# What to say in an ROFR challenge letter?



## DaveNV (Jan 3, 2008)

Okay Tuggers,

I recently won an eBay auction for a PAHIO Kauai Beach Villas ocean view unit.  The price was ridiculously low.  The seller and I discussed ROFR, and since his deed was dated 2001, we decided to go ahead and start the escrow.

Today I learned PAHIO is trying to exercise ROFR on the sale.  I explained to the escrow agent, (a very nice woman who is trying to remain neutral), about PAHIO not having ROFR for deeds dated prior to July 1, 2005, and how the only reason I got this for so little money was I happened to be the only eBay bidder.  She has invited me to write a letter to PAHIO, that she will forward to them, so we can try and get this deal to go forward.

Problem is, what do I say?  Other than stating the obvious, (deed date prior to 2005, PAHIO doesn't have ROFR on this unit, I *really* want to own the interval, seller agreed to sell it to me for this price), what do I want to tell them?  I've written as professional and business-like a letter as I can, but I'm not sure what to put in there that will seal the deal.  I need to send this off tomorrow.  (Sorry for the short notice.  I only learned of this today, when I happened to call the escrow company.)

Can anyone help? 

Thanks,
Dave


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## Mydogs2big (Jan 3, 2008)

Other people would be more experienced in this I'm sure.

But I would first say that you intentionally sat out to purchase a timeshare that was sold prior to the ROFR being included in these sales.

You believe this is one of those timeshares as does the original owner.

The original owner can find no paperwork to the contrary and if this contract was sold subject to Right of First Refusal, you would request that that dated documentation be forwarded in the event that they intend to exercise such right.

And if they do indeed have that right, but are able to use it with their discretion, you would ask (no, beg) that they would let you keep your coveted prize.


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## bobcat (Jan 3, 2008)

Mydogs2big said:


> Other people would be more experienced in this I'm sure.
> 
> But I would first say that you intentionally sat out to purchase a timeshare that was sold prior to the ROFR being included in these sales.
> 
> ...


I would send a copy of all paper work that states the Rofr date and explain that you purchased this unit because of it.


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## timeos2 (Jan 3, 2008)

*The proof is simple if it exists. It doesn't so call them on it*



jeepguynw said:


> Problem is, what do I say?  Other than stating the obvious, (deed date prior to 2005, PAHIO doesn't have ROFR on this unit, I *really* want to own the interval, seller agreed to sell it to me for this price), what do I want to tell them?  I've written as professional and business-like a letter as I can, but I'm not sure what to put in there that will seal the deal.  I need to send this off tomorrow.  (Sorry for the short notice.  I only learned of this today, when I happened to call the escrow company.)
> 
> Can anyone help?
> 
> ...



Ask them to show exactly where in the POS documentation, any other legally binding documentation and/or deed restrictions dated in 2001, filed with the State and given to the original owner (hopefully they still have their copy which, at sale, should be forwarded to you the new owner) it has a provision for ROFR.  If they cannot do so they have no claim to such right. Go get 'em tiger!


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## DaveNV (Jan 4, 2008)

Thanks, John.  That was what I needed.  Will keep TUG posted.

Dave


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## DaveNV (Jan 7, 2008)

*It worked!*

   Wow, that was FAST!  I Faxed my ROFR challenge letter on Friday morning to the escrow company in Hawaii.  They sent it on to PAHIO, and I received notice today that PAHIO has waived their ROFR, and the sale will go forward.

I don't know if it was the letter I wrote, but I'd like to think so.  They referenced my letter in their waiver, and have "reconsidered" things.  Their exact wording was this:

"The Developer, PAHIO Vacation Ownership, Inc., has reviewed the request dated January 4, 2008 and information submitted for its Right of First Refusal on the above-referenced interval.  PAHIO Vacation Ownership, Inc. will not be purchasing the interval and waives its right of first refusal."  

I'm really stoked over this.  Great thanks to Timeos John for his concise verbiage, which was the kicker I needed.  If anyone needs a ROFR challenge letter for PAHIO, I'll be happy to provide the core text of what I wrote.

Once again, my TUG membership has paid for itself.  You guys rock!   

Dave


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## rickandcindy23 (Jan 8, 2008)

That's because they don't have it.  So how can they waive what they don't have?


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## timeos2 (Jan 8, 2008)

*Another successful ROFR rejection!*



jeepguynw said:


> Wow, that was FAST!  I Faxed my ROFR challenge letter on Friday morning to the escrow company in Hawaii.  They sent it on to PAHIO, and I received notice today that PAHIO has waived their ROFR, and the sale will go forward.
> 
> I don't know if it was the letter I wrote, but I'd like to think so.  They referenced my letter in their waiver, and have "reconsidered" things.  Their exact wording was this:
> 
> ...



Great job!  The ROFR is a pox on timesharing and should be assailed at every opportunity.  You did your job well & I hope you got a great deal. Enjoy your future vacations.  

I hope others take you up on your offer rather than give in to the often unjustified blackmail of ROFR.  

Again - congratulations.


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## timeos2 (Jan 8, 2008)

*No smoking and no lying. Wastegate sales shuts it doors? (No such luck - yet)*



rickandcindy23 said:


> That's because they don't have it.  So how can they waive what they don't have?



Never stopped Wastegate! But then again, what are mere laws to that group?


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## DaveNV (Jan 8, 2008)

rickandcindy23 said:


> That's because they don't have it.  So how can they waive what they don't have?



Cindy, that was the issue I was trying to fight.  Without saying anything to either the seller or me, PAHIO sent a letter to the escrow company on December 24th, telling them they were exercising ROFR.  (Both the seller and I knew they didn't have it.)  They gave explicit purchase instructions to the escrow company to send THEM paperwork so they could buy the unit.  (I was faxed a copy of that letter today.)  They said David Walters would be the signer.

It was only by coincidence that I happened to call the escrow company last week, and learned that PAHIO was trying to take over the sale.  The escrow company hadn't sent the paperwork PAHIO had requested, waiting till after the New Year's holiday to go ahead with things.  That was what prompted the urgency of my letter.

What bugs me is that if I hadn't called the escrow company, would PAHIO have eventually been allowed to go ahead with the sale?  I think so.  And that makes me wonder how many other sales have been derailed or outright stolen in cases like this.  If I hadn't called, the deal would have been said and done before I knew anything about it.  And the seller was told even less than I was.

I'm glad my deal will go through, and I'll be happy to put the hassle behind me.  I just hope my experience will serve as a lesson for others.  I think "due diligence" goes further than just up to the point of making an offer to purchase.  I think it follows to stay in close touch with the escrow people, too.  I'm glad that Old Republic Title in Hawaii was so easy to work with.

And John?  You said you hoped I got a good deal after all that.  How about this:  A 1br/2ba OCEANFRONT biennial at PAHIO Kauai Beach Villas for just $279?    I think I got one heck of a deal.  And I've also taken full advantage of my eBay good kharma for awhile...  

Thanks again for all the help.  You folks still amaze me.

Dave


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## ladycody (Jan 8, 2008)

WOW....ummmmm....if'n ya decide it's just costin' ya too much...let me know and I'll take it off your hands...I'll even throw in an extra hundred or two for your troubles.


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## rickandcindy23 (Jan 8, 2008)

jeepguynw said:


> And John?  You said you hoped I got a good deal after all that.  How about this:  A 1br/2ba OCEANFRONT biennial at PAHIO Kauai Beach Villas for just $279?    I think I got one heck of a deal.  And I've also taken full advantage of my eBay good kharma for awhile...
> 
> Thanks again for all the help.  You folks still amaze me.
> 
> Dave



That was a great deal on that week!  Too bad two of the PAHIO's were all reduced from Gold Crown to zero rating by RCI, including Kauai Beach Beach Villas and our very own Bali Hai.  

Someone pointed out that this could be a very clever way for PAHIO to levy assessments to "get the Gold Crown status back."  I think that will be the next thing we will get from PAHIO, a bill for an assessment.  How many bad reports did PAHIO really get on Bali Hai and KBV?  Maybe not that many, but an arrangment may have been made with RCI to downgrade our units to SCARE us into paying the assessments without balking too terribly much.  The sales prices will go down significantly, too.

Cliff's Club kept its rating.  How odd!:annoyed:

It amazes me that PAHIO and David Walters would still be pretending to have ROFR on these old contracts.  Won't be long before we will be seeing units for sale that have contract dates with ROFR on them, July of 2005.  Yes, I do believe that PAHIO gets back about 95% of the resale units.  I didn't see anything in their newsletter stating they will buy back units, if you don't want them anymore.  That would just be too much of a headache for them, I guess.


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## AwayWeGo (Jan 8, 2008)

*The Right Thing For The Wrong Reason.*




rickandcindy23 said:


> That's because they don't have it.  So how can they waive what they don't have?


If it helps save face for the company to "waive" its nonexistent ROFR, then no harm done. 

Sure, it would be better for the company response to say, in effect, we were _wrong-wrong-wrong_*,* we never-ever had any ROFR on this timeshare, & we are _so sorry_ that we mistakenly tried to invoke a nonexistent clause in this transaction, so _please-please-please_ forgive our most grievous transgression. 

Since that is not going to happen, I'd say it's OK to settle for waiver of the ROFR the company never had -- in effect letting'm do the right thing for the wrong reason. 

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


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## T_R_Oglodyte (Jan 8, 2008)

Their "waiver" of ROFR (vs. conceding there was no ROFR on the property) is just legal related - that's all.

If they admit there was no ROFR on this unit, it undercuts their ability to ever argue that they do have a legitimate claim to ROFR.  By "waiving" the ROFR they allow the sale to proceed with conceding the argument.

This kind of stuff happens all of the time when someone backs down during a negotiation.


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## AwayWeGo (Jan 8, 2008)

*Not Mutually Exclusive, Unfortunately.*




> No smoking and no lying.


They told the staff _No More Smoking_. 

Unfortunately they didn't say _No More Blowing Smoke_. 

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


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## DaveNV (Jan 8, 2008)

rickandcindy23 said:


> That was a great deal on that week!  Too bad two of the PAHIO's were all reduced from Gold Crown to zero rating by RCI, including Kauai Beach Beach Villas and our very own Bali Hai.



I was initially concerned about the reduction in RCI rating, too.  But I figure that only comes into play if I want to exchange the unit with RCI.  My primary reason for purchasing is to use the week.  Given the inconsistencies in RCI's rating system, and the potential favoritism that seems to happen with some resorts, I don't know if anyone takes RCI's ratings too seriously.  Those "in the know" will think of KBV as being exactly what it is.  Once the new pool is built, and people start having a reason to be happy (and less reason to complain) I expect the RCI rating will imrpove.  

It'll be interesting to see whether an assessment comes up to get the GC rating back.  Given my investment to date, (two weeks at KBV purchased on eBay for a total cost of $849), I figure I can give quite a bit before it starts to become a burden.  Time will tell.

Dave


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## rickandcindy23 (Jan 8, 2008)

Dave, that is true and well said. 

It will hurt the pocketbook a bit if the assessments are $1,000 each for all of our units or something--all at once.


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## T_R_Oglodyte (Jan 8, 2008)

jeepguynw said:


> I was initially concerned about the reduction in RCI rating, too.  But I figure that only comes into play if I want to exchange the unit with RCI.  My primary reason for purchasing is to use the week.  Given the inconsistencies in RCI's rating system, and the potential favoritism that seems to happen with some resorts, I don't know if anyone takes RCI's ratings too seriously.  Those "in the know" will think of KBV as being exactly what it is.  Once the new pool is built, and people start having a reason to be happy (and less reason to complain) I expect the RCI rating will imrpove.
> 
> It'll be interesting to see whether an assessment comes up to get the GC rating back.  Given my investment to date, (two weeks at KBV purchased on eBay for a total cost of $849), I figure I can give quite a bit before it starts to become a burden.  Time will tell.
> 
> Dave


I would be more concerned if SFX stopped accepting Pahio units.


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## rickandcindy23 (Jan 8, 2008)

Steve, SFX doesn't seem to pay that much attention to resort ratings.  They have French Ridge in Breck listed as one they accept, and that place is not nice at all, at least not in my opinion.  

Sure, it's a great area, but the units are nothing special, and I don't think that resort is even rated Silver Crown with RCI.  

If these new ratings are a clever ruse to get us to willingly open our pocketbooks and say, "here, take what you need...." then my hats off to them because it is an excellent plan.  It will work, but I guarantee the resorts didn't really have such bad resort report cards that they dropped from Gold Crown to nothing in one year.  Something is UP, that's for sure.   

I am very suspicious of this drop in ratings.  I wonder if SFX sends out report cards and what are the results of those?  That would be an excellent question for Mark on Forums.


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## rflowers (Mar 4, 2008)

*Any success with the challenge letters?*

I own 2 one-bedroom units and am purchasing 2 two-bedroom units at KBV.  Wyndham just ROFR'd one of them and I am still waiting on the other.  I sent a letter describing how my family enjoys visiting KBV and really wants two bedroom units.  While this is all true, it is going to result in them waiving the ROFR?

I figured I would play nice at first with the letter.  If that doesn't work, I will get a attorney to review the preliminary title report and see if ROFR even exists.  Any tips or suggestions on content for future letters would be appreciated.


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## rickandcindy23 (Mar 4, 2008)

Your letter should work.  A shmoozy letter always works!  Just tell David Walters how wonderful the resort is, that you love the area and everything about it, so your family would like to own this week.  

Walters is doing his best to ROFR everything out there.  I am actually getting pretty angry about the process and am dreading going through it with my most recent purchase of 2 two-bedroom EOY units at Bali Hai.  

I am actually working myself into such a "mad"  right now, that I have drafted a letter to the Hawaii Real Estate Commission that I am thinking of sending.  Claiming a ROFR that doesn't exist is fraudulent, bordering on criminal.  Being a Realtor myself, I know that real estate commissions take all complaints seriously, and they will see this process as blatantly dishonest.  

And that is what bugs me the most--the process:

1. Owner wants to get rid of a timeshare, but PAHIO doesn't offer owners a way out. 

2. Owner finds someone to list the week on eBay or elsewhere (or perhaps lists it himself/ herself).

3. Buyer comes along and a price is negotiated and accepted (or the auction just ends).  

4. The full price is put into escrow, along with PAHIO transfer fees of $250 and closing costs.  

5. Estoppel goes to PAHIO with full purchase price and *all closing costs included in the price*, as if that is the price agreed upon (the seller wasn't going to get closing costs and the PAHIO transfer fee, but now they will, if David Walters buys the week back).

6. PAHIO exercises ROFR and agrees to pay the seller (often a postcard company, mind you) the full price in escrow for the week.

7. Seller willingly goes along with PAHIO on the matter, and tells buyer that PAHIO exercised their ROFR, which they don't have.  

8. Seller makes more money.  PAHIO gets another week to resell at a price of at least 6 times more, basically reselling some weeks over and over again.   How many times should they make that much money for a single investment in constructing 1/52 of a unit?

Who is wronged here?  Well, the buyer does suffer damages.  Jack (jacknsara is his TUG username) talked about this in a post a while back.  He felt he was being hurt by the process.  I wholeheartedly agree.  PAHIO didn't exercise their "ROFR" until about two years ago, probably about the same time they included it in their new contracts.  

There is a clause in their older contracts that Walters likes to tout as his ability to use as ROFR.  It is basically a clause asking owners to contact PAHIO before selling a unit.  That isn't ROFR.  If they offered the current owners a specific price, like $4,000 for a two bedroom annual week (about the going eBay rate right now), I would be all for that decision.  So why don't they do that for owners?  They want to get the properties as cheaply as possible, is my opinion.  So they wait for the esptoppel letters to come in and rejoice when they can buffalo a buyer into believing they have the ROFR.  The closing companies should know better, but most of the closing companies on eBay are in cahoots with the postcard companies, so why would they care about you?   

Some here would argue that ROFR is keeping resale prices higher, but that isn't true with PAHIO.  Because sellers put the possibility of PAHIO exercising ROFR in their ads, people aren't bidding on them, so PAHIO is getting weeks back for cheaper prices than a year ago.  People don't want to bid up a week, especially knowing that the developer may take it back, so it is HURTING resales.  :annoyed: 

The goal of the real estate commission is fair business dealings as they pertain to real estate, so the buyer is the person that the commission will side with in this.  Timeshare has a bad enough reputation, I expect this to go in favor of the buyers every time.  

The decision is yours as a person affected by this ROFR process.  Do you want to write the nice letter, outlining how much you love the resort you are purchasing?  Or, do you want to affect real change by writing directly to the real estate commission (or just hire a lawyer)?  The decision is a tough one for me because the shmoozy letter always works.


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## jacknsara (Mar 5, 2008)

rflowers said:


> I own 2 one-bedroom units and am purchasing 2 two-bedroom units at KBV.  Wyndham just ROFR'd one of them and I am still waiting on the other.  I sent a letter describing how my family enjoys visiting KBV and really wants two bedroom units.  While this is all true, it is going to result in them waiving the ROFR?
> 
> I figured I would play nice at first with the letter.  If that doesn't work, I will get a attorney to review the preliminary title report and see if ROFR even exists.  Any tips or suggestions on content for future letters would be appreciated.


Aloha,
What was the Interval Control Number (ICN) on the deed?
Depending on what it is, I may be able to tell that it is very unlikely that it was originally sold with ROFR or that it is very possible that it did have ROFR.  
Jack


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## DaveNV (Mar 5, 2008)

Reviving this thread is very timely.  The escrow in question that I successfully fought the ROFR closed last week.  The interval is mine, and I made a reservation today for Thanksgiving week.  So all is well.   

As for the ROFR, my offer stands to share what I said in my challenge letter, if anyone needs it.  Send me a PM with your email address and I'll send it to you.

Dave


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## WestCoastJ (Apr 17, 2008)

*Pahio ROFR*

Hello All,
Pahio is exercising their ROFR, or non-existant ROFR as the case may be, like crazy right now.  We are challenging their right on a couple of weeks purchased at KBV and we will keep you posted. JW


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## rickandcindy23 (Apr 17, 2008)

Good luck to you!  *Be sure to address your letter to Lori Nishimoto*.  She is very kind, we met her in person just about two-and-a-half weeks ago, as a matter of fact.   We have had our share of battles with ROFR, but we met with her this time and she had the decision to reverse our most recent ROFR within two hours.  It was very painless.  

You just have to bring into the conversation "a little spirit of aloha."  That was in one of Jack's posts a while back, when he advised us during our first resale purchase.   We need a hula girl smilie!   

I hope all goes well.  Please do report back, because we would love to know what success you had, and I do expect you to have success.


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## Bill4728 (Apr 17, 2008)

If Pahio wants the units back, instead of using a ROFR (which they don't have), they should just bid on some of these Ebay auctions. 

Diamond resorts started doing that about 6 months ago.


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## talkamotta (Apr 17, 2008)

*WOW  I dont know how this post got by me.*

As you know I bought a Pahio Ka Eo Kai. I should be getting the signed documents this week.    I bought my 2 bedroom for $1850, feel good about the price.  There is another one on ebay right now for $100

Pahio at Ka Eo Kai Timeshare Hawaii Princeville
Floating 2bdrm/2bth sleep 6 - Gold Crowne No Reserve Item number: 150235377617 

I verified that it is in Phase III.   

This is the email I sent to him:

Dear timesharepro,

Thanks there is a big difference between phase II and III. I was wondering about the ROFR because I just bought a unit at Ka Eo Kai Phase III and I was looking to buy another one. Wyndam tried to exercise that right and I asked where it was in the original deed. They backed out. If you say they in fact do, then I wont waste my time, they do exercise that right on all properties. I guess thats why the bidding is so low. Others know about this too. Doesnt make much difference to you since you are a resaler and not the original buyer. 

 His reply was: 

We haven’t been getting to much for these properties lately. The resort has the ROFR even if it is not in the original contract. Thanks.

 Thanks,

John Kushman

This is an example of ignorance.  On the part of the resaler trying to start up a ebay business.  Maybe he is not a very honest man and is in cahoots with Wyndam.  I know he doesnt have his client (the original purchaser) best interest.  

Also how ROFR's affects the owners and thier investment.   Owners not planning to sell arent to concerned, until those that are needing to sell just default and all owners mf increase.


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## rickandcindy23 (Apr 17, 2008)

The seller gets more money when the property is ROFR'd. 

Seller gets purchase price when you buy it; the closing company gets those fees; Wyndham gets the $250 transfer fees and reimbursement of maintenance fees.  

So the seller just gets the purchase price in the above scenario.  

If PAHIO/ Wyndham exercises ROFR, seller gets all of the money, the entire amount, including closing costs and transfer fees that would have gone to Wyndham, and also the maintenance fees.  

Wyndham pays for the whole package.  That is why the resellers are okay with allowing ROFR to go through.


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## talkamotta (Apr 17, 2008)

Oh so thats the scam.  The reseller gets anyone (even a friend) to make a bid on a property knowing full well that Wyndam will do the ROFR.  Feels good about it because he discloses ROFR which is a bunch of :ignore: 

well dummy me.


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## pammex (Apr 17, 2008)

Just wanted to congratulate you on your success.  Good job and enjoy your treasure!!!


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## PA- (Apr 23, 2008)

It seems to me that if a management company claims to have ROFR, when in fact they don't, and they use that claim to interfere with a real estate contract, they are breaking the law.  While most people don't have the money to fight them in court, there may be a less expensive way to fight this.  Anybody can file a complaint with the real estate commission in the state where the resort is.  If I were in the middle of a transaction involving PAHIO or anywhere else where this is going on, I would inform the escrow company, seller and the developer that I intend to enforce my rights.  If the escrow company proceeds to sell to Pahio, or if the seller signs over their deed to the developer, they could be in breach of contract.  That type of warning might force the escrow company to demand proof that the ROFR exists and put an end to this once and for all.

If any of you have been harmed by a claim of an ROFR that didn't exist, I recommend you file a complaint immediately with the real estate commission.  You can generally do that on-line.  The Hawaii regulatory agency is more anti-timeshare developer than most.

Remember, the burden of proof is on the seller for breaking the contract or on the developer for interfering with the contract.  They'll have to show cause, not you.


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## rickandcindy23 (Apr 23, 2008)

PA-, I agree completely.  PAHIO is skating on thin ice with me, but I have always handled it "nicely," even though the closing company and the sellers would rather let the resort have the week back, because they all stand to make more money off of it.


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## DaveNV (Apr 23, 2008)

I still don't understand why PAHIO doesn't just let sellers give units back to them instead of playing this stupid ROFR game.  I started this thread, and I got my unit, but now I read others are being denied theirs.  Where's the consistency?  And if PAHIO isn't actively selling units in the resorts, why would they even want them back?  I'd think a happy owner who pays MFs every year would be a darn site easier to tolerate than a unit nobody owns that isn't generating any income for the management company...

That alll smacks of fraud.

Dave


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## PA- (Apr 23, 2008)

BMWguynw said:


> I still don't understand why PAHIO doesn't just let sellers give units back to them instead of playing this stupid ROFR game.  I started this thread, and I got my unit, but now I read others are being denied theirs.  Where's the consistency?  And if PAHIO isn't actively selling units in the resorts, why would they even want them back?  I'd think a happy owner who pays MFs every year would be a darn site easier to tolerate than a unit nobody owns that isn't generating any income for the management company...
> 
> That alll smacks of fraud.
> 
> Dave



Wyndham turns the deeded week into a UDI interest.  They want to maintain complete control of everything there.


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## DaveNV (Apr 23, 2008)

PA- said:


> Wyndham turns the deeded week into a UDI interest.  They want to maintain complete control of everything there.




I guess I don't know what a UDI interest is.  ???

Dave


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## AwayWeGo (Apr 23, 2008)

*U. D. I. = Undivided Interest.*




BMWguynw said:


> I guess I don't know what a UDI interest is.


I like timeshares deeded as particular weeks in specific units.  That way even if the points system & the floating system & the whole "system" turns into a pumpkin, I've still got _my_ week _my_ unit.  The deed says so. 

However that may be, the timeshare where I own a deeded floating diamond-season 3BR lock-off unit also sold various oddball deeded UDIs -- _Undivided Interests_ -- expressed as a fraction such as (for illustration) 2*,*611 / 843*,*755 of the entire resort. 

It made sense when sold to a new customer who was also signing up for the timeshare company's proprietary points-based timeshare exchange system.  That oddball fraction might work out fine for various options-based or points-based exchanges into various timeshare resorts around the country & around the world that are part of the same proprietary (i.e., non-RCI & non-I-I) "mini-system." 

However, stripped out of the proprietary "mini-system" & transferred via resale to a secondary buyer who doesn't belong to the "club" (& who would have to pay big bux to join the club), those oddball UDIs might not even work out to a full week at the timeshare where they are owned.  As a resort manager expressed it, "Some of the small UDIs are good for approximately 1 afternoon in the pool."  That's an exaggeration, but you get the idea. 

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


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## Hekela (May 22, 2008)

Hi All I am new here  and have been reading all of your horror stories  I just purchased even year week at Bali Hai on ebay for $200.00. Now I love this resort we were lucky and did a last minute trade with my Deer Run Village week(no longer in business, of couse after paid fees) back in 05, this last January we went to Cliffs and I wasnt that impressed and wished we stayed at Bali Hai. Anyway bought this now and am concerned that they will try and use ROFR.  This is what the timeshare lady said 

"Today, I received your original credit card authorization form, as I was out of my office the weekend and Monday.
Just so you know, your transfer will take closer  to 70-90 days as we will need to record a deed in the Bureau of Conveyances in Hawaii. 
I have since found out that all of the Pahio Resort purchases are subject to first right of refusal. The first right of refusal request will go out to them on Thursday, so I will NOT be charging your card until we receive the waiver of first right of refusal directly from Pahio. I have also found out that it can take as along as 2 weeks for them to make their decision.
Once the waiver is received, we will move forward and get the new deed out to the Seller’s for notarized signature and your card will be charged the same day as the documents go out. If I find out that Pahio is intending on purchasing the interval back, you will notified just as soon as I hear from them. Most often, they do not buy the interval back, but it is in their contracts that they need to be notified and the request for the waiver must be issued. I need to follow their rules and regulations and we will both hope for the best. . . . "

So I emailed her and asked what ICN is and when I find it out I read that someone is able to look them up?


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## rickandcindy23 (May 22, 2008)

I saw that week go cheaply.  Was it a one-bedroom?  

PAHIO will try to exercise their phony right, and you just need to be nice and go along with it, write a nice letter, and then get it "waived."  If about five of us wrote to the Hawaii Real Estate Commission at the same time, complaining about this fraudulent claim they are making, it would take no time to end it for all involved.  

I think the reason you got such a great deal is the general lack of knowledge out there; many people don't know PAHIO doesn't have the right, so they let them have the weeks back without a fight.  They figure, "Why go through THAT again?"  The sellers put it in their ads, for crying out loud.  That is cutting right into their profits.


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## Tia (May 24, 2008)

Perfect example of 'Knowledge is Power' don't you think?


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## JimIg23 (May 26, 2008)

Do all Wyndham resorts have ROFR?


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## Hekela (Jun 9, 2008)

yes it was a one bedroom and even year... get this, the title company selling it told Bali Hai I was buying it for 1199 not 199.... interesting. I emailed the title company and she told me that in the seller contract it does state in Misc item 8 about the ROFR. I asked for a copy of it and she said she couldnt. They bought this timeshare in 1999. So I know this is bougus. What do you think?


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## rickandcindy23 (Jun 9, 2008)

The closing company still makes their money if PAHIO buys it back.  The seller makes more money, too, because they can put whatever figure they want on the paperwork.  I hate that you are going through this, but unlike many other people out there, you have more information and can proceed with a plan of attack.   

If you read this thread, you will see that this closing company cannot take the week from you, nor will PAHIO.  You need to write a letter.  If you feel they are going to go forward with the ROFR without your chance at getting the week, then all you need to do is call the Hawaii Real Estate Commission because you are dealing with real estate professionals, and they are breaking laws here.  I am telling you there is a case against these people, and the only cost to you is a phone call or a letter emailed or faxed to the appropriate authorities.


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## Bill4728 (Jun 9, 2008)

JimIg23 said:


> Do all Wyndham resorts have ROFR?


Most FF/Wyndham resorts do not have ROFR.  PAHIO put it into their sale contracts a few years before Wyndham bought their resorts. So Pahio is one of the few Wyndham resorts which have some units which do have ROFR.


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## rickandcindy23 (Jun 9, 2008)

Very few actually have ROFR attached.  I know for a fact that Wyndham isn't putting that clause into their contracts, because I have one of those contracts, and they took over in July of 2006.  The ROFR was in the contracts for one year, from July of 2005- July of 2006.


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## Hekela (Jun 9, 2008)

thanks for the info. They did exercise their right (of course) I have been in contact  with my title company and she says there is nothing we can do. They have that right. I thought it didnt start until 2007? So why would the sellers say they have that in their contract? So I emailed lori and my titlle company and asked for proof. Now what?


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## rickandcindy23 (Jun 9, 2008)

So what you need to do is challenge the ROFR with PAHIO, not with the closing company.  The closing company is breaking the law to alow this to happen.  You are going to be a victim, if you don't fight it, and there is no reason for you to be a victim.  I would find out the unit number and week from the closing company and call PAHIO right away, call Lori Nishimoto, and go over the head of the closing company to get this taken care of.  

What closing company is this?  All of the closing companies KNOW BETTER because TUGgers have been telling them all along that this is illegal.     If they make more money, they will break the law.  It's disgusting!  Disgusting postcard companies and their sellers, who make money on people, as much as they possibly can, even to the point of breaking laws and lying.  I truly couldn't sleep at night if my line of work involved constant lying and deliberately deceiving everyone I come in contact with.


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## Hekela (Jun 9, 2008)

delete post


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## reddiablosv (Jun 9, 2008)

*Pahio fraudulant ROFR*

Intentionally cheating buyers of their legitimately negotiated bargain purchases of a Pahio timeshares by claiming legal rights to that purchase which Pahio knows it does not have is fraud.  IMHO every buyer who has been cheated should be compensated by an amount equal to the difference between his resale purchase price and the amount Pahio charges a retail buyer.      I know many posters disdain lawsuits, but in a class action lawsuit, the primary litigant does very well.     One class action lawsuit would stop this practice.   Ben


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## rickandcindy23 (Jun 9, 2008)

Hi Ben, 
Yes, it drives me crazy, and I am not the only one that is sick of the game they play.  Letters to the RE Commission, and this practice would end immediately, but who is going to do it?  ME!  I already did write a letter, and tomorrow, it gets faxed.  I am going to take my chances that PAHIO will find out.  

Honestly, who is PAHIO anyway?  I thought it was Wyndham now, but they still go by PAHIO everywhere, even RCI.  Wyndham might like to know what is going on as well.  Shneaky, shneaky!


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## richardm (Jun 10, 2008)

Just a quick word of caution- are you sure it's a good idea to try and squash the ROFR attempt by Wyndham? The ROFR process itself shouldn't really a bad thing from an owner's viewpoint- as it helps maintain a consistent level of pricing for a property.

The developers which have consistently applied ROFR decisions have properties with a strong resale value, and have maintained those values. Look at Disney- clients that bought five or six years ago on resale actually saw a slight increase in value if they sold recently- because of the ROFR process pushing up buyer offers. Marriott and Hyatt are other prime examples of this- the resorts with ROFR maintain value and those without drop like stones.. 

We all know the trouble facing Wyndham fixed week and Points owners whose resale values are on life support. Can't the same thing happen at Pahio if the ROFR attempt is discarded or inconsistent?

Everyone likes to get a great deal when they purchase- but don't forget there is always a seller out there who just got crushed! And buyers may one day be sellers..


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## timeos2 (Jun 10, 2008)

richardm said:


> Just a quick word of caution- are you sure it's a good idea to try and squash the ROFR attempt by Wyndham? The ROFR process itself shouldn't really a bad thing from an owner's viewpoint- as it helps maintain a consistent level of pricing for a property.
> 
> The developers which have consistently applied ROFR decisions have properties with a strong resale value, and have maintained those values. Look at Disney- clients that bought five or six years ago on resale actually saw a slight increase in value if they sold recently- because of the ROFR process pushing up buyer offers. Marriott and Hyatt are other prime examples of this- the resorts with ROFR maintain value and those without drop like stones..
> 
> ...



Unfortunately, and without going through the whole song and dance for the umpteenth time, almost every statement above regarding ROFR and prices is incorrect. ROFR only exists for and only benefits the DEVELOPER. All others, if they know it or not - far too many are blinded by developer rhetoric and the human desire to think you got "a deal" to realize they are being played , are hurt by it. So doing anything to put an end to it, especially when it is trying to be invoked retroactively and thus illegally, should be a priority. And of course NEVER buy a resort that had ROFR unless you enjoy being taken on both the purchase and eventual resale end of the deal.


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## Hekela (Jun 10, 2008)

I disagree. Its a form of price setting. Its economics look at the real estate market and prices we can't tell our neighbors what to sell their house for so our value stays high. This is what the market will bear and if people are desperate and need money timeshares and luxuries are the first to go


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## richardm (Jun 10, 2008)

You are correct in that "retroactive and illegal" enforcement should not occur, and I apologize if my post gave that impression.....

I just have a different opinion on whether or not the process itself is good for the industry as a whole. I strongly support it- simply for the fact that the process does help maintain resale values and still allows a seller to accept a lower offer (believe me I present those offers on a daily basis!).. 

It should be viewed as a frustration for buyers- not owners! Owners should LOVE it!


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## rickandcindy23 (Jun 10, 2008)

richardm said:


> You are correct in that "retroactive and illegal" enforcement should not occur, and I apologize if my post gave that impression.....
> 
> I just have a different opinion on whether or not the process itself is good for the industry as a whole. I strongly support it- simply for the fact that the process does help maintain resale values and still allows a seller to accept a lower offer (believe me I present those offers on a daily basis!)..
> 
> It should be viewed as a frustration for buyers- not owners! Owners should LOVE it!



1. Owner no longer uses their timeshare, pays $3,500 to get rid of it.

2. Buyer pays postcard company's partner company $1,200 for a one-bedroom PAHIO at Bali Hai timeshare on eBay. \

3.  Estoppel letter goes to PAHIO, claiming they sold the week for $2, 849, which is $1,000 more than the buyer was willing to pay  for the week, plus they add closing costs of $399 and $250 (PAHIO transfer fee).  

4. PAHIO exercises ROFR and pays full amount seller is claiming to have as an offer (total exaggeration).

5. Buyer is swindled out of a week.  Postcard company's seller gets the money, not the owner who paid the $$$$$ for it in the first place.  

6. PAHIO sells the week as brand new.  

Rich, how is that okay?  How is that holding up the resale value?


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## T_R_Oglodyte (Jun 10, 2008)

What the ROFR does is drive away buyers.  It *may* help elevate prices for those units that are sold; it reduces the number of offers that are made.

Resale timeshares are not bought on a whim; they are bought by people who know that timeshare resales exist and are at least somewhat knowledgeable about the market.

When those people know that a resort is subject to ROFR, they are less likely to put in an offer; why waste the time and energy to put in an offer on a sale that isn't likely to be completed?

++++++

This is basic microeconomics.  Supply and demand are a function of demand; anything that raises the price reduces demand.

Let's say that absent ROFR, the average selling price for a one-bedroom annual unit at Pahio is $4000.  That is the equlibrium pricing, where supply balances demand.  Of course any individual sales will be likely be higher or lower, but that $4000 figure is the median price point.

Now let's say ROFR is successful in boosting that median to $6000. Pricing is now above the free market equilibrium point.  What happens now?  First there are going to be more sellers willing to sell at that higher price.  Simultaneously, there will be fewer buyers willing to pay those prices.  IOW - there will be more supply than demand, with owners who would gladly take that $6000 price, but not getting any takers.

Of course, many of these folks who can't get offers will become fodder for the postcard companies, as they become desperate to find anyone who will take the unit off of their hands.

++++

To the extent ROFR increases selling prices above the true equilibrium point, there *will be* a shortage of buyers, resulting in people who are motivated to sell but are unable to because they aren't sufficient buyers to soak up the supply.  That is an inevitable consequence of the law of supply and demand.


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## richardm (Jun 10, 2008)

No.. ROFR should always be done correctly- no inflation or exaggeration allowed on either the buyer or seller side of the sale.. Again- I'm not bashing this guy- he got a great deal and had the knowlege to get through the roadblocks! Congrats to the Tug family for another job well done!

As he sits at the pool and talks with other owners he'll have people swallowing their tongues when they found out what he paid (and mentally compare that with what they paid!).. Just the image alone is enough to have me whistling all the way home regardless of how traffic kills me!

I just think that ROFR is not a horrendous monster.. ROFR can be abused- and those who do so should be ashamed (didn't their momma teach 'em better!).. I'm just a fan! Maybe I'm more of a fan of the resorts that have it- but I do like it... 

Of course, I was also a Tampa Bay Buc fan when the wore those gaudy orange uniforms!


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## jacknsara (Jun 10, 2008)

Hekela said:


> I disagree. Its a form of price setting. Its economics look at the real estate market and prices we can't tell our neighbors what to sell their house for so our value stays high. This is what the market will bear and if people are desperate and need money timeshares and luxuries are the first to go


Aloha,
I disagree.  If the developer wants to support a minimum price, the developer would be submitting ebay agent bids or sniping for the minimum, which might change as their inventory grows or shrinks.  It can't be that much work since I often track all the Pahio resales - there aren't that many at any given moment.  In our first encounter with Pahio ROFR a couple years ago which we documented here on tug in a thread that is now gone, I pointed out that our ebay agent bid was more than double what our winning bid turned out to be.  It was an oceanfront unit as indicated by the ICN, but the seller did not know or advertise that feature.  The loser in that transaction was the seller (maybe a PC company - but the actually owner had to sign the paperwork, so I am not sure).  Had we lost to ROFR, we too would have been losers since we were willing to pay much more for the ocean front.  
The current practice enables the developer to buy prime (ocean front or two bedroom) units at the lowest possible price. 
ROFR, as practiced by Pahio (someone behind Wyndham), may be suppressing demand - and consequently diminishing prices.
Jack


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## timeos2 (Jun 10, 2008)

jacknsara said:


> Aloha,
> I disagree.  If the developer wants to support a minimum price, the developer would be submitting ebay agent bids or sniping for the minimum, which might change as their inventory grows or shrinks.  It can't be that much work since I often track all the Pahio resales - there aren't that many at any given moment.  In our first encounter with Pahio ROFR a couple years ago which we documented here on tug in a thread that is now gone, I pointed out that our ebay agent bid was more than double what our winning bid turned out to be.  It was an oceanfront unit as indicated by the ICN, but the seller did not know or advertise that feature.  The loser in that transaction was the seller (maybe a PC company - but the actually owner had to sign the paperwork, so I am not sure).  Had we lost to ROFR, we too would have been losers since we were willing to pay much more for the ocean front.
> The current practice enables the developer to buy prime (ocean front or two bedroom) units at the lowest possible price.
> ROFR, as practiced by Pahio (someone behind Wyndham), may be suppressing demand - and consequently diminishing prices.
> Jack



Those who have had to deal with it in reality - not the theoretical dream land of "what if they buy it" and "the developer wants high prices" - know that ROFR is an owner negative process. It hurts buyers, sellers and any agents but sure can help the developer. And only the developer.  As one who has seen it in action you have it right.


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## AwayWeGo (Jun 10, 2008)

*G. Z. P. Z.*




timeos2 said:


> Those who have had to deal with it in reality - not the theoretical dream land of "what if they buy it" and "the developer wants high prices" - know that ROFR is an owner negative process. It hurts buyers, sellers and any agents but sure can help the developer. And only the developer.  As one who has seen it in action you have it right.


_Whoa ! _

So the truth after all is, ROFR = ROFL. 

Jeezy-Peazy -- who'd a-thunk ? 

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


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## richardm (Jun 11, 2008)

Very nicely put, jacknsara! Great points! Thanks for contributing to the discussion...


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