wants to win.  Getting a truly independent candidate on the board is akin to surmounting a coup.  See the WSJ thread for what I mean.


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## DeniseM (Mar 28, 2010)

LisaRex said:


> What I SHOULD have said was that the current proxy system completely favors whomever the current board wants to win.  Getting a truly independent candidate on the board is akin to surmounting a coup.  See the WSJ thread for what I mean.



I completely agree!


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## RLG (Mar 28, 2010)

Fredm said:


> Nothing requires the seller to sell to the developer under the previous terms, if presented with a higher legitimate offer (unless the seller has already signed the developers replacement contract)



This certainly isn't the way most commercial ROFR provisions work.  I've actually never heard of an ROFR provision that doesn't require the seller to sell once it's exercised.  If the seller has the ability to continue to negotiate, that defeats the whole purpose of the provision.  

Have you actually been involved in a transaction where the seller submitted a new higher price after the ROFR was exercised?


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## jarta (Mar 28, 2010)

LisaRex,   ...   "the current proxy system completely favors whomever the current board wants to win"

The current board has to vote a proxy as it is marked by the owner.  If the proxy is marked as a vote for j4sharks, there is no discretion to vote it any other way.  However, unmarked proxies returned to the HOA (except those marked as returned merely to achieve a quorum) give the current board the discretion to vote them the way the current board feels is best for the association.

That's the way it works for every election for every corporation or homeowners association in every State in the USA.  50 State legislatures - all giving the current board the right to vote unmarked proxies.  You should ask yourself how that unanimity of result came to be.

You may not like this maxim of Corporate Law 101. If so, get a State legislature to change the law to accommodate your sense of how corporate and association elections should be run.  Or, stop complaining about how unfair it all is and start working hard within the existing law to make sure that the proxy votes cast for your candidate exceed the votes that will be cast for any other candidate.   ...   eom


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## Fredm (Mar 29, 2010)

RLG said:


> This certainly isn't the way most commercial ROFR provisions work.  I've actually never heard of an ROFR provision that doesn't require the seller to sell once it's exercised.  If the seller has the ability to continue to negotiate, that defeats the whole purpose of the provision.
> 
> *Have you actually been involved in a transaction where the seller submitted a new higher price after the ROFR was exercised?*



Yes, I have been involved in several.

The principle involved is best stated in the following:

_Analysis of the rationale relied on by the
Anderson court persuades us that a good-faith withdrawal
of a third-party offer to purchase should not
activate a right of first refusal. First, the purpose for
which the right of first refusal was created is
essentially a control technique to secure a community
of qualified, congenial residents while protecting
the value of their apartments.11 This purpose
was held by the Anderson court to be sufficient to
satisfy the “purpose” portion of the tri-partite test
for establishing the validity of a right of first refusal
in condominium bylaws. However, where the sale
to a third party is abandoned or withdrawn, that
purpose is not present. The would-be seller remains
a member of the condominium community and
there is no further need to secure or protect the
community. Thus, the exercise of a right of first
refusal by a board when the primary motive is to
capture a “bargain” purchase may always be
vulnerable to a modification or withdrawal._

As with all legal matters, such language gives lawyers something to argue about. But, as a practical matter, timeshare developers are not going to go to the mat with its owners over such a trifle. 
Of course, it cuts both ways. IF a developer pushed back (although they have not to my knowledge), the seller and/or buyer may quickly decide it is not worth pursuing. Usually the amount under dispute is +/- $1,000.

My experience has been that they will simply evaluate the new offer, take it or leave it, and move on to the next transaction overflowing their in-box. Attempting to force an owner to sell in light of a better offer is not only dangerous to the integrity of their reserved rights, it's bad business.

Commercial real estate may be a different animal. I don't know.
My post was simply a contribution, based on my professional experience in transacting timeshares.


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## James1975NY (Mar 29, 2010)

Fredm said:


> I agree. ROFR is an opportunistic exercise. One may be exercised today, and another at a lower price may not, tomorrow.



I think the biggest opportunity is the "hype" that will be caused by their refusal.


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## Fredm (Mar 29, 2010)

James1975NY said:


> I think the biggest opportunity is the "hype" that will be caused by their refusal.



I agree with that!


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## DavidnRobin (Mar 29, 2010)

What 'hype'? It seems that only Tuggers are informed when other Tuggers post a SVO ROFR occurance (rare) here on TUG, and Tuggers likely represent <1% of all SVO Owners.  So it is not more then... 'interesting'.

At some resorts like (e.g.) WKORV/N, WPORV, HRA, WSJ, WKV - I think SVO is missing a profitable opportunity considering that they have the sales infrastructure (and certainly enough 'fish') to exercise a ROFR and turn-around and sell the VOI at a profit to the many fish (...I mean rose-colored glass wearing vacationers...) passing through.  IMO - this would benefit SVO by profiting from the ROFR, and Owners in supporting the underlying value of the VOI.  Of course - this only holds for those VOIs that have perceived value, and where the profitability ends for SVO.
IMO.


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## Fredm (Mar 29, 2010)

Interesting is a better word, for now.

Back a couple of years, hype ran rampant with Marriott shares. But, of course, Marriott was being very active with it's ROFR. No so yet with Starwood.

If/when more are exercised, owners will begin using ROFR prices to tell buyers that a lower price will get swiped. That is what I call 'hype'.


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## James1975NY (Mar 29, 2010)

jarta said:


> Fred,   ...   "Starwood just exercised ROFR on an annual 1 bedroom OV at KOR. $5,000. (doing it again)"
> 
> 2 ROFRs in 2 days?  I guess it is no longer an isolated incident.  Maybe there actually is intrinsic value in those WKORV and WKORV-N units above the panic-driven eBay prices.  I could speculate on why that may be so.  But, I won't.
> 
> ...



More timeshares = more votes?


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## jarta (Mar 29, 2010)

James1975NY,   ...   "More timeshares = more votes?"

Sure, more votes for Starwood; less votes for others.  The total number of votes, however, stays the same.   lol!

Starwood's share of MF goes up.   ...   eom


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## Fredm (Mar 29, 2010)

jarta said:


> James1975NY,   ...   "More timeshares = more votes?"
> 
> Sure, more votes for Starwood; less votes for others.  The total number of votes, however, stays the same.   lol!
> 
> Starwood's share of MF goes up.   ...   eom



Nah. Starwood probably holds title for 15 minutes.
They won't exercise on something they don't already have a buyer for.


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## jarta (Mar 29, 2010)

Fredm,   ...   Don't rain on my parade.  I thought Starwood was afraid of TUG taking over WKORV and looking to further stack the deck against the inevitable TUG putsch.   ...   eom


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## gregb (Mar 30, 2010)

LisaRex said:


> Of course you are correct.  I retract what I said.  What I SHOULD have said was that the current proxy system completely favors whomever the current board wants to win.  Getting a truly independent candidate on the board is akin to surmounting a coup.  See the WSJ thread for what I mean.



Yes, getting a non-board approved candidate onto the board is very difficult.  You hear about "proxy fights" on Wall Street from time to time.  As a former HP employee and stockholder, I can recall the fights over Carly Fiorina and the purchase of Compac computers.  Even with the leadership of Walter Hewlett and much of the Hewlett family stock, we were not able to dislodge the board and prevent the merger.  So yeah, it is hard.

I was recently reading the bylaws for WKORVN Master Assoc. and came across a couple of items.  

1.  The bylaws state that candidates for the board are nominated by the board, or from the floor of the meeting.  No other method is mentioned.  I expect that when the Starwood employee was asked how a person gets nominated for the board, he quoted the bylaws.  

Now it turns out that Hawaii has statues that cover condos and time shares and they they require anyone that is qualified for the board and asks, must be placed on the ballot.  This may be a fairly recent addition to Hawaii statues, as I think the Hawaii statues were recently rewritten.  

To Starwood's credit, when someone pointed out the Hawaii statute and asked to be included on the ballot, they did the proper thing and added them.  One could expect that Starwood ought to know the statues covering Condos and Time Shares in the states they manage property and follow them without having to be reminded.  

2.  The bylaws allow Cumulative voting, as do most corporate bylaws.  This is another well known method that boards (corporate as well as others) have to ensure candidates they like get on the board.  This is something that should be looked into if owners want to elect someone not chosen by the board.  

Greg


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## SDKath (Mar 30, 2010)

Wow, I just read this thread and was very surprised.  My guess is that they happen to have buyers looking for these size or type of units so they just grabbed a couple out of the resales and ROFR'd.

Disney exercises ROFR all the time.  I agree that you should just continue to buy what you want at the price that is good for you and not worry about it.  If Starwood buys up all their foreclosed and low sales price WKORV units, they will have a LOT of unsold inventory all of a sudden during a bad economy....

So I guess we'll see what happens as time goes on.  Marriott completely stopped ROFR'ing their units last year when they had just waaaay too much inventory and no one to buy it.  It only works for so long before the liability of having these unsold units becomes too much for the developer to handle.

Katherine


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## Fredm (Mar 30, 2010)

SDKath said:


> Wow, I just read this thread and was very surprised.  My guess is that they happen to have buyers looking for these size or type of units so they just grabbed a couple out of the resales and ROFR'd.
> 
> Marriott completely stopped ROFR'ing their units last year when they had just waaaay too much inventory and no one to buy it.  It only works for so long before the liability of having these unsold units becomes too much for the developer to handle.
> 
> Katherine



Marriott is warming up again.

Couple of weeks ago Marriott exercised 2 week 52 at Summit Watch. One went for $40,000, the second at $45,000

I don't think this is a return to active ROFR's by Marriott. These were special, high demand ski weeks. But, they are beginning to dig into their pockets.

BTW, Marriott prices for these weeks are $68,000 (after 20% temporary discount).


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## mdrew925 (Mar 31, 2010)

*Unknown Terms*



Fredm said:


> Starwood has just today exercised its ROFR on an eoy IV at North.
> Price was $8,000, with buyer paying 2010 fees.
> 
> Thought you all would like to know.



What does EOY IV at North mean? I get ROFR, but some of these terms are confusing. Thanks.


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## Fredm (Mar 31, 2010)

mdrew925 said:


> What does EOY IV at North mean? I get ROFR, but some of these terms are confusing. Thanks.



eoy IV = every other year Island View.

North = Westin Kaanapali North


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## jarta (Mar 31, 2010)

mdrew,   ...   EOY = Every Other Year (timeshare acronym).

http://acronyms.thefreedictionary.com/EOY

IV = Island View.  At WKORV, weeks were sold with a specific views.  Island View is the least desireable.  Ocean View (OV) is considered better and Ocean Front (OF) is considered the best.

Of course, within the 3 view categories, there are better and worse views.  Some would like to trim or cut down those pesky palm trees that block the views of the ocean on the lower floors.    ...   eom


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## Fredm (Apr 1, 2010)

SDKath said:


> So I guess we'll see what happens as time goes on.



My view from the bleachers has me thinking that the fever has broken. The worst is over.

 - Marriott and Starwood marketing tour flow is up.
 - Both are nibbling around the edges of ROFR.
 - Marriott has begun construction of a new building at Grand  
   Chateau, and sales at Kauai Lagoons. 

 - Resales have picked up nicely in the past 60 days. Indeed, some 
   closing agents are saying that March has been an all time record 
   breaking month. 

Of course, resale prices have been hammered by the ravages of the economy. Combined with rejuvenated resale volume, this also suggests that inventory is being recycled  into the hands of those better able to pay annual fees. Hopefully, this will reduce the number of non-performing owners going forward.

With increased marketing tour flow, a key source of resale buyers is being slowly reintroduced to the secondary market. Those families who attend a timeshare presentation, and do not buy, create resale demand that has been greatly reduced in the past two years.

I do not mean to imply that all is well in timeshare land.  Far from it.
But these are all positive signs, conspicuously absent until now.


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## GregT (Apr 1, 2010)

Fred,

I agree with you.  In business, we feel the difference in discussions with lenders and with investors.  There is more confidence that the world is not coming to an end, and that business is (slowly) returning to normal.

I too find it interesting that there is the occasional ROFR at both Marriott and at Starwood -- also signs that the big guys are willing to commit some of their precious capital to build inventory, versus continued focus on liquidating it.

These are interesting times.

Best to all,

Greg


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## SDKath (Apr 1, 2010)

Fredm said:


> My view from the bleachers has me thinking that the fever has broken. The worst is over.
> 
> - Marriott and Starwood marketing tour flow is up.
> - Both are nibbling around the edges of ROFR.
> ...



This is all really good news for owners.  Travel is up a little in general from what I hear.  On our recent cruise, the Royal Caribbean folks were saying that even cruise prices have risen 10% or more in the last few months compared to the past 2 years...

That said, we met someone who paid $150 per person for a 7 night cruise on the Mariner of the Seas for Spring break!   

Katherine


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## m61376 (Apr 1, 2010)

SDKath said:


> This is all really good news for owners.  Travel is up a little in general from what I hear.  On our recent cruise, the Royal Caribbean folks were saying that even cruise prices have risen 10% or more in the last few months compared to the past 2 years...
> 
> That said, we met someone who paid $150 per person for a 7 night cruise on the Mariner of the Seas for Spring break!
> 
> Katherine



wow- cheaper than staying home. I guess for the cruise ships the biggest hurdle is getting you on board, since most of their profit comes from bar tabs, excursion fees and other cabin charges.


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## Fredm (Apr 1, 2010)

SDKath said:


> This is all really good news for owners.  Travel is up a little in general from what I hear.  On our recent cruise, the Royal Caribbean folks were saying that even cruise prices have risen 10% or more in the last few months compared to the past 2 years...
> 
> That said, we met someone who paid $150 per person for a 7 night cruise on the Mariner of the Seas for Spring break!
> 
> Katherine



Good point.

It may be a bit premature, but increased travel will also begin to put upward pressure on hotel and timeshare rental rates.  Once this starts to happen, timeshare economics will begin to make sense again.


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## Westin5Star (Apr 1, 2010)

m61376 said:


> wow- cheaper than staying home. I guess for the cruise ships the biggest hurdle is getting you on board, since most of their profit comes from bar tabs, excursion fees and other cabin charges.



I met a guy on a cruise in Janauary who does it for a living.  He sold his house about 2 years ago and now he lives on various cruise ships traveling around the world.  He is completely booked for almost a year on future cruises.  He said that he usually spends about $3000 per month total.  He usually stays on each ship for 2-5 weeks depending on where the ships are going.  The funniest thing is that he has lost a lot of weight the past couple of years on the boats.  I always gain weight when I cruise!


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## James1975NY (Apr 1, 2010)

Westin5Star said:


> I met a guy on a cruise in Janauary who does it for a living.  He sold his house about 2 years ago and now he lives on various cruise ships traveling around the world.  He is completely booked for almost a year on future cruises.  He said that he usually spends about $3000 per month total.  He usually stays on each ship for 2-5 weeks depending on where the ships are going.  The funniest thing is that he has lost a lot of weight the past couple of years on the boats.  I always gain weight when I cruise!



I'd like to meet this guy that loses weight on cruises! Next, you are probabaly going to tell us about someone you know that loses weight over thanksgiving!


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## DavidnRobin (Apr 1, 2010)

Westin5Star said:


> I met a guy on a cruise in Janauary who does it for a living.  He sold his house about 2 years ago and now he lives on various cruise ships traveling around the world.  He is completely booked for almost a year on future cruises.  He said that he usually spends about $3000 per month total.  He usually stays on each ship for 2-5 weeks depending on where the ships are going.



that - and a few nalgene bottles filled with liquor (and a soda card) would do the trick - especially with banked Starpoints for hotel stays between trips - hmmm... maybe I will quit my job, sell my house, and cruise around the world...


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## alexadeparis (Apr 1, 2010)

*There's always this option . . .*

This is my dream retirement plan:

http://www.aboardtheworld.com/

Available Units: http://www.aboardtheworld.com/ownership/residences-for-sale/available/

No prices, but I think it's one of those "if you have to ask you can't afford it" things. Then I could just stay at my timeshares as a vacation from my cruising!   Wouldn't that be nice.

Edit: found the original pricing, which I'm sure is lower now:
$1.5M to $5M. Studios "priced lower" per the webstie (but no kitchen in studios)

Yearly Maintenance Fees: Range from $96,586 to $239,567, but includes an onboard ship credit of $20,400 and free laundry and shuttle bus service (gee, thanks for these "freebies"!)

That's a maintenance fee that would keep me up at night!


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## jarta (Apr 1, 2010)

Talked to our travel agent yesterday about a cruise we are taking this Summer on Seabourn's new Odyssey to the Black Sea.  This guy specializes in cruises.  He just returned a couple of weeks ago from 2 months (!) on the Odyssey.  He went from LA to Hong Kong (and all points in between) for free because of all the people he places with Seabourn.

http://www.seabourn.com/YourYachts/Odyssey/

http://www.cruisereport.com/crReview.aspx?id=2111

He said that recently Silversea and Regent Seven Seas raised their fares.  But, no Seabourn price increases - yet.

He says his bookings are up on cruise ships because the prices are still unnaturally low.  You are still able to get 40-60% off list on good cruise lines.   ...   eom


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