# Poipu Point - Walk away from ownership?



## therajman

We have a every-year floating oceanfront unit we bought back in 1996 when it was Embassy...and a second every-other-year oceanfront unit we bought in 2004. 

We have been trying to sell both the units but on the secondary market, they go for $1500 at best and then too, they are not moving...

We are considering abandoning/walking away from both units - in this economy, shelling out $5,400 for 2012 and $3,300 for 2013 and then again $5,400 for 2014 is a financial drain that we simply CANNOT afford. 

I don't know whether our credit will take a hit...or whether we can negotiate an exit or come to a deal. We are willing to give up both units. It is simply unaffordable.

I do know that Diamond will come after us with a vengeance if we default on the maintenance fees. They are one of the most ruthless companies i have dealt with in a very long time. Their customer service is atrocious - their operators are downright nasty and all they care about is money. They have little, if any, regard for their owners and they are of absolutely ZERO help. Calling them has been next to useless...essentially, the specialist I spoke to flipped me the virtual bird on the phone. 

So I researched this matter on the web and came across this portal.

Please, if anyone has any idea, experience or recommendations, I would be mightily obliged.

Thanks.

Raj


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## T_R_Oglodyte

therajman said:


> We have a every-year floating oceanfront unit we bought back in 1996 when it was Embassy...and a second every-other-year oceanfront unit we bought in 2004.
> 
> We have been trying to sell both the units but on the secondary market, they go for $1500 at best and then too, they are not moving...
> 
> We are considering abandoning/walking away from both units - in this economy, shelling out $5,400 for 2012 and $3,300 for 2013 and then again $5,400 for 2014 is a financial drain that we simply CANNOT afford.
> 
> I don't know whether our credit will take a hit...or whether we can negotiate an exit or come to a deal. We are willing to give up both units. It is simply unaffordable.
> 
> I do know that Diamond will come after us with a vengeance if we default on the maintenance fees. They are one of the must ruthless companies i have dealt with in a very long time. Their customer service is atrocious - their operators are downright nasty and all they care about is money. They have little, if any, human capital and they are of absolutely ZERO help. Calling them has been on no help...essentially, the specialist I spoke to flipped me the virtual bird on the phone.
> 
> Please, if anyone has any idea, experience or recommendations, I would be mightily obliged.
> 
> Thanks.
> 
> Raj


DRI has a voluntary surrender program; it does requure that the owner be current on all fees, so that may not help you with the special assessment.


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## therajman

I don't have the money to pay them. 

No matter how it happens, Diamond wins in the end! They get the unit back, they get my money and they damage my credit. 

Amazing.


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## cvillegal

I did a quick search but came up empty, where can I find more info on DRI's voluntary surrender program? Thanks.


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## T_R_Oglodyte

cvillegal said:


> I did a quick search but came up empty, where can I find more info on DRI's voluntary surrender program? Thanks.


Go to the DRI Forums, which you can access from the DRI website after you login.


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## rifleman69

therajman said:


> I don't have the money to pay them.
> 
> No matter how it happens, Diamond wins in the end! They get the unit back, they get my money and they damage my credit.
> 
> Amazing.



How exactly do they damage your credit?   You did sign a contract with Diamond (or whomever) originally right?


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## timeos2

rifleman69 said:


> How exactly do they damage your credit?   You did sign a contract with Diamond (or whomever) originally right?



They can report a delinquent/past due bill - and re-report it every month it remains unpaid.  Plus if they eventually foreclose that too goes to the credit reporting agencies.  While a foreclosure on a timeshare isn't as big a deal as say a home/fully owned condo might be it still is a foreclosure, the amount after all the penalties for late fees, interest, legal fees, etc may make it a significant amount and not everyone that uses the credit report will bother to dig into what the foreclosure was - they just treat it as a big negative tward the score. 

It can make things very uncomfortable for the owners credit score which is why it is used as such as big club to spur collections. As owners they have accepted the obligations so it is all legal to report.


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## Kauaigrl00

I have a slightly different question.  (silly as it may be)  We always pay our maintenance fee's at the end of Dec.  When we pay this next one (with the special assessment at the end of Dec., is this going for the 2012 year?  or is it for the 2011 year?  I had this discussion with another person and I am assuming it is for 2012 whereas the other person said it is for 2011?  Confusion here, I was mainly concerned about getting this paid since we are going in Feb.  OH how we would just love to give this back to Diamond, but we love the point at poipu.  Also on their explanation of the water intrusion it said many other condo's on Kauai have the same issue - Has anyone heard of anyone else having the same water intrusion?  I sure haven't!


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## BocaBum99

I would call a PCC.  Sounds like their fee would be a dream compared to this special assessment.


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## artringwald

Kauaigrl00 said:


> I have a slightly different question.  (silly as it may be)  We always pay our maintenance fee's at the end of Dec.  When we pay this next one (with the special assessment at the end of Dec., is this going for the 2012 year?  or is it for the 2011 year?  I had this discussion with another person and I am assuming it is for 2012 whereas the other person said it is for 2011?  Confusion here, I was mainly concerned about getting this paid since we are going in Feb.  OH how we would just love to give this back to Diamond, but we love the point at poipu.  Also on their explanation of the water intrusion it said many other condo's on Kauai have the same issue - Has anyone heard of anyone else having the same water intrusion?  I sure haven't!



The fee that is due 1/1/2012 is for 2012. You have to pay in advance. If you don't pay by 1/31/2012, you would not be able to use your 2/2012 reservation. We love Poipu too, and want to keep our week in spite of the assessment. Might even consider buying another week.


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## Kauai Kid

artringwald said:


> The fee that is due 1/1/2012 is for 2012. You have to pay in advance. If you don't pay by 1/31/2012, you would not be able to use your 2/2012 reservation. We love Poipu too, and want to keep our week in spite of the assessment. Might even consider buying another week.



There was a 2 br every year at the Point at Pu for $1 just a couple days ago.  See if the seller will pay all the closing costs too.

Go for it and if you get it you owe me an umbrella drink next time we meet.

Sterling


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## SmithOp

Water intrusion in a tropical climate can mean from the humid, corrosive salty air. Buildings can have poor insulation and vapor block, maybe Mike Holmes can audit that 65 mill cost, but I can understand materials and skilled labor costs will be higher. Sounds like they are stripping the buildings down to the frames and replacing with modern skin / insulation materials. Also, if the project is 3 years why cant the owners pay the assessment over the same period?


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## T_R_Oglodyte

SmithOp said:


> Sounds like they are stripping the buildings down to the frames and replacing with modern skin / insulation materials. Also, if the project is 3 years why cant the owners pay the assessment over the same period?


Yes - they are stripping the buildings all of the way.  It's essentially a complete structural rebuild.  They've even got rotting in pressure treated wood.

According to the board, the assessment is paid in two years - whereas the project is a three year project - because funds are needed to pay for materials prior to construction. IOW - the project cash expenditures are front-end loaded.


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## Kauai Kid

SmithOp said:


> Water intrusion in a tropical climate can mean from the humid, corrosive salty air. Buildings can have poor insulation and vapor block, maybe Mike Holmes can audit that 65 mill cost, but I can understand materials and skilled labor costs will be higher. Sounds like they are stripping the buildings down to the frames and replacing with modern skin / insulation materials. Also, if the project is 3 years why cant the owners pay the assessment over the same period?




Because the cost per year would be less over a five year period.

They'd probably be delighted if you'd pay it all at once.

Sterling


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## ocdb8r

SmithOp said:


> Also, if the project is 3 years why cant the owners pay the assessment over the same period?



The owners ARE getting the ability to pay the assessment over a 3-5 year period (depending on the number of weeks owned).  $2000 is just the FIRST installment!!!  

Total assessment per week is $5893.32.  

...and just think of how high fees will go in the future with all the defaults that are SURE to happen.  The assessment is based on all current owners paying...everyone else will get stuck eating anything unpaid by defaulting or foreclosed owners.

SCARY.


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## T_R_Oglodyte

ocdb8r said:


> ...and just think of how high fees will go in the future with all the defaults that are SURE to happen.  The assessment is based on all current owners paying...everyone else will get stuck eating anything unpaid by defaulting or foreclosed owners.
> 
> SCARY.



The letter from the Board of Directors says that the budget includes an allowance for anticipated owner defaults.  No details provided though.


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## ampaholic

*Deja Vu all over again ...*

It sounds suspiciously like Diamond has figured how to "refresh" the developer position.

After this is all over there will be an essentially new resort - with a lot of intervals on the shelf (presumably) controlled by the developer er management co.

Glad I am I don't own any units.


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## Kauai Kid

Something stinks to high heavens. 

Please explain to me why Alii Kai resort at Princeville which receives a whole lota rain especially compared to sunny P@P has NEVER EVER EVEN needed a special assessment for water intrusion?  It didn't even need a SA after hurricane Iniki hit.!!!!!!!!!!!!!!!!

Alii Kai Resort is on the coast, almost as close to the water as the p@p and it is 30 years old.  10 years older than P@P.

Guess they built them right 30 years ago and shoddy since then.

"Nothing is easier to spend than other folks money"  Kauai Kid

HAVE A HAPPY HOLIDAY FROM DIAMOND RESORTS.


Sterling


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## slip

I can't believe this one has 3 bids. I don't see where it mentions the SA.

http://www.ebay.com/itm/Point-Poipu...90351701227?pt=Timeshares&hash=item5ae2c644eb

I almost bought there. It does look really nice.
I know this really sucks. I feel your pain.


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## Kona Lovers

slip said:


> ...
> 
> I almost bought there. It does look really nice.
> I know this really sucks. I feel your pain.



Slip,

Stick with Pono Kai!


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## bogey21

therajman said:


> I don't have the money to pay them.



If I truly didn't have the money or couldn't raise the money, I would tell the Resort that I was unable to pay and try to work something out.  I would make sure they knew that if they were unable or unwilling to work with me, I was fully prepared to accept the consequences of defaulting.  Life is not always fair.  Sometimes one just has to play the hand he/she is dealt.

George


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## rickandcindy23

Diamond is probably hoping you will default and give them back the weeks to sell to another sucker.  I wish everyone thinking of buying anything managed by Diamond could find this thread.  Awful company.  

PCC's require you pay the current assessments and fees, so it wouldn't get you out of it, and they are quite aware of these SA's.


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## slip

I saw 3 listings on Ebay this morning and they all have bids but none of them
mention the SA. Buyers beware!!!


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## MommaBear

I nearly took a "free" Point at Poipu unit from a fellow Tugger a month or so ago. Thanks goodness for procrastination, as I am now a very happy non-owner at the Point!


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## timeos2

rickandcindy23 said:


> Diamond is probably hoping you will default and give them back the weeks to sell to another sucker.  I wish everyone thinking of buying anything managed by Diamond could find this thread.  Awful company.
> 
> PCC's require you pay the current assessments and fees, so it wouldn't get you out of it, and they are quite aware of these SA's.



DRI, like every Developer / Management, has some flaws and overall seems to be high on the fees they tend to collect. But this is a case where, IMO, they cannot be blamed and are doing the best they can in a no-win situation for everyone involved.  You wanna bet they would give up management / sales there IF they had known of the issues that have become obvious now?  No one willingly gets into a mess like this - they inherited a problem and as management now have to do what they can to resolve it.  The blame lies with those long gone from the picture.  Doesn't make it easier to take or make DRI saints but I wouldn't blame them either. 

They have to deal with it and so will the other owners as best they can.


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## T_R_Oglodyte

timeos2 said:


> DRI, like every Developer / Management, has some flaws and overall seems to be high on the fees they tend to collect. But this is a case where, IMO, they cannot be blamed and are doing the best they can in a no-win situation for everyone involved.  You wanna bet they would give up management / sales there IF they had known of the issues that have become obvious now?  No one willingly gets into a mess like this - they inherited a problem and as management now have to do what they can to resolve it.  The blame lies with those long gone from the picture.  Doesn't make it easier to take or make DRI saints but I wouldn't blame them either.
> 
> They have to deal with it and so will the other owners as best they can.



I agree, John.  I can't imagine that Diamond would have picked up Poipu as they did if they had been aware of the extent of the problem.

If they had known of it, Point at Poipu would have been treated as any other troubled asset in an acquisition, such as a property in which the environmental review indicates there's contamination on site that needs to be cleaned up.  In those cases the property is either carved out of the deal or a portion of the sales price is put into an escrow account to fund needed projects - reducing the price to the sellers by that amount.  

Nobody walks into a project of this type knowingly.  Though I'm sure there is some scrutiny going on at Diamond as to how this wasn't caught during due diligence.


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## teepeeca

Weren't Diamond-Sunterra "in bed" with each other in the mid-'90's onward???

I'm not sure of the relationship, but they were "closely related", and then Diamond became the sole owner/manager of the various resorts.  So "if" Sunterra was the original developer of the P@P, then Diamond "should have known" everything about the building of the resort (and it's possible defects).  The "deep pockets" to fix the resort buildings, should then fall on Diamond exclusively, NOT the present owners.

Tony


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## timeos2

teepeeca said:


> Weren't Diamond-Sunterra "in bed" with each other in the mid-'90's onward???
> 
> I'm not sure of the relationship, but they were "closely related", and then Diamond became the sole owner/manager of the various resorts.  So "if" Sunterra was the original developer of the P@P, then Diamond "should have known" everything about the building of the resort (and it's possible defects).  The "deep pockets" to fix the resort buildings, should then fall on Diamond exclusively, NOT the present owners.
> 
> Tony



If they were "in bed" prior to the takeover it's news to me.  There was never any hint of Diamond Resorts involvement in any way with Sunterra until they bailed them out of a second near bankruptcy.  Did anyone know of any prior relationship I missed?


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## lv_maui

Its my understanding that no one could have known about the extent of the problem unless they did extensive testing of the inner walls of the buildings.  That is how Diamond found the extent of the water intrusion issue.  Diamond knew about the water instrusion issues with the soffits since this was a well know problem at the resort.  But it appears that Diamond did not know the extent of the problem.  

Teepeeca has a right to be upset but why should Diamond pay for the units that are owned by owners.  This is just the danger of owning a timeshare just like the owner of a condo unit.  I have read that Diamond has to pay a big chunk of money also for the units that they own.




teepeeca said:


> Weren't Diamond-Sunterra "in bed" with each other in the mid-'90's onward???
> 
> I'm not sure of the relationship, but they were "closely related", and then Diamond became the sole owner/manager of the various resorts.  So "if" Sunterra was the original developer of the P@P, then Diamond "should have known" everything about the building of the resort (and it's possible defects).  The "deep pockets" to fix the resort buildings, should then fall on Diamond exclusively, NOT the present owners.
> 
> Tony


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## T_R_Oglodyte

teepeeca said:


> Weren't Diamond-Sunterra "in bed" with each other in the mid-'90's onward???
> 
> I'm not sure of the relationship, but they were "closely related", and then Diamond became the sole owner/manager of the various resorts.  So "if" Sunterra was the original developer of the P@P, then Diamond "should have known" everything about the building of the resort (and it's possible defects).  The "deep pockets" to fix the resort buildings, should then fall on Diamond exclusively, NOT the present owners.
> 
> Tony





timeos2 said:


> If they were "in bed" prior to the takeover it's news to me.  There was never any hint of Diamond Resorts involvement in any way with Sunterra until they bailed them out of a second near bankruptcy.  Did anyone know of any prior relationship I missed?





lv_maui said:


> Its my understanding that no one could have known about the extent of the problem unless they did extensive testing of the inner walls of the buildings.  That is how Diamond found the extent of the water intrusion issue.  Diamond knew about the water instrusion issues with the soffits since this was a well know problem at the resort.  But it appears that Diamond did not know the extent of the problem.
> 
> Teepeeca has a right to be upset but why should Diamond pay for the units that are owned by owners.  This is just the danger of owning a timeshare just like the owner of a condo unit.  I have read that Diamond has to pay a big chunk of money also for the units that they own.


I've tried to stay on top of the ins and outs of the dealings through the years, and I'm not aware of any relationship between Diamond and Sunterra prior to DRI taking over when Sunterra was spiraling toward it's second bankruptcy filing.  Diamond's involvement at that point has always seemed to me a case of a savvy buyer (Stephen Cloobeck) picking up assets on the cheap from a troubled operator.

Prior to being taken over by Diamond, Sunterra had been trying to sell Point at Po'pu and Ka'anapali Beach Club to raise cash.  About eight years ago it seemed that a sale of those resorts to Hilton seemed imminent.  After that, Sunterra was going to hook up with Radission - Sunterra even changed its stock ticker to SNRR, where the RR was supposed to represent Radisson Resorts.  It was only after those arrangements fell through that Sunterra dropped the Embassy names and rebranded Ka'anapali and Po'ipu as Sunterra resorts.

*******

Even if you think that Diamond and Sunterra may have been in cahoots, how would you pin them with responsibility for construction that occurred in 1991-1992 when Sunterra wasn't involved at the site until 1997, which is when Sunterra acquired Marc Resorts.


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## Passepartout

I have no skin in this game, and maybe I'm missing something, but isn't there insurance on the structures? If not, why not? Seems like structural damage should be covered by some kind of umbrella policy.

Jim


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## kwilson

MommaBear said:


> I nearly took a "free" Point at Poipu unit from a fellow Tugger a month or so ago. Thanks goodness for procrastination, as I am now a very happy non-owner at the Point!



Please name the Tugger who tried to unload on you. If they knew of the assessment and tried to unload on a fellow Tugger they should be be ostrasized.


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## T_R_Oglodyte

Passepartout said:


> I have no skin in this game, and maybe I'm missing something, but isn't there insurance on the structures? If not, why not? Seems like structural damage should be covered by some kind of umbrella policy.
> 
> Jim



Filed an insurance claim but the claim was denied. Commenced litigation about the decision, but dropped the claim after attorneys advised there was a low probability of success.


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## bogey21

kwilson said:


> Please name the Tugger who tried to unload on you. *If they knew* of the assessment and tried to unload on a fellow Tugger they should be be ostrasized.



That is a big "if".  You want the Tugger named and you aren't sure of the facts.  I thought we were fair on this board.

George


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## MommaBear

kwilson said:


> Please name the Tugger who tried to unload on you. If they knew of the assessment and tried to unload on a fellow Tugger they should be be ostrasized.



I actually think person giving the unit was actually innocent of any wrong doing. The fellow's wife had died and she handled all the timeshares- he didn't even know what season or view they owned. I looked back at our correspondance and this was actually 8 weeks ago- so I am going to think the best and assume no malicious intent on the Tugger's part.


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## TUGBrian

hoa letter regarding the insane special assesment of over $5000 this year

https://www.diamondresorts.com/hoa/20111005/PoipuOwnerLetterandInserts.pdf




> The total amount of the water intrusion assessment, which includes all construction costs, legal and consulting fees, permits, Hawaii general excise tax and other items is approximately $65.8 million, or $5,893.32 per interval.


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## Kona Lovers

This is just outrageous and insane.


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## rifleman69

timeos2 said:


> As owners they have accepted the obligations so it is all legal to report.




That's what I was getting at, how is Diamond ruining their credit?   Seems to me it's the OP that's ruining their own credit.


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## Passepartout

TUGBrian said:


> hoa letter regarding the insane special assesment of over $5000 this year
> 
> https://www.diamondresorts.com/hoa/20111005/PoipuOwnerLetterandInserts.pdf



If this whole deal isn't enough to sink the entire timeshare industry, I don't know what is. Not that it is healthy by any stretch anyway.

The insurance carrier who disclaimed responsibility after accepting premiums for years should be held responsible by Hawaii state insurance regulators. That is what insurance is for.

This is not just insane- it is criminal!

Jim Ricks


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## Kauaigrl00

Passepartout said:


> If this whole deal isn't enough to sink the entire timeshare industry, I don't know what is. Not that it is healthy by any stretch anyway.
> 
> The insurance carrier who disclaimed responsibility after accepting premiums for years should be held responsible by Hawaii state insurance regulators. That is what insurance is for.
> 
> This is not just insane- it is criminal!
> 
> Jim Ricks



Jim I agree!  Luckily I only own 1 week a year which is bad enough.  Seems like our hands are tied, I really do feel sorry for the retiree's that own multiple weeks.  I have always loved the Point at Poipu but as our retirement nears it does scare me.  I wonder what every one is going to do?  It also says that water intrusion is a big problem on Kauai - I sure would like to know what other establishments have the same problem since the Point at Poipu is actually built on volcanic rock.


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## Karen P

*Diamond damaging credit?*

I don't believe Diamond can damage an owner's credit. I have bought many Diamond properties over the years, and they have never asked me for a Social Security Number. 

Additionally, it is unlikely that they're interested in damaging your credit. I think their agenda is to either get the unit back from you, or have you pay the special assessment. 

I heard from another source (yahoo finance?) that Diamond acquired their resorts on a line of credit. My first impression is they need to pay off a note, and this is their way of doing it.


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## MOXJO7282

So are the owners just at the mercy of these HOAs who can charge anything they want for these assessments?

What if it was $7500, $10k, are owners just stuck paying? That just seems wrong.  There should be a cap on these things and if it exceeds a death blow vote can take place and the TS dissolved and sold for return to owners.

That may be to simplistic but it just seems like the littel guy owner again gets the short end and the corporation with the deep pockets is spared.


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## Kauaigrl00

MOXJO7282 said:


> So are the owners just at the mercy of these HOAs who can charge anything they want for these assessments?
> 
> What if it was $7500, $10k, are owners just stuck paying? That just seems wrong.  There should be a cap on these things and if it exceeds a death blow vote can take place and the TS dissolved and sold for return to owners.
> 
> That may be to simplistic but it just seems like the littel guy owner again gets the short end and the corporation with the deep pockets is spared.



But it is that and more for some owners that own multiple weeks!  Let it dissolve I will take the loss and be rid of it. Let them close it down, bulldoze it etc.


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## LisaRex

MOXJO7282 said:


> That may be to simplistic but it just seems like the littel guy owner again gets the short end and the corporation with the deep pockets is spared.



In theory, the HOA is supposed to elected and representative of the owners. Just like your state or fed representative is supposed to represent your interests.  That is the checks and balances on corporate greed. 

Many timeshare HOAs, however, are hand-picked by the corporations, which flies in the face of the checks and balances.  It is very difficult, if not impossible, to get a truly independent HOA installed when the developer controls the election process.  I'm not sure if that reality has ever been tested in the courts.

That being said, I'm not sure that it matters in this particular case because the HOA is responding to a situation that they didn't create.  Yet they are obligated to handle it in the manner they deem the most appropriate.

If you don't like it, then I suggest that before simply abandoning your unit, you at least communicate to them your unhappiness, and perhaps offer up an alternative solution.  For instance, they should not pay for a contractor up front, but should negotiate for them to be paid after certain milestones have been met.  Perhaps they could offer up installments for owners so that they are not bit by these huge burdens all at one time.  Most certainly, they could have been more sensitive and less abrasive in their communications with owners.  

In any event, you have my sympathy for whatever it's worth.  It seems that someone -- the builder, the inspector -- let you all down.  And what stinks even more is that the very people who built the structure may be hired to fix the problem.  I'm sure skilled labor on Kauai isn't that plentiful.


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## lv_maui

*Lets set the facts striaght.*

Much of this is false.  Let me set the facts.

Sunterra never tried to sell the two Hawaii properties.  They were key locations for their system.

The sale to Hilton was only the Kaanapali piece, and Sunterra was totally against it and fought it.  It was because Goldman Sachs, their partner in Maui, thought it was time to sell at top dollar, which was really a correct decision on their part and Hilton approached them.

Sunterra trying to hook up with Radison is correct, so much so that the deal was approved by their Board but did not get signed by their CEO Nick Benson.  Benson came from Europe and knew that if Sunterra branded with Radison, his baby, Europe, was going to suffer badly because of how low and dirty Benson and Europe was sold to customers.  Bottomline, Benson sold out USA for benefit of his croniies working in Europe.  

As for SNRR and Radison, that is the first time I have heard of that and now you have me wondering if that was correct.

The Embassy name was taken off becuase Sunterra made a decision to NOT be a branded company as per the above and because Sunterra did not like paying the franchise fee to Embassy.  Embassy also wanted out of the deal for a long time.  IN fact, the Embassy relationship was handled by the Hilton Timeshare people in Orlando who Gennuso knew very well from the old days.  Without Gennuso on Sunterra side, Embassy/Hilton would have asked to get out much earlier.



T_R_Oglodyte said:


> Prior to being taken over by Diamond, Sunterra had been trying to sell Point at Po'pu and Ka'anapali Beach Club to raise cash.  About eight years ago it seemed that a sale of those resorts to Hilton seemed imminent.  After that, Sunterra was going to hook up with Radission - Sunterra even changed its stock ticker to SNRR, where the RR was supposed to represent Radisson Resorts.  It was only after those arrangements fell through that Sunterra dropped the Embassy names and rebranded Ka'anapali and Po'ipu as Sunterra resorts..


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## ocdb8r

I'm sorry, but I don't agree with all the defense of Diamond.  Bottom line is that the developers should be on the hook for this.  If Diamond bought from Sunterra and assumed the role of developer, they should be held responsible.  If they didn't it may be a bit blurry for those who bought from Sunterra.  I understand that maybe those who bought from Sunterra may only have them to hold accountable (depending on exactly what the relationship between Sunterra and Diamond was when Diamond stepped in), but certainly Diamond should be on the hook to anyone who they sold units to.

Just because the defects would have been hard to detect doesn't mean Diamond should be let off the hook. THEY are the supposed experts here...THEY are the ones with property development experience....THEY should have properly diligenced what they were purchasing.


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## GTStone

*Developer Responsibility*

This really depends on how you hold the deed.  If you own a fractional deed, tied to the property, then you carry the financial liability for work that must be done.

It would appear the original developer had some serious construction issues.  Probably some contractors went "cheap" and later it caught up with them.

Liability usually expires after 10 years.  Any litigation against a builder must be brought in the first 10 years.  I don't know this property, but it would appear it is older then that, so the developer has no financial liability.

The HOA runs the property on behalf of the owners.  If the work needs to be done, there are probably no cheap solutions.  When demolition of damaged materials is involved, the cost goes way up.  Its not just the cost of new construction.

When you purchase the deed for any property, either as a residence, or a timeshare, you accept financial responsibility for it.  This is simply the cost of ownership.  If it was simply buying vacation time somewhere, it would be different ( a vacation club, non-deeded ).  

Hopefully the HOA is having an excellent job done to restore the site and provide the maximum value to the owners.  There is nothing malicious about long term planning that benefits the majority of people.  

Your personal financial issues cannot relieve you from your contractual responsibility, but you can likely work out an arrangement that benefits both parties.  Try approaching them with "I don't have that type of money due to the shifts in the economy.  How can we work together to resolve this problem.  Then, listen.


----------



## T_R_Oglodyte

GTStone said:


> Liability usually expires after 10 years.  Any litigation against a builder must be brought in the first 10 years.  I don't know this property, but it would appear it is older then that, so the developer has no financial liability.


In their letter to owners, the Board of Directors did mention the 10-year statute of repose as regards inability to pursue relief from the builder.


----------



## LauritaM

*Points VS Weeks*

Hey -we haven't rec'd a special assessment notice, we own points through The Hawaii Collection DRI which includes Point Poipu, Kaanapali, and some locations in Nevada and Arizona.  I REALLY hope that we will not be a part of this.  When we first bought a week at Kaanapali through Embassy - later Sunterra we got a whopping special assessment for remodeling.

Does anyone know about if points are different than weeks?  I prepaid our 2012 MF a couple months ago as we were booking for June and no mention was made then of any extra owed.  

I know this doesn't help the OP, but knowing if there is a difference will help me and hopefully others.  Thanks!


----------



## T_R_Oglodyte

The way I see this is that everyone who has a deed to the property, which includes the Hawaii Collection trust, should be looking this from the aspect of what is the best option to deal with the property based on what is known right now.  

Some significant information that has not been presented is what the cost would be to simply  close the resort, clear the property, and put the land up for sale.  How much would that cost, and how much of an assessment would be needed to make that happen?  What would be the procedural issues involved to terminate the timeshare program?


----------



## T_R_Oglodyte

LauritaM said:


> Hey -we haven't rec'd a special assessment notice, we own points through The Hawaii Collection DRI which includes Point Poipu, Kaanapali, and some locations in Nevada and Arizona.  I REALLY hope that we will not be a part of this.  When we first bought a week at Kaanapali through Embassy - later Sunterra we got a whopping special assessment for remodeling.
> 
> Does anyone know about if points are different than weeks?  I prepaid our 2012 MF a couple months ago as we were booking for June and no mention was made then of any extra owed.
> 
> I know this doesn't help the OP, but knowing if there is a difference will help me and hopefully others.  Thanks!



You will pay your share of the rebuild through your annual fees due to the Trust. The trust is like any other deed-owner at the property - and the trust is getting the same assessment for each and every deed it owns.  The trust will simply add that to the all of the other fees it receives for all of its deeds, and then pass that on to the Trust members in porportion to the number of points each trust member owns. 

The first installment should show up on your fees statement.  It may not be broken out separately as Poipu special assessment, but it will be included.


----------



## LisaRex

T_R_Oglodyte said:


> In their letter to owners, the Board of Directors did mention the 10-year statute of repose as regards inability to pursue relief from the builder.



Statutes of limitation usually start running only after discovery. So if the water intrusion was discovered in 2005, you should have until 2015 to file suit.


----------



## T_R_Oglodyte

LisaRex said:


> Statutes of limitation usually start running only after discovery. So if the water intrusion was discovered in 2005, you should have until 2015 to file suit.


Statutes of repose are not the same as statutes of limitation.  Most importantly, statutes of repose run from the date of completion.  They are very common in construction law; as of 2006 46 of the 50 states in the US had statutes of repose for real property improvements.  Hawaii's is ten years



> (a) No action to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of any deficiency or neglect in the planning, design, construction, supervision and administering of construction, and observation of construction relating to an improvement to real property shall be commenced more than two years after the cause of action has accrued, but in any event not more than ten years after the date of completion of the improvement.


----------



## ondeadlin

There is an argument to be made for walking away from a large mortgage rather than being saddled with a lifetime of payments over a property that is no longer worth what you paid for it.

I would disagree with that argument, but I understand it.

It's much, much tougher to make the case for walking away for any debt under $20k.  It absolutely will destroy your credit 7 years and will hurt it for longer than that.

It's hard to recommend anyone walk away from a timeshare loan or payment unless you fundamentally can't pay it.  Obviously if you can't pay it, you can't pay it.

Now, all that said, I imagine a very large proportion of P@P owners will walk away.  Why? Because some simply can't pay and some simply won't realize how much walking away will hurt them.

I'd urge anyone thinking of walking away to consult with a creditor/debtor counselor or attorney before doing so.

Obviously the best-case scenario would be a deed-back, but I'm not sure that option exists.


----------



## wilblau

*what's the value of a loser t.s.*



therajman said:


> We have a every-year floating oceanfront unit we bought back in 1996 when it was Embassy...and a second every-other-year oceanfront unit we bought in 2004.
> 
> We have been trying to sell both the units but on the secondary market, they go for $1500 at best and then too, they are not moving...
> 
> We are considering abandoning/walking away from both units - in this economy, shelling out $5,400 for 2012 and $3,300 for 2013 and then again $5,400 for 2014 is a financial drain that we simply CANNOT afford.
> 
> I don't know whether our credit will take a hit...or whether we can negotiate an exit or come to a deal. We are willing to give up both units. It is simply unaffordable.
> 
> I do know that Diamond will come after us with a vengeance if we default on the maintenance fees. They are one of the most ruthless companies i have dealt with in a very long time. Their customer service is atrocious - their operators are downright nasty and all they care about is money. They have little, if any, regard for their owners and they are of absolutely ZERO help. Calling them has been next to useless...essentially, the specialist I spoke to flipped me the virtual bird on the phone.
> 
> So I researched this matter on the web and came across this portal.
> 
> Please, if anyone has any idea, experience or recommendations, I would be mightily obliged.
> 
> Thanks.
> 
> Raj



--------------------------------------------------------------------------
if it is truly a loser and you can salvage $1500 or there abouts, it may be  better to be someone else's headache than yours.  if you are going to use it or rent it perhaps it might be worth keeping if the place is worth the stay.  Like a piece of jewelry, it's only worth the weight of metal or jewels someone is willing to pay for it.  Take time to consider selling and if you really want out, get out--hard times make headaches for everyone


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## lenbeil

*New Point at Poipu Owner*

I bought an every year 2 bedroom at P at P last year and just found out about the $5800 assessment. Lady was very nice explaining it all. Very disappointed, but plan to pay and enjoy the resort. We experienced the same thing in 1992 when we bought at the Cliffs Club on the secondary market. Shortly thereafter incurred major Special Assessments similar to this. I guess that is the breaks of life. We have lots of wins and occasional losses and big disappointments. I too feel your pain!


----------



## ampaholic

*Odd ...*

I think the really odd part of this whole dust up is this quote from the SA paperwork ...



> During the past several years, your AOAO Board authorized three investigations to determine the extent of the damage and formulate a course of action to remedy the situation, which included the possibility of filing an insurance claim. The insurance claim was denied.



So ... several years ... three investigations ... and they just now spring the 5800 SA !!!!!!!!!!!

I think this was known about for some time ... why was the information not shared?


----------



## dougp26364

ondeadlin said:


> *There is an argument to be made for walking away from a large mortgage rather than being saddled with a lifetime of payments over a property that is no longer worth what you paid for it.*I would disagree with that argument, but I understand it.
> 
> It's much, much tougher to make the case for walking away for any debt under $20k.  It absolutely will destroy your credit 7 years and will hurt it for longer than that.
> 
> It's hard to recommend anyone walk away from a timeshare loan or payment unless you fundamentally can't pay it.  Obviously if you can't pay it, you can't pay it.
> 
> Now, all that said, I imagine a very large proportion of P@P owners will walk away.  Why? Because some simply can't pay and some simply won't realize how much walking away will hurt them.
> 
> I'd urge anyone thinking of walking away to consult with a creditor/debtor counselor or attorney before doing so.
> 
> Obviously the best-case scenario would be a deed-back, but I'm not sure that option exists.



The problem with this theory is the assumption that the lein holder won't come after you once the property has sold, if it's sold at a loss. There have been articles I've seen lately indicating banks are begining to go after those who walked but could afford the loan payments.

To walk because of these assessments might result in an action taken by DRI to collect if they feel the individuals had the ability to pay. 

On the other hand, taking legal action against a large number of individuals in various states could be more costly than the amount they are trying to collect. They may simply turn it over to collections and, if that fails, write it off as a bad debt and repport it as a bad debt on the credit file. 

I have empathy for those facing such a large assessment without warning. We would either have to withdraw funds from our savings accounts or take out a loan to pay those fee's. Neither option is attractive to me but, it would be easier to withdraw from savings, then systematically put it back on a monthly basis over the next year. We are fortunate to be in a position where we can do that and, in fact, did have to do this due to an unexpected illness with my wife and an unexpected ER visit with follow up doctors visits and additional testing for me. Thank goodness I work in a field where, at least up until last week, I have been able to work plenty of overtime.


----------



## LisaRex

dougp26364 said:


> The problem with this theory is the assumption that the lein holder won't come after you once the property has sold, if it's sold at a loss. There have been articles I've seen lately indicating banks are begining to go after those who walked but could afford the loan payments.



Was this for privately owned homes or timeshares?

I heard an interesting program on NPR a few months ago. They were interviewing two families who were upside down on their mortgage.  One couple, a military family, couldn't sell their home after the husband was relocated to another city, without having to write a hefty check to the bank.  So the husband and wife/children were living in two different cities.  He flew home to see them twice a month if he could get a cheap flight.

The other homeowner, a childless couple, decided to walk away. The interviewer asked him if he felt that it was unethical to do so.  His answer was basically, "If I was a company instead of an individual, would you feel it was unethical for me to go out of business? Because that's what I've done.  I don't want to lose money any more.  That would be stupid."


----------



## ampaholic

LisaRex said:


> -snip-
> 
> The other homeowner, a childless couple, decided to walk away. The interviewer asked him if he felt that it was unethical to do so.  His answer was basically, "If I was a company instead of an individual, would you feel it was unethical for me to go out of business? Because that's what I've done.  I don't want to lose money any more.  That would be stupid."



I doubt if Freddie Mac or Fanny Mae would underwrite a loan for a business so in essence this guy is presenting a red herring.

If he had had a minimum of 25% (business loan) skin in the game - he wouldn't be walking away - but at 3% sure why not.


----------



## Nrthstr

*No voluntary surrender*

I just went to the DRI website and didn't find anything about the voluntary surrender policy. I spoke with a representative, who told me that they no longer are allowing voluntary surrenders for any of their properties. The options are paying on time or going into collections. (Oh yeah, early payment also is an option, "in case that makes it easier.") Let me know if you have any ideas. We don't have the $3,000.


----------



## lv_maui

*How long did they know??*

DRI knew about this problem for the last 2 years or so.  They will claim that they did not know the extent of the problem until recently?  They will also claim that they did not know how to fix it until recently also?

But if you asked them for an honest, 50-50 question on how much it will cost to fix a year ago, I bet they will tell you that it will be in the thousands per week.  So they knew but they will never admit it.

One of the many legal cases coming from this will be the lack of disclsoure to the State of Hawaii regulators and their lack of disclosure in the public report about this for the last 2 years or more.  Anyone who bought under that public report has a case for rescission since Diamond did not disclose it but knew something about it.  The State may take a tougher stance on this issue.  This is only my opinion but I am sure someone is going to challenge this.  (I should first ask if there is any disclosure in the public report about water instrusion issues first since I do not have it, I just assumed it is not in there).



ampaholic said:


> I think the really odd part of this whole dust up is this quote from the SA paperwork ...
> 
> 
> 
> So ... several years ... three investigations ... and they just now spring the 5800 SA !!!!!!!!!!!
> 
> I think this was known about for some time ... why was the information not shared?


----------



## dougp26364

LisaRex said:


> Was this for privately owned homes or timeshares?
> 
> I heard an interesting program on NPR a few months ago. They were interviewing two families who were upside down on their mortgage.  One couple, a military family, couldn't sell their home after the husband was relocated to another city, without having to write a hefty check to the bank.  So the husband and wife/children were living in two different cities.  He flew home to see them twice a month if he could get a cheap flight.
> 
> The other homeowner, a childless couple, decided to walk away. The interviewer asked him if he felt that it was unethical to do so.  His answer was basically, "If I was a company instead of an individual, would you feel it was unethical for me to go out of business? Because that's what I've done.  I don't want to lose money any more.  That would be stupid."



It was privately owned homes. 

Anytime you owe money and have the ability to pay but refuse, you're on the hook. Car loan, home loans, credit card loans et......it doesn't matter.

As an example, in the mid 80's I was divorced from my wife. She kept the new car and the loan that went with it. She failed to make the payments, the car was repoed and Ford Motor Credit then sold the car at auction for a loss (She had wrecked the car and had not had it fixed). They then came after me for payment of the difference since my name was still on the loan. In the end, that's what tipped the scales and put me into bankruptcy. 

Sure I had a divorce decree that set out her obligations but, when she didn't pay them I was still responsible for them and, according to the lawyer, I had to pay them, then go after her in court for reimbursement. 

If you owe the money, you can always walk away but the lein holder has legal remedies to use. It's up to them to decide if it's worth the expense of getting a judgement. 

Walking away isn't as easy as the news media often makes it out to be. There are people who have walked on a mortgage because they were upside down, only to find out down the road that, when the bank sells the home at a loss, they're still responsible for the balance. 

In this case, the assessment falls before the default. I would be afraid if an owner walks and, if DRI deems it resonable to seek a judgement, then the owner (former owner if the deeded week was foreclosed on) could still be held liable for the fee's if they had the reasonable ability to pay them. 

The trick here is, will DRI spend the money going after those that default and, would there be a ressonalbe chance DRI would be awarded the defaulted fee's PLUS any fee's associated with getting the judgement?

Before walking, it might be worth paying an attorny to see what the consequences might be. I'd hate to get blind sided a year or two down the road by a legal judgement that either had to be paid or, file bankruptcy to avoid. 

I'm not expert. I'm just saying this is something I'd be concerned about based on my past experience.........which occured in the mid 1980's. Things change and I could be a long way off base but, it's something I'd want to make sure of rather than feel self assured it was a done deal if I just didn't pay.


----------



## dougp26364

Nrthstr said:


> I just went to the DRI website and didn't find anything about the voluntary surrender policy. I spoke with a representative, who told me that they no longer are allowing voluntary surrenders for any of their properties. The options are paying on time or going into collections. (Oh yeah, early payment also is an option, "in case that makes it easier.") Let me know if you have any ideas. We don't have the $3,000.



If I were in this position and, if I didn't have money in a saving account, then I'd be looking at either default with the potential for bankruptcy if DRI came after me (seems drastic for a $3,000 debt) or, I'd be looking at taking out a small loan, perhaps an advance on a credit card, that I could reasonably pay off over the course of 3 to 12 months. 

I hope to never see something like this happen at any resort I own but, I have one in Branson where the developer defaulted and the ground the timeshare sits on is part of the bankruptcy. I'm watching the situation closely but fear I could see a similar bite in the keaster when the dust is settled. I'm begining to make plans to face a potential situation as the Point owners are now facing should something unexpected happen in bankruptcy, such as forcing the HOA at my resort to buy out the loan on the land that the timeshare buildings are sitting on.


----------



## T_R_Oglodyte

Nrthstr said:


> I just went to the DRI website and didn't find anything about the voluntary surrender policy. I spoke with a representative, who told me that they no longer are allowing voluntary surrenders for any of their properties. The options are paying on time or going into collections. (Oh yeah, early payment also is an option, "in case that makes it easier.") Let me know if you have any ideas. We don't have the $3,000.



Did you got to the DRI *message board* forums as I suggested?  Look for the link - should be near the bottom of the DRI webpage.  As of a couple of weeks ago the DRI reps were still saying that DRI would take back deeds.


----------



## petekrantz

I own two weeks garden view at P@P. One bought 10 years ago one just bought in April, no one disclosed this fee up coming, I just asked a rep. from DRI if there was a voluntary surrender program and he said NO. 
I would be curious what "point only" owners are assessed? They have been trying to get us to change for years.


----------



## Diamondresortbailout

*Poipu Point Bailout for DRI*

As a owner of 15K Points with the Hawaii Collection, I am totally disappointed with the lack of "communication" by DRI.  It was not until last nite that my maintenance fees for 2012 were posted and there was no explanation for the doubling of the fees.  I found out about it thru my daughter who owns a timeshare at Poipu Point.  I agree with one of the more recent posts that if DRI and or Sunterra knew about this problem it should have been "disclosed" to the purchasers prior to making the purchase.  I am currently exploring this exact issue with an attorney in hopes of getting out of the contract.  I purchased at Poipu Point originally in 2005, but switched to the Hawaii Collection on Maui in 2009.  Seems to me that everyone should get together on this matter and file a "class action lawsuit" against DRI.


----------



## timeos2

MOXJO7282 said:


> So are the owners just at the mercy of these HOAs who can charge anything they want for these assessments?
> 
> What if it was $7500, $10k, are owners just stuck paying? That just seems wrong.  There should be a cap on these things and if it exceeds a death blow vote can take place and the TS dissolved and sold for return to owners.
> 
> That may be to simplistic but it just seems like the littel guy owner again gets the short end and the corporation with the deep pockets is spared.



They can & must by law charge whatever it takes to maintain You repair the property. They tAke on that sometimes unpleasant obligation while owners take on the obligation to pay whatever they assess. That is how shared ownership of condos/timeshares work by law. If you don't want that obligation then don't buy in.  It is that simple.

Suing the Association is suing yourself and usually does not work out well in these cases.


----------



## LisaRex

dougp26364 said:


> It was privately owned homes.



Yes, of course it was. I'm not advocating a position either way.  But I can't imagine that a timeshare company who sued owners who walked away from their timeshare following such a debacle, will stay in business long.  Would you buy a timeshare from DRI? I certainly wouldn't. 

Someone dropped the ball on this project and it wasn't the owners.


----------



## bogey21

Disclaimer:  I'm not an owner here and have never seen the Resort.  But has anyone considered a vote of the Owners to see if they would prefer removing the building; selling the land; and distributing any net proceeds to the Owners as an alternative?

George


----------



## T_R_Oglodyte

LisaRex said:


> Yes, of course it was. I'm not advocating a position either way.  But I can't imagine that a timeshare company who sued owners who walked away from their timeshare following such a debacle, will stay in business long.  Would you buy a timeshare from DRI? I certainly wouldn't.
> 
> Someone dropped the ball on this project and it wasn't the owners.



Actually, it's not DRI that would go after owners for default.  It would be the HOA (technically, the Association of Apartment Owners, or "AOAO" as is appears on resort materials) for the resort, i.e., the remaining owners who were not in default.

*******

Bear in mind that the real latent power at the resort lies with the Trustee for the Hawaii Collection.  The Hawaii Collection owns about 40% of the deeds at Poipu - that means they also have close to 40% of the voles for the AOAO. That's probably sufficient for them to put onto the board whomever they want.

The trustee has a fiduciary duty to Trust owners to manage the Trust in fiscally responsible manner.  Failing to do so can expose the Trustee to direct liability for damages to the trust members.  Not what the Trustee wants to have happen.

So, in the end, if the Trustee decides it is fiscally prudent to pursue collections against defaulted owners, that is what will likely happen.  The trustee is under no obligation to do what is best for Diamond; in fact doing what is best for Diamond at the expense of Trust members is the very definition of breach of fiduciary duty.


----------



## ladyp34

petekrantz said:


> I own two weeks garden view at P@P. One bought 10 years ago one just bought in April, no one disclosed this fee up coming, I just asked a rep. from DRI if there was a voluntary surrender program and he said NO.
> I would be curious what "point only" owners are assessed? They have been trying to get us to change for years.


Yes, I called as well.  All DRI properties have stopped voluntary surrenders as of September 10, 2011.  Isn't that just great? 

I'm looking for a solution as well.  I have tried to sell, give away, etc. this timeshare at Grand Beach.  I've no idea what to do now.


----------



## T_R_Oglodyte

bogey21 said:


> Disclaimer:  I'm not an owner here and have never seen the Resort.  But has anyone considered a vote of the Owners to see if they would prefer removing the building; selling the land; and distributing any net proceeds to the Owners as an alternative?
> 
> George


The problem there is getting all of the owners to vote to agree. There will always be some that will vote to rebuild. Unless there is a provision in either the condo program documents or state statutes governing condo projects that would allow such a decision to be made without unanimous consent, getting all of the owners to vote together is essentially impossible.


----------



## oceanvps

Diamondresortbailout said:


> , but switched to the Hawaii Collection on Maui in 2009.  Seems to me that everyone should get together on this matter and file a "class action lawsuit" against DRI.



in jan 2011 we bought points in the hawaii collection on maui, there was an additional piece of paper "special offer" at the end of all the signing of docs that said that we were exempt from paying special assessments for 2011 relating to the water intrusion problems at pop.  we rescinded when we got home for various reasons but i think if we hadn't the way they worded the special offer would of meant that we would of been on the hook for the special assessment in 2012. convenient how they made the s.a. for 2012 imo.


----------



## T_R_Oglodyte

Diamondresortbailout said:


> Seems to me that everyone should get together on this matter and file a "class action lawsuit" against DRI.


What specifically would you allege that DRI has done?
Bear in mind that *DRI *is not assessing the owners anything.  The assessment is being imposed by the Homeowners Association at the Resort, which is elected by the deedholders at the resort.

Current breakdown of resort ownership appears to be about 35% owned by the Hawaii Collection trust (the shares of which are voted by Trustee, which is not DRI), 11% is deeds held by DRI itself, and the remaining 56% is in the hands of individual deedholders.

****

So who, exactly, do you propose to sue and what would you allege as the basis for the suit?


----------



## LauritaM

*what this point only owner was assessed*



petekrantz said:


> I own two weeks garden view at P@P. One bought 10 years ago one just bought in April, no one disclosed this fee up coming, I just asked a rep. from DRI if there was a voluntary surrender program and he said NO.
> I would be curious what "point only" owners are assessed? They have been trying to get us to change for years.



Hello - well like an other poster my add'l assessment for 2012 just showed up online in my account (it was NOT there yesterday when I checked)  I owe an add'l $2071.50.  I had already paid $2317.58 as I had to prepay (based on 2011) since I booked for two weeks in June 2012.

So ... yes indeed points only owners are also being assessed.  They have some formula for determining it.  Below is what I copied from my actual stmt:

 “2012 - Water Intrusion Payment Option”: The remaining portion of your Water Intrusion Assessment may, at your option, be paid in future years as authorized by The Association of Apartment Owners of Poipu Point. Please see Exhibit “B” – Water Intrusion Payment Schedule for more information.

Amount Due $2071.50

2012 Assessment Fee

Due Date: Jan 1, 2012

Statement Date: Oct 10, 2011

Amount Due: $2071.50

2012-Base Standard Assessment  230.00
2012-GET On Base Standard Assessment  9.58
2012-Standard Assessment - Fee Per Point 1792.50
2012-GET On Standard Assessment - Fee Per Point 75.00
2012-Water Intrusion Assessment - Fee Per Point  2445.00
2012-GET Water Intrusion Fee Per Point 102.00
2012-THE Club(R) Fee  277.00
ARDA-ROC Voluntary Contribution  5.00"

I really don't understand it all, but we own 15000 points and it looks like ALL I need to pay by 2012 (from other info included) is $2000.00 and the balance in 2013 - which won't be much, but to yank their chain I may just pay what I HAVE to   AND  I am going to subtract the voluntary contribution too.  People who have more points also have the SA spread out over several years.  YIKES!  We have considered buying more points - but am glad now that we haven't.

All that being said - I am still glad that we have this timeshare.  We have been able to use our points to trade into some really great places, in fact we just got back from a week in Vegas that was 4000 points in a 2 Bed 2 Bath full kitchen wash/dryer.  We have taken our daughters and their families to Maui and P of P a few times (points allow you to choose length of stay over view) and it has been awesome for us.  Nothing like showing some beautiful parts of the world to the grandkiddos!

BUT ... if you don't have the money to pay the assessment no matter how much you like the timeshare it is a very serious burden and worry.  I wish you all well.  Maybe they will allow some type of monthly payment for you.

I guess I would like to know is the 5800$ SA in addition to what your regualr MF are or are they included?  As near as I can tell ours is a combination?  Can anyone shed any light on this?

I went back and reread some posts and looked at the SA chart for weekly owners and from what I can tell having points (for now at least) looks better.  It looks like we were assessed basically double our normal fee and luckily I had prepayed a couple months ago to book so it will not hit me quite as hard, but still ... it is a LOT of money w/ NO warning.  I didn't even get an email - let alone a letter regarding this situation.


----------



## Tacoma

Sorry to hear about the massive special assessment.  Although I do not own there I do feel the pain.  I remember when I got almost a $1000 special assessment bor BRMR and I owned 2 weeks.  Ouch! I paid it but always wondered what percentage didn't and what happened to them. I do know they used the excuse of people not paying to explain why the renovation took much longer than originally planned.  I also remember being really annoyed when someone admitted that the non timeshare units were renovated first.  I still feel that they had my money for years before I saw the benefit of the renovations.

My question is this week owners are each assessed aproximately 5800 each.  Are the owners there assessed 52 times that or aprox $300,000 each?
Wow is that possible?

Joan


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## dougp26364

T_R_Oglodyte said:


> The problem there is getting all of the owners to vote to agree. There will always be some that will vote to rebuild. Unless there is a provision in either the condo program documents or state statutes governing condo projects that would allow such a decision to be made without unanimous consent, getting all of the owners to vote together is essentially impossible.



Not to mention the percentage of units held by the trust, which is unlikely to vote that large block of units to sell off the resort.


----------



## T_R_Oglodyte

dougp26364 said:


> Not to mention the percentage of units held by the trust, which is unlikely to vote that large block of units to sell off the resort.


I've wondered about that.  The trustee has a fiduciary duty, and if the most cost-effective option is to close the resort, the Trustee could face direct liability if they were found to have breached that duty.  

If anthing were to ever cause the Trustee to zig when DRI wants the Trustee to zag, this is the type of situation where that might happen.


----------



## Kauai Kid

Kauaigrl00 said:


> I have a slightly different question.  (silly as it may be)  We always pay our maintenance fee's at the end of Dec.  When we pay this next one (with the special assessment at the end of Dec., is this going for the 2012 year?  or is it for the 2011 year?  I had this discussion with another person and I am assuming it is for 2012 whereas the other person said it is for 2011?  Confusion here, I was mainly concerned about getting this paid since we are going in Feb.  OH how we would just love to give this back to Diamond, but we love the point at poipu.  Also on their explanation of the water intrusion it said many other condo's on Kauai have the same issue - Has anyone heard of anyone else having the same water intrusion?  I sure haven't!



We own at 30 yr old Alii Kai on the north shore.  Never been a special assessment for water intrusion or anything else including nothing after hurricane Iniki hit. 

No wonder I like it better than the Point at Poipu.

Sterling


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## geekette

ampaholic said:


> I think the really odd part of this whole dust up is this quote from the SA paperwork ...
> 
> 
> 
> So ... several years ... three investigations ... and they just now spring the 5800 SA !!!!!!!!!!!
> 
> I think this was known about for some time ... why was the information not shared?



because people would have dumped their ownerships three years ago, leaving the developer with the entire tab.


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## Diamondresortbailout

*Diamond Bailout*

How many of you rec'd information in your billings in 2008, 2009, 2010 with regard to the water intrusion issue at Poipu Point?  I know for sure that I did not.  We really have a real estate disclosure issue with DRI since this issue has been going on since 1991/1992.  My recommendation is for everyone to get an attorney and also follow-up with the State of Hawaii authorities since the property is not up to "building codes", etc at this time for the condos to be occupied.


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## weisberg

Hello, anyone out there with legal knowledge of timeshares? I am Looking to organize a class action suit. I am a deeded owner of one week at The Point at Poipu resort. Presently owned by Diamond Resorts International. I believe they are trying to pass the buck for property repairs that should come from the profits they have made in the past. They did not share their profits with owners. Why should they bill us for repairing a poorly constructed property? When I buy a property, I have an engineer check things out. They have assessed the owners with a unheard of amount of $5893.32 . This is in addition to your regular maintenance fees. They tried to submit water intrusion repairs to their insurance company. The claim was denied. They admit that rather than pay legal fees to fight the denied claim. They are passing the expense on to the timeshare owners. This just is not right!!!! Can anyone point us in the right direction? 
I fear that this corporation is not in a good place due to the fall of our economy. If we pay the first payment, we have no guarantee that they we follow through with the repairs. We also have no guarantee that we can get to use our resort for the next few years. If the resort is out of commission, a trading company will not accept a resort to trade if there any no units available.  At this point I say lump your original investment and cut your losses 
They have known about this problem for a few years and not given us a clue as to what was in store for us. We bought in good faith and knew that there would be expenses to enjoy our paradise. Why should we be held to our end of the bargain if they are not? Please anyone that can help please reply.   
I have owned for 10 years and watched the amenities that attracted me to buy disappear since the change of ownership went to DRI. Contact bobweisberg@bellsouth.net


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## timeos2

Weisberg - The resort is OWNED by you & the other owners - it is managed & unsold inventory held & sold by DRI.  Unless you bought very recently when there may possibly be a question about sales disclosure your beef is with the resort/Board not DRI.


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## T_R_Oglodyte

weisberg said:


> Hello, anyone out there with legal knowledge of timeshares? I am Looking to organize a class action suit. I am a deeded owner of one week at The Point at Poipu resort. Presently owned by Diamond Resorts International. I believe they are trying to pass the buck for property repairs that should come from the profits they have made in the past. They did not share their profits with owners. Why should they bill us for repairing a poorly constructed property? When I buy a property, I have an engineer check things out. They have assessed the owners with a unheard of amount of $5893.32 . This is in addition to your regular maintenance fees. They tried to submit water intrusion repairs to their insurance company. The claim was denied. They admit that rather than pay legal fees to fight the denied claim. They are passing the expense on to the timeshare owners. This just is not right!!!! Can anyone point us in the right direction?
> I fear that this corporation is not in a good place due to the fall of our economy. If we pay the first payment, we have no guarantee that they we follow through with the repairs. We also have no guarantee that we can get to use our resort for the next few years. If the resort is out of commission, a trading company will not accept a resort to trade if there any no units available.  At this point I say lump your original investment and cut your losses
> They have known about this problem for a few years and not given us a clue as to what was in store for us. We bought in good faith and knew that there would be expenses to enjoy our paradise. Why should we be held to our end of the bargain if they are not? Please anyone that can help please reply.
> I have owned for 10 years and watched the amenities that attracted me to buy disappear since the change of ownership went to DRI. Contact bobweisberg@bellsouth.net


Couple questions.  Whom did you cast your vote for on the Board of Directors?  Why not ask those questions of your elected representatives on the Board of Directors?


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## weisberg

*Mistrust of DRI*



dougp26364 said:


> The problem with this theory is the assumption that the lein holder won't come after you once the property has sold, if it's sold at a loss. There have been articles I've seen lately indicating banks are begining to go after those who walked but could afford the loan payments.
> 
> To walk because of these assessments might result in an action taken by DRI to collect if they feel the individuals had the ability to pay.
> 
> On the other hand, taking legal action against a large number of individuals in various states could be more costly than the amount they are trying to collect. They may simply turn it over to collections and, if that fails, write it off as a bad debt and repport it as a bad debt on the credit file.
> 
> I have empathy for those facing such a large assessment without warning. We would either have to withdraw funds from our savings accounts or take out a loan to pay those fee's. Neither option is attractive to me but, it would be easier to withdraw from savings, then systematically put it back on a monthly basis over the next year. We are fortunate to be in a position where we can do that and, in fact, did have to do this due to an unexpected illness with my wife and an unexpected ER visit with follow up doctors visits and additional testing for me. Thank goodness I work in a field where, at least up until last week, I have been able to work plenty of overtime.



I understand the problems with walking away from a small debt. This goes further than the initial, large, previously, undisclosed assessment. It is a matter trust. I am a owner of a second party purchase of one week every year 10 years ago. Over the 10 years, all of the amenities that attracted me to buy have disappeared. Every encounter I have had with DRI has not been pleasant. I feel the past lean years have made them creative to produce new revenues. After all, getting $5,800. and change from all deed owners helps to make up for lack of sales that have not been produced. After reading comments posted. I agree this is a beautiful place, however what guarantee do we have that they will not run into additional expenses and we will be assessed for more. How solvent is DRI? What if we kick in $68 Million and the go under. That would be a real kick


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## Farmtek

I am suspicious any time I deal with timeshare people.   I think there is more to this than appears on the surface. Why would a smart bunch like Diamond buy into a damaged property?  What is Diamonds financial picture right now?   What about an insurance company that will not pay? What about a roof repair that will cost 65 million dollars?  Has anyone seen a copy of the insurance plan, or the response by the insurance company?  Did the insurance company estimate the damages?  Can we get an assessment of the damages by another source, such as building inspectors for the State of Hawaii?  Should the owners be willing to shell out 65 million until we have a better picture?


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## Rhinestone Redneck

Anyone have an additional information this today regarding the Poipu Point...


----------



## Rhinestone Redneck

Anyone have any additional information today regarding Poipu Point...


----------



## Rhinestone Redneck

weisberg said:


> I understand the problems with walking away from a small debt. This goes further than the initial, large, previously, undisclosed assessment. It is a matter trust. I am a owner of a second party purchase of one week every year 10 years ago. Over the 10 years, all of the amenities that attracted me to buy have disappeared. Every encounter I have had with DRI has not been pleasant. I feel the past lean years have made them creative to produce new revenues. After all, getting $5,800. and change from all deed owners helps to make up for lack of sales that have not been produced. After reading comments posted. I agree this is a beautiful place, however what guarantee do we have that they will not run into additional expenses and we will be assessed for more. How solvent is DRI? What if we kick in $68 Million and the go under. That would be a real kick



that's a huge part of the problem...those that pay will be left empty handed...the board should have made certain that such issues were covered by insurance..."owners" should not have to pay for the board's mismanagement and DRI's asleep at the wheel...


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## timeos2

Rhinestone Redneck said:


> that's a huge part of the problem...those that pay will be left empty handed...the board should have made certain that such issues were covered by insurance..."owners" should not have to pay for the board's mismanagement and DRI's asleep at the wheel...



It is unfortunate that this is such a large assessment but there is no insurance that is going to cover failure over a long (over 10 years + ) failure of walls & surfaces.  If there is or were it would cost as much or more then the repairs as given time anything will fail and requires maintenance and they price it based on that.

For at least 3 years the owner's have been seeing the problems on the surface and complaining about it. The Board has been trying to get it resolved. Now the full extent is known and it's time to fix it & owners to pay the bills. Sorry.


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## tahoeJoe

*File a lawsuit.*



timeos2 said:


> It is unfortunate that this is such a large assessment but there is no insurance that is going to cover failure over a long (over 10 years + ) failure of walls & surfaces.



This sounds like a breach of duty on the part of individual HOA board members. Board members are vested with a fiduciary duty to watch out for owners' interest, property, investment, and act in a diligent manner. 

The fact that this problem has gone on so long (10 years) I would seriously look at suing individual HOA board members for breach of fiduciary duty and neglect. Nothing personal, just business. The board members should be covered by a errors and omission policy. That policy will pay since they HOA board screwed up.  If not, "so sad, too bad" the board members should be held personally responsible. 

-TJ


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## Rhinestone Redneck

*Poipu Point Meeting*

Is anyone planning to attend one of the two meetings in California regarding the water assessment?...There is one in S. California Oct. 19th and another the following day...Oct. 20 in N. California...(San Fransico)...I'm planning on attending the one in N. California...if there's an attorney out there that wants to meet me there and is qualified in matters of this nature...I'll retain you...Please contact me...

Poipu Point Resort is the resort I am referring to in case there is any confusion...:annoyed: :annoyed: :annoyed:


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## AKE

tahoeJoe said:


> This sounds like a breach of duty on the part of individual HOA board members. Board members are vested with a fiduciary duty to watch out for owners' interest, property, investment, and act in a diligent manner.
> 
> The fact that this problem has gone on so long (10 years) I would seriously look at suing individual HOA board members for breach of fiduciary duty and neglect. Nothing personal, just business. The board members should be covered by a errors and omission policy. That policy will pay since they HOA board screwed up.  If not, "so sad, too bad" the board members should be held personally responsible.
> 
> -TJ



You have got to be kidding... suing HOA members as some are also owners.  If this type of action gets off the ground then who in their right mind would ever want to run for the HOA?  AND if there are no owners on the HOA then who is going to represent your interests?  I can recall reading about water problems at  this resort quite some time ago but I doubt that anyone knew the extent of the problem and everyone was always complaining about the high maintenance fees already so the HOA would have been reluctant to start major renovations without a special assessment.  This is the same as owning a condo - you have a property management company (in this case DRI) but it is the owners who have to cover the costs of running the building. Yes DRI probably owns some units but I don't think that they are a majority shareholder by any means. Accept the fact that the buildings were built to standards from the very early 1990's (maybe earlier as originally were these not a Japanese condo development which had financial issues and was then converted into a timeshare) and add to this the tropical climate as well as hurricanes , then *&*^ can and does happen.


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## wilma

Rhinestone Redneck said:


> Is anyone planning to attend one of the two meetings in California regarding the water assessment?...There is one in S. California Oct. 19th and another the following day...Oct. 20 in N. California...(San Fransico)...I'm planning on attending the one in N. California...if there's an attorney out there that wants to meet me there and is qualified in matters of this nature...I'll retain you...Please contact me...
> 
> Poipu Point Resort is the resort I am referring to in case there is any confusion...:annoyed: :annoyed: :annoyed:



Can you post the details of the meetings? Who is organizing? Where, what time? Thanks.


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## T_R_Oglodyte

wilma said:


> Can you post the details of the meetings? Who is organizing? Where, what time? Thanks.


They are discussed in the letter to owners sent by the Board.  If you haven't seen a hard copy, it's available at the Point at Poipu owners website at DiamondResortsHOA.com.  A direct link to the letter is provided in some of the other threads on the special assessment that are extant on this Board.


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## dougp26364

tahoeJoe said:


> This sounds like a breach of duty on the part of individual HOA board members. Board members are vested with a fiduciary duty to watch out for owners' interest, property, investment, and act in a diligent manner.
> 
> The fact that this problem has gone on so long (10 years) I would seriously look at suing individual HOA board members for breach of fiduciary duty and neglect. Nothing personal, just business. The board members should be covered by a errors and omission policy. That policy will pay since they HOA board screwed up.  If not, "so sad, too bad" the board members should be held personally responsible.
> 
> -TJ



So, you want to suit a bankrupt entity like Sunterra. Let me know how that goes for you. Remember DRI took over management of this resort just a couple of years ago. All previous failed management companies ignored the issue. At this point, going after DRI is akin to killing the messenger. Or maybe you'd have prefered DRI ignore the problem like previous management companies have done?


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## dougp26364

Rhinestone Redneck said:


> Is anyone planning to attend one of the two meetings in California regarding the water assessment?...There is one in S. California Oct. 19th and another the following day...Oct. 20 in N. California...(San Fransico)...I'm planning on attending the one in N. California...if there's an attorney out there that wants to meet me there and is qualified in matters of this nature...I'll retain you...Please contact me...
> 
> Poipu Point Resort is the resort I am referring to in case there is any confusion...:annoyed: :annoyed: :annoyed:



So who are you going to suit? The orignal developer who built the resort, Embassy or Sunterra, who are no longer involved with the resort, or DRI, who only took over management of the resort maybe 3 years ago? DRI appeares to be the only management company to addres the issue, file a claim (which was denied), explore the possibility of litigation and finally settle on the fact that they and the oweners are stuck.

Or, would you rather they ignore the issues as Sunterra seemed to do?

Keep in mind that when you suit the HOA, you're suing yourself since your one of the owners. You'll pay both ends of the legal bill. The only thing you'll succeed at is increasing the costs for all the owners even further and delying the inevitable repairs, forcing costs to run even higher. 

Your right when you say the buck stops with DRI. DRI has been the only management company to address the problem. All the others played pass the buck until it's come to this point.


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## caseyatbt

I understand the reality of all this. We are the owners and are on the hook for the repairs. 
The problem I have is the "out of nowhere" cost that were sprung on us with only 2 options to pay. I do not have that kind of money. Things here have been financially tight for a while. We tried to sell our units a few times but decided to keep them by paying dues by renting the weeks to friends and family for the amount to cover them. Which is what we were going to do with this years units (we have 2 even year weeks)
So that leaves us with almost $6000 owed that we cannot pay. There is no place to beg, borrow, or......
What bothers me most is the lack of options. Even if I could swing $2000 this year, $4000 next year??? It would of some much more reasonable to stretch this out over ten years.
I haven't called them yet to find out what happens if I can't afford it, I was waiting to see if the outcry allowed for some creative alternatives, but none so far.
I do not know what to do. I am able to pay my bills and feed my family. Over the last couple of weeks we were already looking at how to do Christmas on a shoestring, and than this shows up.
I don't want my credit hurt or have my house harassed by collectors, but this could really damage our family.


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## LindaB

*Not true about voluntary surrender for Poipu via DRI*



T_R_Oglodyte said:


> DRI has a voluntary surrender program; it does requure that the owner be current on all fees, so that may not help you with the special assessment.



DRI will not take voluntary surrenders at Poipu - check your facts before posting.  I have called two times and asked and begged.  Even offering to pay the whole up front $6K in special assessment.  They said they do NOT have a voluntary surrender program - you have to sell privately.  Nobody will buy there now with what is going on.


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## T_R_Oglodyte

LindaB said:


> DRI will not take voluntary surrenders at Poipu - check your facts before posting.  I have called two times and asked and begged.  Even offering to pay the whole up front $6K in special assessment.  They said they do NOT have a voluntary surrender program - you have to sell privately.  Nobody will buy there now with what is going on.



As of a month or two ago,  at the DRI message boards the DRI reps were indicating the voluntary surrender program was still in effect, so I stand by my statement. I suspect that you have been talking to the resort, which is not the place you need go to handle it.  DRI is very low key about it, and lets people know about the program only through the DRI member forums. Go there for information. People at the resorts or on the general call-in centers are generally completely unaware of the program, by design. I believe that once you get on the right track, you wind up at the "Loss Mitigation" unit within DRI. If that's not where you've been in contact, you may have been at the wrong location.

For the current and most up-to-date information, the thing to do is to post a message on the BBS at the DRI Member Forums.  If you post there and then DRI says they are not taking them back, even with assessments paid, that that would be the most current news and would be a recent development.

As  I indicated, though, one requirement is that there be no encumbrances against the (i.e., loans paid off, all annual fees paid, no pending reservations, and no assessments).  So I'm sure that before they would accept the deed under the program the entire special assessment would have to have been paid off.  So I doubt the program will be of any help to those of us who are staring at this assessment.


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## timeos2

caseyatbt said:


> I understand the reality of all this. We are the owners and are on the hook for the repairs.
> The problem I have is the "out of nowhere" cost that were sprung on us with only 2 options to pay. I do not have that kind of money. Things here have been financially tight for a while. We tried to sell our units a few times but decided to keep them by paying dues by renting the weeks to friends and family for the amount to cover them. Which is what we were going to do with this years units (we have 2 even year weeks)
> So that leaves us with almost $6000 owed that we cannot pay. There is no place to beg, borrow, or......
> What bothers me most is the lack of options. Even if I could swing $2000 this year, $4000 next year??? It would of some much more reasonable to stretch this out over ten years.
> I haven't called them yet to find out what happens if I can't afford it, I was waiting to see if the outcry allowed for some creative alternatives, but none so far.
> I do not know what to do. I am able to pay my bills and feed my family. Over the last couple of weeks we were already looking at how to do Christmas on a shoestring, and than this shows up.
> I don't want my credit hurt or have my house harassed by collectors, but this could really damage our family.



I don't want to be cold about the tough situation this may place some owners in as that is no small problem.  But it is no different than a home that has a small leak in the basement- or at the roof line, or a gutter that gets patched, repaired attempted over the years but, now years later, a full fix turns out to be a multi-thousand dollar repair "out of nowhere".  What seemed to be a small, manageable issue turns out to be a major problem that you have to find a way to deal with.  An HOA Board has the same issues but multiplied by hundreds of "homes".  

You cannot stretch a critical repair lie this out over ten years awhile the payments are made. No contractor is going to guarantee costs 10 years out or keep returning to gear up & dabble at tiny sections of the job and then leave for months only to return and do it again months later. Not a reasonable way to operate.  In this case the owners or the Association may need to float a loan to cover their costs & thus spread out, with added interest cost, the payment period. It is unlikely that the Association can float a loan as it would be massive and they have no assets to pledge - its not the owner of the property just the caretaker for the individual owners.  So it falls to those owner's to figure out how to pay their share through whatever means they can find.  It is their property and their maintenance/management company has identified needed work and a way to get it done.  It may or may jt be the ONLY way but it is the way their elected representatives have chosen to use, much like a tiny version of the US Government model or representative democracy. 

For those calling for lawsuits, owner uprising, demanding answers - great! Get involved - learn what exactly your representatives have been dealing with not the hearsay, rumors that circulate.  You'll find simple, broad platitudes of "tear it down", "sue ____", etc aren't true options and would cost you even more.  A true attempt to challenge the right of the Board to impose this SA would need a large block of votes and money (as in tens of thousands for a viable retainer) just to get started. More votes & money needed for each idea to actually be initiated - money that may produce no results beyond the satisfaction of knowing you tried and costs for the project still due from you and every other owner. Far better to spend the money to become part of the process. Attend the meetings, get the facts and act appropriately.  Maybe there will come a time to sue but certainly not without verifiable facts in hand.  

I hope for the sake of all owners and management this gets resolved and the resort can be a viable operation for decades to come.  Many resorts have gone through tough times and come back stronger longterm - far more than have fallen into disarray or closed due to these types of issues.  Interestingly it has been the hard nosed, "win at all costs" approach (by both sides) that have resulted in troubled resorts with years of decline and poor reputations as a results of costly litigation and refusal to compromise/pay. Those that took a path of compromise and negotiated resolution at limited legal cost tend to be the ones that moved on and often thrived.  Be careful how hard you push for "your way" when others have equally doable plans.  Compromise and agreement will move things along much better than conflict and tensions while the property continues to decline.  You need to take the high road and get the job done.  Take part and have your say then support whatever the final resolution is.  It won't be inexpensive no matter how it goes but conflict is likely to be far more costly than an agreement between all involved.


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## Passepartout

I am in deep sympathy for those owners caught up in this mess. Especially for those who aren't in a financial position to pay the assessment. 

For those who don't currently, and have always wanted to own a Hawaii TS, this may represent a unique opportunity. What will, when $65 million in repairs and upgrades are complete, amount to a brand-new facility that can be had for the price of under $6k (plus transfer fees) from an owner who wants/needs to just walk away. It hasn't been all that long since we paid similar amounts for a week in 30 year old TS condos in much less prestigious locales.

I hope that this ongoing nightmare can be brought to a conclusion that everyone concerned can live with.

Jim


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## Luv2Travel2000

*Letter to HOA and DRI*

We also just received our statement from the Point at Poipu AOAO with the Water Intrusion Assesment and what a shock! Our response in a letter was basically that we are being told 10 weeks in advance that we need to pay $7,126 or else. That is a lot of unbudgeted money. If a decision must be made between family survival and a ruined credit score, I'll choose my family. The problem has been known for years and we are being told to pay up in 10 weeks. That's absurd. We faithfully paid maintainence fees since the early 1990s feeling secure knowing that our property was being maintained. It appears it wasn't. We asked when we bought about natural disasters such as hurricanes and were told that insurance would take care of everything. I fear many owners will default and walk away leaving a much bigger mess for anyone who sticks around. There is no guarantee for anyone who faithfully pays. What a horrific dilemma.


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## riothng

Rhinestone Redneck said:


> Is anyone planning to attend one of the two meetings in California regarding the water assessment?...There is one in S. California Oct. 19th and another the following day...Oct. 20 in N. California...(San Fransico)...I'm planning on attending the one in N. California...if there's an attorney out there that wants to meet me there and is qualified in matters of this nature...I'll retain you...Please contact me...
> 
> Poipu Point Resort is the resort I am referring to in case there is any confusion...:annoyed: :annoyed: :annoyed:



If anyone attends the meeting and can record it please place it on YouTube and notify us owners so that we can not only understand questions asked during these sessions, but their responses.  I have e-mailed and called DRI and they are not willing to open up a teleconference or video.  It is not expensive and very easy to do thus it feels again that they are not being transparent with allowing deeper understanding.


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## Rhinestone Redneck

riothng said:


> If anyone attends the meeting and can record it please place it on YouTube and notify us owners so that we can not only understand questions asked during these sessions, but their responses.  I have e-mailed and called DRI and they are not willing to open up a teleconference or video.  It is not expensive and very easy to do thus it feels again that they are not being transparent with allowing deeper understanding.



I received your e-mail and tried to respond and somehow lost it...could you e-mail me again so I can respond to your direct e-mail...I will to try to record the meeting...I know you have to rsvp and then they say space is limited...(that in and of itself speaks volumes)...every "owner" that wants to attend should have the RIGHT to do so...like I said earlier...I'm trying to find an attorney to attend with me...any thoughts from anyone...please let me know...the meeting is in San Franscio...there's got to me some great attorneys in the the area that would go if I paid for their time...Help Me, folks...let's not take this lying down and just give in and give up...DRI is banking on the idea that we can't rally together...that we are too spread out and can't get organized...the only hope we have is getting a group together and an attorney to represent us or at least give us legal advice...


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## dougp26364

Rhinestone Redneck said:


> I received your e-mail and tried to respond and somehow lost it...could you e-mail me again so I can respond to your direct e-mail...I will to try to record the meeting...I know you have to rsvp and then they say space is limited...(that in and of itself speaks volumes)...every "owner" that wants to attend should have the RIGHT to do so...like I said earlier...I'm trying to find an attorney to attend with me...any thoughts from anyone...please let me know...the meeting is in San Franscio...there's got to me some great attorneys in the the area that would go if I paid for their time...Help Me, folks...let's not take this lying down and just give in and give up...DRI is banking on the idea that we can't rally together...that we are too spread out and can't get organized...the only hope we have is getting a group together and an attorney to represent us or at least give us legal advice...



I'm sure you can find someone to take you money but, most attorny's probably understand the futility of what you want. Not that I don't understand your frustration but, from what I see with my unprofessional eye is, your case doesn't have merit. Your shooting the messenger and those responsible have already been absolved through bankruptcy or time. I fear your throwing good money after bad but, it is your money to throw.

I suppose if nothing else, it might be worth your money to find out from a professional if you have a case or not. So, if you're told you have no case, have you thought about what you intend to do at that point?


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## Rhinestone Redneck

dougp26364 said:


> I'm sure you can find someone to take you money but, most attorny's probably understand the futility of what you want. Not that I don't understand your frustration but, from what I see with my unprofessional eye is, your case doesn't have merit. Your shooting the messenger and those responsible have already been absolved through bankruptcy or time. I fear your throwing good money after bad but, it is your money to throw.
> 
> I suppose if nothing else, it might be worth your money to find out from a professional if you have a case or not. So, if you're told you have no case, have you thought about what you intend to do at that point?



Hi, Doug...I understand what you are saying...there is just something about this particular situation that feels like a "shake down"...it just doesn't feel legitimate and just...like you said I want to find our from a professional what "their" thoughts are...

For instance...I've been unable to rsvp to the meeting in San Fransico on the 20th...and then the statement basically threatens non-payment with small claims court, interest, liens...reports to credit...and then you can't even "hand back" your ownership...seems like a con to me...

and just so you know...I won't handing over any money to any attorney that can't indicate to me why "we'd" have a case...to either not pay the assestment or why I would be able to give my "ownership" back without any ramifications...I'm fine with just walking away and never having to deal with a time share again as long as I live...


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## bogey21

As an outsider looking in my concern would be will the Management Company be able to collect enough money in a timely manner to fix what needs to be fixed.  If I'm an owner, I don't want to put up my $$$ only to find out that it will take years. collection agencies, lawsuits, etc to collect what needs to be collected.

George


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## AKE

So if DRI doesn't want the units back (even if the special assessment is paid), then what does this tell you about the demand for the resort, either as a purchaser or renter (i.e. if there was a demand for this resort then DRI could rent out the units they took back until them managed to resell them)? What happens if only half the owners pay the special assessment?  Will the resort fold?  Will the owners that paid be hit with another special assessment to cover the assessments of those that did not pay?  Who would buy into this resort (even if the unit was given to them as free) based on all these unknown? What are the repercussions (outside of a bad credit score) for those that cant afford to pay or dont want to pay until they see what is happening overall with the special assessment?


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## dougp26364

Rhinestone Redneck said:


> Hi, Doug...I understand what you are saying...there is just something about this particular situation that feels like a "shake down"...it just doesn't feel legitimate and just...like you said I want to find our from a professional what "their" thoughts are...
> 
> For instance...I've been unable to rsvp to the meeting in San Fransico on the 20th...and then the statement basically threatens non-payment with small claims court, interest, liens...reports to credit...and then you can't even "hand back" your ownership...seems like a con to me...
> 
> and just so you know...I won't handing over any money to any attorney that can't indicate to me why "we'd" have a case...to either not pay the assestment or why I would be able to give my "ownership" back without any ramifications...I'm fine with just walking away and never having to deal with a time share again as long as I live...



You're already making public threats to lawyer up. I doubt they'll be interested in talking with you. Trust me when I say it's not hard for someone to learn who you are. I've been found more than a couple of times and DRI does read these forums. 

Of everything that's happened, the one thing I'm not happy with is the short notice on the amount owed. 10 weeks is very short notice for most owners to come up with the SA and MF's. Then to be told pay up or else, yea, I can see where there won't sit well. 

But I think you need to step back and look at the situation. DRI has been the mamagement for maybe 3 years. Previous management is no longer in existance. The original builder can't be forced to pay due to the length of time (over 10 years). DRI began managing the resort past the point where the original builder could have been held responsible. This is not something that could be claimed on any homeowers or property insurance. DRI will have valid bills/costs that can be shown for the cost of the work. 

I understand getting hit with this bill is like getting hit with a hammer between the eyes. I can understand being upset that there wasn't more warning as to the extent or the amount that would be required so owners could plan. I don't understand wanting to file a lawsuit where there seems to be no grounds, just because you're upset at the stance DRI is taking on payment of the SA. It would be better to negotiate vs threaten. Threats are often met with silance from any management company.


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## dougp26364

bogey21 said:


> As an outsider looking in my concern would be will the Management Company be able to collect enough money in a timely manner to fix what needs to be fixed.  If I'm an owner, I don't want to put up my $$$ only to find out that it will take years. collection agencies, lawsuits, etc to collect what needs to be collected.




If the Hawaiian trust owns 40% of the inventory, that leaves 60% as deeded week owners. Assumning that the trust will pay it's share of the SA, that would mean at a 50% bed debt rate for deeded week owners, a 30% default of the total interval ownerships. 

DRI has apparently stated they were accounting for defaults in their figures. I would not doubt that they have accounted for a 20 to 30% default rate. It would be interesting to know the percentage they've figured will default but, I doubt we'll ever know what that is. 

None of my figures are based on facts. Only from what I recall reading on these forums and, my memory is sometimes faulty at best.

I do know that our ownerships at Polo Towers have rather scary bad debt numbers calculated into our yearly MF's. 2012 is lower than 2011 but, it's still a scary high number compared to what other management companies we own through have calculated. Our MF's remained flat for one DRI timeshare and have only gone up 4.9% for the other. I'm guessing there weren't as many defaults as was planned for, allowing for a surplus that has perhaps offset other costs and resulted in lower increases for 2012.


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## Carolinian

There was a post on a European board about DRI taking deedbacks, so I posted a link on TimeshareForums.com in a thread on the Poipu mess

http://www.timesharetalk.co.uk/index.php?topic=15876.msg47892

In that thread, it was said that DRI was now taking weeks back, but someone at TimeshareForums tried that with Poipu and it was refused.




AKE said:


> So if DRI doesn't want the units back (even if the special assessment is paid), then what does this tell you about the demand for the resort, either as a purchaser or renter (i.e. if there was a demand for this resort then DRI could rent out the units they took back until them managed to resell them)? What happens if only half the owners pay the special assessment?  Will the resort fold?  Will the owners that paid be hit with another special assessment to cover the assessments of those that did not pay?  Who would buy into this resort (even if the unit was given to them as free) based on all these unknown? What are the repercussions (outside of a bad credit score) for those that cant afford to pay or dont want to pay until they see what is happening overall with the special assessment?


----------



## Carolinian

Several questions about this resort:

1) When does DRI's management contract come up for renewal?

2) How many total weeks are there at the resort, and how many of those does DRI control? (I use the word control because DRI's weeks are likely all in trusts that they then vote)

3) How many of Point at Poipu's HOA board seats are DRI nominees?  All of them?


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## richardm

I've received several emails from Poipu owners asking for advice or information about what occurs during the foreclosure process in Hawaii, and asking whether any lien or judgement could be tied to other property.

In each case, I've simply recommended they contact a real estate attorney in Hawaii to request a free consultation. This link contains quite a few contracts:

http://lawyers.findlaw.com/lawyer/firm/Real-Estate-Law/Honolulu/Hawaii

Does anyone have specific knowledge about the foreclosure process in Hawaii that might help?


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## Carolinian

Before going to an attorney, and of course you would need a Hawaii attorney, there is something else you should do on your own.  The HOA is a non-profit corporation, and under corporate law as a member of that non-profit corporation, you have a right to inspect and copy most corporate records.  The concerned owners need to get one of their number, preferably someone with accounting or legal experience to go to the office and do exactly that.  You may find enough information, that you don't need a lawyer, but more likely you will have enough that you really don't know what you have and thus need a lawyer to go over it.  You may find the smoking gun.  Any lawyer who is going to give competent advise on this matter is going to need that research, and it will be a whole lot cheaper for concerned owners to do the spade work themselves than to pay the hourly rate a Hawaii lawyer would charge to do it himself.

One of the things that state law allows you to inspect and copy is the list of members with addresses, a key item if you are going to try to gin up an effort to overthrow DRI control of the board.  On another timeshare board, it has been posted that DRI is refusing to comply with state law on this matter, a significant sign that there is a rogue board or rogue management involved here.  So far there is no sign that they are refusing to comply with state law for records other than the membership list.  The reason to try to withhold membership lists is very simple.  It is all about control, and they know that being able to get a message out to the overall membership is absolutely critical to any challenge to their own control, and they want to preempt that.

The key thing here is - DO YOUR RESEARCH.  There may be statute of limitation problems as to going against the oriignal builder, but there is reference to later repairs.  Is there a valid claim against the contractor who did the repairs?  What about a products liability claim against the siding manufacturer?  Has inaction by the board caused the cost of repairs to go up while they stonewalled the info to the membership?  The board itself and management may have liability.  What about the previous developer?  In the lawsuit against Fairfield (now Wyndham) over Bluebeards Castle resort in St. THomas, USVI, the plaintiffs were able to go after Fairfield for issues involving the previous management from whom they had taken over the resort.  Once you have the research done, take it to a competent professional in Hawaii to evaluate all theories on which owners might proceed.  The DRI-controlled board claims there are no valid causes of action against anyone.  One thing you need to look for in the records is whether they got a detailed opiinion on that from a competent Hawaii attorney.  There should be a written opinion or report on that.  Of course, that opiniion is not likely to address any liability the board itself and management may have.  If you find a thorough analysis by a competent Hawaii attorney who evaluates all potential claims and give solid reasons for not pursuing them, like statute of limitations, insolvent defendant, etc. then at least you will know the board did due diligence on those issues and at least they will be off the table and you can limit your conversation with your own Hawaii attorney to a narrower range of issues, and thus save some fees.




Rhinestone Redneck said:


> Hi, Doug...I understand what you are saying...there is just something about this particular situation that feels like a "shake down"...it just doesn't feel legitimate and just...like you said I want to find our from a professional what "their" thoughts are...
> 
> For instance...I've been unable to rsvp to the meeting in San Fransico on the 20th...and then the statement basically threatens non-payment with small claims court, interest, liens...reports to credit...and then you can't even "hand back" your ownership...seems like a con to me...
> 
> and just so you know...I won't handing over any money to any attorney that can't indicate to me why "we'd" have a case...to either not pay the assestment or why I would be able to give my "ownership" back without any ramifications...I'm fine with just walking away and never having to deal with a time share again as long as I live...


----------



## Carolinian

The US Constitution requires states to give full faith and credit to judgments from other states.  Generally the procedure would be to get the Hawaii court to properly authicate a copy of the judgment and then Poipu would send it to an attorney in the home county of the member who would then file a lawsuit to make the Hawaii judgment a judgment of the court in the members home county, which is generally a slam dunk.  Once recorded as a local judgment, it can then be enforced under the same procedures as any other judgment of your own court.

Rather than a foreclosure, given the amount involved, the resort could just seek a money judgment for the amount owed.  Or it could foreclose, bid a dollar at the foreclosure sale, or a penny, and then get a deficiency judgment for the balance.

Given the amounts involved, I suspect just waking away with bad credit may not be an option.  I also do not know if Hawaii allows attorneys fees to be included under any of these scenarios, but I suspect court costs is likely a given including filing fees, service fees, and perhaps cost of publishing a foreclosure notice.




richardm said:


> I've received several emails from Poipu owners asking for advice or information about what occurs during the foreclosure process in Hawaii, and asking whether any lien or judgement could be tied to other property.
> 
> In each case, I've simply recommended they contact a real estate attorney in Hawaii to request a free consultation. This link contains quite a few contracts:
> 
> http://lawyers.findlaw.com/lawyer/firm/Real-Estate-Law/Honolulu/Hawaii
> 
> Does anyone have specific knowledge about the foreclosure process in Hawaii that might help?


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## Kauaigrl00

Has anyone thought of contacting the media to be at these meetings?  

I can almost assure you they will not allow you to tape it.  We were at the P @P a few years ago when owners tried to have meetings and DRI would not allow taping.

I see no real solution to this.  This board is great for sounding out to all us owners.  Guess we are stuck.  Just scares me if something happens to us and our children inherit this mess.


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## Carolinian

Trying to get the media there would help put some heat on DRI.

A post on Timesharetalk.co.uk indicated that the BBC was working up a report on DRI for its Ripoff Britain program.  The BBC has reporters in the US, and this might give them some interesting depth.  It would be worth a try to see if the editors of that program were interested.

As to preventing taping an annual HOA meeting, I would challenge that.  You are a member of the corporation, and you should demand whoever is claiming you cannot tape to show you their authority do so that in the bylaws of the association.  Don't take their simple word on it, as for many resorts, there would be no such authority for any officer to tell a member of the corporation they cannot tape.  With cell phones, these days, it is also easy to do without being so obvious.




Kauaigrl00 said:


> Has anyone thought of contacting the media to be at these meetings?
> 
> I can almost assure you they will not allow you to tape it.  We were at the P @P a few years ago when owners tried to have meetings and DRI would not allow taping.
> 
> I see no real solution to this.  This board is great for sounding out to all us owners.  Guess we are stuck.  Just scares me if something happens to us and our children inherit this mess.


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## Bunk

I read these posts as someone who has no involvement with the Diamond timeshares.  As a result, I might be a little more objective than if I had to come up with the special assessments.  I am a little confused by some of the claims against Diamond.  As I understand it, the property belongs to the HOA; not Diamond.  So in terms of Diamond's exposure, other than the fact that Diamond would owe its percentage of the special assessment on any units at Poipu it owns, exactly what legal or moral liability are you suggesting Diamond has or should have.  What evidence does anyone have to suggest that Diamond knew or should have known about this problem before they got involved.  Why would they have gotten involved if they knew about this problem.

If I were a unit owner here, I would look at 4 issues: 

 1.  an analysis as to whether the property could be sold and what would be the carrying costs until such a sale.  That might be a good solution to some unit owners, at least those who do not have any loans against the unit, on the grounds that they are not throwing good money after bad.; 

2.  An analysis as to whether the proposed construction will solve this problem and how much more construction costs there are likely to be for the next 10 years once the construction is complete.

3.  whether the special assessment could be held in escrow and not be applied until a certain percentage of the unit owners pay it.  Let's say that agreed to percentage is 66%.  If 2/3 of the unit owners pay the assessment, than the repairs will begin.  If they don't get 2/3 paying it, then the money should be returned to those who paid and the hoa should consider a liquidation or a sale.  If Diamond owns any units, it should be revealed whether they will pay their share of the assessment in full.

4.  Whether there are any claims against the professionals involved in the construction and development of the project, i.e., the builders, engineers, architects.  I assume that the original developer had no professional liability insurance and has no assets.  Sometimes claims can be made against builders that appear on the surface to be barred by the Statute of Limitations and that may be covered by liability insurance.  I assume that the HOA and Diamond have the same interest as the unit owners in learning whether there are possible claims in this case.


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## Carolinian

DRI manages the resort and therefore has potential liability for nonfeasance, misfeasance, or malfeasance in its management of the resort.  DRI also controls the Board of Directors and those directors have potential liability if they failed to fullfill their fiduciary duties to the members.  Of course that would be individual liability rather than corporate of DRI as to the directors, and they almost certainly have a large directors liability insurance policy.  Even small resorts tend to carry those in the 7 figure policy limits, so I would imagine that for a resort this size it would be well into 8 figures.

Any liability of DRI, in addition to what its trusts owe on their portion of the whole, would be based on its actions in management.  The potential directors liability would not technically be DRI liability.

When a secondary developer buys a resort, they have a responsibility to do due diligence.  There are times when a secondary developer may be liable for actions or inactions of a preceding developer, as Fairfield (now Wyndham) found out in the lawsuit over Bluebeards Castle timeshare in St. Thomas, USVI.  Therefore, they fail to do due diligence at their own peril.





Bunk said:


> I read these posts as someone who has no involvement with the Diamond timeshares.  As a result, I might be a little more objective than if I had to come up with the special assessments.  I am a little confused by some of the claims against Diamond.  As I understand it, the property belongs to the HOA; not Diamond.  So in terms of Diamond's exposure, other than the fact that Diamond would owe its percentage of the special assessment on any units at Poipu it owns, exactly what legal or moral liability are you suggesting Diamond has or should have.  What evidence does anyone have to suggest that Diamond knew or should have known about this problem before they got involved.  Why would they have gotten involved if they knew about this problem.
> 
> .


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## Kauai Kid

lenbeil said:


> I bought an every year 2 bedroom at P at P last year and just found out about the $5800 assessment. Lady was very nice explaining it all. Very disappointed, but plan to pay and enjoy the resort. We experienced the same thing in 1992 when we bought at the Cliffs Club on the secondary market. Shortly thereafter incurred major Special Assessments similar to this. I guess that is the breaks of life. We have lots of wins and occasional losses and big disappointments. I too feel your pain!



How big was the special assessment at the Cliffs Club?

Sterling


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## AKE

How can DRI control the Board of Directors (I think this is the same as the HOA?)? Isn't membershgip on the board proportional to ownership? Was Poipu not a traditional weeks ownership program where most of the weeks, I would guess, sold so that Sunterra and now DRI would have minority ownership?


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## timeos2

AKE said:


> How can DRI control the Board of Directors (I think this is the same as the HOA?)? Isn't membershgip on the board proportional to ownership? Was Poipu not a traditional weeks ownership program where most of the weeks, I would guess, sold so that Sunterra and now DRI would have minority ownership?



So.many owners signed up for points by placing their ownership into one of the DRI trusts which then hold the voting rights (no longer the individual owners ) that the massive vote of the trust - technically & legally independent but actually under DRI control - can easily out vote the often non-reponsive 60% block of independent owners still holding votes.


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## riothng

*Board Meeting Minutes*

As an owner looking for more information I find the following fact very interesting and disheartening: The Board has not published any meeting minutes since January 17, 2011.  We need owners to ask a lot of questions at the upcoming meetings this week if anyone is going.  There are a lot of them already stated above by many responders.

Here is the link to the 1/17/2011 minutes:
https://www.diamondresorts.com/hoa/20110512/2011_1_17_PPR-AOAOminFNL.pdf

In the minutes there are statements reflected the board moving into Executive session and also reviewing the three hour presentation by BET&R in regard to the water intrusion.  However no information has been provided since then. 

Here were the four motions they made:

*After the Executive Session, Mr. Goeckel said the following motions were needed, all to include confidentiality clauses.*

MOTION: Director Anderson made a motion to retain Cumming Corporation to act as project manager. Director Dean seconded, there was no further discussion and the motion carried unanimously

MOTION: Director Anderson made a motion to retain BET&R to finalize the construction documents, the contractor bid process and selection. Director Fultz seconded, there was no further discussion and the motion carried unanimously

MOTION: Director Anderson made a motion to retain a structural engineer to address the immediate life safety concerns and finalize the approach. Director Fultz seconded and asked if there was a cost estimate. Mr. Goeckel said Management would come back to the Board when there were proposals. There was no further discussion and the motion carried unanimously

MOTION: Director Anderson made a motion to retain local architect Colin Shimokawa as the representative to interface with local building and planning. Director Dean seconded, there was no further discussion and the motion carried unanimously.

So please ask as many questions as possible if you are going.  Here are some that must be asked:

Questions for information:

1.	What are the alternatives that have been considered for the repair of the issue?
   a.	Why aren’t the owners being asked for confirmation of the best options for the property?
2.	What information regarding the board’s meetings content is available to owners? 
   a.	There have been no updates since January 17, 2011?
3.	How many other competitive bids have been sought for handling the repairs?  
   a.	What were the other estimated dollar amounts?  (I feel like this is similar to situations of a singular bid from Halliburton.)
4.	Why isn’t this damage covered by insurance?
5.	How much are the buildings worth and how much is the rest of the property worth?  
   a.	What is this building and property value/assessment based on?
6.	Why has Diamond Resorts stopped the timeshare surrender option?  I am directly requesting resumption of the surrender option.


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## T_R_Oglodyte

AKE said:


> How can DRI control the Board of Directors (I think this is the same as the HOA?)? Isn't membershgip on the board proportional to ownership? Was Poipu not a traditional weeks ownership program where most of the weeks, I would guess, sold so that Sunterra and now DRI would have minority ownership?





timeos2 said:


> So.many owners signed up for points by placing their ownership into one of the DRI trusts which then hold the voting rights (no longer the individual owners ) that the massive vote of the trust - technically & legally independent but actually under DRI control - can easily out vote the often non-reponsive 60% block of independent owners still holding votes.


Current ownership of the resort is ~35% DRI Hawai'i trust and ~10% DRI held inventory, leaving about 55% in the hands of Deeded owners.

Terminating the management contract requires that more than 50% of all ownership interests vote in favor of termination.  That is *not* more than 50% of votes at a quorumed meeting; that is 50% of all owners.

That requirement is contained in the timeshare program documents and has been there, I believe, since Day 1.  Further the Timeshare Disclosure Agreements, required by Hawaii Law and signed off on by every person who bought a deeded interest, specifically brings that provision to the attention of purchasers and specifically notes that the provision makes it virtually impossible for owners to force out the management company.


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## T_R_Oglodyte

riothng said:


> ...
> 6.	Why has Diamond Resorts stopped the timeshare surrender option?  I am directly requesting resumption of the surrender option.



Wouldn't that question be better directed to DRI and not the HOA, since it is DRI and not the HOA that has terminated the surrender program?

As far as I know the HOA has never had a surrender program.


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## FanFiltration

And here I was thinking "What a great deal" when I got a re-sale unit at the Point last spring.  

How simply wonderful!  Not only do we get to pay an extra $2,000 a year for this SA (per unit), we also get to enjoy the peaceful ambiance of major construction work around the resort during our stay for the next three years at least!

Remember when vacations were meant for relaxing?


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## dougp26364

FanFiltration said:


> And here I was thinking "What a great deal" when I got a re-sale unit at the Point last spring.
> 
> How simply wonderful!  Not only do we get to pay an extra $2,000 a year for this SA (per unit), we also get to enjoy the peaceful ambiance of major construction work around the resort during our stay for the next three years at least!
> 
> Remember when vacations were meant for relaxing?



We'll, at least in 3 years you'll know that this resort has addressed the issue. One now has to wonder how many other resorts are ignoring the problem......assuming they have the same problem.

Sorry, I know it's of little consolation but, it's the best I can do. Personally, now I'm concerned about every one of our ownerships. Presently, I have one that is in bankruptcy with the land beneath some of the buildings in bankruptcy but not the actual buildings themselve. To top it all off, it appears that the orignal, now bankrupt, developer failed to file the proper deed works with the county, so many owners can't even sell or transfer their deeds since there are not deeds. I'm wondering how much this is going to cost all the owners in the end. 

Of course, there's already a group wanting to go all class action on the current management company but, how can they be held accountable? They're not the one who didn't file for deeds. All they're doing is managing the resort. In our case, as I see it, the one to go after is already insolvent. Now we're stuck and the HOA isn't telling us enough information to let us know if we need to be planning for a major SA to buy the land out of bankruptcy or if there's a way we'll get out of this unscathed.


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## Carolinian

That sweetheart arrangement to try to lock in management was undoubtedly done when the HOA and management were both in the same hands, and was thus self-dealing.  I wonder if anyone has consulted a Hawaii attorney about the possiblity of an independent board getting around that.  

And now management is abusing its powers to try to preserve itself in control by willfully refusing to follow Hawaiian law to give membership lists to members who requested them, how are you ever going to get them out?  To get owners to kick them out, someone needs to get word to all the independent owners, and without lists they simply do not have the tools to do that.  This is an appalling abuse of power for their own self interest.




T_R_Oglodyte said:


> Current ownership of the resort is ~35% DRI Hawai'i trust and ~10% DRI held inventory, leaving about 55% in the hands of Deeded owners.
> 
> Terminating the management contract requires that more than 50% of all ownership interests vote in favor of termination.  That is *not* more than 50% of votes at a quorumed meeting; that is 50% of all owners.
> 
> That requirement is contained in the timeshare program documents and has been there, I believe, since Day 1.  Further the Timeshare Disclosure Agreements, required by Hawaii Law and signed off on by every person who bought a deeded interest, specifically brings that provision to the attention of purchasers and specifically notes that the provision makes it virtually impossible for owners to force out the management company.


----------



## Carolinian

In DRI's situation, don't those going into the points club surrender their deeds to the trust?  That may make it difficult to try to recover those votes for the underlying members.  The circumstances of each resort are different, but in one of the lawsuits between Outer Banks Beach Club I and II and the Equivest / Peppertree interests, OBBC got the court to rule that it was the underlying individual members of their points club which got to vote weeks controlled by the points club in OBBC annual meetings, not the points club directors.  It is not impossible to obtain such a result in court, as shown by the Outer Banks Beach Club example, but each case would turn on elements of each state's laws and on the particular legal documents involved.

Under normal circumstances, I would say a 55-60% majority would be hard to organize to defeat a compact 40ish% minority.  However, with the majority jolted out of their slumber by this massive SA, those usual calculations may not apply.  If there is ever a time to go for it, then it is now.




timeos2 said:


> So.many owners signed up for points by placing their ownership into one of the DRI trusts which then hold the voting rights (no longer the individual owners ) that the massive vote of the trust - technically & legally independent but actually under DRI control - can easily out vote the often non-reponsive 60% block of independent owners still holding votes.


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## JudyS

Tacoma said:


> Sorry to hear about the massive special assessment.  Although I do not own there I do feel the pain.


I feel the same. My sympathies to the owners!



Tacoma said:


> My question is this week owners are each assessed aproximately 5800 each.  Are the owners there assessed 52 times that or aprox $300,000 each?
> Wow is that possible?


I was wondering the same things. The HOA is saying it will cost almost $300,000 to fix each condo. Wouldn't it be cheaper to tear down the condos and rebuild? Where I live, $300,000 will build a heck of nice house, even allowing for the cost of demolishing an existing structure. Just how big are these timeshare units? Is construction really that expensive in Hawaii?


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## Carolinian

*Beware of PCC's*

Let me mention one other warning for some who are new to these boards.

On another timeshare board where the Point at Poipu brouhaha has been discussed, several representatives of so-called Post Card Companies (PCC's) came on to troll for business.  I suspect that they will be doing all they can to get to Point at Poipu members to get business.  Beware of them.

PCC's are called that because of the way all of them used to primarily generate their business, by mailing postcards soliciting meetings at a local hotel.  Now they use other means as well.  Several state Attorney Generals have investigated a number of them, leading to fines and restitution to customers.

Essentially, these businesses want you to pay them ~$4,000 to take your timeshare off your hands.  Some of them send you a power of attorney authorizing them to transfer your timeshare to someone else.  The problem is that sometimes they just don't ever do that and you end up still owning the timeshare and out the $4,000.

The other scenario seems more common.  They have you sign a deed conveying the timeshare to a limited liability company (LLC) with no assets other than the timeshare deeds being conveyed in.  For those weeks that are sellable, they sell them and deed them out of the LLC.  Eventually, the others, that are not sellable are just marooned there as the PCC casts the LLC adrift.  The HOA then has to foreclose and often has increased time and costs involved with these weeks sitting in dummy LLC's.  The PCC does not pay m/f's of SA's on these weeks.

For the customer, the problem with the second scenario is that they have probably been sucked into engaging in a fraudulent conveyance, for which there are consequences.  In a recent issue of _Timesharing Today_ magazine, there was an article about how a number of large management companies were starting to push back against the PCC's warning their members that if these transfers were made in the future, the PCC and the timeshare member would both be sued for damages for fraudulent conveyance.

Given the amount of fees involved, I would certainly expect DRI to follow this route at Point at Poipu and aggressively go after any PCC transfers trying to escape the SA.  Indeed, it would probably be malpractice for them not to.


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## weisberg

First let me thank everyone for their participation in this forum. After reading some of Carolinian's input and talking to my cousin who referenced the Flamingo resort in Sint Martin. I searched some articles I would like to share. They are lengthy.
Diamond Resorts International Complaints & Reviews - Fraud and cheating
Review all Diamond Resorts International complaints 
Diamond Resorts International
Posted: 2009-02-09 by 	￼	Lucas


Fraud and cheating
Complaint Rating: Company information:
Diamond Resorts International
United States
diamondresorts.com
My wife and I have ownership interests in the Flamingo Beach Resort and the Flamingo Beach Villas in Sint Maarten. These properties were acquired last year by Diamond Resorts International.

When we purchased the time share weeks the initial Maintenance Fees were set in the contract but the contracts were mute with regard to inflation but we were assured that the rates would follow the local inflation rates in St Marten. We have just received our invoice for this year and find that our fees have increased 34% and 42% respectively. When I expressed concern over the increase to Diamond Resorts International I was told to 'get a lawyer'.

If we do not pay the fees we forfeit the properties and our initial investments. We feel that the increase is unconscionable and intended to force owners to abandon their investment so that the properties can be resold.

We understand that a class action suit is being mobilized by a local law firm in Sint Maarten on behalf of owners to address the Maintenance fee increases and the purported use of capital reserves to pay debts. We have also contacted the Attorney General for our state. It is hard to imagine that firms like Diamond Resorts International can operate in such a heavy handed way.

Diamond Resorts International, Hawaii Complaints & Reviews - Corporate Fraud
Review all Diamond Resorts International, Hawaii complaints 
Diamond Resorts International, Hawaii
Posted: 2011-10-16 by 	￼	Shelly Smith	

Corporate Fraud
Complaint Rating: Company information:
Hawaii
United States
I purchased a timeshare at Ka'anapali Beach through Diamond Resorts. During a sales presentation I was told I would save money on maintenance fees if I moved my deeded property ownership into the Hawaii Collection which included the Point at Poipu. On October 14, 2011 I received a maintenance fee invoice which increased by $2, 363.50 or 140%. The increase is for a project that starts on 6/11 and takes 5 yers to complete, yet they are requiring me to pay 84% or $2, 000 by 1/1/12 or face additional fees, penalties, suspension and possible foreclosure. The Board knew of these issues for three years, but waited until 10/11 to communicate this to the owners. A five year project should not include 84% of the money upfront based on estimates and not actuals. There was simply one line item for the total due by the Hawaii Collection of $25, 356, 399 (total project cost $65.8M) with little to no details. This gives new meaning to "Corporate Greed". A corporation of this size should be able to finance the project and pass this along to the owners over a 5-Year period based on actuals and not estimates. Requiring me to pay an additional $2, 000 or 84% by 1/1/12 with an advanced notice of 2.5 months is nothing shy of a corporate scandal. During the sales presentation I was told that I would save money on maintenance fees when mgmt. knew of these costs for three years and failed to include this information in the sales presentation. They simply needed more people to pay for their mistakes. A formal request for detailed information will be sent to Diamond Resorts with the appropriate Attorney Generals Offices copied. The sales presentation to move my deeded property to the Hawaii Collection was done with management's full intent and knowlege that my maintencance fees would significantly increase. On the Assessment Payment Schedule, only one group of owners can finance over 5 years, those with 51, 000 points. What does that represent, 1% of the owners? So, the remaining 99% are basically paying upfront. I am part of the 99%, shall I bring some protest signs for my next visit to Maui?

Diamond Resorts International Complaints & Reviews - Cause Misery For Thousands
Review all Diamond Resorts International complaints 
Diamond Resorts International
Posted: 2011-03-13 by 	￼	baker1236


Cause Misery For Thousands
Complaint Rating: Company information:
Diamond Resorts International
United States
It is quite clear that this is an organization using theoretically legal, though highly immoral and unfair means, to extract money from vulnerable people. Around 15, 000 people in the UK are currently affected. They are also creating the environment for scammers of a wide variety of types to thrive. They need to be stopped.

It seems that they have taken over the management of a holiday club (Grand Vacation Club) and then engineered changes in the rules to make it almost impossible for members of the club to dispose of their “points”. At the same time they have hiked “management charges” by 40% in one year. These management charges now cost members more than it would cost a private individual to rent an equivalent property all in.

This, unsurprisingly, has both destroyed the value of members’ points holding and left them with, in many cases, totally unaffordable charges. They have then issued threats to anyone slow on payment. These include late night phone calls from the US and warnings of referral to debt collecting agencies. I have no doubt that these tactics are causing serious worry to many people. Attempts to return points and to exit the scheme are met with the reply that you remain liable unless the points are sold (effectively impossible because of the way that their policies have destroyed all value).

For someone who is caught in the web (me), it seems impossible to get out. The only suggested options are bankruptcy and death. Even then it seems they demand that the liability be picked up by your heirs. This leaves members vulnerable to a large number of fraudulent offers from a variety of crooks. One attempt to defraud me was made only yesterday by someone who promised that if I gave him £5000 he would take on my points.

If ever a subject deserves coverage, this is it. Hopefully this is an evil which cannot flourish when exposed to the full light of public scrutiny.


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## weisberg

Sorry, I ran out of characters. I also read about the trouble the UK had with DRI in 2008. You can read about this at the mirror.co.uk. 
I am sure if we dig deeper we will find more. This is not a corporation I want to be linked with. Once again I can not put my money where I have no trust. My lack of trust does not stop with DRI. I also have questions about our Board of Directors. Thanks for listening again. 
Joyce Weisberg
bobweisberg@bellsouth.net


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## dougp26364

I think you missed the part where Sunterra had a group going after the old Sunterra mangement (Sunterror and a Scambulence) when DRI took over. DRI was credited with going to the table and settling the differences in that case.

Part of the problem has also been promises made by former Sunterra salesmen and, Sunterra's lax enforcement of rules that were written into the contract. Sunterra failed, DRI took them over and, when DRI began enforcing the rules as they were written, they suddenly became the evil management company.

I understand the frustration. When we originally purchased a fixed unit/fixed week at Polo Towers, we were told not to worry about it as they were allowing owners to "float" their week. For the first few years, we were able to float out fixed week. Then, when the project neared completion, allowing floating caused issues for those who wanted to use their fixed week/fixed unit. The inventory wasn't there like it had to be by contract and, floating all but ended (except for 60 days before check in). I was mad as all get out as the fixed week/fixed unit we purchased didn't really work for us. Needless to say, I learned to read the contract and the rules. 

Just because the rules get bent doesn't mean they will always be bent. I'm not absolving DRI of anything but, I do believe that there are two sides to every story and both sides should be heard.

Recently, there was another owner who had a contract at KBC for a specific view. DRI apparently was trying to interpret the contract in a different manner and he wasn't getting the view he felt he was entitled. He went to bat and, as far as I understand, he prevailed. He had it in writing when he purchased from Sunterra.  

Yes, I know it sounds as if I'm constantly defending DRI. I'm not so much as trying to reason things out. I have a long history with DRI (back to October of 1998) and we've had our battles in the past. If you search the old records, you'll find I haven't always been positive but, over time I've learned to look at my contracts. Every time DRI has been within it's rights. DRI isn't the least expensive but, when they want something done, they typically do it right and to a high standard. 

It's all about what's in writing, not what's been done before. If it's in writing then it's enforcable. Check those contracts and never go by what the saleman promises or what the resort is doing today. If it's not in writing, it's not guarenteed. I believe that's where many of us go wrong when it comes to timeshare.


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## dbrin

*Facebook page*

Let them know how you feel!
http://www.facebook.com/DiamondResortsInternational


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## Carolinian

The real problem is that DRI plays by whatever rules suit them, and if the rules don't suit them, they ignore the rules.  Take the Hawaii law that requires timeshare management to provide copies of the membership lists to members who request it.  That is more than just a rule, it is a state law.  That one is inconvenient for DRI since a member with the membership list might be able to organize members to kick DRI out as management.  So guess what?; they just thumb their nose at that rule / law!!!!

When they are playing fast and loose with the clear requirements of state law, how much else are they playing fast and loose with?

Oh, and Sunterror was an earlier group, whose grievance was dealt with by Sunterra.  The group dealt with by DRI was the Scottish Action Group Against Sunterra, whose website was sunterrified.com and who had the Scambulance.




dougp26364 said:


> I think you missed the part where Sunterra had a group going after the old Sunterra mangement (Sunterror and a Scambulence) when DRI took over. DRI was credited with going to the table and settling the differences in that case.
> 
> Part of the problem has also been promises made by former Sunterra salesmen and, Sunterra's lax enforcement of rules that were written into the contract. Sunterra failed, DRI took them over and, when DRI began enforcing the rules as they were written, they suddenly became the evil management company.
> 
> I understand the frustration. When we originally purchased a fixed unit/fixed week at Polo Towers, we were told not to worry about it as they were allowing owners to "float" their week. For the first few years, we were able to float out fixed week. Then, when the project neared completion, allowing floating caused issues for those who wanted to use their fixed week/fixed unit. The inventory wasn't there like it had to be by contract and, floating all but ended (except for 60 days before check in). I was mad as all get out as the fixed week/fixed unit we purchased didn't really work for us. Needless to say, I learned to read the contract and the rules.
> 
> Just because the rules get bent doesn't mean they will always be bent. I'm not absolving DRI of anything but, I do believe that there are two sides to every story and both sides should be heard.
> 
> Recently, there was another owner who had a contract at KBC for a specific view. DRI apparently was trying to interpret the contract in a different manner and he wasn't getting the view he felt he was entitled. He went to bat and, as far as I understand, he prevailed. He had it in writing when he purchased from Sunterra.
> 
> Yes, I know it sounds as if I'm constantly defending DRI. I'm not so much as trying to reason things out. I have a long history with DRI (back to October of 1998) and we've had our battles in the past. If you search the old records, you'll find I haven't always been positive but, over time I've learned to look at my contracts. Every time DRI has been within it's rights. DRI isn't the least expensive but, when they want something done, they typically do it right and to a high standard.
> 
> It's all about what's in writing, not what's been done before. If it's in writing then it's enforcable. Check those contracts and never go by what the saleman promises or what the resort is doing today. If it's not in writing, it's not guarenteed. I believe that's where many of us go wrong when it comes to timeshare.


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## Kpaul

No Pity for Diamond on this issue


> Originally Posted by timeos2 View Post
> DRI, like every Developer / Management, has some flaws and overall seems to be high on the fees they tend to collect. But this is a case where, IMO, they cannot be blamed and are doing the best they can in a no-win situation for everyone involved. You wanna bet they would give up management / sales there IF they had known of the issues that have become obvious now? No one willingly gets into a mess like this - they inherited a problem and as management now have to do what they can to resolve it. The blame lies with those long gone from the picture. Doesn't make it easier to take or make DRI saints but I wouldn't blame them either.
> 
> They have to deal with it and so will the other owners as best they can.



Seriously John.... Anytime you want to "give" me a Ocean Front Resort in Hawaii for $65 million of other people's money, I'll buy you several of those drinks with the cute umbrellas.
Diamond has absolutely "nothing" to lose! No matter what they get a completely rebuilt resort paid by owners that are willing to pay and if they have to pay for those that default, they simply sell their week for a "PROFIT"

I typically agree with most of your posts but you are way off on this one.
Just think about what is going on here. Not "ONE" penny will come out of Diamond's pockets.........and I will guarantee that they profit off the construction management or administration.

I'm a real estate developer....I'll take it under those terms in a heartbeat!
Book my flight please...oh by the way, you (the owners) will pay for my First Class Flight and my penthouse accommodations at the Marriott during my stay because I can't stay at a damaged resort.

Laughing all the way to the bank.


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## timeos2

*Wow - this answer got REALLY long!*



Kpaul said:


> No Pity for Diamond on this issue
> 
> 
> Seriously John.... Anytime you want to "give" me a Ocean Front Resort in Hawaii for $65 million of other people's money, I'll buy you several of those drinks with the cute umbrellas.
> Diamond has absolutely "nothing" to lose! No matter what they get a completely rebuilt resort paid by owners that are willing to pay and if they have to pay for those that default, they simply sell their week for a "PROFIT"
> 
> I typically agree with most of your posts but you are way off on this one.
> Just think about what is going on here. Not "ONE" penny will come out of Diamond's pockets.........and I will guarantee that they profit off the construction management or administration.
> 
> I'm a real estate developer....I'll take it under those terms in a heartbeat!
> Book my flight please...oh by the way, you (the owners) will pay for my First Class Flight and my penthouse accommodations at the Marriott during my stay because I can't stay at a damaged resort.
> 
> Laughing all the way to the bank.



Good points.  I agree that Diamond does seem extraordinarily adept at managing to get owners to pay for things - especially upgrades at resorts that Diamond desires but may or may not have been part of the original plan/design.  This results in situations where in most cases the developer of a project will have set the standard then it is up to the new owners to keep it up as the resort ages.  The initial cost is in the massive retail purchase price not the annual fees (which at least initially serve to maintain the original resort, not build or rebuild it).  

With Diamond we have a situation where they took over what was originally a relatively high end operation - Argosy and others - that evolved into a rather massive mix of great to extremely threadbare resorts in a "collection" known as Sunterra.  There was little rhyme or reason to what that group brought under their umbrella - they just seemingly purchased whatever they could get their hands on, ran up debt and paid little attention to nagging issues like collections and resort maintenance/upgrades. 

So Diamond buys them out of almost certain financial collapse - but inherits a rather rag tag collection of properties.  Many started out as fine places that had been allowed to deteriorate, some had grown to practically unmanageable size and some were just plain dumps or half completed at best. Still it represented a sizable group of locations and a real opportunity.

The path Diamond seems to have picked is one of selective sell offs either of poor resorts or those that can generate fast cash.  That has upset some like Carolinian that see it as a slap at an area (Europe) that they happen to appreciate.  I'm sure Diamond sees it as a way to improve the bottom line and strengthen the system overall.  While sad to see resorts sold off it is hard to argue with that logic for the Diamond system.  

The other side is the one you describe.  Fees for the individual resorts as well as the Trusts - and to the degree they can raised the fees for the more owner controllable club system where non-trust weeks can be traded for points - have been raised significantly. As Doug has often pointed out it is justified as payment for often massive improvements in the resorts to Diamonds self imposed standards BUT at the expense, with hefty management overhead, of the owners.  It is a great plan for Diamond. In fact I have to stand back and admit it is almost genius. I never would have seen that potential for a way to create a large system of timeshares, attempting and so far largely succeeding in raising them to mid - high standards, and doing it on the owners dime!  They don't have to build another room for years yet they have a positive, profitable revenue stream. Marriott, Fairfield and others must be looking at it with great envy. 

We as owners may or may not like that model but it appears strong and likely will survive even as others falter.  If you hang in with them you tend to get greatly improved resort units but at your cost, not the developers/managements.  If you decide to get out they tend to be the ultimate beneficiaries as they either get a new owner to pay the fees or add it to one of the Trusts & spread the fees over those owners.  As I said it borders on genius.  

Any group can and likely will be challenged - Diamond no exception. But they seem to be very strong financially, have a plan and are executing it to near perfection.  I have grown to have a grudging respect for them. Their standards, while not quite Hyatt/Marriott level, aren't far off.  They have a vision and are executing it - yes, some toes are being stepped on and feelings hurt along the way.  They really do seem to care about the "owner experience" as well as the physical state of the resorts under their banner. Unlike most developers they aren't afraid of the need to fund for improvements and reserves.  For that alone most owners should be thankful as that is the long term way to insure survival of resorts - especially older ones. But they pay the majority of the costs, not Diamond. 

A long way of saying I don't think Diamond is by any means perfect but they will, it appears, do whatever is necessary - admittedly largely on owners dollars - to make a resort "right".  You either buy in and hope to get your value out or you throw in the towel. Either way the plan/system they came up with appear to be self sustaining and very well protected within the rules.  This is by far the most massive special assessment I've seen from them (or anyone else!) but the fact that the resort is in dire need of the work seems to be undeniable.  

It is a shame the weight falls on the owners there and in the Trusts to cover the cost plus overhead, but my guess is as resorts age we'll see this type of thing more and more. Those resorts that have full owner control of the Board might have an option to terminate & sell off those properties - although in reality even small resorts have a tough time getting the super majority needed for any such action - while most will find that the reality is there are blocks of votes held in Trusts or systems that effectively have control.  If they want to rebuild or renovate or upgrade it is tough to stop (and, except for costs, why would you want to? An improved resort benefits all owners, albeit at that cost, so any challenge is likely to fail).  That is the reality of most timeshares. Buy in with the understanding that costs will do nothing but rise.  And there is a real financial risk to owning ANY property - even a "simple" little week of timeshare.


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## gqtapper

*Thanks for all your posts*

We got an incredible education last night after opening our "surprise" bill from Diamond Resorts. We were not hit as hard as some of you but still the sting hurts and at a bad time for us financially.   We stumbled onto this site trying to research DRI and Poipu history. Thanks for all your posts.  Although there are a few  I don't agree with like it's our own fault for not reading EVERY single page of the 100 plus disclosure paperwork.  When you go into a resort to buy, they don't say your maintenance may double or that in the future when one of our properties is in awful shape you all will have to pay for it.  I went through all my paperwork last night and there really isn't any kind of indication of something like this being a possibility.  Actually, most of the paperwork you have you initial only has to do with understanding how you use your points etc.  
We are going to Maui next week and it really makes me want to warn future buyers.  We have all had an expensive lesson with this situation and I am just baffled that there isn't much we can do.
Oh, and for the people who accused some of us of ignoring our proxy voting - it's kind of difficult to vote for folks you don't know and if you don't know they are DRI people etc.
Thanks again and I will be checking daily to read on.....


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## Chinmusic9

I have found all of the previous replies informative, and it appears that legal involvement will only help the members if the members can find an angle that involves DRI directly. These posts have made it clear that every possible effort to put blame on contractors, Sunterra, architects, insurance companies, HOA, etc. will impact the owners financially and that DRI has effectively put themselves at arms length from significant liability.

 However, I think one possibility may involve the lack of disclosure of the problems that have existed at Poipu for years (the last three by admission by the HOA recently) to those of us who were forced into accepting the transition from weeks at  Embassy Kaanapali to points in the Hawaiian Collection when attempting to add time. First of all, there was no disclosure of problems at any of the other three properties in the documentation or presentation as I assume, from what many of you said,  Hawaii law requires (Poipu, Sedona Summit, Polo Towers). Illinois law certainly does. It does seem that DRI changed their disclosure slightly in 2011, as mentioned by a previous poster who used his right of recission.  Secondly, by forcing us to accept points, it removed us from dealing with only the Kaanapali special assessments (which we had to deal with a few years earlier) to involvement in the other properties, a convenient and purposeful effort to expand the financial liability to as many owners as possible. I am sure that our sales experience three years ago can be documented by many others at all four properties.

  I would urge Rhinestone Redneck to try and find an attorney to investigate this angle at the California meeting, as well as evaluate the other suggestions made by Carolinian, weisberg, and riothng. Keep us posted and hopefully you can get the meeting taped.


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## dougp26364

John,

I said this long ago about DRI. As an owner, you'd better like where DRI is going because you're just along for the ride. 

DRI is a mangement company, not a benfactor to owners. They'll manage the resorts but it's the owners who own and pay for the resorts, their maintence, upkeep and repairs. If there's an issue, it's that the bar was set low by Sunterra and now DRI wants to raise the bar,owner experience, and by default, owner expense.


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## Carolinian

timeos2 said:


> The path Diamond seems to have picked is one of selective sell offs either of poor resorts or those that can generate fast cash.  That has upset some like Carolinian that see it as a slap at an area (Europe) that they happen to appreciate.  I'm sure Diamond sees it as a way to improve the bottom line and strengthen the system overall.  While sad to see resorts sold off it is hard to argue with that logic for the Diamond system.
> 
> .



The issue is not really where the resorts DRI sells off are located but the manner in which they go about it, which often involves riding roughshod over the members.

The first example is Carlton Court in central London, sold off because it had one of the highest market values of any resort in the DRI system and because it was easy to do since it had no individual owners, having been brought into Sunterra when Sunterra was only selling points.  Since this is an extreme high demand and low supply location, its sale impacted members choice in vacation location, but that alone would not be enough to raise too much criticism.  From information from people in the system, this resort was bought by Sunterra with corporate funds, but then lots of money was spent out of maintenance fee money to extensively refurbish it.  That refurbishment certainly improved its sale price, but no one seems to be able to track any of that money being returned by DRI from the sale proceeds to the maintenance funds.

The other is Wychnor Park, whose original developer had sold it as fixed weeks, and did extensive marketing in the local community offering it as ''a country club that is also a timeshare'' stressing members yearround use of facilities.  DRI decided to run out the individual members.  Since this resort was highly marketable, some speculation was that the purpose was to set it up for sale.  If so, the bad economy intervened and a sale has not happened yet.  The way they ran out the individual owners was absolutely thuggish.  DRI had acquired enough weeks from inventory Sunterra purchased from the original developer plus weeks they had cajoled members into converting to points, that they had enough weeks to vote to terminate the resort as a timeshare.  They announced to the individual members that this was precisely what they intended to do, but gave them two options, either convert to DRI points or take a deed at another DRI timeshare that was a considerable distance away. Neither offered use of local facilities, which is what many of the remaining individual members had bought for.  They were totally screwed as neither option gave them anything close to what they had or what they wanted. There was not even a cash price on the table. After DRI strongarmed all the individual members out of their ownerships, they kept the resort open for their points members as it still is today.  If just one of those individual members had stuck to their guns and refused to budge, they would likely have forced a public sale of the property, in which DRI would have netted less money but at least the individual owners would get their cut of the proceeds.

Of course the DRI move at Wychnor Park was just following an old Sunterra trick. When Thurnham Leisure Industries got in financial trouble, Sunterra bought them for a song. TLI owned three resorts, Thurnham Hall, Club Britannia, and a third resort whose name slips my mind.  Sunterra ran out the individual owners at Club Britannia and then sold off that resort, reportedly receiving considerably more money than they had paid for all of TLI.  They used a similar tactic, telling the individual owners that they were closing the resort as a timeshare and they had two choices, to accept Sunterra points or a deed to another timeshare far away (actually the third TLI resort and the same one later offered by DRI to Wychnor Park owners).  Club Britannia was a seaside resort on the southern coast of England and the resort they were offered was an inland resort north of Birmingham, not at all the same resort experience for own to use members.  Again, there was no cash offer, but again all the individual members eventually knuckled under to this screw job.

DRI has already strongarmed members of a small points club at Thurnham Hall out of that program in a similar manner, and there is concern that the next victims could be the individual owners at Thurnham.

As to how resorts can protect themselves from the thugs of these large resort chains moving in and trying to take over, Stouts Hill is a good example.  When their member-controlled HOA board heard that their developer had sold his remaining inventory to one of these groups (Sunterra, if memory serves), they moved at the next meeting to amend the by-laws to provide that each owner only got one vote at the annual meeting regardless of how many weeks they owned.  That chopped the corporate marauder down to size and kept the individual members firmly in control.


----------



## Tiger

and that there doesn't seem to be any way to wrest control from management


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## Carolinian

*interesting newspaper article about disgrunted owner from 2010*

_The Garden Island_ Saturday, February 27, 2010

*Timeshare owners still disgruntled*

by Coco Zickos  
. 
  ...PO‘IPU — Hundreds of outspoken timeshare owners at The Point at Po‘ipu are still fed up with mounting maintenance fees that continued to rise some 20 percent this year. Since October, the number of deeded owners concerned with the current management company’s influence on the resort has risen from 250 to around 500 according to Richard Batchelder, who is heading the group of “Concerned Deeded Owners at the Point at Po‘ipu.”

Even though the economy has taken a nosedive, timeshare owners like Brian Carlson, who said he is already enduring difficult financial times, are largely frustrated with Diamond Resort International’s lack of communication with owners.

“There is absolutely no communication between owners and management,” he said Friday.

He now owes some $1,800 in maintenance fees, but when Carlson first invested in the timeshare 14 years ago, payments were only around $500.

During his ownership, Carlson said, he has “never been given the opportunity to vote on anything.”

“I never hear from or know who the HOA is, let alone figure out how they can raise the fees like this,” he said. 

Fees have reportedly escalated since DRI took over management in recent years, Batchelder said.

But what has also concerned Batchelder is that DRI still refuses to “give up the owner’s list,” despite repeated attempts by several owners.

“It is our opinion” there would be “thousands” of the resort’s approximately 10,000 owners willing to express concern if “the owner list was released so they could be contacted,” says a letter from the concerned owners.

Hawai‘i Revised Statutes Chapter 514A states, “The resident manager or managing agent or board of directors shall keep an accurate and current list of members of the association of apartment owners and their current addresses ... The list shall be maintained at a place designated by the board of directors and a copy shall be available, at cost, to any member of the association as provided in the declaration or bylaws or rules and regulations ...”

“Whoever controls the owner’s list controls the resort,” Batchelder said.

DRI also still controls a majority of the Vacation Owners Association and Association of Apartment Owners board members, as three of the five directors are employees of the management company, according to Batchelder.

However, Chapter 514A also states, “A director shall not cast any proxy vote at any board meeting, nor shall a director vote at any board meeting on any issue in which the director has a conflict of interest.” In addition, “the number of persons constituting the board ... shall have an elected board of not less than nine members” and that no single apartment should have more than one representative.

“There’s no way we can compete,” said timeshare owner Roger Veach.

In spring 2008, the board voted to give DRI management a $1.5 million “administrative fee” which Batchelder cites as “pure profit.”

“There are literally millions of dollars involved here,” he said.

Attempts to contact DRI Executive Vice President and General Counsel Elizabeth Brennan for comment were unsuccessful.

“The movement of deeded owners, in many people’s mind, is pretty much unstoppable,” says the letter written by the Concerned Deeded Owners at The Point at Po‘ipu.

For more information, visit www.poipuowners.org.


Read more: http://thegardenisland.com/business...42d-11df-91f7-001cc4c03286.html#ixzz1b9yjZAu6


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## JudyS

timeos2 said:


> ... my guess is as resorts age we'll see this type of thing more and more. Those resorts that have full owner control of the Board might have an option to terminate & sell off those properties - although in reality even small resorts have a tough time getting the super majority needed for any such action - while most will find that the reality is there are blocks of votes held in Trusts or systems that effectively have control.  If they want to rebuild or renovate or upgrade it is tough to stop (and, except for costs, why would you want to? An improved resort benefits all owners, albeit at that cost, so any challenge is likely to fail).  That is the reality of most timeshares. Buy in with the understanding that costs will do nothing but rise.  And there is a real financial risk to owning ANY property - even a "simple" little week of timeshare.


While it is certainly true that many resorts are aging and need substantial work, I still think there is a real question here about the cost. Why is it $65 million dollars to renovate a property with about 212 units? $300,000 per condo seems very, very steep, especially since it isn't a  complete tear-down and rebuild. 

Can anyone give me some info about the size of these units? I'm curious as to how much the cost works out to per square foot. Here in the Midwest, quality construction costs maybe $80-$100 per square foot on an improved lot. I would expect costs in Hawaii to be somewhat higher, plus DRI probably adds on a 15% management fee, plus there would demolition costs if they did a tear-down. Still, unless these are very large units, I'd think a complete tear-down and rebuild would be less than $300,000 per condo.


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## bogey21

JudyS said:


> Still, unless these are very large units, I'd think a complete tear-down and rebuild would be less than $300,000 per condo.



Is it possible that it might not be possible to get the permits necessary for new construction?  If so, maybe "renovating" is the only option.

George


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## Geckowest

bogey21 said:


> Is it possible that it might not be possible to get the permits necessary for new construction?  If so, maybe "renovating" is the only option.
> 
> George



Or better yet, Demolish instead of renovating at $65Mil, and sell the Land...


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## dougp26364

Geckowest said:


> Or better yet, Demolish instead of renovating at $65Mil, and sell the Land...



That is going to require, at the very least, a majority vote. Considering that DRI controls nearly 40 to 45% of those votes as presented here or on another Piopu thread, it's going to require that nearly every deeded week owner vote to close the resort. This is assuming that a simple majority can vote for the resort to be closed. It may take more than a simple majority and, depending on how Hawaiian law and the covenents of the resort owners read, it may be a moot point before you begin. 

It's been said before but, the beauty of the trust is consolidation of control. Many have warned owners about signing over their voting rights. This issue illustrates that concern perfectly. 

Disney is the prefect example of the control a trust based ownership enjoys. Disney recently decided it was moving from I.I. to RCI. Members (owners) had no say in the matter. Disney members are now exchanging through RCI. No vote, no say, just follow.


----------



## T_R_Oglodyte

Geckowest said:


> Or better yet, Demolish instead of renovating at $65Mil, and sell the Land...



An obvious question, which has not been addressed by the Board in any of the information that I have seen to date.


----------



## dougp26364

T_R_Oglodyte said:


> An obvious question, which has not been addressed by the Board in any of the information that I have seen to date.



Could it be that DRI controls enough votes to make this a moot point? That is one of the dangers of trust based ownerships that has been warned about in the past. Owners give up control and become followers vs participating owners.


----------



## timeos2

DRI has rebuilt from scratch but it was a case where there was no choice.  The buildling at Powhatan that suffered massive fire damage a couple years ago was torn down and rebuilt. Interestingly they used the opportunity to create yet another style / level of building (they had two general styles - A-Frames & more traditional apartment style square boxes already) that set the new design for other, new construction they had planned for a new phase. How owners got to reserve that newer style vs the two older ones I have no idea.  

So they can be persuaded that new construction is warranted. But given the regulations and extreme costs of new construction (as well as reconstruction) in an island environment such as Hawaii it is no surprise that even a major rebuild may be more economical, not saying cheap in any case, than a full tear down and rebuild.  Plus they don't have to meet all new codes, etc that invariably add to overall costs by merely replacing damaged with new.  

While it hasn't been stated in anything I've read I have to assume they at least looked at a tear down/rebuild and ruled it out.


----------



## JudyS

bogey21 said:


> Is it possible that it might not be possible to get the permits necessary for new construction?  If so, maybe "renovating" is the only option.


This has occurred to me, too, but I don't think DRI has said anything about trying to get permits for a complete rebuild. If they  tried to get permits for a complete rebuild and failed, I'd expect them to say so. 

By the way, another option would be for DRI to tear down the resort and rebuild a smaller number of units, thereby reducing the number of weeks available and allowing some owners to walk away if they chose. 



Several people raised the issue of tearing down and then SELLING the land, rather than rebuilding. 

Steve replied:


T_R_Oglodyte said:


> An obvious question, which has not been addressed by the Board in any of the information that I have seen to date.



Doug said, regarding selling the land:


dougp26364 said:


> That is going to require, at the very least, a majority vote. Considering that DRI controls nearly 40 to 45% of those votes as presented here or on another Piopu thread, it's going to require that nearly every deeded week owner vote to close the resort. This is assuming that a simple majority can vote for the resort to be closed. It may take more than a simple majority and, depending on how Hawaiian law and the covenents of the resort owners read, it may be a moot point before you begin.


Yes, but the fact that DRI controls so many votes means they probably COULD close the resort and sell the land, if they wanted to. But, instead they are opting to bill the owners almost $6,000 per week.

I'm not a lawyer and I don't know what it takes to close a resort in Hawaii. But, if I were a Poipu Point owner and wanted to sue, the approach I would take is this: I would claim that board was breaching its fiduciary responsibility to owners by spending $65 million on remodeling instead of closing the resort and distributing the proceeds from sale of the land. 

Several people here have noted that timeshare owners have the responsibility to maintain their resorts, and they can't just walk away if a resort needs major repairs. While this is true, it does not give management companies the right to just pick arbitrarily high numbers and bill owners that amount, yet exactly that may be happening here.

I don't own DRI, but I think all owners should be concerned about the problem at Poipu Point. We don't want management companies to feel they can just bill any amount they want for repairs. Even if you have an "owner controlled" board, you should still be concerned about this. A few years ago, there was an attempt to throw out the board of MROP after they made some poor decisions and hurt owners financially. MROP has an "owner controlled board," but the current board controls the proxies and they used the proxies to vote themselves back in.


----------



## timeos2

JudyS said:


> I don't own DRI, but I think all owners should be concerned about the problem at Poipu Point. We don't want management companies to feel they can just bill any amount they want for repairs. Even if you have an "owner controlled" board, you should still be concerned about this. A few years ago, there was an attempt to throw out the board of MROP after they made some poor decisions and hurt owners financially. MROP has an "owner controlled board," but the current board controls the proxies and they used the proxies to vote themselves back in.



This paragraph says a lot.  This is exactly the point I've been trying to impress on those Marriott/Starwood/Hyatt/Hilton, etc owners that seem to think that name is all important - more important than the actual resort. They are, IMO, the most exposed to this issue of all. Not only are they paying the big annual fees  - including a hefty overhead simply to ensure that the name makes a good percentage return on its money - but they are also on the hook to maintain the resort at whatever price the management names. If you read the docs thats what it says. You pay what is billed or you are in default!  With few exceptions there are no limits, so what they declare as due and payable is the bottom line.  

That is why we sold off every ownership we had that didn't have an owner controlled Board.  That is the ONLY refuge you have that fees will stay reasonable - it is other individual owners that are monitoring and setting those fees.  We also look for an independent, non-developer based management as they have to be good to survive. No automatic percentage overhead for them guaranteeing a profit.  They do the job well or someone else is brought in. 

Owning where a developer calls the shots, holds the management and runs the Board is giving them a blank check. The documents were written with very strong ways to be sure the (assumed) independent Association had a way to survive.  In the hands of a developer it is a way to print money as the fees can in fact go virtually unchecked with little recourse by the minority owners.  Look at Wyndham, Marriott, etc and how they thumb their noses at what the owners want and you'll see why this is a very bad spot to be in as an owner.  And a big reason why resale timeshares will continue to drop in value - the real cost is ALWAYS the ongoing fees. Purchase price retail or resale means zero.


----------



## lv_maui

It is interesting that the Summer 2011 Newsletter says that the Soffits have been repaired.  It adds that the soffits have been stabalized and the impearance is greatly improved.

https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0BxZ9om19nlNmZDM2OGUxNjYtY2Q4Mi00MmQ2LTlhNjYtNjcyZDQ4MzgwZjgw&hl=en_US

At a similar time as the newsletter, on June 29, 2011, Diamond is filing registration statements with the state of Hawaii stating in section 9 that a Special Assessment of an unknown amount will be issued on 10/1st.

http://hawaii.gov/dcca_condo/reports/2480R.pdf

I am not making any conclusions or accusations as I am only providing copies of documents on the internet, but I think it would have been better if they did not mention the soffits in the newsletter.  It made me feel as if the water instrusion issues were concluded.


----------



## bogey21

timeos2 said:


> That is why we sold off every ownership we had that didn't have an owner controlled Board.



I made the same decision about 10 years ago and have never regretted it.

George


----------



## T_R_Oglodyte

I'm pretty certain that a lot of owners at Poipu, whether at the resort or through the trust, are reacting and hypothesizing without having first acquainted (or reacquainted) themselves with what is in the documents that they signed.  

Those documents define what your rights and obligations are.  That is the point from which everything starts. Even if you think there might be a case for malfeasance, your argument does not start from ground zero; it starts from what you signed off on and agreed to at the time you purchased.  Or, if you purchased resale, what the original buyer agreed to and signed off on.

For example you can wail about the conflicts of interest involved in the management of the resort.  But since the beginning of sales, every purchaser has received, and has acknowledged receiving, a timeshare disclosure agreement. The document is about 40 to 50 pages long, plus a number of attachments.  The first page of the document has bald face, capital letters, in about 60-point font, *READ THIS DISCLOSURE STATEMENT BEFORE SIGNING ANYTHING*.

Within that disclosure is about one entire page that is devoted to discussions of the conflicts of interest between the developer and the resort management.  Each of us who bought either directly accepted those conditions, with our signature, or indirectly by agreeing to whatever it was that the original purchases

Now that's not to say that there could not be liability for conflicts of interests.  That's really a legal question. But it certainly weakens your case when you acknowledge having received notice of the inherent conflicts and went ahead and completed the purchase anyway.

*****

So, swallowing my own pill, I went back and reviewed the documents.  

And here's a little piece from the Disclosure Agreement for the Hawaii Collection:



> The Collection Instruments limit removal of property from the Collection to instances where the property has been taken by eminent domain or condemnation, damaged beyond repair, or destroyed.
> 
> …
> 
> Collection accommodations may also be removed from the Collection if the component site owners association votes to terminate the component site project. For example, this might happen if a condominium owners association votes to terminate a condominium containing Collection accommodations.



So, if I were the Hawaii plan manager, I would look at the situation and consider that while the buildings have been damaged, as long as there is a plan for repair and the HOA Board is not declared the resort beyond repair my hands are largely tied.  Further it would be very tricky for me to try to lobby in favor of closing the resort as long as a plan to make repairs was in place.

Since the Trust controls ~35% of the votes, for anything to happen that runs counter to what the HOA Board wants, it will be necessary to get the Trust to take a position counter to what I have outlined.

Also note that the only direct power the Trust has is its votes for the Board of Directors. So the earliest that the Trust could do anything directly would be the next directors election.


----------



## Carolinian

dougp26364 said:


> Could it be that DRI controls enough votes to make this a moot point? That is one of the dangers of trust based ownerships that has been warned about in the past. Owners give up control and become followers vs participating owners.



DRI has three employees sitting in three of the five board seats, a majority.  This is an obcene conflict of interest.

DRI controls about 45% of the voting weeks, so the owners, if they can organize, certainly ought to be able to do something about it.  Getting proxies in from a diverse 55% to beat a compact 45% is a challenge but this absurdly high special assessment may well wake up the sleeping giant.  

The problem then is getting the message out and waging a proxy fight.  To do that, you need a membership list.  DRI is violating Hawaii law by refusing to provide members with the membership lists they are clearly entitled to under state law.  DRI is doing that so that it can continue to use its minority stake in ownership to control a majority of the board.  When DRI is knowingly operating illegally in this regard, how much more are they doing illegally?  Until an independent board starts digging, no one will know.


----------



## Carolinian

JudyS said:


> .
> 
> I don't own DRI, but I think all owners should be concerned about the problem at Poipu Point. We don't want management companies to feel they can just bill any amount they want for repairs. Even if you have an "owner controlled" board, you should still be concerned about this. A few years ago, there was an attempt to throw out the board of MROP after they made some poor decisions and hurt owners financially. MROP has an "owner controlled board," but the current board controls the proxies and they used the proxies to vote themselves back in.



This is certainly a problem where HOA's use multi-year proxies instead of meeting by meeting proxies.  Things change and multi-year proxies are far from a good arrangement for member-democracy.

Even so, overturning a board that has lost member support requires somebody taking the bull by the horns and heading up a proxy battle.  I have been involved in those myself at two resorts.  You need the membership list, and a group to raise money to do a mailing.  If you have a solid message and get it out, you can win proxy fights.

Even if you have multi-year proxy, a later proxy revokes an earlier one, so in the proxy battle you can neutralize that advantage.


----------



## Carolinian

You seem to forget that there is a higher souce of authority than the condo docs and that is state law.  DRI seems to forget that, too, as they willfully and wantonly thumb their nose at Hawaii law by knowingly violating it, like in trying to prevent any challenges to DRI control by refusing to obey state law in giving membership lists to members who request them.

State law determines when a resort is damaged to a point that it is destroyed, and that issue has gone before courts twice on the Outer Banks alone when you members disagreed with the HOA board's determination.  Both times the court reversed the board's position.  When repairs cost twice what similar condos are selling for in the market, as is the case at Point at Poipu, I think there is a good factual basis for the argument that the resort has been destroyed and a vote on whether to wind it up is necessary

Apparently the disclosures do not address the conflict of interest in a management company controlling the HOA board.  And of course, the owners themselves can best address that conflict of interest by kicking out the board or management or both.




T_R_Oglodyte said:


> I'm pretty certain that a lot of owners at Poipu, whether at the resort or through the trust, are reacting and hypothesizing without having first acquainted (or reacquainted) themselves with what is in the documents that they signed.
> 
> Those documents define what your rights and obligations are.  That is the point from which everything starts. Even if you think there might be a case for malfeasance, your argument does not start from ground zero; it starts from what you signed off on and agreed to at the time you purchased.  Or, if you purchased resale, what the original buyer agreed to and signed off on.
> 
> For example you can wail about the conflicts of interest involved in the management of the resort.  But since the beginning of sales, every purchaser has received, and has acknowledged receiving, a timeshare disclosure agreement. The document is about 40 to 50 pages long, plus a number of attachments.  The first page of the document has bald face, capital letters, in about 60-point font, *READ THIS DISCLOSURE STATEMENT BEFORE SIGNING ANYTHING*.
> 
> Within that disclosure is about one entire page that is devoted to discussions of the conflicts of interest between the developer and the resort management.  Each of us who bought either directly accepted those conditions, with our signature, or indirectly by agreeing to whatever it was that the original purchases
> 
> Now that's not to say that there could not be liability for conflicts of interests.  That's really a legal question. But it certainly weakens your case when you acknowledge having received notice of the inherent conflicts and went ahead and completed the purchase anyway.
> 
> *****
> 
> So, swallowing my own pill, I went back and reviewed the documents.
> 
> And here's a little piece from the Disclosure Agreement for the Hawaii Collection:
> 
> 
> 
> So, if I were the Hawaii plan manager, I would look at the situation and consider that while the buildings have been damaged, as long as there is a plan for repair and the HOA Board is not declared the resort beyond repair my hands are largely tied.  Further it would be very tricky for me to try to lobby in favor of closing the resort as long as a plan to make repairs was in place.
> 
> Since the Trust controls ~35% of the votes, for anything to happen that runs counter to what the HOA Board wants, it will be necessary to get the Trust to take a position counter to what I have outlined.
> 
> Also note that the only direct power the Trust has is its votes for the Board of Directors. So the earliest that the Trust could do anything directly would be the next directors election.


----------



## Carolinian

It is indeed a real question when a member on another timeshare board consulted Hawaii MLS listings of completed sales and discovered that similar whole ownership condos on the same island in the past year have sold for an average of slightly less than half the renovation figure.  That is a huge red flag that something may be amiss.

One thing that struck me as well was when someone posted the minutes of a board meeting where the renovation was discussed, and most of it was in executive session, or in layman's language, secret.  To me, this is a huge red flag that something might not be kosher.  Did they get real competing bids?  Were the bids accepted the lowest ones?  Were there any insider dealings?  Owners need transparency, not cover ups on such things.  I served on an HOA board during a major hurricane rebuild, a board that included two lawyers, and we never went into executive session on any issue dealing with the rebuild.  The management puppet HOA board's handling of this just does not pass the smell test.






JudyS said:


> While it is certainly true that many resorts are aging and need substantial work, I still think there is a real question here about the cost. Why is it $65 million dollars to renovate a property with about 212 units? $300,000 per condo seems very, very steep, especially since it isn't a  complete tear-down and rebuild.
> 
> Can anyone give me some info about the size of these units? I'm curious as to how much the cost works out to per square foot. Here in the Midwest, quality construction costs maybe $80-$100 per square foot on an improved lot. I would expect costs in Hawaii to be somewhat higher, plus DRI probably adds on a 15% management fee, plus there would demolition costs if they did a tear-down. Still, unless these are very large units, I'd think a complete tear-down and rebuild would be less than $300,000 per condo.


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## djblancett

brand new to this site and the realm of time shares.  My wife and I bought the Hawaii Collection, thinking that we were being sold Ka'anapali Beach Club.  Didn't realize that were were now owners of an interest in a group of properties, and that one of those properties had some SERIOUS structural problems. (that would be P@P)  All of a sudden, we are faced with the cost of maintaining a property we didn't even buy...at least we weren't aware that we bought it.  Sure, we were lame, and missed the implications of a title such as "Hawaii Collection". Also, there is that pesky document that sez "DON'T SIGN ANYTHING..." (you know the rest)  I just discovered it in my paperwork.  I guess the only possible recourse would be to go after DRI for failure to disclose the problems @ P@P.  Hell, there wasn't any mention of the three other properties @ the sales pitch.  Yeah, I read that bit about the verbal stuff (or lackof) not carrying any validity.
Bottom line is, we got screwed, and DRI knew they were screwing us when it happened.  So, what do we do about it?


----------



## ampaholic

djblancett said:


> brand new to this site and the realm of time shares.  My wife and I bought the Hawaii Collection, thinking that we were being sold Ka'anapali Beach Club.  Didn't realize that were were now owners of an interest in a group of properties, and that one of those properties had some SERIOUS structural problems. (that would be P@P)  All of a sudden, we are faced with the cost of maintaining a property we didn't even buy...at least we weren't aware that we bought it.  Sure, we were lame, and missed the implications of a title such as "Hawaii Collection". Also, there is that pesky document that sez "DON'T SIGN ANYTHING..." (you know the rest)  I just discovered it in my paperwork.  I guess the only possible recourse would be to go after DRI for failure to disclose the problems @ P@P.  Hell, there wasn't any mention of the three other properties @ the sales pitch.  Yeah, I read that bit about the verbal stuff (or lackof) not carrying any validity.
> Bottom line is, we got screwed, and DRI knew they were screwing us when it happened.  So, what do we do about it?



At this point - just be glad they didn't sell you to another developer after they were done screwing you.

Oh, wait - they aren't done ...


----------



## artringwald

djblancett said:


> brand new to this site and the realm of time shares.  My wife and I bought the Hawaii Collection, thinking that we were being sold Ka'anapali Beach Club.  Didn't realize that were were now owners of an interest in a group of properties, and that one of those properties had some SERIOUS structural problems. (that would be P@P)  All of a sudden, we are faced with the cost of maintaining a property we didn't even buy...at least we weren't aware that we bought it.  Sure, we were lame, and missed the implications of a title such as "Hawaii Collection". Also, there is that pesky document that sez "DON'T SIGN ANYTHING..." (you know the rest)  I just discovered it in my paperwork.  I guess the only possible recourse would be to go after DRI for failure to disclose the problems @ P@P.  Hell, there wasn't any mention of the three other properties @ the sales pitch.  Yeah, I read that bit about the verbal stuff (or lackof) not carrying any validity.
> Bottom line is, we got screwed, and DRI knew they were screwing us when it happened.  So, what do we do about it?



How bad did the P@P special assessment affect the maintenance fees for the Hawaii Collection Trust?


----------



## T_R_Oglodyte

Carolinian said:


> You seem to forget that there is a higher souce of authority than the condo docs and that is state law.


Didn't forget it, since that's stating the obvious.  I'm giving the readers of the board credit for some measure of intelligence.



Carolinian said:


> State law determines when a resort is damaged to a point that it is destroyed, and that issue has gone before courts twice on the Outer Banks alone when you members disagreed with the HOA board's determination.


Good point. I don't know what the status of this is in Hawaii law.



Carolinian said:


> Apparently the disclosures do not address the conflict of interest in a management company controlling the HOA board.  And of course, the owners themselves can best address that conflict of interest by kicking out the board or management or both.


Actually the disclosures do address conflicts of interest inherent in having the Developer voting for members of the Board of Directors. Of course the "constraint" on that is voting out the Board of Directors.  

However - and you're going to love this one, Steve - 35% of the votes are in the hands of the Hawaii Collection, and the program manager for the Hawaii happens to be .... guess who????  So to change that 35% of the vote would first involve the members of the trust electing a new Board of Directors for the Collection, who then would then dictate to the Manager how the Collection is to vote its holdings.

I have long expressed here - and on DRI's member forums - that the one of the key purposes of creating the trusts was to help ensure that Sunterra (originally) and now DRI would be able to maintain control of the resorts long after sales were completed.

I think you and I (and many others who often contend) are in total agreement that the decision to be in a points and trust system is a decision to get in bed with whomever is the operator.  In timeshare as in life, one should always know the history of the one with whom one is bedding.


----------



## Chinmusic9

artringwald said:


> How bad did the P@P special assessment affect the maintenance fees for the Hawaii Collection Trust?



We "own" 26,000 points and got assessed the full 5800+ dollars just as the owners of a week at Poipu did. I asume that at some point level, everyone in the Hawaiian Collection will be hit for a full week's assessment. My inlaws got hit for  1000+ dollars and they have only enough points to go to one of the  resorts  every two years!   They were shocked and dismayed, to say the least!


----------



## Carolinian

One fine point that I think you missed.  Yes, it is a conflict of interest for the developer to vote on and control the HOA BOD, but that is not the big conflict of interest here.  DRI is also the manager.  The BOD is supposed to oversee the management, but how can they really do that when the BOD is *controlled* by the management?  That is the massive  conflict of interest here, the inmates are running the assylum.  It is *management* control of the BOD that is by far the biggest problem.  Management is demonstrating that conflict of interest by willfully violating Hawaii law that requires them to turn over the membership list to members who request it.  The BOD is not going to order them to obey the law, because the scofflaw management controlls the BOD.  It is hard to tell how much more hanky-panky is going on from this unconscionable relationship, but that clearly is.

Maybe they have pissed off enough members of the trust as a whole to be able to take control of the trust away from them, too, with these massive special assessments, but I bet they will violate Hawaii law by refusing a membership list in that, too, making them impossible to challenge until somebody nails them in court for violating the law.




T_R_Oglodyte said:


> Actually the disclosures do address conflicts of interest inherent in having the Developer voting for members of the Board of Directors. Of course the "constraint" on that is voting out the Board of Directors.
> 
> However - and you're going to love this one, Steve - 35% of the votes are in the hands of the Hawaii Collection, and the program manager for the Hawaii happens to be .... guess who????  So to change that 35% of the vote would first involve the members of the trust electing a new Board of Directors for the Collection, who then would then dictate to the Manager how the Collection is to vote its holdings.


----------



## lv_maui

Good luck with the argument that it is a conflict of interest.  This has been discussed as to its unfairness at length, and the bottom line is that it will NOT change.  The only states that I know that seem to help the consumer in Timeshare is Florida and California.

One would think that since these states are not Hawaii, there is nothing that can be done, but that is FALSE.  In order to send any timeshare marketing material to California residents, Poipu Point must be registered in the state of California just like they are in Hawaii.  The requirement comes when you make the mini vacation contingent upon you taking a tour.  If it is strictly a hotel stay, there is no registration needed.

So there may be some reason to contact the California DRE if someone would like to voice a complaint.  Just a thought and opinion here.



Carolinian said:


> One fine point that I think you missed.  Yes, it is a conflict of interest for the developer to vote on and control the HOA BOD, but that is not the big conflict of interest here.  DRI is also the manager.  The BOD is supposed to oversee the management, but how can they really do that when the BOD is *controlled* by the management?  That is the massive  conflict of interest here, the inmates are running the assylum.  It is *management* control of the BOD that is by far the biggest problem.  Management is demonstrating that conflict of interest by willfully violating Hawaii law that requires them to turn over the membership list to members who request it.  The BOD is not going to order them to obey the law, because the scofflaw management controlls the BOD.  It is hard to tell how much more hanky-panky is going on from this unconscionable relationship, but that clearly is.
> 
> Maybe they have pissed off enough members of the trust as a whole to be able to take control of the trust away from them, too, with these massive special assessments, but I bet they will violate Hawaii law by refusing a membership list in that, too, making them impossible to challenge until somebody nails them in court for violating the law.


----------



## timeos2

Carolinian said:


> Management is demonstrating that conflict of interest by willfully violating Hawaii law that requires them to turn over the membership list to members who request it.  The BOD is not going to order them to obey the law, because the scofflaw management controlls the BOD.  It is hard to tell how much more hanky-panky is going on from this unconscionable relationship, but that clearly is.



It appears that the right to the list isn't clear cut either.  Another post points out that the group that existed & tried to organize these owners in the past discovered the crazy patchwork of Hawaii laws has added a rule that in order to get an owners list you must have permission of the owners to have the information released. So how do you reach them to ask for permission if you don't have the list which you can't get because they haven't been asked/given permission!  

As usual, the minute Government is involved nothing is simple or in any way clear cut.  I'm sure DRI can (and would) use that issue to drag out any release far beyond the time when it would be of any value. We've seen that in these cases in the past. (see the LONG Marriott thread of last year for example)


----------



## FanFiltration

There will be a meeting regarding this special assessment in the San Francisco area on Thursday October, 20th. I plan to be there with a fellow owner. I'll take notes, and will be sure to post back here.

DRI The Point at Poipu (water intrusion) 
Meeting time / Location:

7:00 P.M. October 20th
Embassy Suites
150 Anza Blvd.
San Francisco Airport Waterfront 
RSVP 855-624-4390

FF


----------



## Geckowest

FanFiltration said:


> There will be a meeting regarding this special assessment in the San Francisco area on Thursday October, 20th. I plan to be there with a fellow owner. I'll take notes, and will be sure to post back here.
> 
> DRI The Point at Poipu (water intrusion)
> Meeting time / Location:
> 
> 7:00 P.M. October 20th
> Embassy Suites
> 150 Anza Blvd.
> San Francisco Airport Waterfront
> RSVP 855-624-4390
> 
> FF



That would be Awesome.  I'm helping my Parents out here, so any help, information that we can gain woould be awesome.  Any word on how things went on the meeting today?


----------



## jacknsara

FanFiltration said:


> There will be a meeting regarding this special assessment in the San Francisco area on Thursday October, 20th. I plan to be there with a fellow owner. I'll take notes, and will be sure to post back here....
> FF


Hello,
I've been following this story even though I am not an owner at P@P.  Here's a suggestion to help P@P owners connect with each other.  Copy and type this into a table (Word or Excel) of for example 11 rows and three columns, print a few sheets, and cut them into ~ business card size.  Leave little piles of them all around and have extras to hand out at the end of the row (take one and pass the rest)
Good Luck

P@P Owners connect for free 
on forums at Timeshare Users Group
http://www.tug2.net/


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## JudyS

Earlier on this thread, there was a discussion of whether it would be cheaper to tear down and rebuild rather than remodel, and whether DRI management would have already looked into this question. 

One should not assume that management already looked into the issue of rebuilding versus remodeling. I own at an older resort, managed by Bluegreen, that could use a major remodeling. (Although there are no urgent issues that I know of.) Bluegreen did a minor special assessment in early 2010, which they used to remodel one unit to show how nice the new units would be. They then announced a special assessment to remodel all the units--until the owners realized that the budget worked out to around $120 per square foot. (This is in a part of the country where construction costs are low.) Owners complained to the HOA Board, and the Board admitted they had never considered a tear-down and rebuild instead. Luckily, Bluegreen is fairly responsive to owners and has gone back to the drawing board. No word yet on whether a full tear-down & rebuild would be cheaper than remodeling. Bluegreen is supposed to get back to owners on that issue in spring of 2012, a full two years after they first announced the remodeling.


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## waimea'smom

Geckowest said:


> That would be Awesome.  I'm helping my Parents out here, so any help, information that we can gain woould be awesome.  Any word on how things went on the meeting today?



Hi, I am a newbie here but attended today's meetings.  For those out of Ca who cannot attend, here are some notes.


I attended the meeting today and just a couple of quick notes I have. 
1) The insurance claim was supposedly denied for three exclusions (construction defect/faulty workmanship exclusion, gradual deterioration/wear and tear exclusion, and dry rot exclusion). 
2) The Board decided it was not worth it to sue, and claimed that no competent plaintiffs attorney would do so on a contingency basis.
3) They claimed it would cost 2x this amount to demolish and rebuild the units.
4) They claimed that it was a chemical reaction from the pressure treated wood, salt in the air/sea water, and non stainless steel materials that has led to the corrosion of the nails/connectors.
5) Our reserve fund paid out about 1.8 million dollars to analysts/attorneys in assessing the situation and we currently have only about 2 million in the reserve fund.
6) The schedule of work is as follows: 2012 - building 4; 2013 - building 6, then 2; 2014 - building 3, then 8; 2015 - building 9, then 5; 2016 - building 7, then 1; 2017 - building 10, then Lobby, then shop = only one building will be out of service at a time. If you own a fixed/fixed week (as we do) you will be put in another unit if yours is being serviced, they will "attempt" to put you in a similar view category
7) 9 general contractors were invited to bid, 7 elected to attend a mandatory pre-bid meeting in April of 2011, 4 elected to submit bids and Layton Construction (a Kauai based firm) was chosen for their bid -- which was also the lowest bid
8) Deeded owners make up 63% of inventory, the Collective makes up about 35% of inventory, and Developer is about 2% of inventory and have been assessed their portion of the 65Million accordingly ($41,456,853 to deeded owners, $22,972,175 to trust points owners, and $1,393,771 to developer).
9) The breakdown of the $65 million is as follows:
56.8 million (about 51.5 in actual costs, plus a reserve of 5 million for overages)
2.3 million in consultant fees
3.8 million (assuming a delinquency rate of 10%)
989,000 in credit card surcharges (we are all paying this despite whether or not we are charging our fees or paying by check)
1.7 million in administrative costs (this really irked me -- it is the cost of Diamond's running of the project - don't they already get paid a salary?)
Total: $65,822,529 = $5893.32/interval
10) I asked what if if they have more defaults then 10% will we be assessed a further surcharge - they said yes. What if there are less than 10% will their be a refund he said yes.
11) Total cost to Diamond = $7,313,113 ($1,393,771 in unsold inventory deeds and $5,919,342 in unsold inventory points)
12) If you bought after discovery was made, they claimed you were told of it in section 4.1 of your disclosure agreement!
13) They claimed we were notified in meeting minutes, on the website and other ways prior to this bill going out - a claim many of us dispute.
14) They were actually rather rude during the meeting. Frank Goeckel (not sure of the spelling) said he was talking to us with respect - he wasn't he was rude and condescending. When someone said no he wasn't, he replied "Then I don't have to talk to you any longer." 
15) When someone asked if they could surrender their deed to Diamond, and Frank said no, they asked if they could sell it to someone else, he said, "You can try." I can't really put into words here the tone he used, but it was sarcastic.
16) When people tried to explain it was difficult for some to pay this bill, he stated, "Some people have already paid it."
17) They claimed Hawaii law precludes them from releasing a list of owners (I'm pretty sure that is not correct). I don't doubt their lawyers told them not to, but deeds are recorded in the county of Kauai and a matter of public record. When a man said that the state REQUIRES the release but the Dept. of Real Estate said they could not enforce it (it had to be done by civil suit) they replied "Do what you think you need to do."
18) They stated that of the 5 member board, only 2 are Diamond employees.
19) They said that the two year statute of limitations on warranty of construction would run from time of occupancy - so building 4 and 2 would expire before the project is even done. But they said that they are trying to get warranties on the supplies for 20 years.
20) They are taking the payment plan under advisement and may possibly reconsider it -- but with the caveat that even if changes are made, you would have to be paid in full to occupy or make a reservation for that year.
All in all, I was actually glad to see owners turn out, but unhappy with the condescending and rude nature of Frank and Elizabeth Brennan -- who both made snide remarks. Admittedly they were in a hostile crowd with a lot of angry people but they were both pretty rude. Linda Riddle did the bulk of the presentation but maintained her composure and was polite, if a bit overwhelmed.

My regret was when they insisted it was illegal to provide the owner list, I should have challenged that because deeds are recorded with the county as public record.  Even if they don't disclose the info of points owners, they should with deed owners, perhaps even with an opportunity for an opt out provision.  Also, they are changing the exterior structure of the buildings. I took some photos of the new plan (with a yellow top floor, and brown bottom floor) and of some of the corroded materials on display. I put them on the new Facebook page.


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## waimea'smom

Here is the photo of the materials on display.

http://www.travellifeisshort.com/displaytable.JPG

Here is the photo of the proposed new exteriors.

http://www.travellifeisshort.com/newbuildings.JPG


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## artringwald

waimea'smom said:


> I took some photos of the new plan (with a yellow top floor, and brown bottom floor) and of some of the corroded materials on display. I put them on the new Facebook page.


 Thanks for the report on the meeting! What's the new Facebook page?


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## Carolinian

The numbers given at the meeting indicate that deeded owners have 63% of the ownership.  Given this huge wakeup call, if properly organized, this sleeping giant is a large enough group to throw off the arrogant yoke of DRI.  Of course, it will need to go to court to get the membership list given the illegal refusal by DRI to turn it over as required by law.  That is how things CAN indeed change.

As to the conflict of interest, that is certainly always an ethical issue and should motivate owners to make a change.  In certain contexts, it may be useful as a legal issue, but it is certainly not a silver bullet.

As to states which have historically stood up for timeshare members, you left out one that has done so more than the two states you mention, and that is North Carolina, especially during the decades that Blackwell Brogden headed the timeshare unit at the NC Real Estate Commission.  Brogden would take on anybody, no matter how big, on behalf of timeshare consumers.  He even took on RCI and forced them to change some of the more onerous aspects of their points program as RCI originally rolled it out.




lv_maui said:


> Good luck with the argument that it is a conflict of interest.  This has been discussed as to its unfairness at length, and the bottom line is that it will NOT change.  The only states that I know that seem to help the consumer in Timeshare is Florida and California.
> 
> One would think that since these states are not Hawaii, there is nothing that can be done, but that is FALSE.  In order to send any timeshare marketing material to California residents, Poipu Point must be registered in the state of California just like they are in Hawaii.  The requirement comes when you make the mini vacation contingent upon you taking a tour.  If it is strictly a hotel stay, there is no registration needed.
> 
> So there may be some reason to contact the California DRE if someone would like to voice a complaint.  Just a thought and opinion here.


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## Carolinian

However, they were told by the Hawaii AG according to the article posted that they were legally entitled to the list, but the AG's office would not pursue it for them.  They had to file their own civil action.  That needs to be done.



timeos2 said:


> It appears that the right to the list isn't clear cut either.  Another post points out that the group that existed & tried to organize these owners in the past discovered the crazy patchwork of Hawaii laws has added a rule that in order to get an owners list you must have permission of the owners to have the information released. So how do you reach them to ask for permission if you don't have the list which you can't get because they haven't been asked/given permission!
> 
> As usual, the minute Government is involved nothing is simple or in any way clear cut.  I'm sure DRI can (and would) use that issue to drag out any release far beyond the time when it would be of any value. We've seen that in these cases in the past. (see the LONG Marriott thread of last year for example)


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## waimea'smom

artringwald said:


> Thanks for the report on the meeting! What's the new Facebook page?



This was the page that was created.  
https://www.facebook.com/pages/Point-of-Poipu-Angry-Owners/148027451960608


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## lv_maui

Carolinian, I have addressed this list issue.  They are not violating the law but rather, abiding by a stupid law that allows them to not send it out due to privacy laws.  I agree that someone needs to file in court to at least get this out in the open and moving.  The court of public opinion would be another way to go maybe but that is just an opinion



Carolinian said:


> However, they were told by the Hawaii AG according to the article posted that they were legally entitled to the list, but the AG's office would not pursue it for them.  They had to file their own civil action.  That needs to be done.


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## T_R_Oglodyte

Carolinian said:


> The numbers given at the meeting indicate that deeded owners have 63% of the ownership.  Given this huge wakeup call, if properly organized, this sleeping giant is a large enough group to throw off the arrogant yoke of DRI.  Of course, it will need to go to court to get the membership list given the illegal refusal by DRI to turn it over as required by law.  That is how things CAN indeed change.



The breakdown reported from the meeting differs a bit from the breakdown indicated in the letter to owners, in which DRI's direct share of the assessments was ~11%.

It's possible the difference, though, is due to the fact that DRI owns all 51 weeks of one of the two 3-bedroom units at the property (used for a sales office).  The assessments for 3-bedroom are higher.  Also I don't know if DRI owns 51 ownership units in that unit or if that is a single undivided unit.  If they own it as a single deed that would certainly make their ownership stake much smaller than their proportion of the special assessment.


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## JohnandSue

We are also thinking of walking away or selling cheaply.  Agree water assessment is outrageous.  Have contacted a local attorney in California and it is suggested that we timeshare owners unite and get attorney in Kauai.  Possible letter to Attorney General about conflict of interest due to the fact that memebers of the Assoc of Apt Owners of Poipu Beach are employees of Diamond Resorts.  I have asked for a copy of the insurance denial letter but was told it is not publicly available.  I am putting my request in writing along with a copy of the building inspections that determined the water intrusion issue and a copy of the inspection done when Diamond Resorts purchased from Sunterra in 2005.  I am afraid this is a money scam because Diamond Resorts is in an economical bind and see's this as a way to recoup the money they need to do upkeep on property that they have neglected to take care of since 2005.


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## norm949

MadOwner said:


> OWNERS - Please join this facebook page to help unite us!  I will be assisting the current owner's group in tracking down and recruiting current owners!
> 
> https://www.facebook.com/pages/Point-of-Poipu-Angry-Owners/148027451960608



Thanks for doing this. When I get to the FB page, I only see a "Like" button, no join button or link.  Am I missing something?


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## LauritaM

*owners list*



Carolinian said:


> The numbers given at the meeting indicate that deeded owners have 63% of the ownership.  Given this huge wakeup call, if properly organized, this sleeping giant is a large enough group to throw off the arrogant yoke of DRI.  Of course, it will need to go to court to get the membership list given the illegal refusal by DRI to turn it over as required by law.  That is how things CAN indeed change



The best way to get an owners list would be to talk to the people that are always calling wanting to know if we want to sell our timeshare - ha!  They got a list somewhere.

Another avenue would be if an owner lives on or is going to Kauai and has time to go to the courthouse and look up the records.  That could/would be time consuming I know.  Maybe someone knows someone who knows someone who works in the registrar of deeds office at the court house and they could help.  Our local courthouse will help w/ info - my husband is a State Farm Agent and we often need more info on a property - esp the legals on farms for crop insurance, etc.


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## lv_maui

Going to the county is a good idea but I was told that the addresses on record are not the owner's real address but that of the resort.  So you get a name but that is it.



LauritaM said:


> The best way to get an owners list would be to talk to the people that are always calling wanting to know if we want to sell our timeshare - ha!  They got a list somewhere.
> 
> Another avenue would be if an owner lives on or is going to Kauai and has time to go to the courthouse and look up the records.  That could/would be time consuming I know.  Maybe someone knows someone who knows someone who works in the registrar of deeds office at the court house and they could help.  Our local courthouse will help w/ info - my husband is a State Farm Agent and we often need more info on a property - esp the legals on farms for crop insurance, etc.


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## Cheryl20772

norm949 said:


> Thanks for doing this. When I get to the FB page, I only see a "Like" button, no join button or link.  Am I missing something?


You need to have a facebook account and log in.  Then when you click on the Like button you are joined to the feed of posts from that page.

You just log in to your FB account and read on your feed page.  When you like other users their posts will also come to your FB page when you log in.  I think you can also set up your account to send posts to your email.


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## LauritaM

*yup - you are right!*



lv_maui said:


> Going to the county is a good idea but I was told that the addresses on record are not the owner's real address but that of the resort.  So you get a name but that is it.



Yes - you are right, I recall that now  - they said so that we don't get all kinds of spam mail - but we get calls three four times a year from different places wanting to "help" us sell our TS.  So someone somehow someway is getting lists of names and addresses as well as phone numbers.  Maybe DRI sells our info???  Just sayin ... and speculating.  My main form of exercise is jumping to conclusions.


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## T_R_Oglodyte

LauritaM said:


> Yes - you are right, I recall that now  - they said so that we don't get all kinds of spam mail - but we get calls three four times a year from different places wanting to "help" us sell our TS.  So someone somehow someway is getting lists of names and addresses as well as phone numbers.  Maybe DRI sells our info???  Just sayin ... and speculating.  My main form of exercise is jumping to conclusions.


I seriously doubt that Diamond is selling the data. They might be shifty, but they are not stupid.  The companies try to lock down that information - for a variety of reasons ranging from privacy laws to the simple desire to not have a list of their customers/owners winding up in the hands of their competitors.

If that information gets out, it's most likely is the results of employees copying owner information and selling it on the side.  There's a black market for that data. The companies try to restrict access to owner information, but enterprising employees will always try to find ways to get around the safeguards when there's money to be made.


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## dougp26364

T_R_Oglodyte said:


> I seriously doubt that Diamond is selling the data. They might be shifty, but they are not stupid.  The companies try to lock down that information - for a variety of reasons ranging from privacy laws to the simple desire to not have a list of their customers/owners winding up in the hands of their competitors.
> 
> If that information gets out, it's most likely is the results of employees copying owner information and selling it on the side.  There's a black market for that data. The companies try to restrict access to owner information, but enterprising employees will always try to find ways to get around the safeguards when there's money to be made.



There are marketing companies that compile and sell lists which are not on the black market. I use to buy those lists all the time years ago when I was in sales. They would tailor the product to fit whatever paremeters I requested. They could provide the names of houshold occupants, where they worked, ages, income and/or pretty much anything else I requested. Generally these list were compiled from public records.

I can't say that this would work with timeshares. I guess it would depend on how the deeded weeks had been filed and if the names and addresses of the owners were filed with the deeds. Considering that we get calls all the time about our desire to rent or sell our timeshares, I'm assuming that there are companies that can provide these types of lists. I'm pretty certain that not every one of the timeshares we own has an employee selling off owners information. 

I would keep in mind that not all lists are created equal. The first obsticle I can see with a timeshare project is the original information listed on any particular deed might not be acurate today. We are a mobil society and people tend to move frequently. Any list compiled from public records from the original sales data would likely have a high instance of outdated addresses.


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## Carolinian

The corporate law, which is the more specific should trump any more general privacy law, especially since it is absolutely essential for corporate democracy.  I think the Hawaii AG is very likely correct that it is the corporate law here that prevails.  This stupid privacy law just creates a stupid excuse for abusive developers.  Worldmark played the same assinine game with their lists, were defeated in the trial court, and appealed.  If DRI appeals, due to this special assesment the court should be asked to require a $65 million appeal bond from them.  




lv_maui said:


> Carolinian, I have addressed this list issue.  They are not violating the law but rather, abiding by a stupid law that allows them to not send it out due to privacy laws.  I agree that someone needs to file in court to at least get this out in the open and moving.  The court of public opinion would be another way to go maybe but that is just an opinion


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## T_R_Oglodyte

dougp26364 said:


> There are marketing companies that compile and sell lists which are not on the black market. I use to buy those lists all the time years ago when I was in sales. They would tailor the product to fit whatever paremeters I requested. They could provide the names of houshold occupants, where they worked, ages, income and/or pretty much anything else I requested. Generally these list were compiled from public records.
> 
> I can't say that this would work with timeshares. I guess it would depend on how the deeded weeks had been filed and if the names and addresses of the owners were filed with the deeds. Considering that we get calls all the time about our desire to rent or sell our timeshares, I'm assuming that there are companies that can provide these types of lists. I'm pretty certain that not every one of the timeshares we own has an employee selling off owners information.
> 
> I would keep in mind that not all lists are created equal. The first obsticle I can see with a timeshare project is the original information listed on any particular deed might not be acurate today. We are a mobil society and people tend to move frequently. Any list compiled from public records from the original sales data would likely have a high instance of outdated addresses.


IIRC, in some of the recent busts of upfront fee scammers law enforcement personnel have specifically mentioned the existence of a market in which purloined lists of timeshare owner names, provided by employees of companies, are bought and sold to fuel the operations.


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## Carolinian

T_R_Oglodyte said:


> I seriously doubt that Diamond is selling the data. They might be shifty, but they are not stupid.  The companies try to lock down that information - for a variety of reasons ranging from privacy laws to the simple desire to not have a list of their customers/owners winding up in the hands of their competitors.
> 
> If that information gets out, it's most likely is the results of employees copying owner information and selling it on the side.  There's a black market for that data. The companies try to restrict access to owner information, but enterprising employees will always try to find ways to get around the safeguards when there's money to be made.



''Privacy'' is ALWAYS a phony reason, and is a cover for their real reason, which is CONTROL.  Corporate laws in most states REQUIRE them to provide these lists to members.

My HOA provided these lists to members already on gummed labels for the cost of the label stock if any of them wanted the lists, but also required a signed form that they would use them only in compliance with state law (i.e. not for business soliciations, only for communication with other members on HOA issues, and not transfer them to third parties).  We were not afraid of members wanting to discuss HOA matters with others.  An abusive management company / developer, well, they may have reason to be afraid of such communications.


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## T_R_Oglodyte

Carolinian said:


> ''Privacy'' is ALWAYS a phony reason, and is a cover for their real reason, which is CONTROL.  Corporate laws in most states REQUIRE them to provide these lists to members.
> 
> My HOA provided these lists to members already on gummed labels for the cost of the label stock if any of them wanted the lists, but also required a signed form that they would use them only in compliance with state law (i.e. not for business soliciations, only for communication with other members on HOA issues, and not transfer them to third parties).  We were not afraid of members wanting to discuss HOA matters with others.  An abusive management company / developer, well, they may have reason to be afraid of such communications.


Interesting. I didn't know that the laws required companies to provide lists with owner telephone numbers.


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## bogey21

What a mess.  I feel for the Owners.  All the more reason to only own at well managed Independents Resorts with Owner controlled HOAs.  There are two major problems with Corporate Developer controlled Resorts.  First, they will make decisions in *their* (not the Owners) best interests and second, they have the legal resources to coerce the results they want.

George


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## weisberg

*wiamea'smom*

Hi Wiamea’smom,

First let me thank you for your reporting of the meeting. You’ve given me more information than I probably would have been able to grasp if I had been there myself. I do have a couple of thoughts. Were the materials ruled as defective or under code? How can you rule the workmanship was faulty if the work was inspected ? In the past we built new two times. Each building stage was inspected by the township before the next  stage could begin.  If all was approved, how can the insurance company deny the claim? If the project was not inspected at each stage, is the township responsible in any way?
I would also like to encourage anyone who would be interested in compiling an owner’s list, to start with posting their email address with their comments. I have received seven names along with email addresses. If we start with this the list it will grow. The power we get will be in the amount of participants we have bobweisberg@bellsouth.net . 
Thanks again, Bob Weisberg                                         
1) The insurance claim was supposedly denied for three exclusions (construction defect/faulty workmanship exclusion, gradual deterioration/wear and tear exclusion, and dry rot exclusion).


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## T_R_Oglodyte

weisberg said:


> If all was approved, how can the insurance company deny the claim?



With the caveat that I haven't seen the insurance policies, I'm pretty sure the insurance company denied the claim because property and casualty policies insure against sudden acts of God types of events, such as hurricanes, earthquakes and windstorms, and they are specifically written to exclude coverage for damages that occur gradually and incrementally over a long period of time.

It would be the same as if you had a leaky rook and over a period of ten to fifteen years water had seeped inside that walls of your house and rotted the studs.  If you made a claim on your policy it would likely be denied because the damage didn't occur as the results of a sudden and catastrophic event.

IOW, if a tree falls on your house in a windstorm your insurance pays for a new roof.  If your roof falls apart gradually over a period of ten to fifteen years, your insurance isn't going to pay you for a new roof. I would be surprised if the same didn't apply in this case, as property and casualty insurers to go great lengths in their policies to exclude from coverage precisely this type of situation unless someone specifically purchases coverage for non-sudden events. And if they had purchased such coverage - assuming it were even available - they would have paid a correspondingly higher premium, all the while that owners have been screaming that annual fees were already outrageously high.


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## weisberg

T_R_Oglodyte said:


> With the caveat that I haven't seen the insurance policies, I'm pretty sure the insurance company denied the claim because property and casualty policies insure against sudden acts of God types of events, such as hurricanes, earthquakes and windstorms, and they are specifically written to exclude coverage for damages that occur gradually and incrementally over a long period of time.
> 
> It would be the same as if you had a leaky rook and over a period of ten to fifteen years water had seeped inside that walls of your house and rotted the studs.  If you made a claim on your policy it would likely be denied because the damage didn't occur as the results of a sudden and catastrophic event.
> 
> IOW, if a tree falls on your house in a windstorm your insurance pays for a new roof.  If your roof falls apart gradually over a period of ten to fifteen years, your insurance isn't going to pay you for a new roof. I would be surprised if the same didn't apply in this case, as property and casualty insurers to go great lengths in their policies to exclude from coverage precisely this type of situation unless someone specifically purchases coverage for non-sudden events. And if they had purchased such coverage - assuming it were even available - they would have paid a correspondingly higher premium, all the while that owners have been screaming that annual fees were already outrageously high.



This applies to only one of exclusions. They are claiming the work was of construction defect/faulty workmanship. This doesn’t answer the question as to why it passed inspection. If it did. it seems they can not find it to be of construction defect/faulty workmanship.
1) The insurance claim was supposedly denied for three exclusions (construction defect/faulty workmanship exclusion, gradual deterioration/wear and tear exclusion, and dry rot exclusion). 
We trust our best interest are always a priority with responsible heads of authority. When my yearly maintenance fees were increased by 30% the first year DRI took over, I had every reason to believe that my best interest, including insurance coverage decisions were in good hands. Apparently, I was wrong. It is unheard of that a property should  have to expect to rebuilt after twenty years. You have said that this goes with the territory of ownership. I disagree, this goes with owning a business that generates a profit. DRI will have brand new resort eventually and we will be left with the bill and many bad feedbacks that will prevent any future chance of our selling this nightmare.  
Joyce Weisberg


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## Carolinian

T_R_Oglodyte said:


> Interesting. I didn't know that the laws required companies to provide lists with owner telephone numbers.



Corporate law requires provisions of voting lists to facilitate those not in power to communicate their message to others who have votes, either stockholders or members.  I have never really looked at those laws that relate to for-profit corporations, but I have with not-for-profit corporations.  Timeshare HOA's are organized as non-profit corporations, and those with votes are each of the timeshare owners.  The voters list is the owners list.

The key concept is that the only way to insure corporate democracy is to let anyone with a vote at meetings be able to communicate directly with others who have votes.  Otherwise you have management entrenched forever.  In a corporate context, votes are really going to be determined by who does the best job of solicitiing proxies, which can only be done by contacting those with votes to get their proxies.  To contact them, you need their contact info.

Most state corporate laws are somewhat outdated and the contact info that has to be supplied is mailing address.  Few requires providing email address.  Generally phone numbers are not required to be provided, largely because you cannot send proxy forms over the phone except to those who might have a fax at home.

Many state laws, like North Carolina's provide that voter lists of not-for-profit corporations prohibit those obtaining them from using those lists for commercial purposes or allowing others to do so.

Hawaii's  law, which governs timeshare HOA's, is found at Chapter 514A of the Hawaii Revised Statutes.  The relevent portion, as quoted in a Kauai newspaper in an article on Point at Poipu, is: 
* “The resident manager or managing agent or board of directors shall keep an accurate and current list of members of the association of apartment owners and their current addresses ... The list shall be maintained at a place designated by the board of directors and a copy shall be available, at cost, to any member of the association as provided in the declaration or bylaws or rules and regulations ...”*
This is even more specific as to timeshare HOA's than the general not-for-profit law.


Read more: http://thegardenisland.com/business...42d-11df-91f7-001cc4c03286.html#ixzz1bRU6oisf


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## T_R_Oglodyte

weisberg said:


> This applies to only one of exclusions. They are claiming the work was of construction defect/faulty workmanship. This doesn’t answer the question as to why it passed inspection. If it did. it seems they can not find it to be of construction defect/faulty workmanship.



Like 46 of the 50 states, Hawaii has a statute of repose for construction defects.  Statutes of repose bar strictly bar suits for defects in construction after a set period of years from completion of construction (not from discovery). Hawaii statute of repose is for ten years.  Since the project was completed in 1993 they are well past the stage at which a cost recovery could be taken against the builder.

There is a question that has not been answered as to potential product liability against the manufacturer of the cladding materials, since product liability is subject to statute of limitations and not statute of repose.  That would depend on whether the manufacturer of the materials marketed and represented the materials as suitable for the use to which they were put.


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## T_R_Oglodyte

Carolinian said:


> Corporate law requires .....



You've marched off on a wonderful tangent here, Steve. Going back, the comment is that there is black market in firms selling lists of owners names to scam firms doing telemarketing fraud. I pointed out that the prosecutors  handling the upfront fee scams have alleged that such a market exists, and that the contact information appears to have been purloined from resorts and timeshare companies. I guess I gave you too much credit, I apologize.  I thought you would realize that in a discussion of telemarketing fraud what gives a contact list value is telephone numbers, as it's pretty difficult to telemarket a list of owners when all you have is name and address.

I'm not at all arguing that the timeshare companies are properly withholding owner names and addresses.  What I am saying is that I would expect they would withhold phone numbers.  And *phone numbers* is where the black market exists.


----------



## craigrow

*Why do you hate on Diamond?*

I get that people are upset about the large assessment at the Point at Poipu. Admittedly I'm new to the timeshare world and no expert, but I don't see how anyone can blame Diamond. Here's how I understand things went down.


Somebody, Sunterra I think but definitely not Diamond, built the resort. It is poor design and construction that seems to be the root cause of the water intrusion problems.
Diamond was voted in by the HOA as the new management company. I keep reading "Diamond bought the point" but that's not possible as it is the deed holders who _own_ the resort. Diamond may have purchased a number of deeds but they could not have "bought the resort."
Diamond discovered the water intrusion problem.
Diamond investigated both insurance claims and legal action but determined neither would recover significant money.
Diamond got bids for the repair work.
A winning bid was selected. It's not clear by whom but since the HOA will be on the hook for the bill they must have had at least a veto right.
The HOA, not Diamond, made a special assessment.
Diamond billed the owners for their share of the assessment.


I’m not sure what Diamond was supposed to do differently.


You could certainly argue Diamond should have investigated more thoroughly and found the problem prior to buying any deeds they own. However, that would not have made the problem go away. It only would have left the owners with the problem and no Diamond deep pockets, which are covering a significant amount of the cost. Diamond is on the hook for the special assessment just like other owners. If anyone should be upset about this it is the Diamond Hawaii trust owners that have no desire to use the Point. They’re on the hook for a share of this assessment on a resort they don’t even use.
Was Diamond supposed to pay for repairs that are the responsibility of the owners? That is clearly not a responsibility of _any _management company. _Owners _are responsible for the cost of maintenance and repair on any piece of real estate. The deed holders are the owners.
Was Diamond supposed to ignore the problem or make it magically go away?
Why isn’t anyone addressing their anger at the board for making/approving the decision to essentially re-build the resort and push a large special assessment on the owners.
Why isn’t anyone addressing their anger at the owners who let Diamond become the management company and take over their board? Hell, Diamond only owns 10% of the deeds. If just 2 in 10 deed owners were active Diamond would have zero power.
Why isn’t anyone addressing their anger at the idiots who designed and built a flawed structure?


----------



## weisberg

T_R_Oglodyte said:


> Like 46 of the 50 states, Hawaii has a statute of repose for construction defects.  Statutes of repose bar strictly bar suits for defects in construction after a set period of years from completion of construction (not from discovery). Hawaii statute of repose is for ten years.  Since the project was completed in 1993 they are well past the stage at which a cost recovery could be taken against the builder.
> 
> There is a question that has not been answered as to potential product liability against the manufacturer of the cladding materials, since product liability is subject to statute of limitations and not statute of repose.  That would depend on whether the manufacturer of the materials marketed and represented the materials as suitable for the use to which they were put.



Does Hawaii Law require inspections on new developement? If the answer is yes, the question is not about the builers responibilty. It is about the State of Hawaii 's resonsibility to inspect new construction to assure it's safety as well as it's building to suit the environment. When permits are given, I am sure that there are certain codes that have a criteria to be met. My question is were the proper inspections made? If they were, and if all was built to code. How can the insurance company dispute these facts.  

Joyce Weisberg


----------



## T_R_Oglodyte

weisberg said:


> Does Hawaii Law require inspections on new developement? If the answer is yes, the question is not about the builers responibilty. It is about the State of Hawaii 's resonsibility to inspect new construction to assure it's safety as well as it's building to suit the environment. When permits are given, I am sure that there are certain codes that have a criteria to be met. My question is were the proper inspections made? If they were, and if all was built to code. How can the insurance company dispute these facts.
> 
> Joyce Weisberg



Now you've got me totally confused as to what you're thinking of.

What type of insurance are you talking about and whose policy is it? The resorts for flood insurance or Property damage? Professional liabilty for whomever did the inspection? County government liability for faulty inspection??????


----------



## weisberg

T_R_Oglodyte said:


> Now you've got me totally confused as to what you're thinking of.
> 
> What type of insurance are you talking about and whose policy is it? The resorts for flood insurance or Property damage? Professional liabilty for whomever did the inspection? County government liability for faulty inspection??????



You appear to be very intelligent. My thoughts are very simple and are made with common sense. If inspections were required and all criteria was met. How can the insurance company deny the claim due to faulty material/poor construction. My other question was, does the state of Hawaii require inspections for safety and durability to withstand the environment before a project is completed. I know the state of Florida does.
As I said earlier in one of my posts. That the large purchase DRI made should have been inspected by a structural engineer before they bought it. At this time you said it was known that there was a problem. Just maybe they had a vision of a new resort down the road. Now all of a sudden it our problem and DRI gets a new resort. I don't think so.

Joyce Weisberg


----------



## T_R_Oglodyte

weisberg said:


> You appear to be very intelligent. My thoughts are very simple and are made with common sense. If inspections were required and all criteria was met. How can the insurance company deny the claim due to faulty material/poor construction.


Because the insurance policy is a casualty policy. Faulty materials/construction is not a casualty.  Trying to claim for construction defect/faulty workmanship on a casualty policy is like trying to submit an auto insurance claim to your health insurer.  

The way that construction liability/defect insurance is handled is that the contractor provides a certificate of liability insurance coverage to the property owner that names the property owner as an additional insured.  That essentially attaches the owner to builder's liability policy. Now that policy, of course, is not going to provide coverage in situations when the builder is not liable.  Which means that if the claim falls outside the statute of repose, there is no coverage because there is no builder liability.  If an owner does not want coverage to end after the statute of repose, that would have to be negotiated up front and would represent an additonal - and hefty - insurance premium.


> My other question was, does the state of Hawaii require inspections for safety and durability to withstand the environment before a project is completed. I know the state of Florida does.


I doubt it. And I seriously doubt that Florida does either. I'm sure that Hawaii, like Florida, inspects for compliance with building code.



> As I said earlier in one of my posts. That the large purchase DRI made should have been inspected by a structural engineer before they bought it. At this time you said it was known that there was a problem. Just maybe they had a vision of a new resort down the road. Now all of a sudden it our problem and DRI gets a new resort. I don't think so.
> 
> Joyce Weisberg


I would imagine that at the time they purchased the resort they had a review done by knowledgeable and skilled people.  For a project of this type that may or may not be a structural engineer - a three to four story wooden structure is often within the purview of a civil engineer or architect who does not have a specialized structural pedigree. If they have the expertise in-house it might not even be done externally.

Let's assume they brought in an outside consultant to do the assessment.  The general standard of care that applies is what is customary and normal practice in the locale in which the work was done and at the time the services were performed.  That's the same standard of care, for example, that applies when you go to see a your personal physician. Though I am a registered civil engineer, I don't practice in the area of building inspection, so I don't know what would be expected in this circumstance.  But I do know that when I have bought and sold my houses in my life, ordinary inspection did not include ripping open the walls behind the siding or drywall to verify that there wasn't hidden damage.

Or course this is not a house, but a multi-million dollar condo project and a greater degree of upfront inspection would likely be customary.  Perhaps the ordinary standard of care in such projects does dictate destructive inspection techniques.  I suspect, though, that when doing a pre-acquisition assessment of a fifteen year old wood-frame building, constructed to code and not showing visible evidence of distress, it would be rare to start stripping the exterior off of two or three buildings so that one could inspect the condition of the studs, straps, and connectors behind the wall unless there were specific reason to suspect there was a situation that required that degree of intrusive activity.

Now was there reason to suspect a problem at the time DRI got involved at the site?  I don't know that. But since I already owned at the site before DRI got involved, that really doesn't make any difference. Because DRI didn't make the problem. If they had found the problem and walked away from the deal because of the problem, the owners of the resort would still be faced with this situation, wouldn't they?

Bear in mind that the resort was almost entirely sold out before DRI came on the scene.


----------



## timeos2

JohnandSue said:


> We are also thinking of walking away or selling cheaply.  Agree water assessment is outrageous.  Have contacted a local attorney in California and it is suggested that we timeshare owners unite and get attorney in Kauai.  Possible letter to Attorney General about conflict of interest due to the fact that memebers of the Assoc of Apt Owners of Poipu Beach are employees of Diamond Resorts.  I have asked for a copy of the insurance denial letter but was told it is not publicly available.  I am putting my request in writing along with a copy of the building inspections that determined the water intrusion issue and a copy of the inspection done when Diamond Resorts purchased from Sunterra in 2005.  I am afraid this is a money scam because Diamond Resorts is in an economical bind and see's this as a way to recoup the money they need to do upkeep on property that they have neglected to take care of since 2005.



Just "walking away" isn't really a choice unless you don't care if your credit is damaged and you are willing to be subjected to heavy collection efforts & more.  You pay or you find a new owner willing to pay but as a deeded owner of the property you are on the hook for the costs until you are no longer the owner of that deed.


----------



## timeos2

Carolinian said:


> ''Privacy'' is ALWAYS a phony reason, and is a cover for their real reason, which is CONTROL.  Corporate laws in most states REQUIRE them to provide these lists to members.
> 
> My HOA provided these lists to members already on gummed labels for the cost of the label stock if any of them wanted the lists, but also required a signed form that they would use them only in compliance with state law (i.e. not for business soliciations, only for communication with other members on HOA issues, and not transfer them to third parties).  We were not afraid of members wanting to discuss HOA matters with others.  An abusive management company / developer, well, they may have reason to be afraid of such communications.



I realize the importance of obtaining an owners list or some method of contact with other owners by dissenting owners BUT in all likelihood  the only way they are going to get it is with a court battle and they will need money/owner support to launch that. Plus the legal wheels grind slowly and it would likely be months or even years to get it - by then the work will be well underway and the bills due.  

It needs to be pursued but isn't a short term answer to trying to derail the current Special Assessment.  And it may not be the long term answer either.


----------



## weisberg

T_R_Oglodyte said:


> Because the insurance policy is a casualty policy. Faulty materials/construction is not a casualty.  Trying to claim for construction defect/faulty workmanship on a casualty policy is like trying to submit an auto insurance claim to your health insurer.



Thanks Steve, I think that respectfully we can agree to disagree. They are constantly doing wall repairs and minor renovations. I would think at some point the wood was exposed prior to DRI's purchase. As I stated in my private reply to you about the voting for the HOA. I can't get past the mega mistrust for both.
Respectfully, 
Joyce Weisberg


----------



## timeos2

craigrow said:


> I get that people are upset about the large assessment at the Point at Poipu. Admittedly I'm new to the timeshare world and no expert, but I don't see how anyone can blame Diamond. Here's how I understand things went down.
> 
> Somebody, Sunterra I think but definitely not Diamond, built the resort. It is poor design and construction that seems to be the root cause of the water intrusion problems.
> Diamond was voted in by the HOA as the new management company. I keep reading "Diamond bought the point" but that's not possible as it is the deed holders who _own_ the resort. Diamond may have purchased a number of deeds but they could not have "bought the resort."
> Diamond discovered the water intrusion problem.
> Diamond investigated both insurance claims and legal action but determined neither would recover significant money.
> Diamond got bids for the repair work.
> A winning bid was selected. It's not clear by whom but since the HOA will be on the hook for the bill they must have had at least a veto right.
> The HOA, not Diamond, made a special assessment.
> Diamond billed the owners for their share of the assessment.
> 
> I’m not sure what Diamond was supposed to do differently.
> 
> You could certainly argue Diamond should have investigated more thoroughly and found the problem prior to buying any deeds they own. However, that would not have made the problem go away. It only would have left the owners with the problem and no Diamond deep pockets, which are covering a significant amount of the cost. Diamond is on the hook for the special assessment just like other owners. If anyone should be upset about this it is the Diamond Hawaii trust owners that have no desire to use the Point. They’re on the hook for a share of this assessment on a resort they don’t even use.
> Was Diamond supposed to pay for repairs that are the responsibility of the owners? That is clearly not a responsibility of _any _management company. _Owners _are responsible for the cost of maintenance and repair on any piece of real estate. The deed holders are the owners.
> Was Diamond supposed to ignore the problem or make it magically go away?
> Why isn’t anyone addressing their anger at the board for making/approving the decision to essentially re-build the resort and push a large special assessment on the owners.
> Why isn’t anyone addressing their anger at the owners who let Diamond become the management company and take over their board? Hell, Diamond only owns 10% of the deeds. If just 2 in 10 deed owners were active Diamond would have zero power.
> Why isn’t anyone addressing their anger at the idiots who designed and built a flawed structure?



Great post! Very well stated.  Hopefully cooler heads will come to realize the "enemy" is not Diamond (a player but basically a messenger) but shoddy original construction.  

While that is the real villain those groups (builders, contractors, designers, etc) from 20 years ago are long long gone.  Just like any faulty construction that someone owns it is up to them to tear it down or correct it after trying, as apparently the HOA has, to find anyone who can be asked/sued to cover the costs.  In this case, as in most big constructions problems, the true culprits are no more and cannot be made to pay.


----------



## T_R_Oglodyte

weisberg said:


> T_R_Oglodyte said:
> 
> 
> 
> Because the insurance policy is a casualty policy. Faulty materials/construction is not a casualty.  Trying to claim for construction defect/faulty workmanship on a casualty policy is like trying to submit an auto insurance claim to your health insurer.
> 
> 
> 
> 
> Thanks Steve, I think that respectfully we can agree to disagree. They are constantly doing wall repairs and minor renovations. I would think at some point the wood was exposed prior to DRI's purchase. As I stated in my private reply to you about the voting for the HOA. I can't get past the mega mistrust for both.
> Respectfully,
> Joyce Weisberg
Click to expand...


But that doesn't change the fact that you can't get coverage under an insurance policy for something that isn't covered under the policy.


----------



## lv_maui

*Sorry John*

John, your posts are normally spot on, but I disagree with your endorsement of this post because "Craigrow" has serious errors in his statement.

*  Sunterra did not build the resort.  It was someone else and it was a failed condo project.  

*  *Diamond was NOT voted in as the new management company
*  Diamond took over management from Sunterra's mgmt company.  DRI has been protecting their Board majority ever since.  It is very important to understand that no deeded owners vote them in.  NOT AT ALL.  I think this is the biggest error in the post.

*  Diamond did not discover the water instrusion problem.  It has been a problem for many years.  It may be accurate that they discovered the extent.  

*  The HOA who has 2 employees on the Board, the mother of Linda Riddle and 2 non DRI owners voted in the Special Assessment.  DRI voted in the SA.  The HOA is controled by the HOA

BUT, I CONCUR THAT DIAMOND IS NOT TOTALLY AT FAULT IN THIS MATTER.  I feel that the way they handled it with a TOTAL lack of transparency is really the root of all the anger.  I would have had much more communication to all owners in newsletters and voting polls to guage what the owners wanted to do with this problem.  At least, people would have felt as if they were involved.

But again, conspiracy theories exist that this may be a way for DRI to acquire defaulted inventory from the HOA at a bargain price. Its pretty easy to figure out how to do it at a price of say $500 a week for 21.9 units.  Again, only a theory and not factual and only an opinion of mine.  I can get a bit creative with these matters from my background.



timeos2 said:


> Great post! Very well stated.  Hopefully cooler heads will come to realize the "enemy" is not Diamond (a player but basically a messenger) but shoddy original construction.
> 
> While that is the real villain those groups (builders, contractors, designers, etc) from 20 years ago are long long gone.  Just like any faulty construction that someone owns it is up to them to tear it down or correct it after trying, as apparently the HOA has, to find anyone who can be asked/sued to cover the costs.  In this case, as in most big constructions problems, the true culprits are no more and cannot be made to pay.


----------



## timeos2

weisberg said:


> Does Hawaii Law require inspections on new developement? If the answer is yes, the question is not about the builers responibilty. It is about the State of Hawaii 's resonsibility to inspect new construction to assure it's safety as well as it's building to suit the environment. When permits are given, I am sure that there are certain codes that have a criteria to be met. My question is were the proper inspections made? If they were, and if all was built to code. How can the insurance company dispute these facts.
> 
> Joyce Weisberg



When inspected - 20+ years ago during construction - it most likely looked fine. Then, much like any construction, a bad component here, a missed chalking there, an under-performing product deteriorates over time - none of which any insurance is going to cover anymore than a perfectly good roof, inspected and installed, 20 years ago may no longer be 100% today. 

The problem is real. Looking to blame someone from years ago may feel good but it won't fix it today or make it any cheaper.


----------



## timeos2

weisberg said:


> You appear to be very intelligent. My thoughts are very simple and are made with common sense. If inspections were required and all criteria was met. How can the insurance company deny the claim due to faulty material/poor construction. My other question was, does the state of Hawaii require inspections for safety and durability to withstand the environment before a project is completed. I know the state of Florida does.
> As I said earlier in one of my posts. That the large purchase DRI made should have been inspected by a structural engineer before they bought it. At this time you said it was known that there was a problem. Just maybe they had a vision of a new resort down the road. Now all of a sudden it our problem and DRI gets a new resort. I don't think so.
> 
> Joyce Weisberg



As others have pointed out - they didn't buy the resort they bought the unsold inventory & management contract.


----------



## timeos2

lv_maui said:


> John, your posts are normally spot on, but I disagree with your endorsement of this post because "Craigrow" has serious errors in his statement.
> 
> *  Sunterra did not build the resort.  It was someone else and it was a failed condo project.
> 
> *  *Diamond was NOT voted in as the new management company
> *  Diamond took over management from Sunterra's mgmt company.  DRI has been protecting their Board majority ever since.  It is very important to understand that no deeded owners vote them in.  NOT AT ALL.  I think this is the biggest error in the post.
> 
> *  Diamond did not discover the water instrusion problem.  It has been a problem for many years.  It may be accurate that they discovered the extent.
> 
> *  The HOA who has 2 employees on the Board, the mother of Linda Riddle and 2 non DRI owners voted in the Special Assessment.  DRI voted in the SA.  The HOA is controled by the HOA
> 
> BUT, I CONCUR THAT DIAMOND IS NOT TOTALLY AT FAULT IN THIS MATTER.  I feel that the way they handled it with a TOTAL lack of transparency is really the root of all the anger.  I would have had much more communication to all owners in newsletters and voting polls to guage what the owners wanted to do with this problem.  At least, people would have felt as if they were involved.
> 
> But again, conspiracy theories exist that this may be a way for DRI to acquire defaulted inventory from the HOA at a bargain price. Its pretty easy to figure out how to do it at a price of say $500 a week for 21.9 units.  Again, only a theory and not factual and only an opinion of mine.  I can get a bit creative with these matters from my background.



I'm not holding up Diamond for sainthood by any means.  I'm just saying THEY didn't cause it but they sure reported it and now have a plan to deal with it.  If the owners weren't happy with Diamond as the management, as had been alleged since 2009, they've had over 2 years to get together & act to remove them. They didn't, the problem has been fully identified and those in the seats to make the calls have acted to fix it.  Anything less would really be negligence.   Now it's too late to remove those Board members until the next election and even if the owners did that the work still needs to be done.  

Far too many are ignoring the fact that no matter who is managing they inherited a flawed resort structure.  Those that actually built the thing are no longer around to be held responsible and the owners representatives - whoever they may be - have to act by law to fix it.  I'm all for owner power but they too have to follow the rules.  A bad Board and/or management can be voted out - the owners chose, so far, not to do that thus endorsing the way it stands.   They can still do it but that won't reverse the damage or the cost and in fact may add to it at this point.  

Plainly stated any condo/timeshare Association faces this possibility - usually the numbers just aren't this high.  But more and more they may be as resorts age and faults start to appear.


----------



## Carolinian

I don't know that I have seen corporate statutes that require turning over telephone numbers, or for that matter email addresses.  I agree with you about the phone numbers, but IMHO it would be a welcome update to include turning over email addresses in this day and age.

I think you were the one who got off on the telephone number tangent.




T_R_Oglodyte said:


> You've marched off on a wonderful tangent here, Steve. Going back, the comment is that there is black market in firms selling lists of owners names to scam firms doing telemarketing fraud. I pointed out that the prosecutors  handling the upfront fee scams have alleged that such a market exists, and that the contact information appears to have been purloined from resorts and timeshare companies. I guess I gave you too much credit, I apologize.  I thought you would realize that in a discussion of telemarketing fraud what gives a contact list value is telephone numbers, as it's pretty difficult to telemarket a list of owners when all you have is name and address.
> 
> I'm not at all arguing that the timeshare companies are properly withholding owner names and addresses.  What I am saying is that I would expect they would withhold phone numbers.  And *phone numbers* is where the black market exists.


----------



## Carolinian

They reported it to members a loooonnnngggg time after they knew about it, and members have a very legitimate complaint about that.

The reason that members have not been able to vote Diamond out is that Diamond is stonewalling on turning over the membership list as they are required to do.  As a leader of the concerned owners group there was quoted in a local newspaper last year, ''who controls the list controls the resort''.  Just how are owners supposed to oust Diamond when they are illegally denied the one tool that they could use to get the message out and accomplish that?




timeos2 said:


> I'm not holding up Diamond for sainthood by any means.  I'm just saying THEY didn't cause it but they sure reported it and now have a plan to deal with it.  If the owners weren't happy with Diamond as the management, as had been alleged since 2009, they've had over 2 years to get together & act to remove them. They didn't, the problem has been fully identified and those in the seats to make the calls have acted to fix it.  Anything less would really be negligence.   Now it's too late to remove those Board members until the next election and even if the owners did that the work still needs to be done.
> 
> Far too many are ignoring the fact that no matter who is managing they inherited a flawed resort structure.  Those that actually built the thing are no longer around to be held responsible and the owners representatives - whoever they may be - have to act by law to fix it.  I'm all for owner power but they too have to follow the rules.  A bad Board and/or management can be voted out - the owners chose, so far, not to do that thus endorsing the way it stands.   They can still do it but that won't reverse the damage or the cost and in fact may add to it at this point.
> 
> Plainly stated any condo/timeshare Association faces this possibility - usually the numbers just aren't this high.  But more and more they may be as resorts age and faults start to appear.


----------



## timeos2

Carolinian said:


> They reported it to members a loooonnnngggg time after they knew about it, and members have a very legitimate complaint about that.
> 
> The reason that members have not been able to vote Diamond out is that Diamond is stonewalling on turning over the membership list as they are required to do.  As a leader of the concerned owners group there was quoted in a local newspaper last year, ''who controls the list controls the resort''.  Just how are owners supposed to oust Diamond when they are illegally denied the one tool that they could use to get the message out and accomplish that?



As you well know refusal to hand out the owners list is the number one method used to prevent organizing owners by entrenched/embattled management. The owners have to get creative as the legal road is usually far too long to be effective in the time frame they need now.

There are ways to get the message out without having direct access to that all important list.  Those include getting the Association to do mailing(s) with "alternatives" proposed by an active owners group.  By using all available avenues a determined group - with adequate support of those they have been able to contact/organize through venues such as TUG or now Facebook/Twitter, Yahoo e-groups, etc - can get the word out that owners need to take action.  

Focusing and bemoaning the lack of a desired path such as easy access to the owners list or who makes up the majority of the sitting Board or even who may be to blame for the faulty buildings distracts from making real impact.  It is far better to find alternative ways to get the word out and take steps to effect a change IF the group seeking a change is serious. There is too much spinning of wheels & meaningless venting  that won't change a thing going vs a real move to find other answers if they exist and/or efforts to obtain control for the majority of owners.  Instead it is repeated and worthless sabre rattling while the process they oppose races ahead.  

I really want to see this resort overcome a big problem.  Needless money wasted with legal battles never helps while efforts to find reasonable (and affordable) answers serve everyone well. Efforts to direct and work with the Association as it exists while working within the rules to make whatever changes may be needed works far better than lining lawyers pockets while the property suffers.


----------



## Carolinian

The membership list is the most critical thing to achieve change at any resort.  There should be a full court press to obtain it any way possible when you encounter scofflaw management which refuses to comply with the law as here.  If you can find a list company that has it or a good part of it, great.  That is a start.  If someone can compile it from tax records, great.  But you are also going to need the official list.

This project is also going to need legal advice and from a Hawaii attorney.  Even if litigation is unnecessary, advice will be needed on how to proceed to make sure there are no glitches.

All of the situations I have had a fair knowledge of where authoritarian developers / managers have stonewalled on turning over the management list have resulted in those lists ultimately being produced without having to file a lawsuit.  For that reason, it is worth pushing.  Also, absent an appeal, it is an extremely simple legal issue that requires little research.  Depending on what they can find in Hawaii law, a little research may produce some things to attach to discourage management from fighting.  One attorney who made such a demand of management on the OBX for example threatened to bring suit under the consumer protection act which allowed collection of legal fees by the plaintiffs and to seek injunctive relief to prohibit the election of directors until the list issue was settled and to tie their hands in other ways.  Management's attorney quickly waved a white flag and no lawsuit had to be filed.

The attitude of many developers and sometimes management companies seems well expressed by a quote from Leonid Bresnev, ''The bad thing about free elections is that you do not know who is going to win''.




timeos2 said:


> As you well know refusal to hand out the owners list is the number one method used to prevent organizing owners by entrenched/embattled management. The owners have to get creative as the legal road is usually far too long to be effective in the time frame they need now.
> 
> There are ways to get the message out without having direct access to that all important list.  Those include getting the Association to do mailing(s) with "alternatives" proposed by an active owners group.  By using all available avenues a determined group - with adequate support of those they have been able to contact/organize through venues such as TUG or now Facebook/Twitter, Yahoo e-groups, etc - can get the word out that owners need to take action.
> 
> Focusing and bemoaning the lack of a desired path such as easy access to the owners list or who makes up the majority of the sitting Board or even who may be to blame for the faulty buildings distracts from making real impact.  It is far better to find alternative ways to get the word out and take steps to effect a change IF the group seeking a change is serious. There is too much spinning of wheels & meaningless venting  that won't change a thing going vs a real move to find other answers if they exist and/or efforts to obtain control for the majority of owners.  Instead it is repeated and worthless sabre rattling while the process they oppose races ahead.
> 
> I really want to see this resort overcome a big problem.  Needless money wasted with legal battles never helps while efforts to find reasonable (and affordable) answers serve everyone well. Efforts to direct and work with the Association as it exists while working within the rules to make whatever changes may be needed works far better than lining lawyers pockets while the property suffers.


----------



## lv_maui

*My last post on this issue*

Although I am upset with all of this and I have publicly put out there my concerns, there is not much more I can do with this website posting.  I will have to decide on my own whether I want to get involved in litigation, if it is an option presented to me.

In my opinion, I will be hearing of litigation somehow.  Legal manuevers will take years even a TIO will be iffy in the short term.  If legal slows things up, DRI will claim emergency repairs are needed in certain buildings asap.

If anyone wants to discuss more on PM, please do so.

And in the spirit of quotes, a very respected friend of mine said "The best form of government is a dictatorship.....if you have a good dictator"




Carolinian said:


> All of the situations I have had a fair knowledge of where authoritarian developers / managers have stonewalled on turning over the management list have resulted in those lists ultimately being produced without having to file a lawsuit.  For that reason, it is worth pushing.  Also, absent an appeal, it is an extremely simple legal issue that requires little research.  Depending on what they can find in Hawaii law, a little research may produce some things to attach to discourage management from fighting.  One attorney who made such a demand of management on the OBX for example threatened to bring suit under the consumer protection act which allowed collection of legal fees by the plaintiffs and to seek injunctive relief to prohibit the election of directors until the list issue was settled and to tie their hands in other ways.  Management's attorney quickly waved a white flag and no lawsuit had to be filed.
> 
> The attitude of many developers and sometimes management companies seems well expressed by a quote from Leonid Bresnev, ''The bad thing about free elections is that you do not know who is going to win''.


----------



## bogey21

IMO the best strategy (unless you plan to use your Week) is to hold off paying for as long as you can take the heat.  This will vary from Owner to Owner.  Hopefully, something positive will happen in the interim.

George


----------



## Poobah

*Same church different pew*

I was "lucky enough" to go through this same thing as an owner at Morritts in Grand Cayman after Ivan. The posts on this board are deja vu and in the end David Morritt did whatever he wanted to do. In fact, to the best of my knowledge, he never disclosed how much he got from the arbitration with Lloyds of London.

The situation is a little different in that Morritts is a "right to use" situation, not an ownership situation, nor was the special assessment near the level of this one. But, David and DRI are out of the same mold: Public Relations is not their long suit!

One of the similarities I see is asssessing the current owners/trust for defaulted special assessment fees. This is fine, as long as the HOA gets the defaulted units, and gets the sale proceeds to compensate the owners/trust for their investment.

If the idea is that the owners/trust are going to provide funding to make up for the defaults and then DRI gets the interval to sell and take the profit, this is simply wrong. I think even David Morritt gave in on this point.

If DRI gets the defaulted units and the proceeds of the sales they should be totally responsible for anteing up the delenquent/defaulted fees. Defaulted/delenquent fees should not be part of the Special Assessment to the owners/trust.

Even SunTerra paid the HOA any delinquent/defaulted fees, because they got the units back and re-sold them.:whoopie: 


Cheers,

Paul


----------



## T_R_Oglodyte

Poobah said:


> One of the similarities I see is asssessing the current owners/trust for defaulted special assessment fees. This is fine, as long as the HOA gets the defaulted units, and gets the sale proceeds to compensate the owners/trust for their investment.
> 
> If the idea is that the owners/trust are going to provide funding to make up for the defaults and then DRI gets the interval to sell and take the profit, this is simply wrong. I think even David Morritt gave in on this point.


I think the chances of the trust defaulting on its payments are pretty slim, since the trust likely receives one single bill for all of its intervals.  

*****

I was also thinking some more about what the impact on the trust would be in the resort were to simply close.  And I think that would create some difficult problems for the trust.

If Poipu were to close its door, suddenly the trust would have less inventory to it, but the same number of owners, with the same undivided interest in the trust.  Since there would be the same number of owners but with less inventory, the number of points required for reservations would have to rise to keep the "pricing" in balance with with the  number of  points held by owners in the trust.  If Poipu represents, say, 35% of the total pool of points cirrently in trust inventory, if Poipu were to close, all of the Trust members points would have to devalue by 35% to keep the inventory points and trust ownership in balance.

That would mean that people who bought into the trust at point levels that guaranteed them being able to reserve a full week in a certain unit at a certain time of year would suddenly only be able to reserve 4 or 5 nights instead of 7 nights.

I think the implications of that situation for the trust would be tremendous.  If the noise about misleading sales practices is loud now, it would reach a fever pitch if people who bought an interest in the trust to give themselves a week at Ka'anapali, for example, were no longer able to book that week because of problems that had occurred at Poipu.  Lawsuits would almost certainly start flying, as people who bought with clearly conveyed expectations of being able to make specific reservations were suddenly no longer able to get what they purchased.

As I was thinking about this, I concluded it it almost certain that the Trust will vote its 35% for rebuilding the resort. From a practical point of view, I don't see how the trust could absorb the impact of suddenly losing about 35% of its inventory while maintaining the numbers of owners roughly constant.


----------



## JudyS

MadOwner said:


> OWNERS - Please join this facebook page to help unite us!  I will be assisting the current owner's group in tracking down and recruiting current owners!
> 
> https://www.facebook.com/pages/Point-of-Poipu-Angry-Owners/148027451960608





norm949 said:


> Thanks for doing this. When I get to the FB page, I only see a "Like" button, no join button or link.  Am I missing something?


 Facebook is SO counter-intuitive! Hitting "Like" is the way you join the group.


----------



## JudyS

T_R_Oglodyte said:


> ....
> I was also thinking some more about what the impact on the trust would be in the resort were to simply close.  And I think that would create some difficult problems for the trust.
> 
> If Poipu were to close its door, suddenly the trust would have less inventory to it, but the same number of owners, with the same undivided interest in the trust.  Since there would be the same number of owners but with less inventory, the number of points required for reservations would have to rise to keep the "pricing" in balance with with the  number of  points held by owners in the trust.  If Poipu represents, say, 35% of the total pool of points cirrently in trust inventory, if Poipu were to close, all of the Trust members points would have to devalue by 35% to keep the inventory points and trust ownership in balance.
> 
> That would mean that people who bought into the trust at point levels that guaranteed them being able to reserve a full week in a certain unit at a certain time of year would suddenly only be able to reserve 4 or 5 nights instead of 7 nights....


This is an excellent point -- if the resorts closes, then there will no longer be enough resort nights in the DRI Hawaii trust. However, DRI would have another option: they could rent nights at other resorts to keep the number of available resort nights constant. I doubt DRI would WANT to do this, but they could. For a while MROP was doing just that, renting weeks from other resorts, because MROP had merged with a bankrupt points-based system that didn't have enough inventory to meet its obligations to its owners.


----------



## pseda

I have requested to see a copy of the insurance policy at the resort. I've been told that the request has been submitted and they will get back to me. I also asked if we were going to drop this insurance and look for another. I was told that this wasn't being considered. Amazing!!!


----------



## dwojo

craigrow said:


> I get that people are upset about the large assessment at the Point at Poipu. Admittedly I'm new to the timeshare world and no expert, but I don't see how anyone can blame Diamond. Here's how I understand things went down.
> 
> 
> Somebody, Sunterra I think but definitely not Diamond, built the resort. It is poor design and construction that seems to be the root cause of the water intrusion problems.
> Diamond was voted in by the HOA as the new management company. I keep reading "Diamond bought the point" but that's not possible as it is the deed holders who _own_ the resort. Diamond may have purchased a number of deeds but they could not have "bought the resort."
> Diamond discovered the water intrusion problem.
> Diamond investigated both insurance claims and legal action but determined neither would recover significant money.
> Diamond got bids for the repair work.
> A winning bid was selected. It's not clear by whom but since the HOA will be on the hook for the bill they must have had at least a veto right.
> The HOA, not Diamond, made a special assessment.
> Diamond billed the owners for their share of the assessment.
> 
> 
> I’m not sure what Diamond was supposed to do differently.
> 
> 
> You could certainly argue Diamond should have investigated more thoroughly and found the problem prior to buying any deeds they own. However, that would not have made the problem go away. It only would have left the owners with the problem and no Diamond deep pockets, which are covering a significant amount of the cost. Diamond is on the hook for the special assessment just like other owners. If anyone should be upset about this it is the Diamond Hawaii trust owners that have no desire to use the Point. They’re on the hook for a share of this assessment on a resort they don’t even use.
> Was Diamond supposed to pay for repairs that are the responsibility of the owners? That is clearly not a responsibility of _any _management company. _Owners _are responsible for the cost of maintenance and repair on any piece of real estate. The deed holders are the owners.
> Was Diamond supposed to ignore the problem or make it magically go away?
> Why isn’t anyone addressing their anger at the board for making/approving the decision to essentially re-build the resort and push a large special assessment on the owners.
> Why isn’t anyone addressing their anger at the owners who let Diamond become the management company and take over their board? Hell, Diamond only owns 10% of the deeds. If just 2 in 10 deed owners were active Diamond would have zero power.
> Why isn’t anyone addressing their anger at the idiots who designed and built a flawed structure?


Diamond controls the HOA so being upset with their handling of things is understandable. Had they been more forthcoming with information regarding all of the damage people might have been better prepared for the financial hit. More notice of the size of the SA would have been helpful. I don't think DRI realizes that nowadays many people just do not have the money. I myself would have liked to see a summary of all bids submitted to repair the damage so I would know that the best bid was accepted.


----------



## Pit

Carolinian said:


> Hawaii's  law, which governs timeshare HOA's, is found at Chapter 514A of the Hawaii Revised Statutes.  The relevent portion, as quoted in a Kauai newspaper in an article on Point at Poipu, is:
> * “The resident manager or managing agent or board of directors shall keep an accurate and current list of members of the association of apartment owners and their current addresses ... The list shall be maintained at a place designated by the board of directors and a copy shall be available, at cost, to any member of the association as provided in the declaration or bylaws or rules and regulations ...”*
> This is even more specific as to timeshare HOA's than the general not-for-profit law.



There is also Hawaii's non-profit corp law. Note that the corporation is not required to distribute the information to association members, only to make it available for inspection/copying. Some other states require all HOA records (e.g. phone numbers, email addresses) be made available to members for a proper purpose.



> §414D-302  Inspection of records by members.  (a)  Subject to sections 414D-301(e) and 414D-303(c), a member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in section 414D-301(e) if the member gives the corporation written notice or a written demand at least five business days before the date on which the member wishes to inspect and copy.
> 
> (b)  A member is entitled to inspect and copy, at a reasonable time and reasonable location specified by the corporation, any of the following records of the corporation if the member meets the requirements of subsection (c) and gives the corporation written notice at least five business days before the date on which the member wishes to inspect and copy:
> 
> (1)  Excerpts from any records required to be maintained under section 414D-301(a), to the extent not subject to inspection under subsection (a);
> 
> (2)  Accounting records of the corporation; and
> 
> (3)  Subject to sections 414D-109(b) and 414D-305, the membership list.
> 
> (c)  A member may inspect and copy the records identified in subsection (b) only if:
> 
> (1)  The member's demand is made in good faith and for a proper purpose;
> 
> (2)  The member describes with reasonable particularity the purpose and the records the member desires to inspect; and
> 
> (3)  The records are directly connected with this purpose.
> 
> (d)  This section does not affect:
> 
> (1)  The right of a member to inspect records:
> 
> (A)  Under section 414D-109; or
> 
> (B)  If the member is in litigation with the corporation to the same extent as any other litigant; or
> 
> (2)  The power of a court, independently of this chapter, to compel the production of corporate records for examination. [L 2001, c 105, pt of §1; am L 2002, c 130, §68]


----------



## JudyS

craigrow said:


> I get that people are upset about the large assessment at the Point at Poipu. Admittedly I'm new to the timeshare world and no expert, but I don't see how anyone can blame Diamond....



I think a major issue here is just the amount of the Special Assessment. Owners are finding it hard to believe that such a huge amount per unit is needed, and therefore suspect DRI is "ripping them off" in some way.

I don't own at this resort, and I really don't know if the amount requested (almost $300,000 per condo) is necessary or not. It seems like a huge amount to fix a condo, but I don't know how big these condos are. 

Which brings me to a question that I've asked before: Anyone know the square footage of these units? 

Here's an option I haven't seen before. Given the state of the economy and the drop in tourism, I wouldn't be surprised if there were some hotels in the area that were for sale. Maybe DRI could buy another hotel (or a couple of them), move the timeshare to the new hotel, and demolish this property? Of course that would be expensive--but $65 million goes a long way, even in Hawaii.


----------



## T_R_Oglodyte

JudyS said:


> Which brings me to a question th



IIRC most of the units are about 1600 sf.

BTW - don't underestimate the differences in costs and difficulty working in Hawai'i as compared with the mainland 48 states.  My wife has family who were very successful contractors in the Pacific NW - they've won numerous awards in the Streets of Dreams competitions and are quite highly regarded.  The patriarch, who started the business moved to Hawa'i almost ten years ago, with the goal of expanding the business and retiring after it was established.  They started up with a set of clients already in hand - people for whom they had built houses in the Northwest who wanted them to build another house for them on Hawai'i.

We visited with them on one of our trips, and he spent a lot of time talking about how much more it cost to do construction in Hawai'i.  As we were driving, he was pointing out ordinary houses - simple two to three bedroom, ~1500 sf single family homes in ordinary communities - not ocean front or anythng like that. Places where the residents of the islands live.  They were listing for $350,000 to $400,000 dollars.  He had done due some checking around before he reached the islands, and figured that if worse came to worse and his mainland clientele dried up he could easily provide ordinary single family housing at prices lower than that.  He got his tail handed to him, and a couple of years later they were back in the mainland having jettisoned those plans.

Using that as a reference point, a price of $300,000 per unit seems like it might be on the high side, but not completely out of the question.


----------



## Carolinian

pseda said:


> I have requested to see a copy of the insurance policy at the resort. I've been told that the request has been submitted and they will get back to me. I also asked if we were going to drop this insurance and look for another. I was told that this wasn't being considered. Amazing!!!



State law, at least in most states, gives you an absolute right to inspect and copy such documents, but the resort does not have to sent them to you.  To enforce your right to inspect and copy, you have to physically go to the resort.  But since this management is willfully violating the law as to owners legal rights to inspect and copy membership lists, how much else they will stonewall on remains to be seen.


----------



## JudyS

T_R_Oglodyte said:


> IIRC most of the units are about 1600 sf.


Thanks, Steve. So, the repair costs quoted are about $185 per square foot. That still sounds high to me, but this *is* Hawaii we are talking about.


----------



## Carolinian

A regular poster on another timeshare BBS checked the MLS listings for completed sales of similar condos on the island of Kauai and found the average sale price for the past year to be $147,000.  When it is proposed to spend over twice that on just repairs, it does raise eyebrows.

Also, one member at this resort posted info from minutes of the HOA BOD meeting when the repairs were agreed to and contracts approved.  Most of the meeting was in executive session, which means not in the minutes.  Why this lack of transparency?  This is not the sort of thing a board normally goes into executive session on, which hides the details from members.  To me, this is a huge red flag that something in the whole arrangement may not be kosher.  I served on an HOA board myself during a major hurricane recovery rebuild, and we never went into executive session on any aspect of that.  I Skyped a friend who served on another HOA board that dealt with a major rebuild from the same hurricane and asked if they had held executive sessions on anything during their rebuild, and his response was ''No, we did not have anything to hide''.




JudyS said:


> I think a major issue here is just the amount of the Special Assessment. Owners are finding it hard to believe that such a huge amount per unit is needed, and therefore suspect DRI is "ripping them off" in some way.
> 
> I don't own at this resort, and I really don't know if the amount requested (almost $300,000 per condo) is necessary or not. It seems like a huge amount to fix a condo, but I don't know how big these condos are.
> 
> Which brings me to a question that I've asked before: Anyone know the square footage of these units?
> 
> Here's an option I haven't seen before. Given the state of the economy and the drop in tourism, I wouldn't be surprised if there were some hotels in the area that were for sale. Maybe DRI could buy another hotel (or a couple of them), move the timeshare to the new hotel, and demolish this property? Of course that would be expensive--but $65 million goes a long way, even in Hawaii.


----------



## Carolinian

You really cannot stop DRI from getting the weeks foreclosed.  When it goes to sale at the courthouse door, there are not likely to be any other bidders standing there except DRI.  An independent HOA would bid in the amount of their lien and make DRI pay at least that much, but will a puppet HOA, controlled by the developer do that????????????????  If DRI bids $1 per week, will the HOA even enter any counter bid?

When an HOA is foreclosing, and the HOA is controlled by a developer still in active sales, there is too often some funny business involved in the process.  I have seen it with foreclosures by developer-controlled HOA's on the OBX.




Poobah said:


> I was "lucky enough" to go through this same thing as an owner at Morritts in Grand Cayman after Ivan. The posts on this board are deja vu and in the end David Morritt did whatever he wanted to do. In fact, to the best of my knowledge, he never disclosed how much he got from the arbitration with Lloyds of London.
> 
> The situation is a little different in that Morritts is a "right to use" situation, not an ownership situation, nor was the special assessment near the level of this one. But, David and DRI are out of the same mold: Public Relations is not their long suit!
> 
> One of the similarities I see is asssessing the current owners/trust for defaulted special assessment fees. This is fine, as long as the HOA gets the defaulted units, and gets the sale proceeds to compensate the owners/trust for their investment.
> 
> If the idea is that the owners/trust are going to provide funding to make up for the defaults and then DRI gets the interval to sell and take the profit, this is simply wrong. I think even David Morritt gave in on this point.
> 
> If DRI gets the defaulted units and the proceeds of the sales they should be totally responsible for anteing up the delenquent/defaulted fees. Defaulted/delenquent fees should not be part of the Special Assessment to the owners/trust.
> 
> Even SunTerra paid the HOA any delinquent/defaulted fees, because they got the units back and re-sold them.:whoopie:
> 
> 
> Cheers,
> 
> Paul


----------



## T_R_Oglodyte

Carolinian said:


> A regular poster on another timeshare BBS checked the MLS listings for completed sales of similar condos on the island of Kauai and found the average sale price for the past year to be $147,000.  When it is proposed to spend over twice that on just repairs, it does raise eyebrows.


$147,000 is totally absurd. $147,000 won't even get you a 1000 sf, one-bedroom house in a working class, non-tourist neighborhood on Kauai, sold as is and with termites.  Perhaps one can get an 1500 sf condo somewhere on Kaua'i for $147,000.  It won't be waterfront, it won't be in Poipu, and it won't be built to anywhere near the same standards.

When we were there a month ago, comparable condos in the Poipu Kai development (there are where Point at Poipu is located) were listing for $500,000 to $800,000. Granted those were listings, but  I don't think reputable real estate agents were telling people to put listings at three to five times actual market value.

A few miles down the road, at Koloa Landing, two-bedroom condos are moving, albeit slowly, with a minimum list price of $900,000 - that's list so I'm sure that actual sales are less.  And those aren't even ocean front units - they're about half a mile inland from Po'ipu Beach.


----------



## T_R_Oglodyte

Carolinian said:


> You really cannot stop DRI from getting the weeks foreclosed.  When it goes to sale at the courthouse door, there are not likely to be any other bidders standing there except DRI.  An independent HOA would bid in the amount of their lien and make DRI pay at least that much, but will a puppet HOA, controlled by the developer do that????????????????  If DRI bids $1 per week, will the HOA even enter any counter bid?
> 
> When an HOA is foreclosing, and the HOA is controlled by a developer still in active sales, there is too often some funny business involved in the process.  I have seen it with foreclosures by developer-controlled HOA's on the OBX.


Doesn't that depend on who is doing the foreclosing?  If it's a foreclosure for failure to pay taxes, when the county forecloses all claims and liens are wiped out. 

But if it's the resort foreclosing for non-payment of dues, can't the require that fees be brought current as part of the deal?  (Of course, I'm assuming that they would actually apply such a condition with DRI.)

And if the foreclosure is by DRI because deedholders have are in arrears on their loans (Sunterra/DRI has actually used mortgages to secure loans) then the resort could still insist that the new owner bring the account current before restoring reservation rights.


----------



## Carolinian

T_R_Oglodyte said:


> Doesn't that depend on who is doing the foreclosing?  If it's a foreclosure for failure to pay taxes, when the county forecloses all claims and liens are wiped out.
> 
> But if it's the resort foreclosing for non-payment of dues, can't the require that fees be brought current as part of the deal?  (Of course, I'm assuming that they would actually apply such a condition with DRI.)
> 
> And if the foreclosure is by DRI because deedholders have are in arrears on their loans (Sunterra/DRI has actually used mortgages to secure loans) then the resort could still insist that the new owner bring the account current before restoring reservation rights.



Hawaii may or may not have some odd provisions, but having handled timeshare foreclosures myself, the deeded interest is sold free and clear of any liens.  Where the foreclosing entity should protect itself for past due amounts is to bid in the amount of its liens so the property does not go any cheaper than that.  In every timeshare foreclosure I ever handled, that is precisely what the HOA did, but then that was member-controlled HOA situations.


----------



## Carolinian

T_R_Oglodyte said:


> Doesn't that depend on who is doing the foreclosing?  If it's a foreclosure for failure to pay taxes, when the county forecloses all claims and liens are wiped out.
> 
> But if it's the resort foreclosing for non-payment of dues, can't the require that fees be brought current as part of the deal?  (Of course, I'm assuming that they would actually apply such a condition with DRI.)
> 
> And if the foreclosure is by DRI because deedholders have are in arrears on their loans (Sunterra/DRI has actually used mortgages to secure loans) then the resort could still insist that the new owner bring the account current before restoring reservation rights.



Since you have been participating in the same thread on www.timeshareforums.com , I am surprised you did not respond to his point there.


----------



## JudyS

T_R_Oglodyte said:


> ... $147,000 won't even get you a 1000 sf, one-bedroom house in a working class, non-tourist neighborhood on Kauai, sold as is and with termites.  Perhaps one can get an 1500 sf condo somewhere on Kaua'i for $147,000.  It won't be waterfront, it won't be in Poipu, and it won't be built to anywhere near the same standards.
> 
> When we were there a month ago, comparable condos in the Poipu Kai development (there are where Point at Poipu is located) were listing for $500,000 to $800,000....


That is very interesting. I really had no idea how much condos were going for on Kaua'i. (I live near Detroit, where nice houses are selling for under ten thousand dollars. )

If comparable whole ownership condos are selling for $500,000 and up, then spending $300,000 per condo to repair makes more sense.  Also, there goes my idea that DRI could just buy a different resort on Kaua'i, in better repair,  for under $65 million! 

However, if comparable condos are worth $500,000 plus, then here's another idea. Maybe some of these timeshares could be converted to whole ownership condos. Timeshare owners who can't or won't pay the special assessment turn their deeds in. For every 52 deeds turned in, a whole ownership condo is created and sold for $500,000 or more. This covers the $300,000 repair cost for that condo, with $200,000 per converted condo left to help pay for the repairs to the rest of the resort, or to pacify DRI and get them to agree to the plan.


----------



## artringwald

*Water Intrusion Meeting Presentation*

FYI. The presentation for the meetings is now available if you log into the HOA web site: http://www.diamondresortshoa.com/specialassessment.aspx


----------



## billstellar

*Schedule of payments*

I am a newbie to TUG and have read all of the P@P postings on the special assessment.  (What a way to spend a Saturday .)
Anyway we own a deeded week and the reality of condos has been forcefully rammed down our throats and I am thankful in the sense that we were considering a condo for retirement and that thought has now vanished.
We are not impressed with the non-business-like approach of DRI when it comes to working and communicating with the owners.  However, it is clear that the HOA should be acting in the owner's interest and it is not - at least in this case.
The report on the meeting the other day (thanks for that) showed that the assessment of $5893.32 per unit portion is to be expended over 6 years and the schedule is 1 building in the first year and 2 each other year (if we give the lobby etc the weight of a building which I presume is overweigting it.) So the first phase cost $535.76 of assessment total, and each of the others $1071.52 of the total.  If this money came from a bank it would provide the money in phases and so the HOA should have arranged that for the collection.  This year we should only pay $535.76 per unit for phase 1, and then we should pay $1071.52 for the next 5 years for the following phases.  This would make it bearable for small (coming to retirement) owners like me.
So my First question is: To whom do we collectively speak to have the assessment payments restructured in this way, or in some modified way which spreads the pain over at least 5 years?  The Chairman's assertion that some have already paid is not only arrogant it is unfeeling and Dicksonian - shame on him.
My Second question is : How can the HOA not react to the obvious despair of members who love P&P but cannot see how to get out of the bind they are in?  The HOA is surely the employer of DRI.
My Third question is : Can the HOA be instrumental in getting the management of our property to be more reasonable when it comes to the issue of buybacks?  As someone said the "voice of the people" must surely influence the operation of our resort, and the HOA is supposed to be our voice.  Even the selling of property is based on draconian regulations.

The organization is like a Gorgon, there is no one place to go with concerns, choose a (snake)head and it is the wrong one.  I for one need constructive direction on where to direct my desires and wishes for both management issues and for help and relief (with this particular schedule of payments.)
Anyone with the constructive answers to my questions please post or email me directly billrobertson@eastlink.ca.  I, like many owners, need a solution to this onerous, and apparently unnecessary, payment schedule issue.  Surely an email campaign to the correct person could assist us.
As an aside I am glad I joined TUG and read these posts.


----------



## Carolinian

Maybe the logistics of that would be a bit easier with a floating week resort, but probably not since each week is deeded as a specific unit and week even if it floats.  It would also take a supermajority and perhaps unanimous vote of the owners of all units and weeks at the resort to allow for such a program.  The logistics would be a nightmare.



JudyS said:


> That is very interesting. I really had no idea how much condos were going for on Kaua'i. (I live near Detroit, where nice houses are selling for under ten thousand dollars. )
> 
> If comparable whole ownership condos are selling for $500,000 and up, then spending $300,000 per condo to repair makes more sense.  Also, there goes my idea that DRI could just buy a different resort on Kaua'i, in better repair,  for under $65 million!
> 
> However, if comparable condos are worth $500,000 plus, then here's another idea. Maybe some of these timeshares could be converted to whole ownership condos. Timeshare owners who can't or won't pay the special assessment turn their deeds in. For every 52 deeds turned in, a whole ownership condo is created and sold for $500,000 or more. This covers the $300,000 repair cost for that condo, with $200,000 per converted condo left to help pay for the repairs to the rest of the resort, or to pacify DRI and get them to agree to the plan.


----------



## lv_maui

*One more*

I know that I promised no more posts but I found this on a complaints board that I found interesting and applicable

*
 *13th of Oct, 2011 by* *Frontal Labotomy	   0 Votes
Well this is a 'turn-up' for the books.
It appears that many members of the British DRI Protesters group - http://drip.enjin.com - have emailed Stephen Cloobeck regarding the exhorbitant maintenance fees and their inability to pay. Cloobeck has emailed them back to tell them that " I will revoke your membership. You will be able to reinstate at any time in the future. My apologies for your stress. My offices will send out the paperwork. Wish you would contacted me sooner".
It makes me wonder if this has all come about because the protesters group has pushed the BBC into featuring Diamond Resorts on its programme 'Rip Off Britain' in November ?????*


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## JudyS

I suggested that perhaps some owners could deed back their units, which would then be sold as whole-ownership condos, and Carolinian said:


Carolinian said:


> Maybe the logistics of that would be a bit easier with a floating week resort, but probably not since each week is deeded as a specific unit and week even if it floats.  It would also take a supermajority and perhaps unanimous vote of the owners of all units and weeks at the resort to allow for such a program.  The logistics would be a nightmare.



I hadn't realized this resort was deeded as fixed week instead of float. That would make such a plan much more complicated. 

I don't know how Hawaii timeshare laws work or what the condo docs say at Point at Poipu, so I don't know if my plan would be feasible there or not. If there are a lot of owners who want to walk away, it might be worth their while to look into this at least a little. Many of the other things suggested here, such as suing DRI, are even more risky and expensive, and may have a lower chance of success.

I definitely agree with you, Steve (Carolinian), that timeshares laws in many states are very inflexible. This makes it difficult for HOAs to dissolve, shed units, change ownership terms, or do just about ANYTHING to adapt to changing conditions. I see this as a major problem, and something timeshare owners should work to change. 

On a lighter note, regarding The Point at Poipu:
"We can rebuild it. We have the technology. We have the capability to build the world's first bionic resort. Better than it was before. Better... stronger... faster... The sixty-five million dollar timeshare!”


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## lv_maui

JudyS said:


> I suggested that perhaps some owners could deed back their units, which would then be sold as whole-ownership condos, and Carolinian said:
> 
> 
> I hadn't realized this resort was deeded as fixed week instead of float. That would make such a plan much more complicated.



The resort is a mix of many things, both float week float unit, float week fixed unit, view categories, etc.  

I think your plan, conceptually, would work to get 51 weeks of float float owners together with many caveats.


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## Carolinian

While some states have grafted things on, timeshare law is much more consistent between states than many areas of the law.  This is because all states have adopted the Uniform Condominium Act and that applies to all timeshares organized after its adoption in the particular state.  For timeshares organized earlier, they fall under two different variations of statutoty frameworks, as state condominium laws prior to the Uniform Condominium Act were based on either the HUD Model Act or the Puerto Rico condominium law, the larger group being under the former.

From other posts, the weeks at this resort do float on a functional basis, but like many floating week resorts, the deed references a specific week and unit you own for inventory and legal purposes, and therein lies the rub.




JudyS said:


> I suggested that perhaps some owners could deed back their units, which would then be sold as whole-ownership condos, and Carolinian said:
> 
> 
> I hadn't realized this resort was deeded as fixed week instead of float. That would make such a plan much more complicated.
> 
> I don't know how Hawaii timeshare laws work or what the condo docs say at Point at Poipu, so I don't know if my plan would be feasible there or not. If there are a lot of owners who want to walk away, it might be worth their while to look into this at least a little. Many of the other things suggested here, such as suing DRI, are even more risky and expensive, and may have a lower chance of success.
> 
> I definitely agree with you, Steve (Carolinian), that timeshares laws in many states are very inflexible. This makes it difficult for HOAs to dissolve, shed units, change ownership terms, or do just about ANYTHING to adapt to changing conditions. I see this as a major problem, and something timeshare owners should work to change.
> 
> On a lighter note, regarding The Point at Poipu:
> "We can rebuild it. We have the technology. We have the capability to build the world's first bionic resort. Better than it was before. Better... stronger... faster... The sixty-five million dollar timeshare!”


----------



## Carolinian

If you want to put some heat to DRI over the way they are handling things at Point at Poipu, then I would have some members contact the BBC.  Perhaps they could work that in to the story for November.  Once you get it on the BBC, it should be easier to get some US media coverage.





lv_maui said:


> I know that I promised no more posts but I found this on a complaints board that I found interesting and applicable
> 
> *
> *13th of Oct, 2011 by* *Frontal Labotomy	   0 Votes
> Well this is a 'turn-up' for the books.
> It appears that many members of the British DRI Protesters group - http://drip.enjin.com - have emailed Stephen Cloobeck regarding the exhorbitant maintenance fees and their inability to pay. Cloobeck has emailed them back to tell them that " I will revoke your membership. You will be able to reinstate at any time in the future. My apologies for your stress. My offices will send out the paperwork. Wish you would contacted me sooner".
> It makes me wonder if this has all come about because the protesters group has pushed the BBC into featuring Diamond Resorts on its programme 'Rip Off Britain' in November ?????*


----------



## craigrow

Thanks for the good discussion on my earlier post. I'm sorry not to have responded earlier. The moderators moved it and it took me a while to find it. Anyway...

lvMaui: 


I don't know who built the resort, I just know it wasn't Diamond, which is the point.
"Diamond took over management from Sunterra's mgmt company." This is interesting. Did they pay Sunterra for that contract? Is this what people are referring to when they say "Diamond purchased the Point?" Anyway, if Sunterra had the right to do that without board approval then the ultimate responsibility _still _falls to the board as they gave Sunterra a contract which allowed them to sell the contract without board approval, just dumb if you ask me. Likely the board had to approve this transfer. Also, these contracts are not usually in perpetuity. Presumably the board has a mechanism to fire Diamond if they're unhappy. Again, Diamond only owns about 10% of the units.
"It is very important to understand that no deeded owners vote them in. NOT AT ALL. I think this is the biggest error in the post." Please re-read my original post as I never said the _owners _voted in Diamond. Clearly the HOA acted on their behalf, as the owners elected them to do.
"Diamond did not discover the water instrusion problem. It has been a problem for many years." Fine, you're making my point. The problem was _not created by Diamond_, and would have existed with or without their involvement. They're simply a messenger and the situation would likely be worse without their involvement.
"The HOA who has 2 employees on the Board, the mother of Linda Riddle and 2 non DRI owners voted in the Special Assessment. DRI voted in the SA. The HOA is controled by the HOA" Sorry, I'm not getting your point here. One thing I'd like to know, presumably this is in meeting minutes somewhere, what was the vote on the special assessment. Clearly the Diamond folks voted for it. What about the other HOA board members? What is unanimous? If so, you really don't have an argument about Diamond controlling the board.

Diamond's stonewalling with the member list is the most damning thing I've read. Unfortunately suing for that information would be suing the HOA. Suing a community which you're a member of is kinda like cutting off your own limbs. Still, it should be a relatively quick and painless suit. A homeowner in the HOA where I own my home did exactly that about a year ago. The total cost was about $10K. The HOA was forced to cover the legal fees as their violation was so egregious. Their violation, failure to let members see records of the association. 


The discussion on foreclosures is also interesting. Again, I'm no expert but I don't see how a property gets foreclosed on by a special assessment or how that would end up with Diamond owning the deed.

A foreclosure is a legal proceeding where a _creditor _takes possession of a property which was used as collateral. In this case there is no creditor. Unless the HOA has some special contract with deed holders I expect the most they could do is place a lien on the deed. 

I suppose the HOA might be able to get a court to sell the property and give them the proceeds. That seems unlikely and, given the deeds have about $0 of value on the re-sale market, not likely to help matters. 

It seems more likely the HOA would ask the court to forcibly collect the dues via wage garnishment or the like. Any funds collected would go to the HOA and the deed, and responsibility for future maintenance fees, would stay with the deed owner. 

The fees are a matter between the HOA and the deed owner. Diamond is but a messenger so I really don't see a scenario where Diamond ends up with ownership unless they _buy _the deeds. I don't see Diamond, _or anyone else_, buying _any _Poipu deed until the current owner pays the special assessment.

Finally, since someone asked about how a resort closure would impact DRI trust members...the trust documents clearly state that, if a property is removed from the trust, or becomes unusable, for any reason, DRI is responsible for replacing that property with something equivalent. In the case where the resort is a financial loss, however, I expect the trust (owners) would be on the hook for the cost of the replacement resort.


----------



## T_R_Oglodyte

craigrow said:


> "Diamond took over management from Sunterra's mgmt company." This is interesting. Did they pay Sunterra for that contract? Is this what people are referring to when they say "Diamond purchased the Point?"


Yes. Sunterra was spiraling toward another bankruptcy filing (its second).  Diamond purchased Sunterra, becoming the corporate successor.  Typically, in any kind of acquisition all existing contracts pass through to the acquiring company.  For example, if you are the owner of a lawn-care business and you sell your company to Lawns-R-Us, all of your existing contracts pass through to Lawns-R-Us unless the contract includes a provision allowing the contract to be terminated if one of the parties is acquired by someone else.  I don't know if such a clause exists in the management contract for the resort; I doubt it.


craigrow said:


> Anyway, if Sunterra had the right to do that without board approval then the ultimate responsibility _still _falls to the board as they gave Sunterra a contract which allowed them to sell the contract without board approval, just dumb if you ask me. Likely the board had to approve this transfer.


As noted above, Sunterra didn't sell the contract. Sunterra was acquired by DRI, and DRI became the successor in interest to Sunterra.  It's the same thing that happened when Sunterra acquired Marc Resorts, who was the manager on-site before Sunterra and was acquired by Sunterra.

This is much ado about nothing. If there were a legal problem about the change in ownership, DRI would simply have allowed Sunterra to continue as a legal entity, the only difference being that Diamond would now own all of the shares of Sunterra stock instead of the previous owners.  


craigrow said:


> Also, these contracts are not usually in perpetuity. Presumably the board has a mechanism to fire Diamond if they're unhappy. Again, Diamond only owns about 10% of the units.


Terminating the management contract requires a majority vote of all ownership interests at the resort. That's not 50% of the votes counted at meeting with quorum. That's an absolute 50% of deeds.  Thus failure of any owner to vote or return a proxy is the same as a vote to retain the management company.

The Hawaii Collection owns about 35% of the deeds at the resort.  The Collection's votes are cast by the Manager for the Collection, which happens to be DRI.  So collectively DRI controls about 40% to 45% of the votes at the resort.  The only way to break that grip would be for the members of Board of Directors of the Trust to take over the Trust's voting. Since the Trust Board, like the resort Board, is the thrall of DRI, getting that to happen would require voting out the existing Board of the Trust at a future annual meeting of the Trust.


craigrow said:


> A foreclosure is a legal proceeding where a _creditor _takes possession of a property which was used as collateral. In this case there is no creditor. Unless the HOA has some special contract with deed holders I expect the most they could do is place a lien on the deed.
> 
> I suppose the HOA might be able to get a court to sell the property and give them the proceeds. That seems unlikely and, given the deeds have about $0 of value on the re-sale market, not likely to help matters.
> 
> It seems more likely the HOA would ask the court to forcibly collect the dues via wage garnishment or the like. Any funds collected would go to the HOA and the deed, and responsibility for future maintenance fees, would stay with the deed owner.


The timeshare program documents allows the HOA to foreclose on property for non-payment of fees and assessments.


craigrow said:


> The fees are a matter between the HOA and the deed owner. Diamond is but a messenger so I really don't see a scenario where Diamond ends up with ownership unless they _buy _the deeds. I don't see Diamond, _or anyone else_, buying _any _Poipu deed until the current owner pays the special assessment.


The scenario would be that the HOA forecloses on a bunch of deeds for non-payment. Of course, holding a bunch of deeds doesn't do the HOA much good, because that means those are ownership interests that aren't contributing funds to resort operations.  So after foreclosure the Board will need to remarket those foreclosed units to get them back into revenue.  To do that, they would almost certainly turn to DRI, who already has a sales operation on premises and is set up to market and sell timeshare property.

Now add in that the HOA Board is essentially the thrall of DRI - whatever deal is cut between the HOA and DRI to sell those foreclosed deeds is going be a sweet deal for DRI.  No way DRI is going to pick up those deeds and pay the arrears. Instead most likely the deal will be structured so that DRI first gets a cut of the sales price as a commission.  Then arrears are paid out of any money remaining after DRI collects its commission. And if there's money left over after that I suspect that DRI will want to pocket that as well.  


craigrow said:


> Finally, since someone asked about how a resort closure would impact DRI trust members...the trust documents clearly state that, if a property is removed from the trust, or becomes unusable, for any reason, DRI is responsible for replacing that property with something equivalent. In the case where the resort is a financial loss, however, I expect the trust (owners) would be on the hook for the cost of the replacement resort.


Not exactly correct.  Per §5.4B of the Disclosure Statement for the Hawaii Collection (version as of July 11, 2008) the mandatory replacement provision is triggered in situations in which the loss of inventory is *not* at a resort that that has it's own association separate from the Collection.


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## lv_maui

Point of clarification:

First Manager was Aston Hotels and REsort.  Osaumu Kanecko of Koar which is Sunterra had a relationship with them.
Second, when Sunterra acquired Marc, then made Marc manager.
Third, when Sunterra went through the BK, they sold Marc and created Resort Management International Hawaii to manage
Fourth, when Diamond acquired Sunterra, they became the mangers of RMIH

Marc was never the manager onsite until Sunterra bought them.



T_R_Oglodyte said:


> As noted above, Sunterra didn't sell the contract. Sunterra was acquired by DRI, and DRI became the successor in interest to Sunterra.  It's the same thing that happened when Sunterra acquired Marc Resorts, who was the manager on-site before Sunterra and was acquired by Sunterra.
> .


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## dougp26364

Steve,

I memory serves me correctly, DRI typically has a deal in place whereby they pick up the foreclosed weeks for a set price. It benefits the HOA/BOD and owners in that those weeks have a known value to the HOA/BOD and owners and, those weeks continue to pay their MF's. I have long since forgotten any details I may have read, or thought that I have read, about this in the past. I'm just vaguely aware that something existed either currently or at one time. The reason I even recall this is I've always felt that it was a good thing.

Why have I felt such a deal to be a good thing? Because owners typically don't participate in the HOA/BOD process past ignoring the proxie ballets when they arrive in the mail. I've been guilty of this in the past and, to be honest, I don't know enough about the candidates to cast a knowledgable vote. 


Right now I have three resorts in my collection that I almost wish I didn't own due to differences in the opinion with the how the HOA manages those resorts. Interestingly, that would be my two Marriott managed resorts and one managed by Southwind but, went into bankruptcy from the previous developer/management company. It's not been the managing companies so much as the how the HOA/BOD choose to spend owners money or communicate with owners.

At one point in time, when S. Cloobeck had stepped away from Polo Towers, I was definately not happy with the communication or how the resorts were being run. Two SA's due to underfunding cash reserves didn't help my opinion.

When S. Cloobeck decided to get back in and be more involved, things started to go back to the way they had been originally. A few differences have been that the newletter is now electronic, saving money on mailing, which I appreciate. There is communication with owners but, you need to have an updated E-mail address and you actually have to go to their website and read the newsletters. I'm not certain how P@P has been with this but, if there were newsletters published online, they'll likely still be there. I can go back and read past HOA newsletters to see what's been happening.

Online is also my source for reading HOA/BOD letters that come out with MF's each year. In reading last years newsletter, I understood that the HOA/BOD hadn't collected enough in reserves and that there was a deficit that the HOA/BOD had now decided to make up. That deficit reduction is costing The Suite's at Polo Towers owners approx. $83/year for six years. 

It hasn't been a difficult thing for me to calculate that I can assume 6 to 7% increases in MF's each year until the deficit is errased, just by reading what DRI has published. The thing is, owners have to take some responsibility to find and read that information. It's not as if it's hidden. It's easily found. What's all to easy is for owners to blissfully ignore what's going on at their resorts until something like this smack you right in the face. That's excactly what happened at Polo Towers when the HOA was underfunding the cash reserves and it came time for a refurbishment. Most owners didn't realize that $30 to $40 per year per 2 bedroom unit wasn't going to cut it. Most didn't care that cash reserve funding was reduced to keep MF's almost even. Most were angry when it required SA's to take care of business that should have been funded by the cash reserves. 

Essentially, no one pays any attention until something like this happens, then they want to blame everyone but themselves. Sunterra underfunded a lot of things and went cheap on many items. That's great in that it keeps MF's lower but, in the end it comes back to bite you in the hind end. 

DRI only recently took over the management of this resort. They done their work to see if/where money could be collected and have determined that it would be throwing good money after bad to persue those avenues. It would also further delay repairs, possibly to the point where it would become even more cost prohibitive to owners and, depending upon how the contracts are written, could result in a potential contractual obligation with the trust ownership. In short, it's considerably more complicated than most want to believe. 

What I regret about everything that's transpired is the preception of rudeness by DRI staff at the meeting in SF. That's like tossing gasoline onto a burning fire. I wasn't there so I can't comment as to if this was preceived by angry owners out for blood of if they really were just matter of fact and didn't care. I do know that after you've been battered so long, given the same answers and know that this is the only course of action, you'll generally reflect the mood of the crowd facing you. But then again that's why management is paid the really big bucks. Not only should they be able to manage but they'll have to do some PR work as well. The world is full of former middle and upper mangement types that didn't understand they have to be as good at PR and management theory.

This is a touchy sitaution for DRI. They're caught between having to repair the resort properly, keeping the cost as low as possible while not being so cheap as to cause future problems and find a way to make owners satisfied with their ownership enough to not only pay the SA but keep their ownerships and be happy with them. 

You'll never make everyone happy. The best you can do is try. In reality, the angry owners group is but a small percentage of owners at P@P. It's good to vent but, reality needs to come into the picture as well. Ousting DRI as management will be nearly impossible, even if they had the owners mailing list.Placing blame feels good but doesn't solve the problem. IMO, right now if I were an owner, I'd be making certain this problem was fixed and that I wouldn't be paying for it again in another 10 or 20 years. I'd be looking at the cash reserve funding and asking questions. I might even be considering selling out or giving the ownership away. But banging my head against the wall isn't something I'd be doing and, looking to place blame or remove DRI as management at this point is a waste of energy. Even if successful, you STILL have the water intrusion project AND, you'll likely be back to square one.

A better angle would be to get a large enough group of owners to negotiate payment terms and search for options other than what has been rather abruptly presented to owners. Personally, I'd have been a little more than shocked at the assessment and, despite being in a good financial position, would have difficulty managing such a large payment that wasn't budgeted for over time. It would be difficult enough to adjust our budget to cover the increased fee's for the next two to five years. Maybe something can be done on this front, either through financing or allowing a delayed payment structure. Possible a monthly payment plan or something of that nature.


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## dougp26364

For those who have not been able to find the online DRI site which links to your HOA newsletters, financial information and many other owners documents, here's the link http://www.diamondresortshoa.com/splash.aspx . You will need to register and create a login on ID to access your resorts information.


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## timeos2

dougp26364 said:


> A better angle would be to get a large enough group of owners to negotiate payment terms and search for options other than what has been rather abruptly presented to owners. Personally, I'd have been a little more than shocked at the assessment and, despite being in a good financial position, would have difficulty managing such a large payment that wasn't budgeted for over time. It would be difficult enough to adjust our budget to cover the increased fee's for the next two to five years. Maybe something can be done on this front, either through financing or allowing a delayed payment structure. Possible a monthly payment plan or something of that nature.



Very good post Doug.  You really get into where things are & how they got there. I share your feeling that while DRI is far from a perfect organization they do seem to understand the need for continuous improvements at resorts - simply living off what is there is really supporting a deteriorating situation as nothing gets better with time on its own - and that reserves need to be properly funded to maintain/upgrade resorts. 

I still see places where they seem at first glance at least to be holding fees down by shortchanging reserves (either for sales or management reasons it seems) and it will be interesting to see where those resorts are in 5 years and what has happened regarding reserves collected and any special assessments. But overall, for established resorts and those with long term management in place, they seem to be budgeting far better for needed reserves.  That in the long run is a very good thing for owners even if they don't see it that way.


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## tidefan

dougp26364 said:


> For those who have not been able to find the online DRI site which links to your HOA newsletters, financial information and many other owners documents, here's the link http://www.diamondresortshoa.com/splash.aspx . You will need to register and create a login on ID to access your resorts information.



Hey Doug, not to hijack this thread a little bit, but the St Maarten resorts aren't on the list.  Do you know why?


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## dougp26364

tidefan said:


> Hey Doug, not to hijack this thread a little bit, but the St Maarten resorts aren't on the list.  Do you know why?



Honestly, I have no idea and didn't realize they weren't there. It'd be a good question to ask DRI. I understand that the owners there have had issues but don't know what they've been. 

I do know that P@P is on the list. Not being able to see information on any resorts other than those we own at, I can't even say with certainty that their HOA's have kept updated information available to owners. I'm sure if they haven't, it's another complaint that can be added to the list of complaints they already have.


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## craigrow

Wow, nice reply TR, thanks.

So, Diamond purchased the maintenance contract. That makes sense. I guess this is what people are talking about when they say "Diamond bought the Point." If I were writing one of these contracts for the HOA, I would give the HOA the option of cancelling the contract in the case of a significant change such as sale to another company. An easier out that a majority vote. These contracts are written by the developer though so that doesn't seem like an easy solution. The most likely solution would be the HOA realizing their management company is in trouble and finding a new manager before the change is made for them. Still, I get that the developer has designed the system to make that very difficult. Of course, we all knew that when we bought in, or should have.

It's interesting that the DRI Hawaii Collection owns such a large share of the deeds. How did they acquire those deeds? 

It's also interesting that the HOA has the ability to "foreclose" for non-payment. I guess those who want a deed-back option already have it. Simply don't pay and let the HOA foreclose. This will likely hurt your credit but it will relieve you of the deed, special assessment fees and future maintenance fees. This doesn't seem right to me as it would not help the HOA or Diamond to foreclose on a deed that owes them thousands of dollars.

Where do I find the "disclosure statement" you're referring to? I don't see that on Diamond's HOA web site.


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## dougp26364

craigrow said:


> Wow, nice reply TR, thanks.
> 
> So, Diamond purchased the maintenance contract. That makes sense. I guess this is what people are talking about when they say "Diamond bought the Point." If I were writing one of these contracts for the HOA, I would give the HOA the option of cancelling the contract in the case of a significant change such as sale to another company. An easier out that a majority vote. These contracts are written by the developer though so that doesn't seem like an easy solution. The most likely solution would be the HOA realizing their management company is in trouble and finding a new manager before the change is made for them. Still, I get that the developer has designed the system to make that very difficult. Of course, we all knew that when we bought in, or should have.
> 
> *It's interesting that the DRI Hawaii Collection owns such a large share of the deeds. How did they acquire those deeds?
> *
> It's also interesting that the HOA has the ability to "foreclose" for non-payment. I guess those who want a deed-back option already have it. Simply don't pay and let the HOA foreclose. This will likely hurt your credit but it will relieve you of the deed, special assessment fees and future maintenance fees. This doesn't seem right to me as it would not help the HOA or Diamond to foreclose on a deed that owes them thousands of dollars.
> 
> Where do I find the "disclosure statement" you're referring to? I don't see that on Diamond's HOA web site.



I would assume that, when Sunterra hit upon the idea of trust based ownership for their resorts, it was a no brainer to design a program to get owners to give up their deeds for an interest in a trust vs one specific resort.

The give was you have home resort rights at a group of resorts rather than just one resort.

The take is you give up your deed and your vote. 

For the developer interested in keeping the management contract, this gives them leverage. 

For the owner looking for flexibilty, this gives them options. 

Trust style developements can be very attractive to developers because it puts them in the drivers seat. DVC, for instance, provides the product but owners appear to have little say in how the resorts are run. When DVC wanted to switch from RCI to I.I. and then switch back to RCI, they just did it without needing member approval. DVC will always be the mangement company for DVC resorts.

DVC has, as far as I know, always been a trust style ownership using right to use for a specific number of years. Sunterra, and now DRI, is a mixture of trust and deeded weeks ownerships. Sunterra did not start out as a trust based ownership but now, as I understand it, that's all DRI sells. 

DRI obtains deeds by converting deeded week owners over to trust ownership, by foreclosure, deed backs or buying units that show up on the resale market.


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## weisberg

*sensible scheduled payments*

Yes Bill, your plan is a lot more palatable than that which has been proposed. My thoughts are still to walk away, but your plan is definitely more doable. I would like to post your thoughts and plan on facebook for the followers that do not log on to this forum. Please contact me at bobweisberg@bellsouth.net if this is ok with you. Please contact we even it is not. We have a list of email addresses going and I would like to add yours to this list. Thank you again for sharing your ideas. 
Take care, Joyce Weisberg



:zzz: 





billstellar said:


> I am a newbie to TUG and have read all of the P@P postings on the special assessment.  (What a way to spend a Saturday .)
> Anyway we own a deeded week and the reality of condos has been forcefully rammed down our throats and I am thankful in the sense that we were considering a condo for retirement and that thought has now vanished.
> We are not impressed with the non-business-like approach of DRI when it comes to working and communicating with the owners.  However, it is clear that the HOA should be acting in the owner's interest and it is not - at least in this case.
> The report on the meeting the other day (thanks for that) showed that the assessment of $5893.32 per unit portion is to be expended over 6 years and the schedule is 1 building in the first year and 2 each other year (if we give the lobby etc the weight of a building which I presume is overweigting it.) So the first phase cost $535.76 of assessment total, and each of the others $1071.52 of the total.  If this money came from a bank it would provide the money in phases and so the HOA should have arranged that for the collection.  This year we should only pay $535.76 per unit for phase 1, and then we should pay $1071.52 for the next 5 years for the following phases.  This would make it bearable for small (coming to retirement) owners like me.
> So my First question is: To whom do we collectively speak to have the assessment payments restructured in this way, or in some modified way which spreads the pain over at least 5 years?  The Chairman's assertion that some have already paid is not only arrogant it is unfeeling and Dicksonian - shame on him.
> My Second question is : How can the HOA not react to the obvious despair of members who love P&P but cannot see how to get out of the bind they are in?  The HOA is surely the employer of DRI.
> My Third question is : Can the HOA be instrumental in getting the management of our property to be more reasonable when it comes to the issue of buybacks?  As someone said the "voice of the people" must surely influence the operation of our resort, and the HOA is supposed to be our voice.  Even the selling of property is based on draconian regulations.
> 
> The organization is like a Gorgon, there is no one place to go with concerns, choose a (snake)head and it is the wrong one.  I for one need constructive direction on where to direct my desires and wishes for both management issues and for help and relief (with this particular schedule of payments.)
> Anyone with the constructive answers to my questions please post or email me directly billrobertson@eastlink.ca.  I, like many owners, need a solution to this onerous, and apparently unnecessary, payment schedule issue.  Surely an email campaign to the correct person could assist us.
> As an aside I am glad I joined TUG and read these posts.


----------



## weisberg

*telephone solicitation*

I just recently started following comments on facebook. I also posted a comment myself. Not sure which contact sparked a telephone solicitation for the sale of my timeshare. I have even less faith or trust in these promotion offers than I have with our HOA & DRI. It boggles me that we can not come up with a list of owners, yet, these companies can get our telephones numbers so easily. I know that this has been addressed on this forum previously. Has anyone been contacted recently to try to sell their timeshare?


----------



## artringwald

A trust based ownership is also a way for a developer to oversell a desirable resort. That's how a Las Vegas and Sedona resort ended up in the Hawaii Collection.


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## T_R_Oglodyte

craigrow said:


> So, Diamond purchased the maintenance contract.



I repeat, DRI did not purchase the contract.  DRI purchased Sunterra.  Sunterra did not put out a notice in the trade venues saying "_Here's this lovely contract which generates huge profrits.  What am I offered by someone who wants to take our place as manager of Point at Poipu?_"  Those types of sales or rights do occur in the commercial world; that's why many contracts (including those in my business) specifically prohibit that unless the other party to the contract agrees to the transfer. I would be surprised if the management contract between Sunterra and the HOA at Po'ipu didn't include such a provision barring the sale or transfer of rights under the contract.


----------



## timeos2

T_R_Oglodyte said:


> I repeat, DRI did not purchase the contract.  DRI purchased Sunterra.  Sunterra did not put out a notice in the trade venues saying "_Here's this lovely contract which generates huge profrits.  What am I offered by someone who wants to take our place as manager of Point at Poipu?_"  Those types of sales or rights do occur in the commercial world; that's why many contracts (including those in my business) specifically prohibit that unless the other party to the contract agrees to the transfer. I would be surprised if the management contract between Sunterra and the HOA at Po'ipu didn't include such a provision barring the sale or transfer of rights under the contract.



Assuming that the "standard? Sunterra / RPM management agreement was used (it most likely was as they always tried to use it if possible) then there was a onerous to break automatic renewal and no prohibition of transfer to a susequent to a succeeding management group.

When we were able to break our old Sunterra management agreement we made sure the new contract had the following provisions:


Management contract can be terminated with 90 days notice for any reason (this scared away a few bidders - but we demand it)
Contact awarded by the Board and does not require owner vote (although that always remains as an option)
No automatic renewals
No automatic transfers to subsequent buyers of the management company without Board approval
We also went out for open bidding and interviewed the top 3 contenders. Our savings in 2001 was nearly $750,000!! Imagine what it would have been today if the "standard" increases had been allowed.  We renegotiated the contact in 2008 with additional savings obtained and will revisit it again in the near future.  

It isn't easy or usually inexpensive to get owner control of any Association unless you have the rare case where the Developer does the right thing and voluntarily turns it over.  Once in Owner control there is no reason management shouldn't be opened to bid just as any other service is - and there is usually a savings to be realized especially with a non-developer based management firm.   That isn't always the case but over the long term the history of timeshares says a non-developer management will be more responsive and cost less than the typical developer based group.  

It is up to the Association / Board to write a good and cost effective agreement for management services.  You do not have to accept the "standard" contract offered by any group but if you rewrite it make sure it accomplishes what you want.  A good attorney is priceless in the process.


----------



## bkahoona1

*About this poipu point mess*

[_Text of this post has been removed at the request of the poster, as a condition of a legal agreement with Diamond Resorts._ - Makai Guy, BBS Administrator]


----------



## Carolinian

T_R_Oglodyte said:


> I repeat, DRI did not purchase the contract.  DRI purchased Sunterra.  Sunterra did not put out a notice in the trade venues saying "_Here's this lovely contract which generates huge profrits.  What am I offered by someone who wants to take our place as manager of Point at Poipu?_"  Those types of sales or rights do occur in the commercial world; that's why many contracts (including those in my business) specifically prohibit that unless the other party to the contract agrees to the transfer. I would be surprised if the management contract between Sunterra and the HOA at Po'ipu didn't include such a provision barring the sale or transfer of rights under the contract.



The problem is that when the developer has a puppet HOA board, then they simply rubberstamp the deal.  That is one reason why timesharers should always beware of developer-controlled HOA boards.  If there is no member democracy at the resort, it is better to buy somewhere else.


----------



## craigrow

Just curious, when exactly did Diamond purchase Sunterra and take over management of the Point?


----------



## Apelila

*Suntera/Diamond 2007*



craigrow said:


> Just curious, when exactly did Diamond purchase Sunterra and take over management of the Point?



My last Suntera Maintenance Fee invoice was dated for 1/12007.
My First Diamond Maintence Fee invoice was dated for 10/17/2007 Due: 1/1/2008.


----------



## MadOwner

[Deleted at request of poster]


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## timeos2

MadOwner said:


> UPDATE: The owners group www.poipuowners.org WILL be taking up the fight against DRI. Please give them time to update their contact list and to get organized. This group is open to ALL individuals impacted by the recent assessment (deeded owners and points). They are currently working on communication for all those who have registered with the site.
> 
> CDOPP Home Page
> www.poipuowners.org



While it is a great idea to get the owners together in a coordinated  action the lack of simple news updates/posts on that web site (it appears the newest item is over a year old and has actually been addressed) doesn't lead to willing owner participation.

Owners look for UPDATES and proposed action. If they are serious about this they need to get updates and new information NOW!  Otherwise those that take a quick visit / look will quickly dismiss it as a dead organization.  I hope they make changes to the site quickly or they will lose whatever momentum they may have.


----------



## lv_maui

We have heard nothing but bad news from that group as far as their handling of money contributions and keeping the site up to date.  John is right, you need to get the site up to date and do it every day to make a difference.  



timeos2 said:


> While it is a great idea to get the owners together in a coordinated  action the lack of simple news updates/posts on that web site (it appears the newest item is over a year old and has actually been addressed) doesn't lead to willing owner participation.
> 
> Owners look for UPDATES and proposed action. If they are serious about this they need to get updates and new information NOW!  Otherwise those that take a quick visit / look will quickly dismiss it as a dead organization.  I hope they make changes to the site quickly or they will lose whatever momentum they may have.


----------



## lv_maui

*I have to ask*

I said that I would no longer post and I am violating my rule.

I am really confused as to what the owners want from Diamond at this point.  There is so much misinformation out there and when you get down to the "nitty gritty", I am not sure what we want from DRI.

The only thing that I think some owners should be upset about and demand rescision and money refunds is for owners who have purchased in the recent past such as 2 years since it seems like the disclosure was not adequate.

But what is it that we want:
1.  I think we want better payment terms.
2.  I think we want more disclosure and transparency.
3.  I think we should ask for DRI to eliminate the clause in the management agreement that specifies that we need 50% of all owners to change managers.

Past that, I am not sure what you all want.  Do you want a vote of all owners to decide if they want the repairs or not?  What else?





MadOwner said:


> UPDATE: The owners group www.poipuowners.org WILL be taking up the fight against DRI. Please give them time to update their contact list and to get organized. This group is open to ALL individuals impacted by the recent assessment (deeded owners and points). They are currently working on communication for all those who have registered with the site.
> 
> CDOPP Home Page
> www.poipuowners.org


----------



## billstellar

*Payment of Special Assessment*



bkahoona1 said:


> Here are some of my major concerns:
> 
> 
> 
> 4.  I do not think that pursuing lawsuits will amount to anything but the resort's ultimate demise.  I am willing to pay (preferably with a more reasonable payment plan) the fees necessary to fix the resort but I do not want to put money into a "sinking ship" and unfortunately I think that is where this is headed with the current plan.  If too many owners default and/or sue and fight the progression this will never work.
> 
> 5.  How do we know that if we pay the total assessment that the repairs will be done correctly and who will monitor this?  I don't have much faith in the current management team and we need mote transparency and communication as this process proceeds.
> 
> 6.  Why should Diamond get any type of gain out of the current problem?  If any part of the assessment is lining diamond's pockets in any form then that is a huge problem and I believe I saw some amounts that they will get from the current budgeted amount.  Wound be nice to see at least 95 % of our the funds going directly to the repairs and not management fees!!
> 
> 7.  If the current owners do not unite and progress down a logical and thought-out plan to rescue this resort then anyone playing into the assessments may just as well burn or flush the money down the toilet because that is what the ultimate outcome will be.  The foreclosures. defaults, lawsuits and poor management and planning of where the assessment fees go will be the recipe for disaster.
> 
> 
> 
> BC



I have to agree here.  How we got here is now of less interest to me that finding out how to spread the SA over the project duration to lessen the annual cost.  A trust should surely be in place to safeguard our funds. The threat of lawsuits from either side are simply unproductive. Can CDOPP (Home Page www.poipuowners.org) perhaps lead us to a better agreement (or are they too combatativefor that role?)


----------



## bogey21

From the prospective of an outsider looking at the situation I see a hugh problem with the number of Owners who decide that paying the amounts assessed (regular and special) will be a hardship and will choose to default.  IMO this could bring the whole thing down.  Sure, DRI can chase the defaulters and ultimately collect a decent portion of the money but at a large cost.  Again IMO, even if they eventually collect a significant portion of the regular and special assessments getting enough cash in a timely manner is going to be a big time problem.

George


----------



## billstellar

lv_maui said:


> I said that I would no longer post and I am violating my rule.
> 
> I am really confused as to what the owners want from Diamond at this point.  There is so much misinformation out there and when you get down to the "nitty gritty", I am not sure what we want from DRI.
> 
> The only thing that I think some owners should be upset about and demand rescision and money refunds is for owners who have purchased in the recent past such as 2 years since it seems like the disclosure was not adequate.
> 
> But what is it that we want:
> 1.  I think we want better payment terms.
> 2.  I think we want more disclosure and transparency.
> 3.  I think we should ask for DRI to eliminate the clause in the management agreement that specifies that we need 50% of all owners to change managers.
> 
> Past that, I am not sure what you all want.  Do you want a vote of all owners to decide if they want the repairs or not?  What else?



I cannot speak for others Iv_Maui, however for  your 1. payments over the project duration would help as would payment into a trust (too many unknowns to risk my money on others' defaults), 2. yes to this one with better PR from DRI and HOA and 3. I was not aware of; it is undemocratic and unfair to the individual owners and favours the block votes, however it is perhaps irrelevant to the present situation (given that DRI does not seem to have caused the water problem as they inherited it, and they, albeit in a heavy handed manner, have accepted their responsibility as managers to fix the problem (from what I have seen in these posts.)  I would however like to see proportional representation on the HOA.  63% of owners do not seem to have a voice in anything.


----------



## billstellar

lv_maui said:


> We have heard nothing but bad news from that group as far as their handling of money contributions and keeping the site up to date.  John is right, you need to get the site up to date and do it every day to make a difference.



If the owners group is proving to be ineffective is there an alternative group that is ready and able and willing to unite the owners?  I have the feeling that we are venting a great deal, however we are unfocussed and lack direction so the owners group did seem to be the best (only) option for coordinated action.  The membership of 500 is clearly insufficient if the 63% is made up of around 7000 people.
ps I coopted your disclaimer Iv_Maui - hope you don't mind.
__________________
Whatever I post is my personal opinion and is in no way intended to be, or should be construed to be, an indictment of any company or individual.


----------



## billstellar

dougp26364 said:


> For those who have not been able to find the online DRI site which links to your HOA newsletters, financial information and many other owners documents, here's the link http://www.diamondresortshoa.com/splash.aspx . You will need to register and create a login on ID to access your resorts information.



I looked here Doug and there is an email address for questions.  Perhaps if owners all ask for a more reasonable period to pay we may get a positive response.  http://www.diamondresortshoa.com/specialassessment.aspx.  Also we can maybe ask why a Trust is not available for the funds.

__________________
Whatever I post is my personal opinion and is in no way intended to be, or should be construed to be, an indictment of any company or individual.


----------



## Carolinian

You know, one confidence builder for the membership that DRI just could try is to voluntarily hand over control of the HOA BOD to the members.  That should give them more faith in things getting done properly.




bogey21 said:


> From the prospective of an outsider looking at the situation I see a hugh problem with the number of Owners who decide that paying the amounts assessed (regular and special) will be a hardship and will choose to default.  IMO this could bring the whole thing down.  Sure, DRI can chase the defaulters and ultimately collect a decent portion of the money but at a large cost.  Again IMO, even if they eventually collect a significant portion of the regular and special assessments getting enough cash in a timely manner is going to be a big time problem.
> 
> George


----------



## timeos2

billstellar said:


> I cannot speak for others Iv_Maui, however for  your 1. payments over the project duration would help as would payment into a trust (too many unknowns to risk my money on others' defaults), 2. yes to this one with better PR from DRI and HOA and 3. I was not aware of; it is undemocratic and unfair to the individual owners and favours the block votes, however it is perhaps irrelevant to the present situation (given that DRI does not seem to have caused the water problem as they inherited it, and they, albeit in a heavy handed manner, have accepted their responsibility as managers to fix the problem (from what I have seen in these posts.)  I would however like to see proportional representation on the HOA.  63% of owners do not seem to have a voice in anything.




1 - What good would a trust do? The money would still have to be used ASAP to get the project underway & as soon as that money is spent if the next round doesn't come in as planned then the whole thing is at risk of collapse.  A trust gets you no benefit I can see.
2 - Naturally it is always better that the Board/Association/DRI communicate more but how will that change the message? There is a serious structural and facade problem that has been simmering for years without repair. Now it has a price tag to correct.
3 - Any change to the percentage required to change anything about the governing documents has to require a super majority as the owners (at least in theory) purchased based on those facts.  Plus the 63% HAVE a voice - their vote - the majority of which have done exactly zero to use that power.  That isn't DRI's fault nor does it require any change to the documents.


----------



## bogey21

timeos2 said:


> 1 - What good would a trust do? The money would still have to be used ASAP to get the project underway & as soon as that money is spent if the next round doesn't come in as planned then the whole thing is at risk of collapse.  A trust gets you no benefit I can see.





Again, I am an outsider looking in thus have no stake in this.  But what if one of the provisions of the Trust was that nothing could be spent until a certain threshold of dollars had been collected in each round?  

George


----------



## dougp26364

timeos2 said:


> 1 - What good would a trust do? The money would still have to be used ASAP to get the project underway & as soon as that money is spent if the next round doesn't come in as planned then the whole thing is at risk of collapse.  A trust gets you no benefit I can see.
> 2 - Naturally it is always better that the Board/Association/DRI communicate more but how will that change the message? There is a serious structural and facade problem that has been simmering for years without repair. Now it has a price tag to correct.
> 3 - Any change to the percentage required to change anything about the governing documents has to require a super majority as the owners (at least in theory) purchased based on those facts.  *Plus the 63% HAVE a voice - their vote - the majority of which have done exactly zero to use that power. * That isn't DRI's fault nor does it require any change to the documents.



This is problem #1 for owners. If the majority doesn't like the direction DRI is going, then VOTE! Personally, since S. Cloobeck came back in and took over, I've been happy with the direction of DRI. But then again, I purchased into DRI for the quality and fully expect the quality to be maintained. I also expect the MF's stay within reason but not to the point my ownerships aren't maintained. I've had issues with DRI but those were when Mr. Cloobeck had taken a less active position with DRI and I was watching my ownerships decrease in quality (again, IMHO). I also watched the HOA decrease cash reserves to dangerously low levels in order to keep owners happy. This resulted in a SA of over $1,000 for most Suite's owners because the money wasn't there when the units needed refurbishment after approx. 15 years. I NEVER want to see the HOA fail to plan for necessary future refurb's again.

I believe what we're seeing is a very vocal minority. Sure I'd be ticked to get such a huge bill on short notice but, the work is going to have to be done no matter who the management company might be. DRI inherited this long standing problem from the former management company, who apparently did nothing. It sure would have been less expensive had the problem been addressed years ago when it became apparent there was a water intrusion issue.

Yes the assessment is huge. Yes I'd have been shocked and would have difficulty finding a way to pay such a large assessment. But I wouldn't go blaming DRI. At least not in this case. DRI is mearly the messenger. It does no good to shoot the messenger. Right now, it does no good to change the messenger either. The problem, and the expensive solution, will still exist. In the end any owner will still be stuck holding the bag and would have no matter WHO the management company might be.


----------



## lv_maui

*Special assessment*

Not exactly on point, but I heard that Diamond is purchasing the assets of Pacific Monarch out of their Bankruptcy.  Sounds like a pre-arranged BK with a concurrent sale.


----------



## lv_maui

*Is it confirmed - Pacific Monarch has biled Bankruptcy*



lv_maui said:


> Not exactly on point, but I heard that Diamond is purchasing the assets of Pacific Monarch out of their Bankruptcy.  Sounds like a pre-arranged BK with a concurrent sale.



CAse #11-24270 in Central California filed on 10/25.

I hear that Diamond is buying certain assets.


----------



## billstellar

timeos2 said:


> 1 - What good would a trust do? The money would still have to be used ASAP to get the project underway & as soon as that money is spent if the next round doesn't come in as planned then the whole thing is at risk of collapse.  A trust gets you no benefit I can see.
> 2 - Naturally it is always better that the Board/Association/DRI communicate more but how will that change the message? There is a serious structural and facade problem that has been simmering for years without repair. Now it has a price tag to correct.
> 3 - Any change to the percentage required to change anything about the governing documents has to require a super majority as the owners (at least in theory) purchased based on those facts.  Plus the 63% HAVE a voice - their vote - the majority of which have done exactly zero to use that power.  That isn't DRI's fault nor does it require any change to the documents.


You are of course correct as the Trust funds would be released as work is done, and yes the work has to be done.  However in the worst case a Trust keeps the money for the purpose for which it was paid, and in the case of a company failing the money in the Trust is not part of the company's assets.  If there are major defaults then those who stay in the game have a measure of protection.  With regard to voting I agree we are a silent majority, however that may be because we have no nomination from our own ranks - which of course can be said to be our own "fault" as we are free to nominate - it is a bit of a "chicken and egg" situation. With respect to Doug's response it is indeed unfortunate that some have taken to attacking the messenger, however in any situation people will vent before they come to a conclusion.  Doug is right as DRI have addressed a situation that was neglected so they have done the right thing.  The question remains whether or not DRI (and the HOA) can continue to do the right thing by being more reasonable to those who are cryng for help due to a sudden demand for funds which strains their resources (removal of priviledges is not appropriate if rescheduling can be arranged.)  I certainly hope they can do so as the vocal minority is in many cases likely to awaken the slumbering majority as recent history has demonstrated.  Rescheduling payments may not adversely affect the project and would go a long way to address the concerns of some members.  The HOA, our representative, is silent on the issue of those who need some consideration in this case.


----------



## T_R_Oglodyte

billstellar said:


> However in the worst case a Trust keeps the money for the purpose for which it was paid, and in the case of a company failing the money in the Trust is not part of the company's assets.  If there are major defaults then those who stay in the game have a measure of protection.


I'm confused by this. For all practical purposes failure of the AOAO is the same as failure of the resort. If the AOAO (Association of Apartment Owners) for Point at Po'ipu bellies up, then how are those who "stay in the game" protected? For that matter, what would it even mean to "stay in the game" in that circumstance?


----------



## billstellar

T_R_Oglodyte said:


> I'm confused by this. For all practical purposes failure of the AOAO is the same as failure of the resort. If the AOAO (Association of Apartment Owners) for Point at Po'ipu bellies up, then how are those who "stay in the game" protected? For that matter, what would it even mean to "stay in the game" in that circumstance?



Of course not being a lawyer I may be wrong, however if a company bellies up then surely any money left in a Trust set up for the purposes of reconstruction can go back to those who paid into the Trust.  So they have a measure of protection. (Here a Trust would essentially hold the funds in escrow on behalf of owners for use by DRI for the re-construction only.)  Staying in the game would mean not defaulting and paying the SA into the Trust in the "hope" that all the water damage will be repaired and the resort will have a bright future.  If the resort bellies up it is probably "game over" and no-one wants that outcome.  I would be happy to pay into a Trust on a reasonable schedule with some rules on the release of funds for reconstruction.
__________________
Whatever I post is my personal opinion and is in no way intended to be, or should be construed to be, an indictment of any company or individual.


----------



## timeos2

billstellar said:


> Of course not being a lawyer I may be wrong, however if a company bellies up then surely any money left in a Trust set up for the purposes of reconstruction can go back to those who paid into the Trust.  So they have a measure of protection. (Here a Trust would essentially hold the funds in escrow on behalf of owners for use by DRI for the re-construction only.)  Staying in the game would mean not defaulting and paying the SA into the Trust in the "hope" that all the water damage will be repaired and the resort will have a bright future.  If the resort bellies up it is probably "game over" and no-one wants that outcome.  I would be happy to pay into a Trust on a reasonable schedule with some rules on the release of funds for reconstruction.



The idea is laudable but I really don't think it protects anyone.  The trust would exist to pay the repair costs - they wouldn't know at the time of construction/payment if the next round will get paid or not thus they would spend the trust until the next payments were due.  

I reminds me of the Association who put the money - ALL OF IT - for an upcoming renovation into an escrow / trust type investment as they were very leery of the ability of the contractor to supply and finish the work.  All went well with phase 1 but they didn't pay the bill & the contractor accepted it as it was safely with the trustee. They went ahead and collected for Phase 2 - got the supplies on site and were ready to start the work - but the 1st payment had to made first. They made the request and got a notice that the ESCROW COMPANY /Trust had filed for bankruptcy and couldn't pay!!  Longer story short they only got 33% of the total back from insurance and then about 10% more from a final accounting. But they had PAID for this "service" and insurance coverage to "protect them" and it was anything but. Ever since our management company has advised against any type of escrow/trust for reserves or special assessments based on this true life experience one of their resorts suffered. 

And oh yeah, maybe a resort can be "jinxed".  When the resort involved was being built one of the major structures - an extremely large metal building with a wide open floor space for three tennis courts & another 1/3 for a recreation center - was knocked down not once but twice during construction from hurricanes in an area that hardly ever has one no less two in a single construction season.  Plus a few years later the resort went bankrupt due to bank shenanigans on another development the developer was building causing the whole company to be declared insolvent. 

Fortunately an independent management was able to step in and turn it all around (for the resort owners not the developer/bank) but the damage lingered for years.  Now it is ancient history but all involved have never forgotten how things can go terribly wrong no matter how much you try to avoid it. 

I wouldn't recommend doing anything that costs extra or delays the project that isn't required.  Getting too gun shy can sometimes be just as bad as charging ahead without a clue.  Go with the middle road, conservative assumptions and it will most likely work out.  A trust may sound good but it wouldn't really get the owners much if anything in protection IMO.


----------



## T_R_Oglodyte

billstellar said:


> (Here a Trust would essentially hold the funds in escrow on behalf of owners for use by DRI for the re-construction only.)


This comment reinforces a point that so many people seem to have a hard time grasp that DRI is not the resort.

DRI does not own the resort. DRI would not do any construction at the resort. DRI would not be paying contractors or engineers.  DRI would not be holding any of the construction money.

*****

Personally my interest is in reducing the cost of construction. Throwing a trust into the middle of the process is going to directly add the trust fees to the cost of the project, plus by making project administration more complex will further add to project overhead.

If you want to control costs a big place to start is by simplifying instead of complicating.


----------



## MadOwner

*Concerned Deeded Owners at the Point at Poipu( CDOPP)*

November 1, 2011

Note: We will be changing the name to reflect that this group consists of deeded owners and point’s program owners (Hawaiian Collection).  We are looking for a remedy for both ownership groups as a collective group of vacation owners.

We would like to welcome all of the new and existing registered members, as well as those of you that have not yet registered on our website.  We appreciate your patience while we have been gathering information and reorganizing the Board of Directors for CDOPP.  We are receiving a lot of new registrations on a daily basis and we are working diligently to get information to you.  The website is being worked on daily to provide better communication and more content, as we look to make positive changes.

Several years ago, many owners at the Point at Poipu banded together and formed CDOPP with the intent of collecting contributions in an effort to get the Association Membership List released to CDOPP.  In addition, CDOPP launched the website www.PoipuOwners.org as an effort to inform and further identify owners that shared the same concerns. 

The board members devoted countless hours collecting information, talking to concerned owners, meeting with government officials, seeking legal consultations, documenting the complaints made by owners of the Point at Poipu, as well as many other actions.  Much of the work had to be done “behind the scenes” in an attempt to keep things confidential.  In the winter of 2011, the website was hacked by someone forcing the Guestbook page to be shut down.  This led members and others to believe that the group was inactive.  In addition, the newsletters were making their way into to the hands of Diamond Resorts employees through a member that registered as a concerned owner, which we now believe may have been an employee of Diamond Resorts or one of their affiliates.  

In response to the shocking Water Intrusion Assessment Invoice, one of the new board members, Tammy Sona started the Facebook page Point of Poipu Angry Owners (https://www.facebook.com/pages/Point-of-Poipu-Angry-Owners/148027451960608?sk=wall&filter=2). Between the new Facebook page and the water intrusion assessment notice, there has been an increased awareness of our group and the realization that there is an even stronger need to band the owners together.  Many are looking to our group to assist in protecting our resort from the poor decisions made by the Board of Directors at our resort under the guidance of the current management company, DRI.  The registrations on the website have been growing in numbers very rapidly over the past few weeks and we expect that to continue as more owners are becoming aware of our efforts.

Here are a few basic facts that we would like to share with you.  

1.   The 2012 AOAO & VOA Approved Budget consists of various line items.  We would like you to be aware that Diamond Resorts is collecting a total of $3,265,745 for management and corporate administration fees.  This does not include the $612,732 budgeted for administration fees.

2.  The water intrusion fee is nearly $6,000 per deeded week for the deeded owners and an unknown amount for the Points people in the DRI Hawaiian Collection. This is an economic hit of at least $65 million dollars for the deeded and Hawaiian Collection (points/Club/Trust) owners.  “Your” VOA & AOAO Board of Directors voted to require this payment with the terms and penalties presented in the assessment.  “They” decided to spread the assessment over 3 years instead of giving owners the option to spread it over a greater number of years to make it more affordable.

3.  The State of Hawaii has received dozens of complaints to act on, and they need to receive even more to get them to enforce their own laws concerning time-shares in the State of Hawaii. 

4.  “Your” elected Board Member, Cleana Dean, is the mother of Linda Riddle (a Vice President with DRI) and was elected to the Board of Directors without disclosure regarding her relationship with DRI. 

5.  It appears that DRI has taken over the Point at Poipu in its entirety with no resistance except for the actions initiated by our members group.

The initial goal of this group (CDOPP) was to obtain the membership list consisting of contact information for all of the owners of the Point at Poipu to provide a direct line of communication with other owners for voting purposes.  Without this list, we believe that it is virtually impossible to obtain the support of other members and also to ask them to vote (or assign their proxy to a representative of CDOPP) for OWNERS, not affiliated with DRI at the next election.  We believe this has to be done in order to gain the majority interest on the boards of OUR resort.  

The identified goals of CDOPP going forward are as follows:
1.  Obtain the contact information of as many of the owners as possible.
2.  To continue our efforts to obtain a copy of the membership contact list.
3.  Assist owners with information about candidates that we support in upcoming elections.
4.  Provide communication to owners beyond what the current management company provides.
5.  To have an option regarding the costs of our management fees and the ability to seek other qualified management companies or to change the structure of management at our resort.
6.  Assess the options available regarding the Water Intrusion issues
7.  Take action to make changes to the existing assessment, including working out an agreeable payment solution with our AOAO and/or VOA Board of Directors.  It’s pretty easy to defend their actions to us individually, with a group this size, we believe they will be compelled to make some changes.

The new Board of Directors has been working diligently and we are looking forward to sharing the actions that are being planned to help achieve the goals that we have identified with you.

CDOPP 
Keith Paulsen – President
www.PoipuOwners.org

If you have contributed to CDOPP previously and would like your contribution returned, contact us and we will return your contribution immediately.  If we do not receive a request for a refund by November 15, 2011, we will assume that you want to continue to support the efforts of CDOPP.

The information and opinions expressed in this letter are the opinions of the members of CDOPP.  For legal purposes, we ask that you always include this disclaimer in your correspondence with CDOPP or other written communication.  Contributions and/or registration to CDOPP by any Diamond Resorts International employees, relatives of employees, subsidiary or affiliated companies, or any other person not purely identified with the purposes of the CDOPP cause, is strictly prohibited and legal action will be taken as deemed prudent and necessary.


----------



## lv_maui

*Owners List*

I was curious as to how to get the owners list other than Diamond.  As I had stated earlier, the County recorders office has the names of the owners listed but their addresses are that of the resorts.  Someone could get the owner's names for deeded owners by doing a search on this website:

https://boc.ehawaii.gov/docsearch/nameSearch.html;jsessionid=86C51A7319A4F0F79F9FD25EFF535EC7.kolea

If you put in Poipu Resort Partners, and then sort by TSD which stands for Timeshare Deeds, you can get all owners names online just sitting at your computer.  But that is only the deed owners not point collection owners.

After that, I do not know any reliable way of getting the addresses of the owners.  I am thinking that someone knowledgable in Skip Tracing ?? might be able to help.


----------



## T_R_Oglodyte

lv_maui said:


> If you put in Poipu Resort Partners, and then sort by TSD which stands for Timeshare Deeds, you can get all owners names online just sitting at your computer.  But that is only the deed owners not point collection owners.



When I did that it only served up 135 total records, a good number of which were between the HOA and Poipu Resort Partners.  There are many deeds that don't seem to be returned by this search.


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## billstellar

billstellar said:


> (Here a Trust would essentially hold the funds in escrow on behalf of owners for use by DRI for the re-construction only.)





T_R_Oglodyte said:


> This comment reinforces a point that so many people seem to have a hard time grasp that DRI is not the resort.
> 
> DRI does not own the resort. DRI would not do any construction at the resort. DRI would not be paying contractors or engineers.  DRI would not be holding any of the construction money.


I think I grasp that point, however adding the layer of the Trust seems to have good arguments against it, especially the one earlier about Escrow companies going bust.  An earlier point regarding more favourable payment terms may be the way to go forward if the HOA (or whoever is our representative) can be persuaded.  I, like others, am simply searching for a soluton that would help folks who wish to keep their ownership, and see a viable resort emerging, to pay the SA over a reasonable period rather than the 3 years the HOA has chosen.


----------



## T_R_Oglodyte

billstellar said:


> I think I grasp that point, however adding the layer of the Trust seems to have good arguments against it, especially the one earlier about Escrow companies going bust.  An earlier point regarding more favourable payment terms may be the way to go forward if the HOA (or whoever is our representative) can be persuaded.  I, like others, am simply searching for a soluton that would help folks who wish to keep their ownership, and see a viable resort emerging, to pay the SA over a reasonable period rather than the 3 years the HOA has chosen.



Unfortunately, we are not privy to all of the discussions of the board.  That being said, I think that in selecting the three-year time frame the Board was trying to balance project cost and payment shock, against a backdrop where money has to be collected in advance of construction (since a obtaining bank financing for a project such as this isn't feasible).

Again, one of the assumptions that people seem to be making is that the project can simply be extended without significantly impacting project cost.  That just isn't true.  A number of factors come into play.

First is that it's always cheaper for a contractor to do a project in one concerted effort rather than stretching it out over time.  For every project there is an optimum length construction window, within which the contractor can most effectively plan and deploy resources.  Any movement outside of that window - be it fast-tracking to complete a project quickly or slowing down the project to meet other constraints - increases the project costs.

Second is that stretching out a project adds to uncertainly in the prices and availabilities of materials.  If you want to negotiate a firm price for the contract - where the contractor assumes those risks - the contractor will add extra contingencies to the project cost.  And those risks don't increase linearly -  They increase dramatically each year.  

Third is that you also need to factor inflation into the picture.  If you stretch out the project and the costs go up as discussed above, you not only need to cover the added project cost, you need to collect yet another amount extra over the life of the project to address inflation.  So by stretching the payment period over six years, that assessment of $2000 per interval for three years might turn into something more like $1300 per interval for six years.

Fourth, you can also stretch a project out so long that contractors lose interest in the project. If the project requires significant technical expertise that must be imported - i.e., the project can't be farmed out to a local contractor but needs to be handled by someone from the mainland, they will lose interest in nursing along what becomes a small project in a distant location.  It isn't cost effective for them to work that way.

As I look at the logistics side of the proposed program it actually makes a lot of sense to me once you throw out the option of simply getting the project done in one concerted push (i.e., the lowest cost option).  It maintains a continuous level of activity at a pace that is likely to still maintain project efficiencies, and gets the project done within a period of time within which the contractor can probably obtain reasonable guarantees of pricing from vendors.  

I'm certainly interested in anything that can be done to stretch out the payment time for the project. But I suspect that is one area in which the Board has already run through the alternatives and has already pushed the schedule about as far as they reasonably can.


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## edgarrison

*Points owners*

I apologize if this topic has been covered in one of the many previous posts.  I have 10,000 points in the DRI Hawaii collection and I have the same concern as everyone else about the increased yearly maintenance fees and the "water intrusion" assessment.  I am interested in the efforts of the  organization of deeded owners who are trying to get more controll of the HOA board.  Is there a similar effort on behalf of the owners of points?

It is frustrating to read the litany of suggested remedies in these many pages of posts and to see each and every suggestion explained away by TUG members who seem very knowledgable about the situation.  I hate feeling powerless and I fail to believe we have no choice but to bend over the barrell and take it.


----------



## lv_maui

T_R_Oglodyte said:


> When I did that it only served up 135 total records, a good number of which were between the HOA and Poipu Resort Partners.  There are many deeds that don't seem to be returned by this search.



You appear to be correct.  It seems to stop in early 1996.  But when you use date ranges, you get more.  I think the issue is that there a limit of 500 records to be displayed.  So, they are there, you just need to limit with date ranges


----------



## Poobah

*Taxation w/o Representation*

Note: I posted this on another thread; it fits better on this thread

The situation at the P@P is that HOA and AOAO represent a minority interest in the resort. Steve's point is well taken that most of the deeded owners don't realize they are part owners of the resort. It has always frustrated me that people don't take an active interest in the care and feeding of this piece of paradise. 

Hopefully this will be a wakeup call to the apathetic deeded owners to get involved and take an interest in what is going on.

Looking at some of the other sites that have threads on the subject (Facebook and Redweek.com) this has been a wake-up call for the Trust members as well. There are post from owners at KBR wondering why they are paying for repairs at P@P, they don't even go there. The reason is simple: you agreed to it when you surrendered your deed. I suspect that the Trustees are also going to get a dose of frustration as well.

The subtlies of the organizational relationships that Steve has pointed out (several times) is the way we should deal with this. It is difficult for people to appreciate this because the pervaiseness of DRI thoughout the VOA/AOAO, the Trustees, and the Management Company. IMHO it is the organizational equivalent of a Mobius Strip!

If you read the letter to the owners that accompanies the MF, the DRI is never mentioned.

The bottom line nothing is going to change until the VOA/AOAO represents the majority interest in the resort. That is never going to happen unless apathetic owners get off their duffs and get proactive. We can always hope!

Cheers,

Paul


----------



## billstellar

T_R_Oglodyte said:


> Unfortunately, we are not privy to all of the discussions of the board.
> ...
> I'm certainly interested in anything that can be done to stretch out the payment time for the project. But I suspect that is one area in which the Board has already run through the alternatives and has already pushed the schedule about as far as they reasonably can.



You make excellent points as always.  As we are not privy to the details of the cash flow and the payment sources it is difficult to see how the cash flow could be addressed differently.  The ones with the deep pockets might be the management group itself.  It might be interesting to see if up front payment by them of their portion (I think I read $7Million but could be mistaken) would make any difference to the cash flow for our $43Million.  If we cannot persuade the HOA to re-open this it might be best to finance our payments and pay as requested then look at this again when buybacks return and/or the resort is restored to its former grandeur.  A good long term strategy might then be for us to vote people representing the "slumbering" majority onto the Board to avoid repeats of the actions we have seen, and CDOPP needs our support to do that.  The key for that might be to ensure we do not divide our own vote through fielding too many of our candidates simultaneously (in competition with each other.)  We need a a good strategist to plan how to accomplish this over a few elections.
__________________
Whatever I post is my personal opinion and is in no way intended to be, or should be construed to be, an indictment of any company or individual.


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## billstellar

Poobah said:


> Note: I posted this on another thread; it fits better on this thread
> 
> The situation at the P@P is that HOA and AOAO represent a minority interest in the resort. Steve's point is well taken that most of the deeded owners don't realize they are part owners of the resort. It has always frustrated me that people don't take an active interest in the care and feeding of this piece of paradise.
> 
> Hopefully this will be a wakeup call to the apathetic deeded owners to get involved and take an interest in what is going on.
> ...
> The bottom line nothing is going to change until the VOA/AOAO represents the majority interest in the resort. That is never going to happen unless apathetic owners get off their duffs and get proactive. We can always hope!
> 
> Cheers,
> 
> Paul



As you can see from the posts "getting off their butts" means acting together and it seems that other than CDOPP there is no simple mechanism to do so as the membership lists are not available (plenty of posts on this point.)  Any suggestions on how to have CDOPP found by members or have members found by CDOPP would be a good proactive starting point.  Superficially at least it seems that social networks might be the answer, however I for one am not sure how to put that in motion.  Any experts out there?


----------



## pedro47

How much would a lawsuit costs both parties and how much time would passed before a final court decision is render?


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## T_R_Oglodyte

pedro47 said:


> How much would a lawsuit costs both parties and how much time would passed before a final court decision is render?



Which "both parties"?


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## billstellar

MadOwner said:


> *Concerned Deeded Owners at the Point at Poipu( CDOPP)*
> 
> November 1, 2011
> 
> Note: We will be changing the name to reflect that this group consists of deeded owners and point’s program owners (Hawaiian Collection).  We are looking for a remedy for both ownership groups as a collective group of vacation owners.
> ...
> 3.  The State of Hawaii has received dozens of complaints to act on, and they need to receive even more to get them to enforce their own laws concerning time-shares in the State of Hawaii.
> CDOPP
> Keith Paulsen – President
> www.PoipuOwners.org
> 
> If you have contributed to CDOPP previously and would like your contribution returned, contact us and we will return your contribution immediately.  If we do not receive a request for a refund by November 15, 2011, we will assume that you want to continue to support the efforts of CDOPP.
> 
> The information and opinions expressed in this letter are the opinions of the members of CDOPP.  For legal purposes, we ask that you always include this disclaimer in your correspondence with CDOPP or other written communication.  Contributions and/or registration to CDOPP by any Diamond Resorts International employees, relatives of employees, subsidiary or affiliated companies, or any other person not purely identified with the purposes of the CDOPP cause, is strictly prohibited and legal action will be taken as deemed prudent and necessary.


Hi Keith: To whom should complaints be addressed?  Can you say if the appropriate complaint is the non-release of the member's list as it seems DRI has taken reasonable managerial steps to fix an inherited problem and we can hardly complain to Hawaii about DRI's lack of PR skills.
__________________
Whatever I post is my personal opinion and is in no way intended to be, or should be construed to be, an indictment of any company or individual.


----------



## singlemalt_18

*Wow!  Where to begin…*

We bought at KBC more than 10 years ago under Embassy.  We converted to points and became Diamond owners in the fall of 2010 – less than 90 days apparently – before _special waivers_ were being used to entice sales in Jan 2011.  *If this was an ongoing issue for a few years, at what point may they have been guilty of non-disclosure to new investors in the Trust?*

*Forget about the DRI members forum as it is useless.*  It is moderated with an iron fist at the corporate level, and as of this moment there is not a single mention of this issue to be found by anyone!  I once tried to post an open letter to Cloobeck but received an email stating that they did not think my letter was appropriate for the open forum; they instead forwarded my letter up the chain.  I did receive a personal executive contact, but it was not from the president. No surprise there. 

Although I am an owner, I am in no way a fan of DRI.  I do however agree with others that *DRI is not to blame for the issues now at hand with Poipu.* They are only guilty of piss poor communication and relationship management with their most important customers – Diamond owners.  For all of their ignorance or arrogance, they clearly show every confidence by spelling out such a multi-year assessment fee schedule.  If nothing else, one must be impressed with their confidence and conviction in choosing to go down this road. _ This ain’t your neighbor’s Netflix!_

While I understand the anger and frustration, as well as the financial hardship this imposes, my concerns are also about the big picture.  *Just how much money will I be needing to pump into this over the next few years?*  I am not convinced that any viable guesstimate can be made about current and future delinquencies, and thus the downward spiral.  This could not have come at a worse time IMO.  What impact has the economic downturn of the past few years had on delinquencies across the industry in general, SAs not withstanding?

The personal balance sheets for most of the country have been stressed for some time, and the credit markets are still quite dysfunctional.  _Unfortunately, you can’t get blood from a stone unless you hit yourself in the head._  We just stayed at the Peppertree in Atlantic Beach, NC, and there *Festiva is desperate to give away deeds to anyone willing to simply pay the annual fees.*  I wasn’t impressed.  Peppertree my friends, is not Diamond.

I have a different take on the benefits of owning in a trust, and the ability to diversify away individual property or resort risk as a result of this.  It is the same as owning a mutual fund instead of an individual stock.  The deeded owners are in a horrible position, and that is where I believe the true current risk sits. *What would a collapse of 60% of the revenue do?*  I would not be surprised if this event becomes a marker for some type of future reform for the industry, but that will be a day late and a few dollars short for many.  *Any Poipu owners that did buy-up into points (and the Diamond Trust) over the past few years should be thanking owners like me, and count your blessings – YOU MADE THE RIGHT CHOICE !!!*

Keep in mind that we were previously KBC owners and now must share in the loss with the entire group. *The protection afforded to the Poipu owners who did convert into the trust amounts to about $4,100 per week,* and here are the round numbers.  The assessment for a deeded week is ~$5,800.  Within the Trust, a 10 to 11,000 point owner (~ one prime week) is being assessed approximately $1,700 or 17 cents/point.  That is a 17 cent assessment on top of the 17 cent/point MF in the trust. So even though our cost has doubled, the sad truth is it looks pretty sweet compared to those with individual deeds.

This is a real eye opener, and I’m so glad we did not opt to buy additional points.  It was something we would have considered doing upon retirement, but as a result of this, we will make due with what we have, and limit any *additional unquantifiable future risk*.

Will it continue to be Paradise... or Paradise Lost?


----------



## Poobah

*PR Skills*

I agree with Bill that we can't really complain to the State of Hawaii that DRI has a yet to mature its PR skills. But, we can complain

.... that the elected VOA/AOAO has demonstrated a lack of reasonable fudiciary transparency to its constituency needed for a financial action of this magnitude and impact. 

There are three classes of votes at The Point @ Poipu, the Trust, the units for sell by DRI, and the deeded owners. When votes are cast, the first two classes are voted as a block and are voted in the best interest of DRI. The deeded owners (the majority) are unable to organize, inform, and motivate owners to participate simply because they do not have access to the list of all deeded owners.

We request the State of Hawaii follow its own statutes and release the owners list so that the majority, in a true democratic manner, elect a Board that truely represents all the constituents.

Just an approach.

Cheers,

Paul​


----------



## billstellar

Poobah said:


> I agree with Bill that we can't really complain to the State of Hawaii that DRI has a yet to mature its PR skills. But, we can complain
> 
> .... that the elected VOA/AOAO has demonstrated a lack of reasonable fudiciary transparency to its constituency needed for a financial action of this magnitude and impact.
> 
> There are three classes of votes at The Point @ Poipu, the Trust, the units for sell by DRI, and the deeded owners. When votes are cast, the first two classes are voted as a block and are voted in the best interest of DRI. The deeded owners (the majority) are unable to organize, inform, and motivate owners to participate simply because they do not have access to the list of all deeded owners.
> 
> We request the State of Hawaii follow its own statutes and release the owners list so that the majority, in a true democratic manner, elect a Board that truely represents all the constituents.
> 
> Just an approach.
> 
> Cheers,
> 
> Paul​




Thanks Paul for this succinct wording.  If Kieth can supply the address I am sure a number of us will write to Hawaii along these lines.
__________________
Whatever I post is my personal opinion and is in no way intended to be, or should be construed to be, an indictment of any company or individual.​


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## billstellar

MadOwner said:


> *Concerned Deeded Owners at the Point at Poipu( CDOPP)*
> 
> November 1, 2011
> ...
> 3.  The State of Hawaii has received dozens of complaints to act on, and they need to receive even more to get them to enforce their own laws concerning time-shares in the State of Hawaii.
> 
> ...



Regarding to whom to write I found a list of addresses on this web site : http://www.poipuowners.org/LINKS_9ZCV.html  .
Also there are references to this approach on the Facebook Group "Point of Poipu Angry Owners".
__________________
Whatever I post is my personal opinion and is in no way intended to be, or should be construed to be, an indictment of any company or individual.


----------



## dag2

*voluntary surrender program*



T_R_Oglodyte said:


> DRI has a voluntary surrender program; it does requure that the owner be current on all fees, so that may not help you with the special assessment.



T.R.,

I'm unable to locate this "surrender program".  How do I find the info?


----------



## fluke

*"Surrender" program*

This question was recently asked on the DRI forums and it appears the program has been recently stopped and may restart in the 2nd quarter next year.  This is the response:

Thank you for your post.  I regret to tell you that at this time Diamond is not accepting voluntary surrenders.  You are still welcome to sell your week, if you wish, but be careful in searching for a resale company to assist you with this.  Be sure to check references, and also with the Better Business Bureau (BBB) and attorney general both in the state where you live as well as the state in which you own.

It may be that Diamond will again accept surrenders after the second quarter of next year, but you will need to check on this closer to the middle of next year..


----------



## fluke

You may draw your own conclusion but perhaps they stopped it as the Point at Poipu special assesment was announced.  And presumedly the assesments will be collected or legal liens placed by mid next year.


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## timeos2

singlemalt_18 said:


> I have a different take on the benefits of owning in a trust, and the ability to diversify away individual property or resort risk as a result of this.  It is the same as owning a mutual fund instead of an individual stock.  The deeded owners are in a horrible position, and that is where I believe the true current risk sits. *What would a collapse of 60% of the revenue do?*  I would not be surprised if this event becomes a marker for some type of future reform for the industry, but that will be a day late and a few dollars short for many.  *Any Poipu owners that did buy-up into points (and the Diamond Trust) over the past few years should be thanking owners like me, and count your blessings – YOU MADE THE RIGHT CHOICE !!!*
> 
> Keep in mind that we were previously KBC owners and now must share in the loss with the entire group. *The protection afforded to the Poipu owners who did convert into the trust amounts to about $4,100 per week,* and here are the round numbers.  The assessment for a deeded week is ~$5,800.  Within the Trust, a 10 to 11,000 point owner (~ one prime week) is being assessed approximately $1,700 or 17 cents/point.  That is a 17 cent assessment on top of the 17 cent/point MF in the trust. So even though our cost has doubled, the sad truth is it looks pretty sweet compared to those with individual deeds.



Better (maybe) for former deeded owners who opted to go to the Trust (but only if you ignore the substantial cost to do that change & giving up your meaningful voting rights) but a terrible "deal" for all the other trust owners.  

They tend to sell the Trust on the idea that fees are spread over more (true) but never mention that you'll pay for resorts you may never even see. And seldom do the promised "savings" in fees occur - we all know they only go up, Trust or not.  Overall I prefer to have at least a say in things (my vote) and only one property to worry about paying for.


----------



## Mr.Benny

There is a website for The Point at Poipu owners at www.poipuowners.org 

There is a movement underway with a letter writing campaign, and donations to assist with a legal fund to take DRI to court.

They are seeking injunctive relief on the Dec 31 date for the first payment and as well, seeking to enforce Hawaii State law that will compel them to turn over the owners list.  With this list, they will be able to vote DRI members off the Board of Directors and take control of their resort.


----------



## T_R_Oglodyte

Mr.Benny said:


> There is a website for The Point at Poipu owners at www.poipuowners.org
> 
> There is a movement underway with a letter writing campaign, and donations to assist with a legal fund to take DRI to court.
> 
> They are seeking injunctive relief on the Dec 31 date for the first payment and as well, seeking to enforce Hawaii State law that will compel them to turn over the owners list.  With this list, they will be able to vote DRI members off the Board of Directors and take control of their resort.


An interesting strategy, but IMHO this is absolutely doomed to failure since DRI is neither the entity that is obligated to provide names, nor is DRI the entity that is assessing members.


----------



## T_R_Oglodyte

Mr.Benny said:


> They are seeking injunctive relief on the Dec 31 date for the first payment and as well, seeking to enforce Hawaii State law that will compel them to turn over the owners list.  With this list, they will be able to vote DRI members off the Board of Directors and take control of their resort.



From a practical standpoint, rallying the deeded owners is neither important nor critical.  In fact, it simply dissipates energy that is better spent implementing a strategy that has a chance of succeeding. 

Rallying the deeded owners can succeed only if a minimum of about 95% of the deeded owners vote as a bloc for one specific set of candidates. The chances of that happening are pretty close to zero. In fact, a more realistic strategy would be to take the money people have contributed and use it to buy Powerball tickets, in the hopes of hitting the right numbers and then using the Powerball proceeds to rebuild the resort.

+++++++

Realistically, the only way that DRI members can be voted off is by taking control of the Hawaii Collection trust - replacing the DRI cronies on the Board of Directors of the Trust with Directors who are committed to then using the Trust voting power to vote DRI interests off of the Boards of the individual resorts.  The owners that need to be rallied are the owners in the Trust.  If the group is interested in replacing the resort Directors, that is the only owners list that really counts.

+++++

I frankly  have a very, very hard time taking seriously anyone who thinks they can can take control of the resort by rallying the deeded owners.  The primary thrust needs to be getting control of the Hawaii Collection trust. Without accomplishing that, nothing else matters.


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## timeos2

T_R_Oglodyte said:


> From a practical standpoint, rallying the deeded owners is neither important nor critical.  In fact, it simply dissipates energy that is better spent implementing a strategy that has a chance of succeeding.
> 
> Rallying the deeded owners can succeed only if a minimum of about 95% of the deeded owners vote as a bloc for one specific set of candidates. The chances of that happening are pretty close to zero. In fact, a more realistic strategy would be to take the money people have contributed and use it to buy Powerball tickets, in the hopes of hitting the right numbers and then using the Powerball proceeds to rebuild the resort.
> 
> +++++++
> 
> Realistically, the only way that DRI members can be voted off is by taking control of the Hawaii Collection trust - replacing the DRI cronies on the Board of Directors of the Trust with Directors who are committed to then using the Trust voting power to vote DRI interests off of the Boards of the individual resorts.  The owners that need to be rallied are the owners in the Trust.  If the group is interested in replacing the resort Directors, that is the only owners list that really counts.
> 
> +++++
> 
> I frankly  have a very, very hard time taking seriously anyone who thinks they can can take control of the resort by rallying the deeded owners.  The primary thrust needs to be getting control of the Hawaii Collection trust. Without accomplishing that, nothing else matters.



The "owners list" for the Trust deeds is very short I believe.  It is DRI.  The individual "owners" (really members) are NOT the owners anymore at the resort and would not be included in any owners list.  And as the DRI Trust is under the control of the trustee(s), who in turn are believed to be at a minimum under influence of DRI, they are not likely to ever release those names to anyone, even other Trust members. 

Your thought that this is a near impossibility for any number or reasons seems to be on the mark to me.  

And there are MUCH worse than DRI out there. None are perfect but DRi at least appears to have the best interests of the resort in mind (why not - they stand to make money on it in a number of ways from ongoing management to new sales or Trust conversions) and want it up to par.  How can even an individual owner complain about that?  The costs may be an issue of course but the very survival of the property is at stake and DRI, as the management, is acting exactly as they should to protect it. 

Much like Doug I feel a certain comfort in knowing that DRI understands the never ending need to keep these properties current.  In the past Sunterra as just one bad example, there are plenty of others including some VERY big brand names, weren't willing to pay or bill for the necessary reserves.  That will ultimately result in a very run down resort and/or serious special assessments.  This particular SA is rather unique (thankfully) but has been known to be brewing for a number of years.  Only the amount seems to  be a shock but it takes what it takes to make things right. And the owners are the ones responsible to pay.  

The other drama of any revolt to unseat the management is really just a distraction at this point IMO.  It may need to be addressed in the long term but right now it isn't the problem.


----------



## T_R_Oglodyte

timeos2 said:


> The "owners list" for the Trust deeds is very short I believe.  It is DRI.



No - it's not DRI. It's the Hawaii Collection Trust, which is a separate legal entity from DRI. The trust has it's own elected Board of Directors. 

The trust holds ~ 35%-40% of the deeds for the resort. DRI itself is also a deeded owner at the resort, holding about 5% of the deeds, leaving the remaining deeded owners at ~55%-60% of ownership. So to vote out the existing board would require that ~90% of those remaining deeded owners to vote as a bloc.  As I mentioned in my other post, there are probably better odds of winning at Powerball than there are of getting that 90% bloc vote from the deeded owners.

The trust has it's own owners list, which is the only owners list that really matters, in my opinion.  That is the only list that is worth going to the mattresses to obtain, because the whole effort to replace directors at the resort will never have enough votes in support if the Trust does not cast it's votes in favor of replacing directors.


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## Mr.Benny

There is a website for The Point at Poipu owners at www.poipuowners.org 

There is a movement underway with a letter writing campaign, and donations to assist with a legal fund to take DRI to court.

They are seeking injunctive relief on the Dec 31 date for the first payment and as well, seeking to enforce Hawaii State law that will compel them to turn over the owners list.  With this list, they will be able to vote DRI members off the Board of Directors and take control of their resort.


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## T_R_Oglodyte

Mr.Benny said:


> There is a website for The Point at Poipu owners at www.poipuowners.org
> 
> There is a movement underway with a letter writing campaign, and donations to assist with a legal fund to take DRI to court.
> 
> They are seeking injunctive relief on the Dec 31 date for the first payment and as well, seeking to enforce Hawaii State law that will compel them to turn over the owners list.  With this list, they will be able to vote DRI members off the Board of Directors and take control of their resort.


Duplicate post, so duplicate reply.

1. Suing DRI is, IMHO, a total waste of time since DRI is not the entity that is charging the assessment to owners, nor is DRI the entity that controls the owners list.

2. There aren't enough deeded owners to gain control of the resort by that means.  The only way to gain control of the resort is to first gain control of the Hawaii Collection trust.

*****

Until the leaders of the deeded owners groupls realize that the critical issue is gaining control of the trust, it's hard to take them seriously.  To me, that failure demonstrates that they haven't taken the time to understand the resort governance.   Talking about starting legal action without first grasping how the resort is governed is ..... I'll just leave it to you to supply your adjectives of choice.


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## timeos2

T_R_Oglodyte said:


> No - it's not DRI. It's the Hawaii Collection Trust, which is a separate legal entity from DRI. The trust has it's own elected Board of Directors.
> 
> The trust holds ~ 35%-40% of the deeds for the resort. DRI itself is also a deeded owner at the resort, holding about 5% of the deeds, leaving the remaining deeded owners at ~55%-60% of ownership. So to vote out the existing board would require that ~90% of those remaining deeded owners to vote as a bloc.  As I mentioned in my other post, there are probably better odds of winning at Powerball than there are of getting that 90% bloc vote from the deeded owners.
> 
> The trust has it's own owners list, which is the only owners list that really matters, in my opinion.  That is the only list that is worth going to the mattresses to obtain, because the whole effort to replace directors at the resort will never have enough votes in support if the Trust does not cast it's votes in favor of replacing directors.



Correct - it is the DRI Trust. But it is still one owner & many members. I still doubt they are under any requirement to identify the members of their private Trust (nor would those members want them to!)


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## T_R_Oglodyte

timeos2 said:


> Correct - it is the DRI Trust. But it is still one owner & many members. I still doubt they are under any requirement to identify the members of their private Trust (nor would those members want them to!)


I imagine that would depend on the laws for wherever the trust is incorporated.  Though I suppose that if the trust also has to have approval from various states in which it operates, they might be a patchwork of applicable requirements.


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## bogey21

A tough situation.  From the outside looking in (I don't own at Poipu Point) I think the owners are eventually going to have to suck it up and pay.  I would, however, hold off writing the check until the absolute last minute hoping that something positive would happen in the interim.

George


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## artringwald

*Five Stages*

1. Denial 
2. Anger/Resentment
3. Bargaining
4. Depression
5. Acceptance

Okay, I'm ready for acceptance. I'm not happy with the big SA, but I love the resort and I want to see it maintained. I'm not in the trust, but you can be sure I'll be voting next election, and I'll be looking closely at the candidates. Other than that, I really don't see how legal action has any chance of accomplishing something positive.


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## Fisch

artringwald said:


> 1. Denial
> 2. Anger/Resentment
> 3. Bargaining
> 4. Depression
> 5. Acceptance
> 
> Okay, I'm ready for acceptance. I'm not happy with the big SA, but I love the resort and I want to see it maintained. I'm not in the trust, but you can be sure I'll be voting next election, and I'll be looking closely at the candidates. Other than that, I really don't see how legal action has any chance of accomplishing something positive.



Well said.


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## MOXJO7282

bogey21 said:


> A tough situation.  From the outside looking in (I don't own at Poipu Point) I think the owners are eventually going to have to suck it up and pay.  I would, however, hold off writing the check until the absolute last minute hoping that something positive would happen in the interim.
> 
> George



If I loved the resort I think ultimately I'd come up with the money but my biggest concern would be knowing that there is going to be many, many that won't or simply can't come up with the money. What about all those defaults? Who comes up with the money to cover those associated SA payments. 

So I could see paying and then being asked for more. That is what we concern me the most.


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## timeos2

MOXJO7282 said:


> If I loved the resort I think ultimately I'd come up with the money but my biggest concern would be knowing that there is going to be many, many that won't or simply can't come up with the money. What about all those defaults? Who comes up with the money to cover those associated SA payments.
> 
> So I could see paying and then being asked for more. That is what we concern me the most.



I'm not positive what the estimated delinquency factor is under the current SA but I seem to recall it is between 10-15%.  In that case it is quite high and hopefully will cover the potential defaults that will occur.  The other part is that the early defaults will (again hopefully) be sold to new buyers near the end of the project & thus will return to paying status.  There certainly is a potential for a shortfall but they have done a relatively conservative job of anticipating the inevitable percentage of non-payments. Plus if they have adjusted reserves correctly they could conceivably dip into those if required to complete the work rather than assess a second time.  Only time will tell how this ends up going.


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## artringwald

Anybody watch House Hunters last night? They bought a house within walking distance of the Point At Poipu. I wonder if they had the house inspected for water intrusion.


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## Luv2Travel2000

*Walking Away*

I'll walk away and gladly ruin my credit. I won't need any credit for decades to come anyway. I am an owner of three weeks (2 bedroom unit) at the Point at Poipu. My regular maintenance fee per week is $1,348. Special assessment fee per week is $5,893. That's $7,241 per week owned or, for me, $21,724! There is no way in hell I am paying that or any portion of it. I do believe MANY owners will walk away, far more than the "10% default" rate that DRI is estimating and say they will cover. If it's greater than 10% then owners who stick around and pay may end up paying a lot more. No thank you.


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## california-bighorn

Luv2Travel2000 said:


> I'll walk away and gladly ruin my credit. I won't need any credit for decades to come anyway. I am an owner of three weeks (2 bedroom unit) at the Point at Poipu. My regular maintenance fee per week is $1,348. Special assessment fee per week is $5,893. That's $7,241 per week owned or, for me, $21,724! There is no way in hell I am paying that or any portion of it. I do believe MANY owners will walk away, far more than the "10% default" rate that DRI is estimating and say they will cover. If it's greater than 10% then owners who stick around and pay may end up paying a lot more. No thank you.



Not that I'm giving advise, but, in many cases like this if you file a letter with the credit reporting companies, the credit score hit you would take is often minimized by the circumstances.  And from what I've read here, some things just don't "smell" right and there will be some finger-pointing going on for a while.  It's too bad as we stayed here a few years ago and really enjoyed the resort and our stay.


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## MOXJO7282

Luv2Travel2000 said:


> I'll walk away and gladly ruin my credit. I won't need any credit for decades to come anyway. I am an owner of three weeks (2 bedroom unit) at the Point at Poipu. My regular maintenance fee per week is $1,348. Special assessment fee per week is $5,893. That's $7,241 per week owned or, for me, $21,724! There is no way in hell I am paying that or any portion of it. I do believe MANY owners will walk away, far more than the "10% default" rate that DRI is estimating and say they will cover. If it's greater than 10% then owners who stick around and pay may end up paying a lot more. No thank you.



There has to be many that simply cannot come up with that kind of money. Its a sad state of affairs for a place that is supposed to be a stress reducer not creator.


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## billstellar

T_R_Oglodyte said:


> Duplicate post, so duplicate reply.
> 
> 1. Suing DRI is, IMHO, a total waste of time since DRI is not the entity that is charging the assessment to owners, nor is DRI the entity that controls the owners list.
> 
> 2. There aren't enough deeded owners to gain control of the resort by that means.  The only way to gain control of the resort is to first gain control of the Hawaii Collection trust.
> 
> *****
> 
> Until the leaders of the deeded owners groupls realize that the critical issue is gaining control of the trust, it's hard to take them seriously.  To me, that failure demonstrates that they haven't taken the time to understand the resort governance.   Talking about starting legal action without first grasping how the resort is governed is ..... I'll just leave it to you to supply your adjectives of choice.



The Deeded Owners Group is now open to Trust Members, I do not know if COPP is going after both lists, however as you said in an earlier post owners controlling boards is a long term objective.  Going for legal action against DRI is a waste of time and money and not something I support (and have told COPP so.)  Going after the lists (maybe both) is worthwhile I believe and I support thaat action.  On the SA, basically as other posters say, it is either opt out or buy in depending on individual situations.  For my part I have decided to pay the first installment in January sometime and wait for the next step - how many defaults are there - before making the next decision.  DRI has to fix the problem or close the resort.  The latter is unlikely as many poster have said. I like your posts - very pointed and "on the nose" so I hope COPP is reading them.
__________________
Whatever I post is my personal opinion and is in no way intended to be, or should be construed to be, an indictment of any company or individual.


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## T_R_Oglodyte

billstellar said:


> The Deeded Owners Group is now open to Trust Members, I do not know if COPP is going after both lists, however as you said in an earlier post owners controlling boards is a long term objective.  Going for legal action against DRI is a waste of time and money and not something I support (and have told COPP so.)  Going after the lists (maybe both) is worthwhile I believe and I support thaat action.  On the SA, basically as other posters say, it is either opt out or buy in depending on individual situations.  For my part I have decided to pay the first installment in January sometime and wait for the next step - how many defaults are there - before making the next decision.  DRI has to fix the problem or close the resort.  The latter is unlikely as many poster have said. I like your posts - very pointed and "on the nose" so I hope COPP is reading them.



That's pretty much the position that I'm in.  COPP does read my posts and considers that I am part of the problem.

As regards the trust owners list, I have doubts whether DRI can be compelled to release that information.  The Trust is not a condominium, so the law requiring disclosure of owner contact information wouldn't be applicable to the trust.  I think it's worth noting that the Trust is incorporated in Delaware, so the governing law regarding release of owners names is likely Delaware law, not Hawaii law.

COPP wants $200 per interval to support their cause.  Without evidence of any kind of credible strategy to break the DRI stranglehold on the trust, that looks to me like throwing away another $200.  (It's statements like that that make COPP think I'm part of the problem.)


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## Poobah

*COPP Strategy*

I agree with both Steve and Bill that the objective is to get the owners list so that the VOA AOAO Board can be structured to reflect the ownership of the resort.

I plan to pay the January assessment and will contribute to the COPP. I think to get the list is going to take some legal action. Again we need to establish who "owns" the list. I think it is the VOA/AOAO, not DRI.

One can't help but notice that things seem to be a little quiet on the VOA/AOA/DRi front.

Cheers,

Paul


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## T_R_Oglodyte

Poobah said:


> I agree with both Steve and Bill that the objective is to get the owners list so that the VOA AOAO Board can be structured to reflect the ownership of the resort.
> 
> I plan to pay the January assessment and will contribute to the COPP. I think to get the list is going to take some legal action. Again we need to establish who "owns" the list. I think it is the VOA/AOAO, not DRI.
> 
> One can't help but notice that things seem to be a little quiet on the VOA/AOA/DRi front.
> 
> Cheers,
> 
> Paul



My problem, Paul, is that I don't see where acquiring the Poipu owners list accomplishes anything.  The only owners list that matters is the Hawaii Collection, since there is no realistic chance of breaking the stranglehold on the Board of Directors as long as the trust is controlled by DRI.  

Spending any resources to get the Poipu owners is an utter waste as far as I can see.  Lacking any other information, for as long as COPP puts gaining access to the Poipu owners list front and center, I will continue to believe they are living in Fantasy Land.

But then, I guess that makes me part of the problem, doesn't it?


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## Jasonb334

T_R_Oglodyte said:


> From a practical standpoint, rallying the deeded owners is neither important nor critical.  In fact, it simply dissipates energy that is better spent implementing a strategy that has a chance of succeeding.



Communicating with some of the Poipu Owners group, it sounds like they do have a strategy in place and it rallying the deeded & Hawaii collection members is important.



> Rallying the deeded owners can succeed only if a minimum of about 95% of the deeded owners vote as a bloc for one specific set of candidates. The chances of that happening are pretty close to zero. In fact, a more realistic strategy would be to take the money people have contributed and use it to buy Powerball tickets, in the hopes of hitting the right numbers and then using the Powerball proceeds to rebuild the resort.



I think the people running the Poipu group have a pretty good idea that the 95% block is not realistic and the Hawaii Trust holds the key.  I doubt that they have spent this much energy and don't realize that.

+++++++


> Realistically, the only way that DRI members can be voted off is by taking control of the Hawaii Collection trust - replacing the DRI cronies on the Board of Directors of the Trust with Directors who are committed to then using the Trust voting power to vote DRI interests off of the Boards of the individual resorts.  The owners that need to be rallied are the owners in the Trust.  If the group is interested in replacing the resort Directors, that is the only owners list that really counts.



*BINGO!*  That's exactly what I heard from the Poipu group.  But they realize that you can't take over the board of the Hawaii Collection because it is also stacked with 4 Diamond Resorts International employees, so this is not an option!  Probably why the lawsuit is the most viable option (IMHO).

+++++


> I frankly  have a very, very hard time taking seriously anyone who thinks they can can take control of the resort by rallying the deeded owners.  The primary thrust needs to be getting control of the Hawaii Collection trust. Without accomplishing that, nothing else matters.



*BINGO!* I thought that a court action will include "discovery" and in that process the attorney representing the owners will have access to the 12,000 members in the Hawaii Collection as well as the deeded members at both resorts in Hawaii.  The law firm is not stupid, they will file against the associations, the board of directors in the association personally (yes they have insurance for that, and not immune if fraud exists), Diamond International Resorts, specific individuals of DRI and Does 1-100. 

The Class Action that was just settled was a minute assessment compared to the Poipu issue.  With the Hawaii resorts alone, there are 30,000 interval weeks, approximately 21,000 deeded owners + 12,000 Trust owners/members.  That's a class action waiting to happen.


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## Jasonb334

Poobah said:


> I agree with both Steve and Bill that the objective is to get the owners list so that the VOA AOAO Board can be structured to reflect the ownership of the resort.
> 
> One can't help but notice that things seem to be a little quiet on the VOA/AOA/DRi front.



The objective should be to call the Board members and tell them what a crappy decision that they made and your owners are ticked off.
The board voted for the assessment and the payment terms so you can't blame Diamond Resorts International.

Your board members can call a special meeting and change the terms.

Point at Poipu Association

Woody Cheeks 907-696-2771
Jacalyn Anderson 651-486-7423 or 651-295-8252
Troy Magdos - Jason Toste - Kathy Wheeler 

There was a post earlier that one of the board members in both associations may have resigned - a Diamond Resorts International employee.  That would leave the boards somewhat even and the remaining board members could recall this assessment until a better plan is worked out.


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## paaly

therajman said:


> We have a every-year floating oceanfront unit we bought back in 1996 when it was Embassy...and a second every-other-year oceanfront unit we bought in 2004.
> 
> We have been trying to sell both the units but on the secondary market, they go for $1500 at best and then too, they are not moving...
> 
> We are considering abandoning/walking away from both units - in this economy, shelling out $5,400 for 2012 and $3,300 for 2013 and then again $5,400 for 2014 is a financial drain that we simply CANNOT afford.
> 
> I don't know whether our credit will take a hit...or whether we can negotiate an exit or come to a deal. We are willing to give up both units. It is simply unaffordable.
> 
> I do know that Diamond will come after us with a vengeance if we default on the maintenance fees. They are one of the most ruthless companies i have dealt with in a very long time. Their customer service is atrocious - their operators are downright nasty and all they care about is money. They have little, if any, regard for their owners and they are of absolutely ZERO help. Calling them has been next to useless...essentially, the specialist I spoke to flipped me the virtual bird on the phone.
> 
> So I researched this matter on the web and came across this portal.
> 
> Please, if anyone has any idea, experience or recommendations, I would be mightily obliged.
> 
> Thanks.
> 
> Raj



Dear Raj!

I would give at least one testicle to have known when we bought our timeshare (The Manhattan Club) from the developer, in 1999, what I know now.  Finally, we did get rid of it, at an enormous loss.  It's a crooked business.  We could stay more than a week in Manhattan at a hotel for what the current maintenance fees are.  And the place was atrociously decorated -- in the "living room," anyway.  The bedroom and baths (in the Penthouse Suites) were nice.

Hindsight!  What a brilliant concept!


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## Kpaul

*Looks like COPP is gaining ground. 3rd article this month on the internet!*

Here is a posting I received 12/30/11 that may be of interest to those owning at the Point. Remember, I am not the source of the info but only passing it on.

Let the lights shine brightly. Sterling

Diamond Resorts responds in dispute with timeshare owners

Submitted to The Garden Island newspaper in Hawaii

The following information was provided to The Garden Island Newspaper some time ago. The fight is ongoing and COPP’s voice is getting louder.

LIHU‘E — In a wry turn of events, the Concerned Owners of The Point at Poipu (“COPP, LLC”, formerly “CDOPP”), a vacation owners group that was threatened with a lawsuit by the developer/management company of The Point at Poipu in March of last year, is now itself preparing a lawsuit against this corporate giant, Diamond Resorts International, Inc. (“DRI”), one of the largest hospitality companies in the world. There has been an intense struggle between DRI and many upset vacation owners at the resort in Kauai who have owned there long before DRI ever showed up. Many of these owners are alleging that they have been deceived by DRI , that DRI has serious conflicts of interest in Board decisions and does not recuse itself, that there is a shocking lack of disclosure of essential information, that it has been non-compliant with Hawaii Revised Statutes and that the resort is generally mismanaged.

The initial grassroots efforts of this owners group was spearheaded by former President of CDOPP, Rich Batchelder, who retired from the group in October of this year, leaving the group floundering. Unwilling to give up, members of CDOPP recruited a new, energized board to help them. According to Keith Paulsen, the new President, it was a Facebook page designed by one of the vacation owners, Tammy Sona, which helped revitalize the group. This Facebook page now gave members a way to communicate with each other where there had been none before. Sona currently plays a pivotal role as one of the new board members of the owners group that is now called “COPP, LLC.” The address of the Facebook page that she created is: http://www.facebook.com/pointatpoipu.

Meanwhile, the next DRI atrocity was foisted on all of the vacation owners at The Point at Poipu when they were informed in October 2011 of a $65 million assessment to repair damages to the resort from water intrusion. This outrageous price tag would be paid for by the vacation owners and in part by DRI. To illustrate, an owner that holds a vacation interest for two weeks a year is expected to pay, by January 1, 2012, more than $6,300, consisting of maintenance fees and the first-year water intrusion assessment fees. Further, this entire amount would have to be paid by February 1, 2012, in order to avoid: “…the following:

a. A one-time late charge equal to 5% of the delinquent amount.

b. An interest charge of 12% per annum from the due date.

c. General Excise Tax (GET) of 4.16666% on all of the above charges.

d. Owner will suffer suspension of use rights.

e. All future reservations will be cancelled and owner will be required to re-book the reservation and will be subject to first come, first served availability.”



If the account is not paid in full or not operating under a payment plan by February 15, 2012, “…the account will be submitted for collection action resulting in additional collection fees.” If the account is not paid by March 15, 2012, “Your Board of Directors may request any necessary actions to collect outstanding assessments. Actions may include but are not limited to the following:



1. Submit a delinquent account to an attorney.

2. Engage a professional collection agency.

3. Record a claim of assessment lien.

4. Foreclose on the claim of assessment lien.

5. Institute a small claims suit or legal action.



All related costs for the above, including General Excise Tax (GET) of 4.16666%, will be added to the delinquent member’s account.”

Tammy Sona speaks for many vacation owners when she says, “A great number of our owners are retired now, having spent many years working hard so they could enjoy their senior years vacationing in Kauai. This assessment is such a hardship on these owners, not just the ones that are retired, and some will be forced to surrender their deeds or be foreclosed on. This just isn’t right, it’s not the way you treat people.”

Vacation owners were notified of all this in October 2011, giving them THREE MONTHS NOTICE to come up with thousands of dollars for an unexpected assessment. To add fuel to the fire, two informational meetings were held on October 19, 2011, in Irvine, California, and on October 20, 2011, in San Francisco, California, just days after the assessment fees were announced. Most vacation owners, of course, would not be able to attend these meetings on such short notice and at their expense. NO informational meetings about the water intrusion problem have taken place at the resort!

The vacation owners have been led to believe that DRI has performed its due diligence regarding the $65 million assessment. To the contrary, DRI will not release pertinent information such as the consultants’ reports, engineers’ and architects’ reports, insurance policies and other documents that would help to justify this huge expense. COPP, LLC, does not dispute that some of the work is necessary, but it wants the opportunity to bring in an independent third party to assess the situation. “With many of our members having backgrounds in the construction-related industries, we’re not about to accept this without some degree of scrutiny” asserts Paulsen. DRI insists that the insurance company denied the claim for the damage, but no one except DRI has seen the denial letter. DRI has created a website for vacation owners’ perusal regarding the water intrusion problem, but nothing of real substance can be found there.

Former Diamond Resorts International Executive Vice President and General Counsel Elizabeth Brennan was quoted in a March 1, 2010, Garden Island article that stated “…the few members of the concerned owners group are not representative of the ownership of this resort and their satisfaction level.” The disgruntled owners group, renamed COPP, LLC (Concerned Owners at the Point at Poipu) has grown to well over 1,000 determined owners looking for changes to the operations and management of the resort.

Members of COPP, LLC, who have been interested in running for a position on one of the resort’s Boards of Directors have been denied by DRI their request for the resort’s membership list, needed to gain support for their candidacy by contacting other owners. This denial, both at The Point at Poipu and at the Kaanapali Beach Club in Maui, is contrary to the laws of Hawaii and to the resorts’ organizational documents. Section 514A-83.3 of the Hawai‘i Revised Statutes requires the board of directors to provide an ownership list to any owner for the use of soliciting votes.

The management and corporate administration fees at The Point at Poipu that were $721,262 in 2007 have increased to $3,265,745, budgeted for 2012--over a 353% increase during this short timeframe. The DRI executives would like us to believe that the Board of Directors (consisting of a majority of DRI employees or relatives of DRI employees) voted for these increases independent of their association with DRI.

DRI’s Vice President of Association Administration, Linda Riddle, was quoted in an earlier article, “If they aren’t happy, they could vote us out. They have the power to do that.” COPP, LLC, members disagree. “If it was that easy, it would be done immediately,” said Paulsen, “but without the membership list everyone knows that it’s virtually impossible to campaign for office, and DRI wants it that way.”

Paulsen adds “with control of the boards, including the Hawaii Collection Board of Directors, the vacation owners are at the mercy of this corporate giant. It’s really a David versus Goliath situation but this is a determined group of owners that are not going to stop fighting no matter who is running the show. I think they are underestimating the strength of the membership and the power of the internet.” Members of COPP, LLC, have been very active on the internet and others have helped support their efforts.

COPP, LLC, registration grows on a daily basis and it is a very simple registration process. Hawaii Collection members can also register by inputting their account number followed by “HC” to identify that they are a points collection member.

The Hawaii Collection consists of The Point at Poipu in Kauai, The Kaanapali Beach Club in Maui, the Polo Towers Villas in Las Vegas, and the Sedona Summit Resort in Sedona, AZ. Members of the Hawaii Collection are also charged a portion of the assessment based on the amount of points they own, whether or not they have ever used or plan to use the resort in Kauai.

Brennan and Riddle said the proscription elsewhere in 514A against directors voting on an issue in which they have a conflict of interest could apply to developer reps and deeded owners alike, and said they do not believe there are conflicts of interest when the boards vote on budgets that include fees that impact the company’s bottom line. To that Sona replied, “This statement made by DRI is almost comical. Do they really think people are that stupid? They want us to believe that their employees are going to bite the hand that feeds them, seriously?” :hysterical: 

DRI’s tactics have demonstrated its intention to completely take over the Point at Poipu. It has encouraged vacation owners to surrender their deeds in exchange for membership and points in its vacation club. It recently offered some vacation owners a reduced Water Intrusion Assessment if they would give up their deeds for points and then buy additional points in the vacation club. What DRI is not disclosing is that owners who surrender their deeds lose all voting rights and no longer have any say about how the resort is run. COPP, LLC, intends to discourage vacation owners at the Point at Poipu from surrendering their deeds. It fully intends to keep working diligently to reclaim its resort from DRI.

For more information on the concerned deeded owners, visit www.poipuowners.org


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## TSToday

We have been following issues raised by the Concerned Owners at Poipu Point for the past few years. Our Jan/Feb issue contains an article summarizing the latest special assessment. We also had a recorded interview earlier in December with Keith Paulsen, president of COPP that will be broadcast on TimeSharing Today Radio. 

A recent article in the Garden Island newspaper had the following quote from DRI. “Diamond’s Sloane said there is no evidence to show the repair fee announcement has resulted in units going up for sale”.

TimeSharing Today did receive email from owners looking to sell and several resale brokers advised us that they have received inquiries from PPT owners looking to sell or walk away. If you have any comments on the issue that we can publish, please email staff@tstoday.com Subject: PPT

We will continue to follow developments as they occur. 
Happy New Year.
Shep Altshuler
Publisher
TimeSharing Today


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