# Did you know that the BOD of each collection has no say?



## BobInNH (Nov 20, 2015)

Did you know that the BOD of each collection has no say in new acquisitions?  I sent a note to the DRI folks about the recent six resort acquisition in Virginia asking why there was no discussion of it in the BOD minutes and what due diligence the BOD goes through.  I want to know if the new acquisitions would basically pay for themselves.  My worry is that they'd buy cheap run-down properties and then have the entire ownership pay for the upgrades.

Here is the response I got:

From: Lopez, Olga [mailto:Olga.Lopez@diamondresorts.com] 
Sent: Friday, September 11, 2015 8:14 PM
To: rhatcher@
Subject: U.S. Collection

Mr. Hatcher,

Kathy Wheeler forwarded me your email.  By way of introduction, my name is Olga Lopez, and I am a point of contact for Diamond’s management business which includes responding to questions such as yours.  We appreciate your desire to further understand the Board's relationship to inventory acquisitions.  Under the governing documents, Diamond Resorts U.S. Collection Development, the developer entity for the U.S. Collection, has the  right to annex additional inventory into the U.S. Collection.  

The Board does not participate in the process to add new component sites to the U.S. Collection as this right is given to the developer under Section 5.1 of the Amended and Restated Declaration for Diamond Resorts U.S. Collection.  I have copied the provision below for your convenience:

5.1       Additional Resort Interests.  The Declarant hereby reserves the right (but not the obligation), in its sole and absolute discretion, without the consent of the Board or any Member, to transfer or cause an Appointee or any other Person approved by Declarant (including the Component Site Developer) to transfer additional Resort Interests directly to a Trustee, in any order and at any time, and the Association and each Member, by entry in the Register of Members, hereby grants the Declarant the exclusive right to transfer, or cause an Appointee or other approved Person to transfer, such additional Resort Interests to a Trustee, provided that the Declarant pays or causes an Appointee or such other approved Person to pay, all appropriate taxes (if any) charged in connection with the transfer of such additional Resort Interests to a Trustee and all costs of issuing an Owner’s Title Insurance Policy or its equivalent (the “Title Policy”) in the amount of the then fair market value of such additional Resort Interests (such amount being determined by the transferor in its reasonable judgment) and insuring the applicable Trustee as the owner of such additional Resort Interests subject only to the matters described in this Section 5.1.  Prior to the issuance of any Membership all or any portion of whose Points are attributable to any additional Resort Interests, the Declarant shall provide to the Board  the Title Policy insuring the applicable Trust’s title to such additional Resort Interests is (A) free and clear of all Blanket Liens, or a Non-Disturbance Agreement, or other agreement, is in place to ensure that such Trust’s title to such additional Resort Interests will not be divested by foreclosure of any Blanket Lien on such additional Resort Interests, and (B) subject to only the Collection Instruments, the Component Site Instruments, if any, and those other matters that do not unreasonably interfere with use of such additional Resort Interests in the Collection,  a copy of a temporary or permanent certificate of occupancy, or its equivalent, with respect to that portion of such additional Resort Interests where construction of the related Collection Accommodations is complete, and  a payment and performance bond, a letter of credit or the like in favor of the Association or the applicable regulatory agency with respect to that portion of such additional Resort Interests where construction of the related Collection Accommodations is not complete.

Please let me know if you have any further questions or concerns.  Kindly note that you can access all U.S. Collection governing documents and minutes online at www.diamondresorts.com with your owner login information.

Sincerely,
Olga Lopez


Olga Lopez | Association Administrator | Diamond Resorts International® | Tel: 702.823.7309 | Fax: 702.684.8711


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