# Maybe Oceanfront isn't so good after all



## timeos2

A post offering for FREE a *The Ocean Club on Smugglers Beach, Waterfront, Cape Cod. 

*I guess that the $2199 (!!) special assessment pending doesn't help - even if it ocean front.  A sign of poor planning/management. Give me a better managed and more year round resort any day.


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## Stevenh1

Maybe I'm lucky, the 2 BR units will cost $2800. Would it be ok to post the letter to us owners on this forum? I would be happy to do this.


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## Stevenh1

Here is the letter posted on the spmresorts website. I hope the other owners are as pissed of as we are.  B.O.H. I.C.A.



March 16, 2011

Dear Owner

As many of you are aware, we have been working hard these past few months to complete the refurbishment of our Resort. We are excited as we see the progress and believe you will be as well when you visit for your vacation. We want to take a moment of your time and update you on the progress.

We began construction the first week of January, with a planned completion date of April 15th. Our plan included contingencies for a certain level of unknowns, based on our experience with remodeling Unit 10. Unfortunately, as we progressed and dug deeper into the project, we found additional issues which needed to be addressed that we did not encounter with Unit 10. As we pulled down wallpaper in the units, we began to discover water damage in the drywall. This water damage was found in most every unit. Because of this, we had to remove the damaged drywall and replace it with new. With the additional remediation work identified, we were required to undergo another review with the Town Officials. Due to the removal of the dry wall, the Town Officials required us to bring the resort up to the current electrical code, which meant we needed to remove all of the existing electrical wiring in the units and replace with new. At the same time, the Fire Department required that we add a new fire suppression system and in-room alarms.

On top of all this, we discovered extensive structural damage under most of the bathrooms in the building. It appears back in 1986 when the Ocean Club was being converted, some shortcuts were taken to complete the project. In order for us to properly finish this project, these repairs must be made. By accomplishing both the required and desired improvements, The Ocean Club will not only be beautiful, but safe and modern as well.

As you can imagine, making these additional improvements and required safety upgrades adds additional cost to the project. The original budget that was approved by your Board of Trustees was $2.8 million, with $2.6 million being covered by a loan from Wells Fargo Bank. With the modifications to the plan demanded by the Town Officials, the cost is now $4 million, with anticipated completion of the project delayed until May 27th. As with our original loan and payback plan, we will still be able to collect the assessment over a three-year period; however, we will have to assess an amount greater than originally anticipated. Some owners have asked us if we had a contingency plan, and were we prepared for additional expense. The answer is yes, we did prepare, but as stated above we planned based on our experience with Unit 10. We did budget contingency funds, as the Board expected unplanned issues. What could not be planned for was a 42% increase in expense based on issues completely outside our control and required by the Town of Yarmouth.
Please note that your Board of Trustees understands that this payment will be difficult. We are first and foremost owners too, and it will not be easy for us either. We deliberated over this decision for many hours over several Saturdays of conference calls, and are convinced that this is the best decision to take for The Ocean Club to ensure a strong future and great vacation experience for us all.

The special assessment will be billed in April, and will be due June 1. It can be paid in one, two or three installments. Should you opt to pay in installments, you will share in the interest payments that will have to be made on the loan. Should you choose to pay in one lump sum; any interest that would be due will be deducted from your account, thus saving you money. We encourage each of you to attempt to make the one lump sum payment, thus saving you money and also helping the Association reduce the debt more quickly.

The special assessment billing amounts will be as follows:

One bedroom unit $2,199.45
Two bedroom unit $2,815.56

Payment options:

                  1 Payment         2 Payments                3 payments

One bedroom unit $1,967.00   $1,069.87 per year      $733.15 per year
Two bedroom unit $2,518.00   $1,369.56 per year     $938.52 per year

Now that the project is moving ahead again, we will begin putting pictures and updates on the SPM Resorts’ website for you to review (www.spmresorts.com). We are working to send a newsletter with pictures of some of the units, once we have a few that are completed. This way, you will be able to see what you are paying for.

We also want to take a moment to thank the owners displaced by the renovation work. Your understanding and willingness to switch weeks is allowing us to complete the job more promptly and properly. We do recognize this was an inconvenience, but feel you will agree that it was worth it once you stay at The Ocean Club upon completion.

We look forward to hearing from each of you, as you begin to use The Ocean Club after the renovation is completed and have the opportunity to enjoy your vacation. In the meantime, should you have any questions, please contact your resort team at (508) 398-6955 or feel free to write to any of your Board Members using the resort address. These letters will be forwarded and we promise to respond to all of them.

Please look for our newsletter that should be sent sometime in April, and check out the websites for updates after March 15th. Again, thank you for your cooperation, patience and understanding as we work to improve The Ocean Club so that it may provide the best vacation experience possible for you, your family and your friends.

Sincerely,

Robert Kayer Ken Nordeen Mark Fishbon, Esq. Kathy Kittredge Doug Manning
Board Chairman Vice Chairman Trustee Trustee Trustee


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## timeos2

*Hope for the best & move on*

Thank you for posting the full letter/explanation. It helps to see what the Board there is struggling with. 

It is all too common that, like an old home, when serious renovations are tackled far more problems than anticipated can be uncovered.  Certainly it seems they tried to identify what was needed and for how much before they started the work on an old, converted timeshare. 

Unfortunately they picked a unit that had fewer issues than others. And it appears that they have not been properly planning for even the minimum reserve needs as all but a tiny fraction of the costs are being done by loans and special assessment.  The majority should be from reserves set aside over the years as the existing work was "used up".  

Now it will be interesting to see if enough owners feel their ownership is worth a couple thousand to maintain.  It may be a reasonable deal for the prime times but are off season weeks really a value for the required payments?  I wish them the very best and hopefully this will result in a beautiful renovated resort that will have in place a financial plan for the future that will eliminate unexpected assessments for foreseeable work required.


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## Carolinian

A well managed resort at any location should have a professional Reserve Study and should budget their reserves based on that study.  They should also buy the maximum in insurance that they can.

On the OBX, some resorts were done a favor by being severely damaged by Hurricane Isabel, as insurance money covered total refurbishment of some or all units.  At least one resort was closed long enough, that they had to bring plumbing and electical up to the new code to reopen, had an insurance rider that covered that, and got all new wiring and plumbing also paid for by insurance.  Another was about to have a major expense in replacing roofs, but thanks to the hurricane which destroyed the roof on one building and badly damaged the other, they got that expense covered by insurance money.  And through good board negotiating skills, most did this with no special assessment for any overage.

I am sort of surprised at SPM not having reserves for matters such as this.  They generally have a good reputation as a management company.  I wonder how long they had been managing this resort?


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## timeos2

*Having a disaster is not a good plan*



Carolinian said:


> On the OBX, some resorts were done a favor by being severely damaged by Hurricane Isabel, as insurance money covered total refurbishment of some or all units.  At least one resort was closed long enough, that they had to bring plumbing and electical up to the new code to reopen, had an insurance rider that covered that, and got all new wiring and plumbing also paid for by insurance.  Another was about to have a major expense in replacing roofs, but thanks to the hurricane which destroyed the roof on one building and badly damaged the other, they got that expense covered by insurance money.  And through good board negotiating skills, most did this with no special assessment for any overage.



While it turned out to be a lucky break it certainly doesn't speak well to the foresight/planning of the resort Boards. If there hadn't been a natural disaster then they would have faced a serious special assessment. Just because they were saved by a fluke doesn't mean they did a good job. It means they got lucky once. Hardly a plan for most resorts or even for them in the future. I'd be worried about how they are running things. As they got paid for damage they should have huge surplus funds that they didn't need to use - instead they barely got by only thanks to an unplanned occurrence.    Hopefully they learned a lesson and are now collecting correctly for future needs rather than hoping for another fortuitous calamity to bail them out.


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## e.bram

I would say that the very existence of the TS is precarious. If I were an off season owner , I would tell the powers that be to "pound Sand" or "chop water"


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## stevedmatt

Maybe I am being naive, but doesn't this equate to over $100,000 per unit? Is this because there are weeks that aren't owned? Is this resort open year round? If there are weeks that aren't owned, does the management company have the right to rent these weeks and does that money go to the management company or the general fund?


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## mrpickle

*Wow That is expensive!*

As you can imagine, making these additional improvements and required safety upgrades adds additional cost to the project. The original budget that was approved by your Board of Trustees was $2.8 million, with $2.6 million being covered by a loan from Wells Fargo Bank. With the modifications to the plan demanded by the Town Officials, the cost is now $4 million, with anticipated completion of the project delayed until May 27th.

$100,000 per unit they only need $1,500,000  (the 4 million - 2.6)
Does that mean they only have 15 units or is there something I'm missing?


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## e.bram

What has "oceanfront" have to do with poor maintenance and planning. Being oceanfront means that the value of the land would exceed the aggregate value  of the TSes. Not so with inland TSes(like the Ocean Cove(not near the ocean but implying it in it's name)).
,and if oceanfront is so bad , why do the Kennedys own oceanfront? On the Cape, in Florida and other places.


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## bilfbr245

It seems to me that an SA of this magnitude should be accompanied by a ballot offering dissolution as an alternative.  The owners might be better off keeping the $2000+ and possibly getting some value out of the ocean front land to distribute among them.  It sounds like there was mold to clean up, and that can be expensive, so possibly there would not be anything left.  But mold remediation would probably be cheaper for a tear down, and the ocean front land on Cape Cod should have considerable value.


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## timeos2

*It's location, costs and prime time. Two up one down for ocean side*



e.bram said:


> What has "oceanfront" have to do with poor maintenance and planning. Being oceanfront means that the value of the land would exceed the aggregate value  of the TSes. Not so with inland TSes(like the Ocean Cove(not near the ocean but implying it in it's name)).
> ,and if oceanfront is so bad , why do the Kennedys own oceanfront? On the Cape, in Florida and other places.



Oceanfront means higher maintenance costs as the beating from weather/surf/moisture presents an extraordinary toll on buildings and equipment.  Plus it severely limits the use season, thus creating massive amounts of off season time that simply isn't a value for the fees required.  There is nothing "wrong" with oceanfront but being that doesn't automatically mean better value - in fact, except for a few prime weeks, it may be the reverse. And it comes at a much higher than average cost. If you are a Kennedy and can afford it and the costs for the long, off season periods then great - most timeshare owners aren't that wealthy or they would be buying full ownerships not one week slivers of time. When they start having to pay what may seem like full time owner costs it can be a big problem.


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## Stevenh1

e.bram said:


> I would say that the very existence of the TS is precarious. If I were an off season owner , I would tell the powers that be to "pound Sand" or "chop water"



This our sentiment exactly. We don't plan on paying one red cent!!!


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## rickandcindy23

Stevenh said:


> This our sentiment exactly. We don't plan on paying one red cent!!!



Seriously?  You bought off-season Cape Cod and will refuse to pay this assessment, which apparently was necessary?  That means you are expecting everyone else to pay, but you won't.  

Glad I am not on a sinking boat with you.  That's what an older timeshare is, a sinking boat, and the only way to salvage it is to keep it fresh and new.  There is no value to a timeshare, except what you are willing to pay in maintenance fees to use it each year.  

This letter is reminiscent of the one Twin Rivers sent a few years back, and I understood why owners were upset, but mold is intolerable, and could make everyone sick, so we opted to fix it, right down to the tearing down of the drywall.  I hated being on the board, with unhappy owners calling me, but at least I knew we were doing the right thing.  The same people who complained were also the same ones who refused to sell the timeshare units as wholly owned.  We could do so much better, selling the full units, and we could get our money back, too. People just want to complain and offer zero solutions.

Hope you unload your week.


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## Stevenh1

rickandcindy23 said:


> Seriously?  You bought off-season Cape Cod and will refuse to pay this assessment, which apparently was necessary?  That means you are expecting everyone else to pay, but you won't.



I'll try to work with the Trustees to get rid of it of course and hopefully we can work something out. Maybe they should sell it wholly (if you were on our board and suggested that option I would have backed you 100%). I think that is a great idea!

I didn't buy it, it was aquired when I entered a relationship. I'm just trying to get rid of it. The person who bought it is an original owner, who probably like most people, listened to the sales pitch and jumped in. The MF have been paid faithfully for 24 years. We've been trying to sell it  for just as long too. I would like to do a deedback, but have not got a response from any of the trustees. I'm trying to give it away and you can see how well that is going.  Back in the early 90's when the resort was in financial trouble due to the savings and loan scandle, I offered the unit to the Trustees at that time (offering to keep all payments up to date until they sold it) they wouldn't touch it.


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## timeos2

Stevenh said:


> I'll try to work with the Trustees to get rid of it of course and hopefully we can work something out. Maybe they should sell it wholly (if you were on our board and suggested that option I would have backed you 100%). I think that is a great idea!
> 
> I didn't buy it, it was aquired when I entered a relationship. I'm just trying to get rid of it. The person who bought it is an original owner, who probably like most people, listened to the sales pitch and jumped in. The MF have been paid faithfully for 24 years. We've been trying to sell it it for just as long too. I would like to do a deedback, but have not got a response from any of the trustees. I'm trying to give it away and you can see how well that is going.  Back in the early 90's when the resort was in financial trouble due to the savings and loan scandle, I offered the unit to the Trustees at that time (offering to keep all payments up to date until they sold it) they wouldn't touch it.



There is no requirement that the resort/trustee's take the week - and given the current situation they would be extremely foolish to do that as a resale right now is most likely nearly impossible.  Every week they own needs to be funded by the other owners - meaning a higher SA and allowance for bad debt required. They cannot afford to take that on.  

You need to find someone willing to take over the future obligations. You may have to pay 1/2 to all of the SA then give the week away to make it attractive to a new owner. That way they get a nice, renovated resort they can justify the future fees for. Splitting the SA 50/50 may be the best you can expect and you may not even get that.  Good luck. Hope it works out for you and the resort in the long run.


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## Stevenh1

I am trying to donate it. If the cost to get out of it is less than the SA then this will probably be the route we'll take. Thanks for the advice


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## Carolinian

Actually, both of the resorts involved that I am most familiar with were in no danger of a special assessment.  One had a professional reserve study some years back and m/f's had been based on that reserve study.  The windfall from the insurance just put them in a stronger financial position.  The other was still holding a large sum that was part of the settlement when they kicked the developer out and had added to it.  They had plenty of funds on hand for the needed work, and again were just put in a stronger financial position from the insurance money.





timeos2 said:


> While it turned out to be a lucky break it certainly doesn't speak well to the foresight/planning of the resort Boards. If there hadn't been a natural disaster then they would have faced a serious special assessment. Just because they were saved by a fluke doesn't mean they did a good job. It means they got lucky once. Hardly a plan for most resorts or even for them in the future. I'd be worried about how they are running things. As they got paid for damage they should have huge surplus funds that they didn't need to use - instead they barely got by only thanks to an unplanned occurrence.    Hopefully they learned a lesson and are now collecting correctly for future needs rather than hoping for another fortuitous calamity to bail them out.


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## bilfbr245

I think that Stevenh makes a good point that bears on the hard line that many of you take about the responsibility of all owners to pay up no matter what.  Many owners have acquired their timeshare through inheritance, or means other than purchase.  They never made make a purchase decision that should ever hold their feet to the fire. They just got stuck.  And what it insidious about some such commitments is that there will never be an escape, just one more payment after another.  Its very nice, of course, to wish him good luck, but it is unlikely that he will have good luck given the parameters in the marketplace.  When enough people refuse to pay, and by necessity some timeshare resorts are dissolved and liquidated, there may finally be a solution to the mess the industry is in.


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## Mel

Owners of the weeks during the refurbishment have been offered use of other weeks - which makes it sound like perhaps a large percentage of units are owned by the HOA.  That must factor into the cost of the Assessment - every week owned by the HOA means a larger payment for the other owners (You pay your share plus a fair share of the fees attributable to weeks owned by the HOA).

We had to pay a similar SA several years back for our unit at Tropical Breeze, but for very different reasons.  In our situation the HOA ended up owning about 30% of the units.  Consider yourselves lucky the HOA was able to obtain financing - I doubt what the HOA owns is enough to provide security for a loan of that amount.

I don't buy the excuse that many owners didn't purchase the weeks.  If they inherited them, they had the option at the time to not accept the inheritance.  They accepted it, and have undoubtedly enjoyed use of the timeshare, so now they are having to pay to bring things up to date.  The HOA has 2 main options at this point (with a few other options that might also work, with some tweaking).  

Option 1:  Fix what needs fixing, and move on.
Option 2:  Sell the underly property.  If they do this, the property still might require remediation.

Some intermediate options might include selling the HOA inventory to a developer group (making sure to amend the bylaws to prevent that developer from gaining control of the HOA);  Reassigning some units to different units in the same week to provide the HOA with whole owned units which could be sold off as full ownership units; onsolidating in a similar fashion, and only remediating enough units to cover usage (demolishing or selling off the other units).  Since the repairs are well underway, it sounds like perhaps the last idea isn't really an option.

Unfortunately this could cause a death spiral - a percentage of owners choose not to pay, which increases the cost to the other owners, causing more owners to be hesitant to pay.


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## timeos2

bilfbr245 said:


> I think that Stevenh makes a good point that bears on the hard line that many of you take about the responsibility of all owners to pay up no matter what.  Many owners have acquired their timeshare through inheritance, or means other than purchase.  They never made make a purchase decision that should ever hold their feet to the fire. They just got stuck.  And what it insidious about some such commitments is that there will never be an escape, just one more payment after another.  Its very nice, of course, to wish him good luck, but it is unlikely that he will have good luck given the parameters in the marketplace.  When enough people refuse to pay, and by necessity some timeshare resorts and dissolved and liquidated, there may finally be a solution to the mess the industry is in.



No one can be forced to take over a timeshare. If they have accepted the obligation either through purchase, accepted gift or inheritance they willingly took on the responsibility.  It is up to them - not the other owners - to make sure the obligations are met and if they want out find a taker.  It isn't that hard to understand and can be done in every case but not always cheaply.  That's part of what they accepted when they took possession.   Given the dispersed nature and large number of owners for even small timeshares it is very unusual for any resort to get to the point that the only answer is shutting the doors/liquidation. It can/has happened but you can count on three hands how many times in the whole history of timeshares. 

The owners need to figure this out for themselves not try to make it the problem of the many other owners who are living up to their agreement.


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## Stevenh1

For the record, getting married was how I got involved with the timeshare 

I do appreciate everyones input and have learned much from the posts.

I don't know how the other owners will feel as I stumbled onto the SA letter online the day it was posted. None of us have been sent the hard copy in the mail. It is due to be sent on Aprill 1st


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## bilfbr245

Mel, I believe that the death spiral you refer to is essential to allow the timeshare market to hit bottom and start to restore itself, and in particular to bring supply and demand into a better relationship.

    Also, I wonder, would it make a difference to you if the owners of an inherited timeshare had not actually been using it happily for years?  Also, what are heirs supposed to do when there are timeshares in the estate?  If they refuse to accept them, and the estate is unable to otherwise dispose of them, things are stuck.  

    I want the best for the timeshare market, but the truth is that there are way more timeshare units than there are people who want them.  Liquidation of some resorts is the only answer I see. Putting off the inevitable only makes it worse.  Moments when there are substantial SA's are in this respect moments of opportunity, in that they can encourage a vote for liquidation and dissolution.

     And John, yes there have only been a few liquidations to date, but how else is the vast oversupply to be rectified?


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## Stevenh1

I just got the hardcopy so That means the other owners are starting to recieve theirs also.


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## timeos2

bilfbr245 said:


> And John, yes there have only been a few liquidations to date, but how else is the vast oversupply to be rectified?



The problem is creating value for the majority of (usually) off season times that plague so many resorts. Either by reducing fees for those times (meaning higher fees for the prime times) and/or improving on site features so thee is a reason and value to use/visit in what otherwise is undesirable time periods. Not easy and maybe not cheap but the only other answer would be to sell it off - nearly impossible to achieve consensus to do that even in the best circumstances. There is no easy answer.  

I fully agree there are simply too many timeshares out there for the number of willing user/buyers. Yet they continue to sell more (fortunately not too many new ones are in the pipeline - now most sales are more focused on the "club" type systems that are often recycling old inventory for new sales dollars). 

Some resorts will fail or close. But I'll bet far more will struggle through and still be around a decade from now.


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## e.bram

What sense does it make  to put $2800.00 into a ts that you have to pay another $2800.00(net $5600.00 loss to dump? BAIL!!! BAIL!!! BAIL!!! That is even  true for prime time holders whose MFs will skyrocket to cover the bailors not paying. . Each unit is worth $150,000.00 or more as a whole ownership condo. Inland the situation would be worse since even as whole ownership the properties are not valuable.

LIQUIDATE NOW!!!

For instance if the Cove at Yarmouth(and others) went belly up it would end as welfare housing. Oceanfront is always worth money, if even just the real estate.

I live in a house 1 block from the edge of a cliff.If I were 1 block over the same house is worth twice as much because of the Hudson River and NYC skyline view. The same is true for the condos i9n the area.


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## timeos2

Unless they get a super majority vote to  liquidate (nearly impossible) that is not an option for the individual owners to choose. They can push for it and, with enough support, get a vote on it but it is highly unlikely to pass. 

So owners have to deal with reality not theoretical options they don't have.


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## e.bram

Liquidation does not have to be voluntary.


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## bilfbr245

Liquidation is difficult but not impossible to achieve, especially with good communication and planning, and certainly a high SA can be a rallying point.  Yes it is difficult, but if ever there were an idea whose tiime has come, this is it.  People are paying $3000 or more to hopefully, sometimes unsuccessfully, dispose of timeshares.  People are not buying them because they are concerned they could never sell them, even if they might otherwise like the idea of owning one. Old resorts are requiring thousands for renovations, and all the while the sinking ship sits on valuable real estate that could be sold to everyone's advantage.  

       John, you say that you think that most timeshare resorts will manage to survive the next ten years.  But is that honestly what you think is best for the timeshare marketplace?  Is perpetuating this albatross of vast over supply into the the next generation what we should be advocating? Wouldn't everyone be better off it supply and demand were in a better relationship?


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## timeos2

e.bram said:


> Liquidation does not have to be voluntary.



If it were easy or cheap for an owner to force liqidation it would happen quite often especially at smaller resorts. It doesn't because it isn't. Why keep pushing so called solutions that simply aren't realistic options?


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## timeos2

bilfbr245 said:


> John, you say that you think that most timeshare resorts will manage to survive the next ten years.  But is that honestly what you think is best for the timeshare marketplace?  Is perpetuating this albatross of vast over supply into the the next generation what we should be advocating? Wouldn't everyone be better off it supply and demand were in a better relationship?



No, I don't think it's for the best. But the real answers are to stop all new sales until the glut is worked off. Never happen. It is a niche market that is over saturated with unwanted, low value inventory along with a tiny percentage of higher value time that carry the whole system. It is sold with questionable ethics and value but it's easy money for the pros and they aren't going to give it up without a really big fight. 

We as mere owners need to find ways to make it work or get out. We aren't going to fix the industry anymore than 100 years of trying has cleaned up used car sales. That process looks outright clean next to the costs and tactics of the vast majority of timeshare sales operations. The timeshare world is too small to hold the attention of those who have to hold them accountable (the government) - the industry knows it and does just enough to skate by.  It's been under fire for 30+ years and will be around for 30+ more. If every TUG member acted today to stop the abuses it wouldn't make one bit of difference in a few weeks.  We can speculate but can't change much of anything outside our own little parts of the pie and maybe a resort or two. We'll never change the big guns.


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## bilfbr245

I am not sure that I understand why getting a "supermajority,"  or hopefully, all owners, to pay a huge special assessment for a unit that may have no value even after the improvements are made is "realistic", but giving the same owners an option on the same page, telling them that they could avoid the assessment and get money back if they vote to dissolve the timeshare commitments and sell the real estate, is not "realistic."

      Also, as far as injecting realism into the equation, if enough owners refused to pay, the remaining owners who do want to continue the timeshare would get a very important dose of reality.  This could lead to the death spiral referred to earlier.  But the death spiral does not mean that the resort goes belly up. It means that the resort sells off its real estate, divides the till, and takes one important step in the process of correcting the demand/supply imbalance.


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## timeos2

Talking realistic means options that have a chance of real world success. Looking at the vast majority of resorts it is tough to get 15-20% of owners to vote on anything muchless needing a super majority to have something occur. Add in the fact that there will usually be in place a group working to keep the resort alive - in the past even at resorts that an outsider might view as clearly on a death spiral - and another, usually much smaller, that takes a contrary view assuring  a split vote and you have a tie or at least no super majority thus the resort lives on. 

There have been just a handful of resorts that have ever successfully shut down & even less that distributed even a dime of the sales price to the timeshare owners. It is so tough to accomplish that it is merely a technical not  real possibility in 99%+ of resorts.  Thats just the reality of the options.


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## Stevenh1

Seems like a death spiral may be the only way to get out of these places!!! Nobody wants to stop paying and leave the burden on the remaining owners, but on the other hand all this does is keep the cycle going in perpetuity. These places simply aren't worth it. So what's the alternative? Unless one wants to continue paying for the rest of their lives, then there may not be one. Since 1987 we've spent over $25K in mortgage and MF's. Now that would be a really fine vacation somewhere else, anywhere else.


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## timeos2

*The end may be near but no one can pull the plug!*



Stevenh said:


> Seems like a death spiral may be the only way to get out of these places!!! Nobody wants to stop paying and leave the burden on the remaining owners, but on the other hand all this does is keep the cycle going in perpetuity. These places simply aren't worth it. So what's the alternative? Unless one wants to continue paying for the rest of their lives, then there may not be one. Since 1987 we've spent over $25K in mortgage and MF's. Now that would be a really fine vacation somewhere else, anywhere else.



That certainly can be the unfortunate bottom line, especially for any resort that gets hit with multiple special assessments.  Isn't it a bit ironic that those big numbers the slick sales folk love to tout "See if you pay just $120/night for a room plus 10% inflation in 20 years you've paid $25K and all you have is receipts"  IS true, but for the timeshare they convinced you was such a great buy!  Of course they ignored that you pay $85+ of that $120 in annual fees (NEVER included in the sales talk) and then you have the outrageous purchase cost as well! 

Bought resale to use at an owner operated resort with close to year round demand a timeshare can be a great route to inexpensive vacations. But far too many are just money pits, sold under false hype that don't come close to the real costs or commitment the buyer is signing on for. 

If you own you seriously need to look at each of your ownerships and ask if it truly is a value to you or not. If not don't throw good money after bad - find a way to get rid of it without burdening your fellow owners. Give it away, pay someone to take it, see if the resort will accept it back (a very few do)  - offer it to the owners around you if they might want a second week or two.  But don't just let it go to waste as you pay every year. That is a bad use of funds and eventually, as in this case, the resort may need a BIG SA and then if you haven't sold it's too late. No one is buying or even accepting a "gift" with a $2500 SA hanging there to be paid! 

Ocean front, inland, seasonal or nearly year round every resort has to be evaluated for its return value for the fees to YOU. By doing all you can to be sure you're getting the best bang for your buck (again, smaller, owner controlled resorts bought resale tend to be the best values) you can have a great vacation in a resort you enjoy and when needed get a trade or rental. Trades or rentals are easy when the resort is a good one, costs are reasonable and the time is in demand. The same things you want as an owner.  

Don't plan on ever making money for a "sell off" of what may seem to be extremely valuable land/buildings if sold as a whole ownership/property package, as it is so hard to ever actually sell a complete timeshare project. Most of those that have ended their life as timeshares were RTU with an end date specified OR have declined into bankruptcy (and dragged out for many years as owners struggled to pay ever increasing fees) and sold for pennies to a new developer.  It is NOT traditional real estate and there are no good, proven ways to gracefully end the Associations. 

I do think that as more and more resorts - especially those that were conversions when "new" - are going to be facing the need to be put of their misery through liquidation. But the reality is that the process simply isn't understood and few owners end up supporting it. Another of the many unexpected problems that have come up with the hard sell used to push an unwanted product on uninformed buyers.  We are in full agreement that it is a huge and growing problem but one that has no simple answers and none on the horizon. In fact it is getting worse as ever more convoluted overlays are used to generate new income for the developers and create pockets of inventory tough to access and often without a resale option. What a mess.  

If you don't own then it is a great time to simply take advantage of the unprecedented market and rent for unbelievable values.  That is the one bright spot for value but actually hurts - not helps - owners.  Staying out of the game unless extremely sure of what you are getting into and that it represents true value for your use is the only way to buy/own.  To me selling is also important IF what you own doesn't work for you anymore.   It is a bad time to be a seller, but weigh that against the costs of just hanging on. Dumping at a loss may still be the most prudent choice in many cases.


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## Stevenh1

John, I am trully amazed at your knowledge of the TS market. Thanks for you input!


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## Stevenh1

timeos2 said:


> That certainly can be the unfortunate bottom line, especially for any resort that gets hit with multiple special assessments.  Isn't it a bit ironic that those big numbers the slick sales folk love to tout "See if you pay just $120/night for a room plus 10% inflation in 20 years you've paid $25K and all you have is receipts"  IS true, but for the timeshare they convinced you was such a great buy!  Of course they ignored that you pay $85+ of that $120 in annual fees (NEVER included in the sales talk) and then you have the outrageous purchase cost as well!



Don't forget "If you don't use it, you can always sell it" or "It's an investment" and my favorite which was pitched to my wife (before we met) "If you don't want it we'll buy it back"...trully classics


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## Ridewithme38

Ok as a person looking to buy during this down market...I've been looking at MF's and accounting for 10% gains each year and comparing that to what i believe i'll be making over that same time frame....

But what happens if someone is just Unable to pay an SA, lets be realistic...ALOT of america is in trouble financially right now...people out of work, mortgage rates, gas prices, all costs are going up, credit cards are maxed out savings accounts are mostly dry and no more credit is really available for anyone...There's got to be atleast 5% of timeshare owners that are trying to sell just because they can't afford the MF's, another 15-25% that can just barely make the MF's each month...

What happens to that 30% with their credit cards maxed out and savings dried out with a SA like this? Do they have to sell? Or can they just refuse to pay?


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## timeos2

*they would own & owe but have no use rights*



Ridewithme38 said:


> What happens to that 30% with their credit cards maxed out and savings dried out with a SA like this? Do they have to sell? Or can they just refuse to pay?



Like any bill it can be ignored/refused. But then it is subject to collection and the resulting credit hit. In some cases the families credit is shot anyway as they are maxed out so another thousand or two reported as unpaid isn't really going to harm them much.  They may be heading to personal bankruptcy or some type of hopeful settlement of debts to get their income back in line with expenses.   

But if they are squeaking by for the important items like rent/mortgage, car expenses, utilities, medical expenses and food a negative mark from an unpaid condo/timeshare fee can trigger the start of a bad series of things. Suddenly new credit is cut off or raised  to super high levels of 31% or more.  Things like insurance rates can go up based on a poor credit report.  Creditors become nervous and a missed or late payment can trigger a demand to pay an outstanding loan in full.  It can be ugly and very tough for a family to have to deal with over what was supposed to be wonderful, low cost vacation option. 

Again it is best to find a way to end the obligation held for the fees by whatever means possible. That should NOT include paying $3-$4 thousand dollars the family does not have to one of the many Post Card companies that have sprung up to prey on this type of increasingly desperate family. Instead use some of what you'd pay "to get rid of it" to make it as attractive as possible for someone else to accept the risk of those future fees due.  Often for 1/4 or less of the PPC's fees you can entice a buyer to take weeks by prepaying fees and/or covering transfer expenses.  Be a bit creative and almost any timeshare can find a new owner - hey, it was sold to you!  

If they don't pay then eventually the week will be foreclosed and they will lose it. In the interim once the SA or any other fee is past due any use rights are suspended.  So once it goes delinquent they still own it but have no use rights and cannot even transfer it without first bringing the fees up to date. And until it is sold/transferred the negative reports will continue to pile up and do potentially serious credit damage.


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## judyjht

*Unit #204 at Sandcastle?? Provincetown*

Never mind - posted to the wrong place.  Sorry.


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## Stevenh1

*Wish Some Ocean Club Owners would Comment*

I'd like to hear from some of the Ocean Club owners to get thier input on the assessment.


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## Stevenh1

*FaceBook Page for Ocean Club Owners to Express Themselves*

This is for the Ocean Club Owners. It appears there is a Facebook page for us to express our thoughts. There have been some interesting comments already posted

http://www.facebook.com/permalink.php?story_fbid=10150182745030120&id=126174950119#!/pages/The-Ocean-Club-on-Smugglers-Beach/126174950119


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## Stevenh1

*Here it comes*

It seems like a vailed threat is being sent to owners. Is this is how the club is thinking of dealing with owners who are unable to pay?

March 22, 20l l

Dear Owner:

Recently, the Commonwealth of Massachusetts changed their laws to allow for non-judicial
foreclosures, To comply with the new legislation, we are distributing the enclosed information to
all owners to inform you that we now fall under this program.

It is never the Board’s intention to foreclose on anyone. On occasion, however, it becomes the
only method available to clear a title or rectify a delinquency. In these rare cases, the Board does
its best to sell the unit and obtain a new maintenance fee-paying owner. This new legislation
means that on those occasions that we must foreclose, it will be less expensive and the
transaction can be completed much faster. While this not only saves you and the Association
money, it allows the Association to replace the delinquency with a good dues-paying owner like
yourself. In tum, you as an owner and the Association will benefit from the new processes.

As always, please feel free to let us know if you have any questions.

Sincerely,

The Ocean Club on Smuggler’s Beach Board of Trustees

Robert Kayer, Chairman
Kemieth Nordeen, Vice Chairman
Mark Fishbon Esq., Trustee
Doug Manning, Trustee
Kathleen Kittredge, Trustee


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## e.bram

Threat or promise?
it means owners that want out can get out faster. Your obligations stop after forclosure!


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## timeos2

Stevenh said:


> It seems like a vailed threat is being sent to owners. Is this is how the club is thinking of dealing with owners who are unable to pay?



This is a BIG positive for paying owners. It adds to the pressure to pay for the rest which is the idea. If you can't/won't pay then it is in the best interest of the Association to be able to end the bleeding by foreclosure (after required notices of course) for a reasonable cost (far lower now with non-judicial foreclosure vs the far more expensive full court method) as quickly as possible to minimize the loss. 

Of course owners can choose to force the foreclosure before a judge vs the new non-judicial method but if they do they are fighting (and paying for legal service) for a week they haven't paid for. If they just pay then the procss stops so why spend $$ on a lawyer? 

Overall this is a good sign from this resort to it's owners that they understand what is happening and acting on it correctly.


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## Stevenh1

*Corrected!*

OK, I probably misunderstood...still they won't have to froreclose, I'll give it to them! And for the record, I am still trying every conceivable way of transferring, selling or giving the TS to someone who will be a MF paying owner.


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## timeos2

Stevenh said:


> OK, I probably misunderstood...still they won't have to froreclose, I'll give it to them! And for the record, I am still trying every conceivable way of transferring, selling or giving the TS to someone who will be a MF paying owner.



Remember that even though they can & will foreclose if needed that does not mean they will accept a deed back. They may feel it is better to continue to go after you as the legal owner for the fees rather than accepting them as an Association cost for others. So finding a new taker is your best bet if possible.


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## e.bram

Timeos2:
Isn't foreclosure implicitly taking the deed? How can the HOA foreclose and not take the deed back?


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## timeos2

e.bram said:


> Timeos2:
> Isn't foreclosure implicitly taking the deed? How can the HOA foreclose and not take the deed back?



Simply accepting the deed back is different than a foreclosure procedure as I'm certain you are aware. 

If they take the deed back basically on demand they are setting themselves up for potential lawsuits when other owners want the same and get told no and/OR to have an overwhelming amount of returns thus jeopardizing the whole Association the Board is charged by law to protect. Plus a deed back means no negative credit marks to the owner (good for them) and the Association may want to be sure to cause as much discomfort as possible to encourage payments or sales, not deed backs, by owners.  Again the Association has to protect itself.  Accepting weeks back that they cannot easily resell threatens the very existence of the Association / resort as you have also noted in the past. Unlikely to be a desired goal for most HOA's.

IF disbanding the Association IS the goal then there are procedures in place to properly do that. They are NOT to have the majority of members deed back their ownerships or default on payments but rather a controlled vote by the owners to disband. It can & has been done if in fact the majority of owners feel that is the best answer for any given resort. It is one of many reasons that saying there "is no way out" isn't true.


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## e.bram

Timeos2:
I meant , how can the HOA foreclose and not get the deed back? What sort of "discomfort" are we talking about?
From the TS point of view isn't taking the deed back and foreclosing the same?


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## timeos2

e.bram said:


> Timeos2:
> I meant , how can the HOA foreclose and not get the deed back? What sort of "discomfort" are we talking about?
> From the TS point of view isn't taking the deed back and foreclosing the same?



No. The end result is but the process and ramifications are completely different means to that ultimate end result. 

Discomforts: Negative credit reports and more such as recorded liens.


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## e.bram

From the point of view of the TS, what are the ramifications of the deed back and foreclosure. What are the TSes benefits of one action over the other.


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## Ridewithme38

So since MF's go up when people deed back their ownerships or walk away...Do MF's go down when more people buy?


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## e.bram

Nah: The tax and spend BOD will find a way to fritter it away.


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## Ridewithme38

e.bram said:


> Nah: The tax and spend BOD will find a way to fritter it away.



Yah, i've alot of trouble believing that the BOD's of these places aren't completely in the pocket of the resort...Its a bit obvious by how some of them talk


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## timeos2

Ridewithme38 said:


> So since MF's go up when people deed back their ownerships or walk away...Do MF's go down when more people buy?



The answer is probably no - but not due to the always popular conspiracy / big spending BOD theory.  The facts are that every week is being paid for by someone - even when the resort is in new sales.  For that hopefully limited time the Developer usually has a choice to pay the fees OR make up any shortfall each year. Once the new sales end then every interval has an owner that is obligated to pay. So the only thing that can happen is that some don't - creating a shortfall. 

The other reason for rising fees can be that the Association has taken ownership of intervals, either through foreclosure or deed back, thus those have no owner to pay so all owners pick up that extra cost. Usually most Associations do their best to rent that delinquent time to reduce the bad debt as much as possible.   So unless the Association holds a tremendous amount of inventory & suddenly gets it sold it is unlikely fees will go down when a resale week (which are all weeks at a sold out resort) gets a new owner.


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## timeos2

e.bram said:


> From the point of view of the TS, what are the ramifications of the deed back and foreclosure. What are the TSes benefits of one action over the other.



For what I think is the fourth, and last time, the difference is the very real possibility of payment and or sale of the interval in question when the foreclosure process is used. If a deed back is simply accepted the Association is agreeing to take over 100% of the fees due from that moment on until it resells.  The obvious benefit being the additional fees collected (I'm always surprised how many people do pay when threatened with foreclosure), the real possibility of a sale to a new, paying owner with the need for the Association to be involved and creating pressure on the owners to stay current when they know negative action will occur if they go delinquent. 

The flip side can be the cost.  Until recently both the time and expense required to do a full foreclosure was in the thousands. It was often tough to front that money and to find a buyer to cover it after recovery. Now that non-judicial foreclosure is the law in many heavy timeshare states it is much cheaper and far faster to get the process done. More foreclosures are likely to take place now thanks to those law changes.


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## timeos2

Ridewithme38 said:


> Yah, i've alot of trouble believing that the BOD's of these places aren't completely in the pocket of the resort...Its a bit obvious by how some of them talk



Hmm, I can see your point when the BOD is under the control of a developer as I too believe they favor their employer over the individual owners. It is a bad situation and owners should work to get it changed. But you can't paint all Associations with the same brush as many are owner controlled / managed and they tend to be quite conservative with the owners (their) money!  

So as usual the real answer is "it depends".  Owners are well advised to buy / own at resorts with independent owner controlled BOD's for best accountability and value IMO.  I put my money where my mouth is by selling / giving away all our timeshares that aren't under owner control.  I'm finding it is far better this way as I expected.


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## e.bram

Although John is beating around the bush and spinning, the new foreclosure law benefits the deadbeat non paying owner. with my spin by implementing the new, the TS is taking back the TS deed and relieving  the non paying deadbeat owner of his obligation to the TS. This is exactly what a deed take back does and what the deadbeat owner desires. Any impact on the owner does not financially benefit the TS one little iota. In fact by not letting the non paying TS use the unit, it legally takes on the obligation to try to rent(or sell) that unit to mitigate the obligation of that owner.

Basically the new law benefits the non paying owner more than the TS. It lets that owner get out of his(her)sooner, and implicitly places the TS under the obligation to implement it.


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## timeos2

There is no spin or beating round the bush. What non-judicial foreclosure does is compress the time required for the interval to remain unpaid while the owner decides what they will do.  This way they have to decide if they will pay or lose their week & suffer a (very negative) set of credit hits for first delinquent fees then a legal foreclosure.  It is not a joke or a whim to the credit bureaus. Plus it reduces the ultimate cost of foreclosure to the Association. 

So yes, it reduces the time between Joe Deadbeat going delinquent and when the Association has either a sale, payment or interval to resell. That is a positive for the Association not a benefit to the deadbeat.  The whole process can be done in one billing cycle vs the 3 or even 4 years that full court foreclosures could end up taking. That is up to 3+ years that the Association doesn't have to deal with a delinquent week & excuses from Joe Deadbeat. Now within the year the Association knows if they will have an interval to sell or if they were paid.  That is a much better spot to be in than sitting for years on bad debt.


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## e.bram

John Chase "So yes, it reduces the time between Joe Deadbeat going delinquent and when the Association has either a sale, payment or interval to resell. That is a positive for the Association not a benefit to the deadbeat."

This is exactly for what people pay $3000.00 to PCC. How does it not help Joe Deadbeat?  Also with only 1 year of MFs owed , it even can't make financial sense for the TS to sue the owner.(legal fees too high relative to debt).

It is definitely a Joe Deadbeat help law. He wants to get out of his TS fast and this helps him. The TS is in the same position as a deed back with respect to the money it receives.

Joe Deadbeat probably has a bunch of dings on his credit anyway or like myself doesn't need credit owes nothing and pays cash for everything. Sometimes even enjoys fencing with collection agencies(I proposition the ladies) .I tell them if you think I owe you money, sue me, let the judge decide . If the court says pay, I'll pay. Have not been sued once.


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## timeos2

It does make sense to foreclose ASAP as usually the annual fees are at least $500 & foreclosure now $400 or less.  Plus it does the Association no ood whatsoever to be sitting on a deliquent week for years - having to try to rent it - vs finding out the owner will never pay & recovering the interval for the least amount, with the least amount past due with all steps possible taken to collect ten, if still needed, foreclosed.  It can and does all occur within 12 months and stretching it beyond that serves no purpose for anyone. It used to be common as the Association did have the large amount of money required to go through full foresclosure. 

A well run HOA will have one or even two levels of collection services that do the work for free (they get paid from the penalties imposed - and it DOES work as those companies make good money!) while the Association is held harmless with full payment of any amount due prior to them getting a dime. If they fail then the official notice of forclosure, just a certified letter, goes out to Joe Deadbeat, his credit dinged & , if he doesn't pay then which also happens more frequently than you would think, the foreclosure is filed. Quick - low cost and the Association has done all it can to collect thus meeting fiduciary responsibilities  but also acted quickly when it was certain payment was never going to be made.  In no way does that help the delinquent owner except that they get the credit dings and loss of the interval in months rather than years.  That helps everyone in the system.


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## ronparise

e.bram.

Would it make you feel any better if someone agreed with you? I can go halfway.  Sure; a quick foreclosure helps the the owner. the process is done quicker...and he can begin to recover the hit to his credit sooner. But, so what,  the association benefits too. You seem unwilling  to get behind  any solution that might help the deadbeat even if for the greater good of the association

And to be sure, the association also benefits. The process is quicker and cheaper, and they can begin their recovery process sooner too, ie re sell or rent what they now own. 

The situation where nobody benefits is the real problem. And thats the situation that should be discussed.   Im thinking of those off-season weeks that wont rent and nobody wants to buy. The owner stops paying and the association (after having exhausted all their collection strategies) wont invest in foreclosure. That week is in never-never land. Its a problem and the only solutions I see benefit no-one.


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## e.bram

John; To cut to the Chase(pun intended):
What you are saying is that the bailer's only "discomfort" is a ding on his(her)credit and calls from a collection agency.
The TS lost the MF and the legal fees. Why not allow a take back for a fee, let's say $1000.00? Seems like a win win to me.


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## timeos2

e.bram said:


> John; To cut to the Chase(pun intended):
> What you are saying is that the bailer's only "discomfort" is a ding on his(her)credit and calls from a collection agency.
> The TS lost the MF and the legal fees. Why not allow a take back for a fee, let's say $1000.00? Seems like a win win to me.




Hey - we agree! In fact if the Association has an outlet or an owner mandate to take weeks back for flip then that would work.  But most don't have any way to resell that the existing & obligated owner doesn't also have.  And they are risking the owners money if they take it back - again without an owner mandate that is a great way to fail to meet fiduciary duties as a Board.  THATS a lawsuit owners can win!  

I'm open to every reasonable method to keep a resort functioning. If taking weeks back makes financial sense then by all means the Association should do so.  I know that our Boards have looked at the options and feel that is not - at least for the past few years & looking ahead - a good move. It could change if the market changes or new options come along for the intervals obtained.


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## Stevenh1

e.bram said:


> John; To cut to the Chase(pun intended):
> What you are saying is that the bailer's only "discomfort" is a ding on his(her)credit and calls from a collection agency.
> The TS lost the MF and the legal fees. Why not allow a take back for a fee, let's say $1000.00? Seems like a win win to me.



You are brilliant! This a terrific idea. I would definitely be will to pay a fee to get out of the unit! I will even suggest this to my trustees!


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## timeos2

Stevenh said:


> This a terrific idea. I would definitely be will to pay a fee to get out of the unit!



Unfortunately at many resorts far too many owners would too. What is the Association supposed to do with all those weeks even with the small fee charged? It is a feel good idea but if you want to keep your timeshare and see it prosper how would you feel if the Association suddenly decided to take back a bunch of weeks - couldn't sell them before the next fees are due - so your fees go up to cover those intervals? IF you're willing to pay more for other owners, and maybe eventually you, to have that option then let your Board know.  But realize that in all likelihood fees will go up if such an open policy is put in place. 

I realize this is a fine line and people want to help other people. But Associations are set up to RUN resorts/condo NOT to own property. Most don't even do sales. It just isn't part of their charge to take on those obligations and, since it passes to all paying owners thus raising their fees and the chance that they too will want out, it usually makes no financial sense for a resort to do that.  Until the majority of owners approve it IMO the Board would be way overstepping their bounds to unilaterally implement such a policy.


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## e.bram

For the resort what is the difference between aq take back for a fee and foreclosure except costs? They will end up with them anyway.
In seasonal resorts the death spiral eventual. Intimidating(with credit dings and collection agencies) disgruntled owners will only delay this a little. Here we have an aging population(who will bail sooner or later) and no chance(w/o high pressure sales used initially to sell them)   of disposing of off season weeks(ever). Even using points to confuse and sell has had its' day.


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## Ridewithme38

I think you guys make a good point...When an owner is close to Foreclosure, why not make the offer. "for $XXXX you can deed us back the property...or we can continue with the foreclosure proceedings, and your credit will never be the same"

Either way you end up with the Deeded week


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## timeos2

Ridewithme38 said:


> I think you guys make a good point...When an owner is close to Foreclosure, why not make the offer. "for $XXXX you can deed us back the property...or we can continue with the foreclosure proceedings, and your credit will never be the same"
> 
> Either way you end up with the Deeded week



Once it reaches that point - after months of collections, bad credit reports and other contacts, who says this isn't an offer made?  It may very well be  as by that time there is proof the owner will never pay up and maybe the additional costs of finishing the full foreclosure can be avoided. Maybe not. But it is certainly an option IF the resort / collection group decide that is the best choice for all. It is not a given and if it is done it is on a case by case basis not a blanket procedure/offer. 

Remember too that often that whole process is removed from the resort and handled by third parties who have the mandate to recover every penny they can and get the intervals back into paying status by the best possible method as quickly as possible. How they accomplish that is up to them - all the resort cares about is having the intervals back on the paid list and off the delinquent one. And in the meantime the resort should be doing everything possible to rent those delinquent use times as allowed (actually mandated) by law.  Combined these steps should hold the net amount od delinquent fees to a bare minimum.


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## e.bram

Timeos2:
If a delinquent unit is rented the owner must legally get credit for it.

Are you implying that the TS employs "Giuseppe" to collect.

Collection agencies have never collected a penny from me if I feel I don't owe it. Differences of opinion as to the validity a debt are best handled by the courts.


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## Bunk

In general, I don't believe that it is prudent for the HOA to refuse to take back units.  I do not believe that most HOA's will recoup their losses from the collection/foreclosure process.  As a result, the best thing is to recover the asset as soon as possible and to stop throwing good money after bad in an attempt to collect bad debt.

The next issue is whether the HOA will be able to find a new buyer for the unit it has taken back.  If there are a significant number of units that the HOA can not even give away for free or rent, then the remaining unit owners have to pay more money for maintenance.  

If it turns out that the maintenance for the off season units is so high that nobody wants the units even for free, and the income for renting those units is much lower than the unpaid maintenance, the HOA may not survive.

This may be the case in Cape Cod, where the income from unit owners of the months that are attractive to an owner (which are basically 3 months) may not be able to support the inability to collect maintenance from the owners of the other 9 months.

In that case, the HOA may have to figure out some way to charge the owners of the attractive weeks more maintenance and the owners of the non-attractive weeks less maintenance.  If that can not be done legally, the foundation of the HOA may be no stronger than a sand castle.


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## timeos2

e.bram said:


> Timeos2:
> If a delinquent unit is rented the owner must legally get credit for it.



No one said they didn't.  But it seldom covers the fees due plus the penalties, interest and overhead for the rental. Even if it does all they get credit for is being paid up (I've never seen that happen) as the use is gone to the rental for that period. 



e.bram said:


> Are you implying that the TS employs "Giuseppe" to collect.
> 
> Collection agencies have never collected a penny from me if I feel I don't owe it. Differences of opinion as to the validity a debt are best handled by the courts.



Licensed, professional collection agencies. 

There is no question that the fees are due - read the documents. If you want to go to court over it then do so. To date in nearly 20 years of dealing with timeshares and condos not once has an owner taken the issue to court. The Associations have gone to court (and won) a number of times. It is usually a 2-3 minute process as there is no defense. They owe, they lose. End of "case". Plus it has to be filed in the jurisdiction where the resort is located, not where the owner resides. That can also make it very tough to "go to court" over it although it is of course their right to do so if they want.  

(PS - STILL waiting for the magic cost saving list. We could have implemented those wonderful cost savers by now if you had only let us all in on where the savings are so easy to find at every resort/condo! PLEASE! We want to lower fees!)


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## e.bram

Timeos2:
Barnstable venue could be an advantage for the defendant taking a vacation on the Cape. 
Could be tough on you if you were made to answer  interrogatories, depositions and subpoenaed as a BOD as well any employees and the management company(all needing lawyers). The defendant could request a jury trial(constitutional right).
You can't always count on a default due to the non appearance of the defendant. 

I once had a dispute with an insurance company over a $1000.00 claim. Once I requested a jury trial they settled.


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## Bunk

timeos2 said:


> The Associations have gone to court (and won) a number of times. It is usually a 2-3 minute process as there is no defense. They owe, they lose. End of "case". Plus it has to be filed in the jurisdiction where the resort is located, not where the owner resides.)



A default judgment entered in one state (e.g. Florida)  is usually not enforceable in another state (e.g. New York) unless you bring a separate lawsuit in New York to enforce the judgment.

How much $ does the Association want to spend on collecting from people who no longer wish to belong and would be glad to give back the unit?

How long do you think is appropriate to require someone who doesn't use the unit to continue to pay maintenance.

In my opinion, the idea of the Board allowing someone to give back his unit provided maintenance is current and he pays a fee in an amount TBD by the Board is fair.


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## timeos2

e.bram said:


> Timeos2:
> Could be tough on you if you were made to answer  interrogatories, depositions and subpoenaed as a BOD.



Unlikely as the dollar amounts are small claim levels - even if we were talking years of delinquency (and we are not - that's one reason why we stay on top of it). You've never even tried to do it or you'd know that isn't going to happen.  You can't make a case something it isn't no matter how many times you repeat it. Giving "advice" that has zero basis in fact has no value.  Unfortunately much of what you propose, on more than just this subject, has no value as it simply does not apply or doesn't exist as an option. 

If it weren't for the fact that I fear someone might actually think these wild statements thrown around had something behind them  & then mistakenly act on them I wouldn't even bother to reply.  But someone might be fooled into thinking it's really an option - so I try to present the facts that refute it. My guess is most find it getting very old. 

You cannot create conspiracies at every resort, magic and substantial savings that don't exist, paint every BOD/Management as corrupt and throw out unworkable plans to avoid obligations and be taken seriously.  I have always felt you care about the system and the resorts but want easy outs where there are none. I assume you got seriously burned at some point at a timeshare and now want revenge.  Far better we discuss serious proposals that could actually address the serious issues in the timeshare world rather than simple rallying cries that have no basis in the real world.


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## e.bram

The defendant can put in counterclaim of an amount to put the venue in a court where discovery is permissible.

      “	In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law."

Quote from the 7th amendment to th US Constitution, need I say more?


If I had a unit at the Cove(which I would not ,ie not oceanfront,no kitchen)I would take you up on it. However, I might by one for a $1.00 with transfer and MF paid(like Denise touts). Use it for a free vacation and let you  come after me.

John: The only time you don't respond is when it is impossible put put any spin on it your way. Your silence will be deafening.


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## timeos2

*And end to all shared housing. Yup. Thats going to occur tomorrow*



e.bram said:


> “    In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law."
> 
> Quote from the 7th amendment to th US Constitution, need I say more?
> .



Perfect example. The documents that make up part of the agreement / deed /RTU at most timeshares or condos contain language that place any disputes in a local venue. They often require mediation and other processes. Add to that trial by jury isn't going to granted over a $1000 civil dispute - although you are welcome to waste your time & money if you care to try. 

Again, sweeping "facts" you post that have no application to what we are discussing. You may not like that  condos/timeshares restrict or limit your rights, but the courts have blessed that as in the common interest and benefit to all. When you sign up or buy from a third party the use and ownership rights you are agreeing to those restrictions and obligations. Unless you plan to sue (and win) to end all condo/fractional/timeshare developments and existing agreements your ranting holds no value.  If you get all those long standing types of shared housing / ownerships rescinded please do let us know.  I'm not holding my breath.


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## ronparise

John

Regarding a magic list of cost cutting ideas

Heres the actual budget of a small independent resort...there are 38 units here or 1976 unit/weeks The budget is based on just 1375 paying unit/weeks or about  70% anticipated collections. Clearly thats the biggest problem here. One of the reasons I bought here is that the board has begun a major effort to get the association controlled weeks rented and ultimately re-sold. But thats not my question. Take a look at that wages and employee benefit line. Doesn't $3635000 seem excessive.  Thats 7 full time employees (@50k) for a 38 unit facility. They budget just 1 hour cleaning per unit per week, or just 38 man hours per week for housekeeping. They charge owners by the hour for any housecleaning beyond that. So what I would figure to be the biggest labor expense is well controlled.   I think this wages number could go down considerably

If this place is not unique...thats my short magic list of budget cuts..wages and salaries


2011 Budget 							Per Unit/Week
Wages and Employee benefits 		$363,698.00 	$264.15
Casual labor 					$5,065.00 	         $3.68
Guest Services 					$32,324.00 	         $23.47
Insurance general 				$75,606.00 	         $54.91
Insurance Group 				        $24,798.00 	         $18.01
Property taxes 					$46,301.00      	 $33.62
Ofc Supplies/Postage/Equip rep 		$12,342.00 	         $8.96
Supplies,linen and laundry 			$26,474.00 	         $19.23
Professional fees 				        $5,562.00 	         $4.04
Management fee 				        $82,958.00 	         $60.25
Maintenance Elevator 				$12,356.00 	         $8.97
Interior repairs and maintenance 	        $66,258.00 	         $48.12
Interior maintenance F.F.& E. 		$15,190.00 	         $11.03
Exterior maintenance 				$15,317.00 	         $11.12
Taxes & Fees 					$308.00 	         $0.22
Hotel Security 					$2,588.00 	         $1.88
Telephone 					        $18,662.00 	         $13.55
Computer Expenses 				$15,921.00 	         $11.56
Energy 						$54,535.00 	         $39.60
Water and sewer 				        $15,212.00 	         $11.05
Bank & credit Card 				$16,195.00 	         $11.76
Miscellaneous 					$3,502.00 	         $2.54
Cable 						$4,495.00 	         $3.26

Total Expenses G&A 				$915,667.00 	$665.00


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## e.bram

What costs are you talking about? It will cost the TS more. And in today's legal system that what it is all about.


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## timeos2

ronparise said:


> John
> 
> Regarding a magic list of cost cutting ideas
> 
> Heres the actual budget of a small independent resort...there are 38 units here or 1976 unit/weeks The budget is based on just 1375 paying unit/weeks or about  70% anticipated collections. Clearly thats the biggest problem here. One of the reasons I bought here is that the board has begun a major effort to get the association controlled weeks rented and ultimately re-sold. But thats not my question. Take a look at that wages and employee benefit line. Doesn't $3635000 seem excessive.  Thats 7 full time employees (@50k) for a 38 unit facility. They budget just 1 hour cleaning per unit per week, or just 38 man hours per week for housekeeping. They charge owners by the hour for any housecleaning beyond that. So what I would figure to be the biggest labor expense is well controlled.   I think this wages number could go down considerably
> 
> If this place is not unique...thats my short magic list of budget cuts..wages and salaries



Salaries and benefits is usually the largest line item at any operation. 7 employees may be too many - but that would be specific to that resort (and especially at only 70% collections - there should only be 70-80% of budgeted staff required). 

e.bram has made the blanket statement " How about cutting expences (sp) and eliminating dead wood?"  as if there is automatically large savings to be found at every resort by simply cutting "things". My question was and is what things are there to cut that will substantially cut fees and not impact the quality/maintenance/operation of every resort? I know some (could be most, I'm not really sure) have areas where a dollar or two per owner could be saved but that isn't going to make a difference. To make an impact there would have to be significant drops of $50 -$75 -$100 or more per week.  I placed the challenge of what has to go to get those types of automatic savings - but without hurting the resorts - and of course there is no such thing. 

It is SO easy to sit back on the outside and throw stones. It is very common for new candidates for an HOA Board for example to tout "cut fees". But if they actually get elected all too often they discover the existing Board members had already done what they could to hold fees down and there are no magic bullets to lower costs thus lower fees. It is unlikely any owner based BOD is going to raise any fee simply to raise fees - they pay them too - so it is only after every avenue for savings get a review that an increase is OK'd. 

That may not be the same story when there is a developer controlled management and BOD. In fact it is so prevalent that they pay far too much to the developer group that we have now terminated all our non-owner controlled ownerships. We tried to make a difference at some of those but  it wasn't going to happen. 

We didn't walk away, we found takers for our intervals and now we don't have that responsibility anymore.  We didn't have to pay anyone $3000-$7000 to "dispose" of the time nor did we expect the resort to accept a deed back just because we decided the interval was no longer a value to us. Had they offered to do so we may have done that, but they didn't so we found legal buyers, willing to take over the ownership & obligations just as we did when we bought. That, and keeping fees current, are the least an owner has to do. The rest of timeshare ownership is mostly enjoyable.


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## timeos2

e.bram said:


> What costs are you talking about? It will cost the TS more. And in today's legal system that what it is all about.



We have a legal team for the Association. The average billing for collection related expenses in 2009 (last year I have the total for) was $26/case for 111 cases or about $.33 per owner for that year. I'll bet most owners will agree they can afford $.33/year to help assure everyone pays their fees due vs paying hundreds to cover those delinquent fees. even with those best efforts to collect and an overall collection that approached 98% for the year each owner paid nearly $8.50 to cover delinquencies. Imagine what the number would be if the resort allowed a free deed back policy or didn't aggressively pursue every dollar due. Just a rise to 6% delinquency would mean a $6-7 increase in annual fees. I thought you want to hold fees LOW?


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## e.bram

You are saying foe $0.33 per week you collected 100% of the MFs from all units. Hey, April 1st was on Friday.
And you crack legal team collected at total 0f about $2500.00. Which law firm was that?


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## timeos2

e.bram said:


> You are saying foe $0.33 per week you collected 100% of the MFs from all units. Hey, April 1st was on Friday.
> And you crack legal team collected at total 0f about $2500.00. Which law firm was that?



I'm saying at year end 2009 we collected 97.9% of ALL fees due. Leaving just 2.1 % or about $8.50/week in bad debt. That is one of the lowest you will find anywhere. 

Out of nearly 1200 intervals that were delinquent in January of the year (the day after fees were due) only slightly over 100 ended up needing any type of legal action from our Attorneys.  In 2010 that number went down to less than 10.  As for collections, as defined by how many of the 1200 potential non-payers ended up as potential foreclosures there were less than 200 for the year. 

As usual you are taking unrelated issues, stirring them together and trying to come to a negative result ("collected at total 0f about $2500.00") Where did that number come from? See why I have to make sure no one takes things you post seriously?  What the total collection effort by all groups involved along with active rentals of delinquent time yielded was 98% collections. The vast majority of costs for all of that work was paid for by the delinquent owners  - NOT the Association - again holding costs down to a minimum.  I'm sure your system would have collected the full 100% but we missed out on that by 2%. Oh - wait. Seems delinquencies over by the ocean are about 8% or more!  Hmmm, I guess the system isn't perfect after all.


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## e.bram

I don't know, but when I drive by the Cove, and in the lot it is a lot more than half empty By comparison Surfside has relatively more cars parked in their lot.

Actually desolate is a more apt description of the off season Cove(every time but weeks 26-33). And he is telling us he is collecting from 98% of the weeks. Yeah,right.


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## Ridewithme38

After reading some of the threads here about how much money the BOD's are stealing from the owners...Thousands of dollars for dinners and Hotel rooms...

I'd say the best cost cutting measure ANY TS could take is completely getting rid of ANY BOD's 

Maybe they can be kept, we can use the members for general work around the resort, manning the front desk, taking out the garbage, cleaning up after pigeons...Ya know, the kind of work people that steal from the general Community deserve


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## timeos2

e.bram said:


> I don't know, but when I drive by the Cove, and in the lot it is a lot more than half empty By comparison Surfside has relatively more cars parked in their lot.
> 
> Actually desolate is a more apt description of the off season Cove(every time but weeks 26-33). And he is telling us he is collecting from 98% of the weeks. Yeah,right.



Ah,the ever accurate "parking lot loading" factor!  We have parking not only for our units but also for much of the massive public areas such as our highly regarded restaurant (winner of the Bobby Flay Meatloaf Throwdown in 2007) as well as our large sports & racquet building (enjoyed by owners and outsiders) and more. So it is certainly possible that there would be spaces available even if the resort is heavily booked (and last weekend it was at over 85% - a weekend that the temperature never got above 30!  Nice time on the beach, no?) We also have things that should matter to those that care about the environment. Since the start we have had an on site waste treatment plant & soon should be hooked to the new Yarmouth sewer system rather than using the highly polluting septic systems all beach front resorts have (thankfully they are not occupied much of the time - it helps keep flows down & thus cuts the serious pollution they create in those sensitive areas). 

Any owner is free to see our annual, independent audit that verifies the rate of collections as stated. I have pointed out many times that a resort that is creative, uses on site features to create demand even in otherwise slow periods and that works to give value to "off season" owners reaps the benefits.  Those have been goals at the Cove since day 1 and it has paid off for the Association/owners. It's why we are the number one resort in Cape Cod by RCI demand.  All year round.  And why our owners pay whats due - they get value back no matter what time of year.


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## timeos2

Ridewithme38 said:


> After reading some of the threads here about how much money the BOD's are stealing from the owners...Thousands of dollars for dinners and Hotel rooms...
> 
> I'd say the best cost cutting measure ANY TS could take is completely getting rid of ANY BOD's



The problems you mention are very real but tend to be at resorts where the owners lack control of the BOD leaving the "fox" (developer) as the sole oversight to all operations, collections and more. Not a good situation no matter what named brand is in charge - it needs to be the independent owners to have the best chance of best value.  

Because of that lack of owner say/control we dumped what we felt were otherwise very good to great systems with both Wyndham & DVC - and also resorts that failed to turn over control as promised such as Wastegate. We now will only own at resorts/systems where owners hold the control of management & the Board.  That has proven to be a key along with buying to use within driving distance to be happy timeshare owners.  

I'm with you on the lack of accountability & value of hand picked, developer placed Boards. Let them do the dirty work  on their own dime.  As for elimnating the HOA Boards once again that isn't even a possibility due to laws governing timeshares/condo's. We owners just need to be sure they are OUR Boards not a developers ATM.


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## Ridewithme38

timeos2 said:


> I'm with you on the lack of accountability & value of hand picked, developer placed Boards. Let them do the dirty work  on their own dime.  As for elimnating the HOA Boards once again that isn't even a possibility due to laws governing timeshares/condo's. We owners just need to be sure they are OUR Boards not a developers ATM.



The lack of accountability is with all BOD's...the fact is when you put power in the hands of a few over the many...corruption will happen, its almost a given hand picked developer controlled or Owner controlled doesn't change that fact

If the laws are really the issue, we have to find a way around it, or get them changed, Kinda proves my point about the corruption when we can't even disband them...If we can't disbann the BOD's we should make them TRUELY work for the owners....want a PENNY to go towards them, let them man the front desk, if they want to have Board Meetings, let them do it on their dime...We shouldn't be paying thousands of dollars out of pocket just so they can take lavish vacations anytime they want

The BOD's contribute NOTHING to the TS and yet we end up paying them thousands to do it


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## timeos2

Ridewithme38 said:


> The lack of accountability is with all BOD's....
> If we can't disbann the BOD's we should make them TRUELY work for the owners....want a PENNY to go towards them, let them man the front desk, if they want to have Board Meetings, let them do it on their dime...We shouldn't be paying thousands of dollars out of pocket just so they can take lavish vacations anytime they want
> 
> The BOD's contribute NOTHING to the TS and yet we end up paying them thousands to do it



Again - wild and totally false statements presented as facts. 

The vast majority of Boards are run according to the rules and manned by unpaid volunteers taking their time and often money to be responsible for multimillion dollar businesses and hundreds or thousands of owners. The Boards don't spend money for themselves but for all owners. A well run Board/HOA should be open with owners and every owner has an absolute right to all financial information (with just a few exceptions due to privacy rules).  If your's aren't then I agree that Board/Management should be removed.  But those are the exceptions - far from the norm.  

I will again recommend you read the fine book about SOC's (Shared Ownership Communities) so you understand what the facts really are regarding this type of unique ownership.  Throwing out this type of non-workable and incorrect information (the original post to "disband HOA's") helps no one and may create confusion as to what an owner can really do if they feel their Board/HOA is being improperly run/managed.  

Remember if you don't agree with the laws and rules these types of Associations operate under you do not have to take part. Don't buy/own them and you can safely ignore the whole thing. If you choose to own then it is best to be knowledgeable so you can make reasonable decisions about your best moves to get value out.  The book would help you and others a lot - highly recommended.


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## e.bram

OK . Parking lot almost empty, TS 85% full. MMMMM.
Maybe the occupants came by bus or went to the beach?


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## Ridewithme38

timeos2 said:


> Again - wild and totally false statements presented as facts.



Just want to double check something...You realize that because you don't agree with a statement, doesn't mean its false right???  When you don't agree with a statement made, you tend to just rule it as false, and then go off on a completely off topic tangent...its interesting, but seems like a bit of a straw-man to me

Most boards/HOA are Run according to the rules...Guess why that is??  THEY MADE THE RULES...those rules just happen to let them do nearly anything they want while collecting thousands of dollars in free dinners, vacations and other perks that come right out of the pockets of the Resort owners...Now granted i am making general statements...But that doesn't make them false

Now as for disbanding Boards/HOA, while legally, as you claim, this isn't currently possible...i think if the truth came out to the corruption and theft within their system....enough owners could step up and have that changed...BOD's/HOA's need to start being accountable for every dollar they spend...the wild vacations framed as board meetings, lavish dinners on the Owners dime and thousands of other expenses that shouldn't be need to be stopped...


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## AwayWeGo

*Au Contraire, Mon Frère.*




Ridewithme38 said:


> Most boards/HOA are Run according to the rules...Guess why that is??  THEY MADE THE RULES.


Auctually, the rules come 1st, then the HOAs enter the scene afterward. 

The folks who write the rules are the timeshare company's lawyers.  They write'm in compliance with state laws governing condo developments.  That includes setting up HOAs with authority to levy fees & set budgets & hire operating personnel, etc. 

After all the rules & procedures are signed & sealed & delivered & recorded down at the courthouse, only then are deeds sold & an HOA established.  

The HOA in turn must operate according to law & within the provisions spelled out in the official condo documents.  That pretty much rules out lining the members' pockets, taking vacations in the guise of HOA-BOD meetings, exceeding established per diem rates for meals, etc. 

Board members may be able to cram some extra timeshare soap in their briefcases when nobody's looking, but that's about it. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


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## timeos2

Ridewithme38 said:


> Most boards/HOA are Run according to the rules...Guess why that is??  THEY MADE THE RULES...those rules just happen to let them do nearly anything they want while collecting thousands of dollars in free dinners, vacations and other perks that come right out of the pockets of the Resort owners...Now granted i am making general statements...But that doesn't make them false



No, they didn't make the rules. The States did. It is part of every SOC in both the disclosure and rules/regs as filed and approved by the State. I am more than willing to say that one or more Boards and one or more members of a Board may fail to live up to those rules. It happens. It should be exposed & corrected. But to try to say "most" or all Boards are operating in an out of control manner isn't a true statement.  There is nothing to support such a charge. Not just an opinion I hold (although I do certainly tend to take a very black or white view of things - I have to watch that to realize that there can be some grey areas ...).  I am shocked by that report from the Aruba Marriott because it is so out of control AND so unusual. Most Boards go out of their way to ensure they operate within the rules - they are sticklers for it. As usual the few rogue members/Boards can taint them all, but that doesn't mean they all act in that way. 



Ridewithme38 said:


> Now as for disbanding Boards/HOA, while legally, as you claim, this isn't currently possible...i think if the truth came out to the corruption and theft within their system....enough owners could step up and have that changed...BOD's/HOA's need to start being accountable for every dollar they spend...the wild vacations framed as board meetings, lavish dinners on the Owners dime and thousands of other expenses that shouldn't be need to be stopped...



The HOA's exist basically as mini-governments for the Associations. It is not hard to ferret out any corruption and theft as there is an absolute right for every owner to full disclosure.  If a Board/Association/Management hides anything from owners they are subject to removal and certainly should get serious oversight by owners as to what they are trying to hide and why. If any owner suspects anything they can and should go find out if its legal or not and take appropriate actions. The full power of the law is behind them - no changes needed. They can stop it - in that case they haven't. That is a failure of owner oversight not the HOA system.  Disbanding isn't an option and doesn't need to be. Proper oversight and accountability IS needed and, at least in that case, apparently hasn't been done. But it certainly can be and should be. Yesterday.


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## Stevenh1

timeos2 said:


> Simply accepting the deed back is different than a foreclosure procedure as I'm certain you are aware.



I just heard from the Ocean Club and they will take the unit back *IF* I pay the assessment. How nice that they would take this worthless unit back _*AFTER*_ I pay the $2199:hysterical:. Again the place is worthless!!! and will still be worthless after the refurbishment (sigh)


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## e.bram

I would tell them to pound sand. You will put yours after everybody else(if they prove it to your satisfaction). ie yours will be the last check.


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## timeos2

Stevenh said:


> I just heard from the Ocean Club and they will take the unit back *IF* I pay the assessment. How nice that they would take this worthless unit back _*AFTER*_ I pay the $2199:hysterical:. Again the place is worthless!!! and will still be worthless after the refurbishment (sigh)



If you really feel it is worthless then refuse to pay. Period. Eventually they will foreclose and you'll be out. No charge. There will be some uncomfortable demands for payment & collection calls - if it really is worth nothing to you ignore them. Eventually they will decide you'll never pay, they will foreclose (along with the proper reporting to all the various credit agencies about the unpaid fees & the foreclosure) but you will be out and at no cost out of your pocket. 

If it really is worthless then simply stop paying. It couldn't be any easier.


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## bilfbr245

John,  I think that it is more than a feeling. I think it is solid objective fact that a timeshare today needing a $2000 special assessment is not only worthless, but has negative value.  So this seems like something new in your advice, or maybe I am missing something.  If I were in the situation, I would probably pay, but that is me.  I do wonder though, as I have indicated earlier in numerous places,  whether when enough people do refuse to pay that a difficult but ultimately beneficial process can begin.  Maybe I am wrong.

       In regard to your earlier comment out how unrealistic the liquidation option is, you note how difficult it is to get 15 per cent of owners to vote on anything. That is so true about run of the mill things, like voting in directors or whether to amend a bylaw about some vague thing.  But to avoid a $2000 bill and possibly get money out of a sale of oceanfront land, I think you could get more people to vote, especially with good communication.  Personally if I were in the situation involving a substantial special assessment, I would like to see the option tried even if it fails, rather than just assuming that it could not. As noted, I think the Board could have send a clear statement with the assessment offering the vote as an alternative.  Bill


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## timeos2

bilfbr245 said:


> John,  I think that is more than a feeling. I think it is solid objective fact that a timeshare today needing a $2000 special assessment is not only worthless, but has negative value.  So this seems like something new in your advice, or maybe I am missing something.  If I were in the situation, I would probably pay, but that is me.  I do wonder whether though, as I have indicated earlier in numerous places,  when enough people do refuse to pay, that a difficult but ultimately beneficial process can begin.  Maybe I am wrong.



The term "worthless" has a relative meaning. It can be worthless in the sense that finding someone to pay to buy the week for that amount or more is problematic at best. But that doesn't mean it's necessarily worthless to YOU or other owners who already have an investment there, enjoy the resort and feel that having it rebuilt and brought up to todays standards is reasonable despite the rather hefty cost. In other words can you replace it with something as nice as the renovated units should be for $2000 or less? Hopefully the answer is NO thus making the SA not enjoyable but a reasonable amount to pay for future use & enjoyment. 

IF too many owners felt it isn't worth the money then the resort & Board faces a tough choice. They can move ahead and hope to find new owners willing to pay (risky, no guarantees to anyone) or they can opt to put the idea of closing & liquidating to owner vote.  Most resorts are reluctant to do that for the many reasons we've discussed here before - largely the near impossibility of getting a super majority vote of owners to approve which would be required. Once word gets out that a potential close down is in the works - approved or not - the resort is tainted & any resale does in fact become nearly impossible. The obvious hope is it doesn't come to that drastic move.



bilfbr245 said:


> In regard to your earlier comment out how unrealistic the liquidation option is, you note how difficult it is to get 15 per cent of owners to vote on anything. That is so true about run of the mill things, like voting in directors or whether to amend a bylaw about some vague thing.  But to avoid a $2000 bill and possibly get money out of a sale of oceanfront land, I think you could get more people to vote, especially with good communication.  Personally if I were in the situation involving a substantial special assessment, I would like to see the option tried even if it fails, rather than just assuming that it could not. As noted, I think the Board could have send a clear statement with the assessment offering the vote as an alternative.  Bill



It would seem that way but experience with just such an option at a resort I'm familiar with in the late 90's resulted in the highest ever return of proxies/votes yet still fell far short (by over 30%) of the amount required to even possibly approve any type of shutdown.  At the time it was one of if not THE highest special assessment ever heard of (long since dwarfed by far too many others), yet we still couldn't get enough owners to respond. They just don't care as it is a relatively small amount in most owners budget even at $2K+.  (or about $1000 way back then when annual fees averaged about $495/week) 

Again the stigma of a vote to potentially shutdown a resort is deadly. It can become self-fulfilling as owners bail due to the rumor!  There are cases where a sell out/closure was a positive financial move under every scenario you could come up with yet a fair amount of owners still voted against it or failed to vote at all.   

There are no easy answers or sure fire plans. Hopefully the Board studied the many options and have decided on the one most likely to succeed.  I really wish all the owners the best and hope they can support their resort & Board.


----------



## bilfbr245

Thank you for your reply.  You make a lot of good points, and may be right.  You certainly have the knowledge and experience to back you up.  But as  one never prone to give up too easily, I hope you won't mind if I raise a couple more points.  First, I think that the timeshare market was much healthier 10 years ago, and more people thought they could always sell if they wanted out.  I think that has changed, and is an important change.  So I think you could get more people to vote today, especially if you offered fact sheets showing market value of the property if liquidated and sold, and potential proceeds per unit, as opposed to a substantial special assessment.  As to whether you would get enough, I have to admit that I don't know.  You might be right.   But I would like to see the option tried.

As far as whether just raising the issue stigmatizes the timeshare, I actually wonder if the reverse could be true.  I am influenced a little by discussions I have had with other owners at a timeshare I own.  I own four units at the Silver Seas in Fort Lauderdale.  Its our favorite timeshare because of its wonderful beachfront location in the center of everything, as well as its simple laid back feeling.  (Translation: its not so fancy that we feel out of place.) I personally would hate to see it liquidated, because we would miss it a lot. 

But people there are talking about it, and some have actually bought extra units on ebay speculating about a payoff.  I would not do this, and think it is potentially risky and foolish, but the point is, people have done it.  So instead of stigmatizing the place, the liquidation discussions have actually encouraged some sales. The resort does sit on land worth at least ten million dollars an acre, next to the Ritz Carlton and with fantastic beach views.  It has less than 1500 units, so the payoff per unit could be significant if sold off.  It would be sad for me, because I would miss being in the area and cannot afford the Ritz.  But for people trapped paying assessments and wanting out, I have to admit that they would be better off. I guess what I am saying is that the potential stigma of a liquidation might depend on whether it was conceived of as a potentially advantageous business alternative, rather than a distress move that signaled failure. All the more reason, I think, to raise the option before we actually get to that point.

The Board has been sending out proxy votes to streamline the liquidation process for years, and is steadily working toward the required majority.  They also discuss the issue sometimes with owners at check in.  And if they were really serious, there is a lot more they could do.  

So by extrapolation, knowing that Cape Cod oceanfront is extremely valuable, I guess I am slow to give up on at least considering this option.


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## timeos2

All good points and well worth consideration. 

There is never just one approach and looking at all the options is a good way to go.


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## AwayWeGo

*You Typed A Mouthful.*




bilfbr245 said:


> First, I think that the timeshare market was much healthier 10 years ago, and more people thought they could always sell if they wanted out.  I think that has changed, and is an important change.


You are correct, sir.  

We never counted on being able sell at a profit when we got done with our timeshares, but we also never dreamed we would actually give'm away_ el freebo_ (which is what we did last year, twice).    

Back in 2002, who'd a-thunk ? 


bilfbr245 said:


> As far as whether just raising the issue stigmatizes the timeshare, I actually wonder if the reverse could be true.  I am influenced a little by discussions I have had with other owners at a timeshare I own.  I own four units at the Silver Seas in Fort Lauderdale.  Its our favorite timeshare because of its wonderful beachfront location in the center of everything, as well as its simple laid back feeling.  (Translation: its not so fancy that we feel out of place.) I personally would hate to see it liquidated, because we would miss it a lot.
> 
> But people there are talking about it, and some have actually bought extra units on ebay speculating about a payoff.  I would not do this, and think it is potentially risky and foolish, but the point is, people have done it.  So instead of stigmatizing the place, the liquidation discussions have actually encouraged some sales. The resort does sit on land worth at least ten million dollars an acre, next to the Ritz Carlton and with fantastic beach views.  It has less than 1500 units, so the payoff per unit could be significant if sold off.


Full-freight timeshare sellers at Summer Bay Las Vegas (formerly Las Vegas Vacation Suites & before that Ramada Vacation Suites Las Vegas) used to point out to sales prospects that the land where the timeshare was situated -- right behind the Strip, adjacent to the rear of Harrah's & Imperial Palace -- was extremely valuable & highly coveted by the major money casino developers.  

Without actually saying so, they planted the idea that buying in (even at full freight) would open the door to a future big cash payoff to every owner.  

That idea took hold with so many of the owners that when negotiations did get going about swapping the old Las Vegas Summer Bay site for an upgraded resort nearby, plus land, lots of the owners reacted by holding out unreasonably.  They wanted the deal sweetened to the point that each of them would collect that dreamed of big cash payoff. 

That never happened, of course, but there was enough foot-dragging over the hope that it could happen to delay & jeopardize the swap.  Eventually, the trade was approved & the swap actually happened.  Summer Bay Las Vegas is now the Summer Bay Desert Club a few blocks away from the old site, & a few swings of the wrecking ball demolished the so-so & the outright shabby old timeshare buildings, with the debris trucked away to Mt. Trashmore & something splendid & new (but non-timeshare) to be built where Ramada Vacation Suites Las Vegas once stood. 

Arguably, it might all have happened sooner if the hold-out owners hadn't been filled with unrealistic dreams of big cash payoffs. 

In a similar way, a Washington DC church sitting on land coveted by a big-moneybags entity of some kind gave up its site for another nearby.  (That was about 20 years ago.)  The church fathers reacted to the initial feelers by stating that they would never-ever agree unless they were provided, up front, with a newly constructed exact replica of their stone church building on the new site several blocks away, plus given a cash payment.  The big money group said OK, even agreeing to move all the furnishings & equipment that were not being replaced by new construction (e.g., pipe organ, pulpit, pews, etc. -- essentially, the whole church sanctuary) into the new structure at no cost to the church.  Everything was completed to the satisfaction of the church fathers before the transfer was made official.  Only then did the big money people call in the wrecking ball to clear the site for their fancypants new building on Pennsylvania Avenue NW, while churchgoers assembled for services in their spanking-new exact-replica church a few blocks away in Foggy Bottom.  

Click here for the church's version of the story. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


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## e.bram

Bilf:
Stop paying on your off season unit and see if you can snag a prime (26-33 week) unit cheap from someone wanting to get out.


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## Stevenh1

e.bram said:


> Bilf:
> Stop paying on your off season unit and see if you can snag a prime (26-33 week) unit cheap from someone wanting to get out.



Hmm, interesting thought, but I wonder if the HOA would let me slide on my SA while aquiring the Prime unit? If they did, I would have a better chance of dumping the prrime unit later, after the refurb.


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## e.bram

Use a different name(ie wife's)or a trust,LLC etc. You could use or rent it.


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## timeos2

The value of even the prime weeks will be history if virtually all the poorer times - which are about 80% of the total - are in default. That 20-30% left will be covering 100% of the costs thus pricing them out of the market for value. 

Instead it IS up to the developer/HOA / Management to make all that poorer time that doesn't enjoy automatic value due to great weather have a value to owners. It will never be equal to the top 20% but it can represent a reasonable value that keeps the owners paying & enjoying the resort. 

For far too long the prime times expected the poorer times plus artificial value obtained through RCI/II to support (subsidize) them. As the average fees rose and RCI/II stopped giving away valuable time for basically nothing the value for the dollar due went away. 

Today prime time owners should fully expect to pay more in annual fees as they have a more valuable time. They also need to press their resorts to be creative in finding ways to increase the value of the lesser times as well as lowering the annual fes for those off weeks.  In the long run that is how seasonal resorts will survive - those that insist on sticking to the "same fees for all" are doomed IMO.  Simply being on the beach as an example is great for 8-10 weeks per year. The rest it is actually a negative as it doesn't appeal to the vast majority of travelers/owners.  It is the same for every highly seasonal area  needs to be addressed.


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## Stevenh1

timeos2 said:


> The value of even the prime weeks will be history if virtually all the poorer times - which are about 80% of the total - are in default. That 20-30% left will be covering 100% of the costs thus pricing them out of the market for value.
> 
> Instead it IS up to the developer/HOA / Management to make all that poorer time that doesn't enjoy automatic value due to great weather have a value to owners. It will never be equal to the top 20% but it can represent a reasonable value that keeps the owners paying & enjoying the resort
> 
> For far too long the prime times expected the poorer times plus artificial value obtained through RCI/II to support (subsidize) them. As the average fees rose and RCI/II stopped giving away valuable time for basically nothing the value for the dollar due went away.
> 
> Today prime time owners should fully expect to pay more in annual fees as they have a more valuable time.


 
The only thing this club has is an indoor pool and an exercise room. No restaurant, or other emenities. With this SA I don't  think anyone would be willing to shell out more cash to add anything to the location (if it's even possible). As it is it's nothing more than an upscale, for lack of a better term, Motel.

As for the prime weeks paying more, I do think you're correct in saying the prime week owners should be footing more of the bill, but I'm willing to bet that would never happen.


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## pdgoodrich

Hi, They are actually collecting the entire 4.2 million since they have to pay the loan back as well. The billing amount took into account the fact some wouldn't pay.




mrpickle said:


> As you can imagine, making these additional improvements and required safety upgrades adds additional cost to the project. The original budget that was approved by your Board of Trustees was $2.8 million, with $2.6 million being covered by a loan from Wells Fargo Bank. With the modifications to the plan demanded by the Town Officials, the cost is now $4 million, with anticipated completion of the project delayed until May 27th.
> 
> $100,000 per unit they only need $1,500,000  (the 4 million - 2.6)
> Does that mean they only have 15 units or is there something I'm missing?


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## timeos2

Stevenh said:


> The only thing this club has is an indoor pool and an exercise room. No restaurant, or other emenities. With this SA I don't  think anyone would be willing to shell out more cash to add anything to the location (if it's even possible). As it is it's nothing more than an upscale, for lack of a better term, Motel.
> 
> As for the prime weeks paying more, I do think you're correct in saying the prime week owners should be footing more of the bill, but I'm willing to bet that would never happen.



Hopefully reality will hit the prime owners that will realize if they want to keep their resort they will pay more than non-prime.  They can do it by modifying the docs or by new sales plans (such as a Trust or RTU type vs deeded) where the fees due can be adjusted for seasons.  Or it will occur by default as more and more weeks go unpaid and those fees are covered by increases to the remaining weeks. Far better to do it in a controlled, orderly fashion but it will most likely occur in any case. 

It is a shock and not what they were originally told but at some point they have to be willing to accept a change or shut down.  That is the bottom line as many here already recognize.  It doesn't appear that the current interest level in timeshares in general can support all the intervals out there. Some resorts are going to be forced to close.  Doing that to maximize the owners value even as they get out is preferable to letting it slide into disrepair and eventually be sold for pennies even as whole ownership.  It can and has happened and we may see many more cases soon. Owners / Boards that care need to be proactive and not let it be their resort that becomes a statistic.  Or decide the best way IS to close and do it correctly. 

These are tough times and timeshare values are hit harder than most.


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## timeos2

pdgoodrich said:


> Hi, They are actually collecting the entire 4.2 million since they have to pay the loan back as well. The billing amount took into account the fact some wouldn't pay.




Correct. Every billing has to allow for the estimated rate of delinquency so if they have 10% delinquent they need to bill $1.10 for every dollar required.  Another reason delinquencies can kill a resort.


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## e.bram

Does the resort have a kitchen?


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## Stevenh1

*No Kitchen!!!*

The last I remember it had a wet bar and a microwave, but the microwaves may have been taken out, There is no kitchen...there is a useless jacuzzi tub in the bedroom taking up usable space though.


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## Stevenh1

*Still Nothing*

Just wanted to give an update on the unit. I've had it listed 3 times on Bishares.com http://www.bidshares.com/auctions/index.cfm?fuseaction=auctionview&auctionid=948377 This last one has me paying the 1st installment of the SA and all closing costs with a minimum bid of $1. Still no takers!! So I guess the Board Member who told me the place would be worth something after the renovation just might have been overly optimistic:hysterical:


----------



## user name here

Ridewithme38 said:


> Ok as a person looking to buy during this down market...I've been looking at MF's and accounting for 10% gains each year and comparing that to what i believe i'll be making over that same time frame....
> 
> But what happens if someone is just Unable to pay an SA, lets be realistic...ALOT of america is in trouble financially right now...people out of work, mortgage rates, gas prices, all costs are going up, credit cards are maxed out savings accounts are mostly dry and no more credit is really available for anyone...There's got to be atleast 5% of timeshare owners that are trying to sell just because they can't afford the MF's, another 15-25% that can just barely make the MF's each month...
> 
> What happens to that 30% with their credit cards maxed out and savings dried out with a SA like this? Do they have to sell? Or can they just refuse to pay?



If you're at the point where your credit cards are maxed out and zero savings, well, sometimes bankruptcy can be not only a viable option, but it can be a welcome way to get some relief,  make a fresh start, and even free yourself from the debt of a timeshare you haven't been able to get rid of any other way.   

Especially with the burst of the housing market bubble, if you've been left upside down in your mortgage, and may already be facing foreclosure, or will be in the near future.  If you refuse to pay on your HOA, depending on the state of your timeshare, and terms of your contract, it is possible they can foreclose on your timeshare.  It's also possible that your HOA may be able to file a lawsuit for the balance due, and if they win, they may even be able to garnish the amount owed from your wages -- so I recommend seeking the advice of a qualified (licensed) real estate attorney before considering this course of action.    

The average time it takes a bank to foreclose on a property is 18 months, (although in Florida I understand they've shortened this to 6 months, at least for certain types of properties.)  With the current economic crisis, we know a number of people who have just stopped paying on their mortgages and are just staying in their homes, waiting out the 18 months. Very tragic.  

Just a warning.  You can't just transfer an unwanted timeshare to someone else right before they file bankruptcy because under federal law, a bankruptcy trustee can "set aside" or void any transfers made 1 year prior to filing chapter 7 protection, and there's a couple of states that even extend the "look back" period to 4 years.


----------



## Carolinian

You seem to be making invalid and erroneous assumptions about HOA BOD's.

I would never own at a timeshare that is run by anyone other than a hands-on HOA board.  These people volunteer a lot of their own time and get paid nothing.  At most resorts, when they have board meetings, they try to find vacant units for them to stay in to save costs in there is a need to stay overnight.  On the OBX, there was even a group of resorts that looked out for each other to find vacant units for board meetings.  On the board I served, most of our board meetings were one day events, so there was no overnights, and yes we paid milage and meals for board members attending.  You always have to keep a tight rein on management and that is what an effective BOD does.  It is management companies and managers that you have to watch for stealing.  One management company on the OBX even put an illegal rakeoff of insurance proceeds right into their contract, and with two really big claims with major hurricane damage, those illegal rakeoffs were major factors in crashing two resorts.




Ridewithme38 said:


> The lack of accountability is with all BOD's...the fact is when you put power in the hands of a few over the many...corruption will happen, its almost a given hand picked developer controlled or Owner controlled doesn't change that fact
> 
> If the laws are really the issue, we have to find a way around it, or get them changed, Kinda proves my point about the corruption when we can't even disband them...If we can't disbann the BOD's we should make them TRUELY work for the owners....want a PENNY to go towards them, let them man the front desk, if they want to have Board Meetings, let them do it on their dime...We shouldn't be paying thousands of dollars out of pocket just so they can take lavish vacations anytime they want
> 
> The BOD's contribute NOTHING to the TS and yet we end up paying them thousands to do it


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## Reloxprt

*Special Assessment*

After getting my special assessment letter and reading it carefully I have decided not to pay either. 
It seems that poor maintenance and poor planning have caused these problems, being a realtor I see it all the time. They obviously were not conducting proper inspections or maintenance or would have noticed the wet areas before the mold! When something leaks in my home, I fix it immediately! Poor planning on their part does not allow them to force us to pay, and to pay for resort owned units as well.
Did any of you get a cut of the sales commissions or rental fees? 
I did the math as well and they are collecting far more than they need and in this economy, the repairs can be done at a bargain. They really should shop around, but if it's someone else's money....There are lots of hungry contractors out there who would love to bid for this work.
I am looking for an out, any ideas? 
Class action lawsuit perhaps?


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## timeos2

Reloxprt said:


> Did any of you get a cut of the sales commissions or rental fees?



You have no claim to the original sales amount as the developer put up at their own risk the money to build and equip the resort. They have an absolute right to any income that generates as that is how THEY get paid. You do get benefit, through your ownership, of the use and enjoyment of that investment along with the bill for maintenance and upkeep. 

You also DO get the benefit of rental income if it is from Association held intervals or rental of delinquent accounts. You do NOT get income from privately owned intervals- even Developer owned- as they are liable for the fees on those weeks and once paid they get the use rights which includes any rentals for themselves just as you hold the use and rental rights to your interval.



Reloxprt said:


> did the math as well and they are collecting far more than they need and in this economy, the repairs can be done at a bargain. They really should shop around, but if it's someone else's money....There are lots of hungry contractors out there who would love to bid for this work.



Getting a contractor to take on the unknown of repair of not one home but the equivalent of many homes is not easy. The costs of commercial level insurance, permits, any require bonds, etc are substantial and far exceed what you may pay for a repair around your home.    Plus they have to collect more than the actual amount required to cover for those that don't pay (as you are considering doing) so if that represents 15% of the total they need to bill at 115% of the amount needed to generate the total funds required. Until you add up what repairing multiple "homes" actually can cost it is easy to be lulled into thinking the numbers are inflated when in fact they are reasonable for the amount of work / personnel required. 



Reloxprt said:


> I am looking for an out, any ideas?
> Class action lawsuit perhaps?



Sell / give away your ownership. If you have a class action realize you are suing yourself as you are the owner & that's who pays!  Either come up with a better plan the Association can use or sell off your ownership if it no longer meets your needs. If you remain an owner you have an obligation to pay as that is what you agreed to through your purchase and the rules/ regs accepted in that transaction.


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## Stevenh1

Reloxprt said:


> After getting my special assessment letter and reading it carefully I have decided not to pay either.
> It seems that poor maintenance and poor planning have caused these problems, being a realtor I see it all the time. They obviously were not conducting proper inspections or maintenance or would have noticed the wet areas before the mold! When something leaks in my home, I fix it immediately! Poor planning on their part does not allow them to force us to pay, and to pay for resort owned units as well.
> Did any of you get a cut of the sales commissions or rental fees?
> I did the math as well and they are collecting far more than they need and in this economy, the repairs can be done at a bargain. They really should shop around, but if it's someone else's money....There are lots of hungry contractors out there who would love to bid for this work.
> I am looking for an out, any ideas?
> Class action lawsuit perhaps?



You should join the disscussion on the Facebook page of the Resort (Motel actually) http://www.facebook.com/pages/The-Ocean-Club-on-Smugglers-Beach/126174950119 and make your opinions heard. Don't expect any responses from the BOD though and don't bother emailing them because they won't respond. By updating the property they have just perpetuated this whole mess for another 20+ years. I've said this before in this thread, they should have liquidated, or at least given us that option.



timeos2 said:


> Sell / give away your ownership. If you have a class action realize you are suing yourself as you are the owner & that's who pays!  Either come up with a better plan the Association can use or sell off your ownership if it no longer meets your needs. If you remain an owner you have an obligation to pay as that is what you agreed to through your purchase and the rules/ regs accepted in that transaction.


Easier said than done. I'm still trying to give it away by paying the closing and some of the SA, but nobody will touch it with a 10 foot pole.

An obligation??? Really?? To a Resort (Motel) timeshare that was sold using dishonest sales tactics?? :hysterical:


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## e.bram

Timeos2:
What has oceanfront to do with poor maintenance which resulted the property deterioration. At least the location is valuable because it's location. more than I can say for inland locations(which also deteriorates)..


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## timeos2

It is well established that any buildings subject to direct weathering from the ocean take a much worse  beating - thus need far more costly upkeep - than those even slightly removed from that direct assault.


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## e.bram

"It is well established that any buildings subject to direct weathering from the ocean take a much worse beating - thus need far more costly upkeep - than those even slightly removed from that direct assault."
 Yeah I know: Moses(timeos2) brought that down from Mt. Sinai?


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## Stevenh1

*Clock is Ticking...*

...and I still haven't paid the SA, oh, and NO correspodence from any of the Board Of Trustees...figures


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## Reloxprt

Why should we all have to pay for the negligence of the management company. This resort has gone way downhill in quality since SPM took over. What have they been doing with our maintenance money? Problems like what their assessment letter describes take years to occur which means they have not been properly maintaining the units. I sit through hundreds of home inspections a year and this kind of damage and mold is from not repairing leaks, storm damage promptly. In addition, the contractors are all hungry for work and their prices have gone down. SPM probably didn't even get estimates. It seems to me that if I have paid all my yearly fees for twenty years and a new management company takes over to "fix" problems, the new management company needs to pay the costs of repairing and sell the place or upgrade it to make more rental money to recoup costs. Since when do owners have to pay for the business deal a company makes without being able to opt out? I think it's a scam!


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## Stevenh1

i just can't believe, people would just fall in line and pay up!! I think people have just lost the will to fight and would rather keep paying for the rest of thier lives for useless property. I've seen the Facebook page following the renovation (of course as an owner I am barred from making comments ). It looks exactly the same! Upgrades,what upgrades? There is an open house on May 27th...might be a good time to go and confront them.


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## Stevenh1

*Short One's*

Well it looks like if I don't pay my credit will get F-ed so I am going to grudgingly pay...If anybody wants the unit (floating week MAY/JUNE or SEPT/OCT) just let me know...I just can't bring myself to ever go there again because it would be way too painful and I'd probably spend the whole time taking out my frustration on the staff. I'd, however, like to thank the Trustees (except for Ken) who NEVER, EVER got back to any of the owners!!!!!:deadhorse:


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## mulberry416

*Ocean Club*

The Ocean Club on Smuggler's Beach has been in the process of upgrading the resort for the past 5 to 6 years, and the research, reviews and planning that took place during that time are finally coming to fruition in the form of the major renovations that OWNERS can now enjoy. This weekend over 300 people visited during the open house and we received many wonderful comments. 

Before the renovations were under taken, SPM and the Board recieved and considered actually THOUSANDS of suggestions and comments from owners as well as actually built several rooms in different ways for owners to see Before committing to anything. The board and SPM consulted numerous contractors--close to ten(10)--and multiple proposals were taken from each about the work needed. SPM has worked diligently with the board to get the resort working from a positive operating budget--which is where it is today--and to oversee the renovation project to ensure the best possible financial accountability possible to the owners and the board.

I'm happy to see the resort renovated and updated in a way that will take care of the property and owners for a long time to come. I look forward to enjoying it with many of you once it reopens soon.

Doug


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## LisaRex

timeos2 said:


> The problem is creating value for the majority of (usually) off season times that plague so many resorts. Either by reducing fees for those times (meaning higher fees for the prime times) and/or improving on site features so thee is a reason and value to use/visit in what otherwise is undesirable time periods.



I read somewhere (probably Tug) that some states have laws that disallow HOAs from imposing higher MFs to high season owners. They have to assess fees by the square footage.  Because, of course, an owner who uses a TS in the summer doesn't cause more wear and tear than someone who uses the same property in November.


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## Stevenh1

mulberry416 said:


> The Ocean Club on Smuggler's Beach has been in the process of upgrading the resort for the past 5 to 6 years, and the research, reviews and planning that took place during that time are finally coming to fruition in the form of the major renovations that OWNERS can now enjoy. This weekend over 300 people visited during the open house and we received many wonderful comments.



Really, and over that 5 to 6 years not ONE bit of correspondence from the BOD!! Wonderful comments? Well, talk is cheap...if these places are NOW desirable then I should be hearing from some of them  because I'm selling mine to the first one that contacts me.




> Before the renovations were under taken, SPM and the Board recieved and considered actually THOUSANDS of suggestions and comments from owners as well as actually built several rooms in different ways for owners to see Before committing to anything. The board and SPM consulted numerous contractors--close to ten(10)--and multiple proposals were taken from each about the work needed. SPM has worked diligently with the board to get the resort working from a positive operating budget--which is where it is today--and to oversee the renovation project to ensure the best possible financial accountability possible to the owners and the board.



It's a glorified Motel! There are NO amenities that other "resorts" have.




> I'm happy to see the resort renovated and updated in a way that will take care of the property and owners for a long time to come. I look forward to enjoying it with many of you once it reopens soon.



It better be for the $4.5 Million we are being forced to pay. For that price the fixtures better be gold plated! The sad, sad truth is the SA is WAY more than the motel rooms are worth!!!

I'm not drinking THAT Kool-Aid!


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## JudyS

John (Timeos2), what happens if a large number of owners don't pay, and the resort goes bankrupt? Is that one way to dissolve the timeshare? With the degree of repairs needed, this timeshare really doesn't sound like it is worth fixing. Timeshare owners need easier ways to dissolve their properties. 

I also wonder if the damage wasn't even visible before the opening the walls, why was it necessary to fix the whole resort at once? Why not do a few units at a time and spread the cost out over more years?



LisaRex said:


> I read somewhere (probably Tug) that some states have laws that disallow HOAs from imposing higher MFs to high season owners. They have to assess fees by the square footage.  Because, of course, an owner who uses a TS in the summer doesn't cause more wear and tear than someone who uses the same property in November.


Most states seem to require MFs to be the same all year. (Colorado is the only state I know of where MFs vary during the year.) However, resorts can get around this rule by using a points system--perhaps the MF is $5 per point, and a 1-bedroom costs 200 points during July and 75 points during January, that sort of thing.


----------



## timeos2

JudyS said:


> John (Timeos2), what happens if a large number of owners don't pay, and the resort goes bankrupt? Is that one way to dissolve the timeshare? With the degree of repairs needed, this timeshare really doesn't sound like it is worth fixing. Timeshare owners need easier ways to dissolve their properties.



Yes, if it gets that bad the only remaining eligible voters (those few that still were current on fees) could vote to end it by a sale but given the dire circumstances that leaves it all in what would they get? Very little as an offer as most likely it would be heavily discounted to allow for a messy and drawn out sale. Plus any claims, past due invoices, etc would have to come out of the sale price reducing any value to near zero.  

If things are really so bad then you have to hope  that owners would be reasonable and vote long before it got to that point that the timeshare be dissolved and any residual value be distributed between them. 

On the other hand $4 million for a complete overhaul of a property is NOT that much.  You are talking structural work as well as cosmetic for a whole resort.  Our (much larger, granted) resort in FL is spending nearly $10 million on it's most recent upgrades/maintenance after spending $2.5 million in 2000, $6.4 million in 2004 and planning (raising money slowly now through reserve collections) another $7 million+ in 2016and $9 million+ in 2022 to keep it up to owners standards and competitive with the resorts of today. It is very common in the hotel/motel industry to see $5-10 million thrown at hotels in rejuvenation efforts and they have far less infrastructure to maintain than a timeshare does.  Keeping things up costs money and need to be done every 5-7 years on average.  Anything less and things are seriously deteriorating as is the case here.  



JudyS said:


> I also wonder if the damage wasn't even visible before the opening the walls, why was it necessary to fix the whole resort at once? Why not do a few units at a time and spread the cost out over more years?



You can do things in steps or sections if they aren't completely worn out. But if it has all been let go as bad as this apparently had then it all has to be addressed at once or you're creating two classes of owners/guests. Those with decent, renovated and up to date units and those without.  How would that be fair? All are paying the same fees. 



JudyS said:


> Most states seem to require MFs to be the same all year. (Colorado is the only state I know of where MFs vary during the year.) However, resorts can get around this rule by using a points system--perhaps the MF is $5 per point, and a 1-bedroom costs 200 points during July and 75 points during January, that sort of thing.



You have it exactly right. There are ways around it.  Another is to take deeds into a trust and sell RTU against those.  The fees can be set on a sliding scale based on use/trade value for the $.  Associations MUST get creative and be proactive to do all they can to create value for every owner to keep them happy and fees coming in.


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## Ridewithme38

timeos2 said:


> You can do things in steps or sections if they aren't completely worn out. But if it has all been let go as bad as this apparently had then it all has to be addressed at once or you're creating two classes of owners/guests. Those with decent, renovated and up to date units and those without.  How would that be fair? All are paying the same fees.



See thats how i'd do it...if you don't want to pay the SA, you stay in the section of the resort that wasn't renovated...$2000 in one chunk is alot to some people and i just don't think its reasonable to spring that on people so suddenly like this has been done...i'd look into doing the resort piece by piece and if people weren't able to pay the SA in 2011 they'd stay in an unfinished piece of the resort until they did...eventually by giving people the option to pay overtime you'd find you wouldn't end up with the 25%-40% default rate that they are getting....but i'd bet on less then 10%


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## timeos2

Ridewithme38 said:


> See thats how i'd do it...if you don't want to pay the SA, you stay in the section of the resort that wasn't renovated...$2000 in one chunk is alot to some people and i just don't think its reasonable to spring that on people so suddenly like this has been done...i'd look into doing the resort piece by piece and if people weren't able to pay the SA in 2011 they'd stay in an unfinished piece of the resort until they did...eventually by giving people the option to pay overtime you'd find you wouldn't end up with the 25%-40% default rate that they are getting....but i'd bet on less then 10%



Interesting but you'd have to have established a "protest" annual fee rate as they can't come in and use even the worn out sections for no annual fee!  You'd be blessing a two tier fee system - we're back to the need to charge all equally again....


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## Carolinian

John - Ending a timeshare is quite different depending on whether the resort was developed after the Uniform Condominium Act was adopted in that state or not.  Timeshares earlier than that are still under state laws based on either the HUD Model Unit Ownership Act or the Puerto Rico condominium laws, most under the former (including NC).

Except when the property is substantially destroyed in a disaster or at set years set out in the Declaration of Covenants, a vote to terminate a timeshare has to be unanimous under the older laws and still a supermajority under the Uniform Act, and it is a supermajority of all voters not just a supermajority of those who send in proxies or show up.  If there is a vote to dissolve, the sale itself is not that messy.  One kicker is that any proceeds from HOA owned weeks are not divided among members but have to be given to charity since the HOA is a non-profit corporation.  Also as to liens and unpaid bills, under the Uniform Act, these would come out of sale proceeds, but under state laws based on the Model Act, they would not as they are not liens on the ownership interest of individual members.  Of course, if the HOA owns many weeks, there is going to be a pool of money to pay those debts and liens before the balance is given to charity.  And of course, a blue week gets the same payout as a prime red week if the resort is sold, an incentive for blue week owners to vote for dissolution but an incentive for prime week owners to vote against.



timeos2 said:


> Yes, if it gets that bad the only remaining eligible voters (those few that still were current on fees) could vote to end it by a sale but given the dire circumstances that leaves it all in what would they get? Very little as an offer as most likely it would be heavily discounted to allow for a messy and drawn out sale. Plus any claims, past due invoices, etc would have to come out of the sale price reducing any value to near zero.
> 
> If things are really so bad then you have to hope  that owners would be reasonable and vote long before it got to that point that the timeshare be dissolved and any residual value be distributed between them.
> 
> On the other hand $4 million for a complete overhaul of a property is NOT that much.  You are talking structural work as well as cosmetic for a whole resort.  Our (much larger, granted) resort in FL is spending nearly $10 million on it's most recent upgrades/maintenance after spending $2.5 million in 2000, $6.4 million in 2004 and planning (raising money slowly now through reserve collections) another $7 million+ in 2016and $9 million+ in 2022 to keep it up to owners standards and competitive with the resorts of today. It is very common in the hotel/motel industry to see $5-10 million thrown at hotels in rejuvenation efforts and they have far less infrastructure to maintain than a timeshare does.  Keeping things up costs money and need to be done every 5-7 years on average.  Anything less and things are seriously deteriorating as is the case here.
> 
> 
> 
> You can do things in steps or sections if they aren't completely worn out. But if it has all been let go as bad as this apparently had then it all has to be addressed at once or you're creating two classes of owners/guests. Those with decent, renovated and up to date units and those without.  How would that be fair? All are paying the same fees.
> 
> 
> 
> You have it exactly right. There are ways around it.  Another is to take deeds into a trust and sell RTU against those.  The fees can be set on a sliding scale based on use/trade value for the $.  Associations MUST get creative and be proactive to do all they can to create value for every owner to keep them happy and fees coming in.


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## Carolinian

It is the HOA that would go bankrupt, and if it were organized after the Uniform Condominium Act was adopted those debts would also go against the actual resort property, which would pull that in.  For older resorts, however, such debts would not be a lien on the actual resort property, and it might be possible to simply organize a new HOA to run things.  From talking to a manager of a resort operating under French law, he actually brought up in the conversation that it was easy to do that under their law if the association got in a pinch.  Whether you could do that under pre-uniform act law in the US is an open question and I do not know of any examples of where it has been tried.  For older resorts dealing with contractors, the contractors cannot file a materialmans lien on the whole resort, they can only do it by searching titles and filing it against every owner of the resort, and even so the lien is likely no good.  I know of a couple of examples where that aspect of the law has come in handy for HOA's where contractors have tried to overcharge them, as it gave the HOA an extremely strong bargaining position.




JudyS said:


> John (Timeos2), what happens if a large number of owners don't pay, and the resort goes bankrupt? Is that one way to dissolve the timeshare? With the degree of repairs needed, this timeshare really doesn't sound like it is worth fixing. Timeshare owners need easier ways to dissolve their properties.
> 
> I also wonder if the damage wasn't even visible before the opening the walls, why was it necessary to fix the whole resort at once? Why not do a few units at a time and spread the cost out over more years?
> 
> Most states seem to require MFs to be the same all year. (Colorado is the only state I know of where MFs vary during the year.) However, resorts can get around this rule by using a points system--perhaps the MF is $5 per point, and a 1-bedroom costs 200 points during July and 75 points during January, that sort of thing.


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## Carolinian

This ''RCI subsidation'' argument is a myth.  RCI let them trade into short shelf life last minute inventory, whose value was depressed and thus an equal trade, and into overbuilt areas where there was a glut of inventory which had a similar supply-demand curve as the off season weeks, and thus also equal trades.  The problem came in when RCI decided they would rather divert much of that inventory to rentals to the general public or to members of another exchange system (Points).

The solution is to develop non-exchange own-to-use markets for that inventory or convince people to use other exchange companies.

Your theory also ignores the shoulder season, which for most resorts is probably viable.  The actual off season is not that long, although the farther north you go, the longer it is likely to be.




timeos2 said:


> The value of even the prime weeks will be history if virtually all the poorer times - which are about 80% of the total - are in default. That 20-30% left will be covering 100% of the costs thus pricing them out of the market for value.
> 
> Instead it IS up to the developer/HOA / Management to make all that poorer time that doesn't enjoy automatic value due to great weather have a value to owners. It will never be equal to the top 20% but it can represent a reasonable value that keeps the owners paying & enjoying the resort.
> 
> For far too long the prime times expected the poorer times plus artificial value obtained through RCI/II to support (subsidize) them. As the average fees rose and RCI/II stopped giving away valuable time for basically nothing the value for the dollar due went away.
> 
> Today prime time owners should fully expect to pay more in annual fees as they have a more valuable time. They also need to press their resorts to be creative in finding ways to increase the value of the lesser times as well as lowering the annual fes for those off weeks.  In the long run that is how seasonal resorts will survive - those that insist on sticking to the "same fees for all" are doomed IMO.  Simply being on the beach as an example is great for 8-10 weeks per year. The rest it is actually a negative as it doesn't appeal to the vast majority of travelers/owners.  It is the same for every highly seasonal area  needs to be addressed.


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## Stevenh1

timeos2 said:


> Yes, if it gets that bad the only remaining eligible voters (those few that still were current on fees) could vote to end it by a sale but given the dire circumstances that leaves it all in what would they get? Very little as an offer as most likely it would be heavily discounted to allow for a messy and drawn out sale. Plus any claims, past due invoices, etc would have to come out of the sale price reducing any value to near zero.




But, what about us, the owners who don't want thier units, feel trapped by the Fees, Can't pay the SA (I'll have to put it on a CC to get it paid by the due date of 6/15). The $4.5 Million for a renovation may not seem like much in the whole scheme of things when compared to other resorts, but realize the Ocean Club has absolutely NO amenities to speak of. It started as a Motel and is still essentially the same.

I was informed by the Ocean Club, they would take back the units from the Prime and High owners once the SA is paid, but NOT the Getaway ownwers. Isn't this proof the units are worth less than the SA? Also, wouldn't this be the same as paying one of the Timeshare resellers to take the timeshare thus painting them in the same light?


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## Carolinian

A properly functioning HOA should have had a professional reserve study done and been including enough money in the m/f to meet the identified amount for all anticipated renovations and updating.  If they failed to do so, it is malfeasance on the part of the HOA board and/or the management company.  Only when there is a disaster loss for something that is uninsurable like a swimming pool or to cover any deductibles, should there be a SA.




Stevenh said:


> But, what about us, the owners who don't want thier units, feel trapped by the Fees, Can't pay the SA (I'll have to put it on a CC to get it paid by the due date of 6/15). The $4.5 Million for a renovation may not seem like much in the whole scheme of things when compared to other resorts, but realize the Ocean Club has absolutely NO amenities to speak of. It started as a Motel and is still essentially the same.
> 
> I was informed by the Ocean Club, they would take back the units from the Prime and High owners once the SA is paid, but NOT the Getaway ownwers. Isn't this proof the units are worth less than the SA? Also, wouldn't this be the same as paying one of the Timeshare resellers to take the timeshare thus painting them in the same light?


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## Stevenh1

Carolinian said:


> A properly functioning HOA should have had a professional reserve study done and been including enough money in the m/f to meet the identified amount for all anticipated renovations and updating.  If they failed to do so, it is malfeasance on the part of the HOA board and/or the management company.  Only when there is a disaster loss for something that is uninsurable like a swimming pool or to cover any deductibles, should there be a SA.



Thank you for your response.

How can we, as owners tell if there was any malfeasance when we can't even get the BOD to respond to questions? Sure they'll take "softball" questions about the renovation, but usually won't respond to any of the angry frustrated owners except to say if we all don't pay, who will? We have no idea whether the managment company is doing their job or whether anyone is working on our behalf. The Management company and the BOD all have a vested interest to keep the Club on life support and perpetuate this for eternity. I know all the SA and ronovations have done is to guarantee they'll be sucking money out of me for years to come. We may be owners, but we have no rights!!


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## timeos2

Stevenh said:


> Thank you for your response.
> 
> How can we, as owners tell if there was any malfeasance when we can't even get the BOD to respond to questions? Sure they'll take "softball" questions about the renovation, but usually won't respond to any of the angry frustrated owners except to say if we all don't pay, who will? We have no idea whether the managment company is doing their job or whether anyone is working on our behalf. The Management company and the BOD all have a vested interest to keep the Club on life support and perpetuate this for eternity. I know all the SA and ronovations have done is to guarantee they'll be sucking money out of me for years to come. We may be owners, but we have no rights!!



And while technically there could (but most likely isn't as Boards are specifically exempted if they merely made "errors in judgement" regarding needs) be grounds for a malfeasance lawsuit the cost is usually prohibitive especially since is is very unlikely to succeed. And if it did the OWNERS would have to pay themselves anyway (less any insurance)!  Not exactly a great move IMO.  You have an elected Board - best to work through them as that is really the proper channel. If they aren't responding then attend the meeting(s)!  Thats what they are for and no owner should be excluded.You do have options but just not paying is not a good one. The ultimate answer is still in the majority hands - and may not be what YOU want it to be but that how shared housing ownership works.  You get to vote for or run as a representative - beyond that you agreed in your documents to be bound by the rules and decisions made.


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## Carolinian

Every HOA board I know of has a Directors and Officers Liability policy in the seven figure range.  Those with hired managers often techinically make the manager an assistant secretary or something, so that he/she will be covered, too.

In all states that I am aware of, members of HOA's have legal right to inspect and copy a wide range of records.  Reading the minutes and looking over budgets would be the place to start.




timeos2 said:


> And while technically there could (but most likely isn't as Boards are specifically exempted if they merely made "errors in judgement" regarding needs) ground for a malfeasance lawsuit the cost is usually prohibitive especially since is is very unlikely to succeed. And if it did the OWNERS would have to pay themselves anyway (less any insurance)!  Not exactly a great move IMO.  You have an elected Board - best to work through them as that is really the proper channel. If they aren't responding then attend the meeting(s)!  Thats what they are for and no owner should be excluded.You do have options but just not paying is not a good one. The ultimate answer is still in the majority hands - and may not be what YOU want it to be but that how shared housing ownership works.  You get to vote for or run as a representative - beyond that you agreed in your documents to be bound by the rules.


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## Stevenh1

*SOLD!*

Thanks for everyone input over the past few months. Here's an update. The ownership is in the process of being transfered to an individual who is well suited to the timeshare model of ownership. I gave it away for the price of the SA...a win/win situation


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## timeos2

Stevenh said:


> Thanks for everyone input over the past few months. Here's an update. The ownership is in the process of being transfered to an individual who is well suited to the timeshare model of ownership. I gave it away for the price of the SA...a win/win situation



GREAT! And no $3000+ to the timeshare scammers needed! An honest offer to a willing buyer, even at no cost, will often work.  Good job & everyone, including the resort and the other owners, are better off for your being a responsible owner. Good job.


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## peterny

*Please help*



Stevenh said:


> Thanks for everyone input over the past few months. Here's an update. The ownership is in the process of being transfered to an individual who is well suited to the timeshare model of ownership. I gave it away for the price of the SA...a win/win situation



Steve,

Can you give me some feedback on where/how you managed to do this? Any info would be greatly appreciated!!!

-Peter


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