Creating a liquid timeshare resale market

[Carolinian]

Let's look at where you are coming from, Boca. You have a resale business, and you sell one brand, Bluegreen. It would indeed benefit you personally for Bluegreen's competitors to go belly up. You have already admitted that you are already sourcing supply for your business from PCC's. So you may not be running for office, but you do have obvious conflicts of interest as to why you want timeshares other than Bluegreen to die and for why you support PCC's.

The broad market consists of many, mostly small sales venues, and both eBay and PCC's are a very tiny part of that, and not at all representative. Your own business is one of those small parts of the broad market. Do you sell Bluegreen for $1?

This is completely wrong and I'll prove it.

1) If there is a hotel in the area that is operating at a profit, then there is absolutely no reason that a timeshare resort can't operate with a lower budget since it will have higher occupancy and guaranteed revenues in the form of owner maintenance fee payments. There is no reason a timeshare resort that does not have daily check ins, or daily housekeeping and has much higher occupancy rate should not be able to kill a hotel in the rental market.

2) If there aren't any hotels that are operating at a profit, then get a clue. That timeshare resort should be terminated. There is currently no mechanism for timeshares to die in most places.



WRONG. What the contract is saying is that the HOA is going to be accountable for ensuring that your resort has a non-zero value. That is a pretty damn low bar. If the HOA has the power to terminate the timeshare plan, just about any timeshare in existence today will get some positive value if the timeshare is knocked down and the land is used for something else like a new public storage facility. Those proceeds can be distributed to current owners. That would be the price floor. If a timeshare resort has a positive, non-zero value in a liquid market, why wouldn't they want to take it back? It is just profit for the HOA. Any other thought process diverts from this fundamental truth.

Moreover, if the timeshare unit had a positive value, why would the owner want to pay to give it back to the resort? They would want to sell it on the open market. If the HOA is providing that function, they can say put it into the resale program or rental program. IF the HOA is doing its job, the rental should earn a profit above the maintenance fees. That alone would encourage the owner to keep it.



WRONG. My theory assumes that HOAs should have the accountability for ensuring non-zero market value and liquidity for resales. I propose 2 timeshare acts that if adopted will naturally result in liquidity in timeshares. If a resort has positive value and is liquid, then if people want to keep it, they can. Just because IBM stock can be bought and sold any trading day of the week does NOT mean that everyone wants to sell it. It just says that the day you want to sell it, you can.



WRONG again. For the market to work, market mechanisms must be in place. There is no market maker in timeshares. PCCs and eBay do it because not enough other parties are doing it. I claim the HOAs should be mandated to do it.

Two mechanisms that would make it work are the ones I am advocating. Since I am not running for office, I can tell the truth. The truth is that if HOAs don't take deedbacks, then they will die a slow death and end up taking the deeds back anyway. If timeshares aren't allowed to die, then the entire industry will die a slow death.

If you think I am saying this because I have a vested interest in it, let me assure you that there is a ton of money to be made in dying industries. I spent a lot of time in the Telex business in the 80s and 90s. If you think back then, fax had taken over and there was nobody in their right mind who thought telex was a business that should not die. As a result, there were no competitors and margins were extremely high. I am saying this because the timesharing industry has a huge problem and without sweeping action, it will die a slow death.

 

[ampaholic]

...
1) There can be 2 laws adopted in most states tomorrow that requires
a) All new timeshare plans to self terminate after 25 years.
b) Timeshare statutes can be modified to require that all new timeshare plans must take deed backs for a transfer fee and 1 or 2 years forward maintenance fees.

Boca - Go here for some remedial education on politics - please.

This educational video is for Fed Law - but educational for the 50 states as well.

tomorrow, sheesh

 

[Carolinian]

Sometimes I wonder if you grasp the fact that HOA's are non-profit corporations not profit making businesses.

Most of the other niche players like you, often geographically based, would probably take issue with you on lack of liquidity. Together, all the niche players make up a market far larger than eBay and far more representative of the actual timeshare market.

You are a knee jerk defender of RCI, even its rentals to the general public. You have your blinders on as to why supply is getting goosed. It is the exchangers getting out because of RCI changes. That excess supply does indeed impact the resale market as it puts more supply out there. That is Economics 101 even if you want to ignore it. And RCI flooding the market with cheap rentals does NOT drive up rental prices, it drives them down. What planet are you on?

Exchange companies are not relevant in the discussion on timeshare liquidity. They are not material. Here you are just an RCI hater bringing up a non sequitur. If anything, exchange company rentals has helped with the liquidity issue because rental rates have risen as consumers see timeshares as excellent vacation alternatives to hotels and it provides an objective method for determining the value of a timeshare. There are some retailers who get very high rates for timeshares due to their brand.



I agree. Not only should all HOAs have an in house or outsourced broker, they should also have a rental program.




Wrong. I am speaking about the resale market for timeshares in general. There has been a lack of liquidity in the market in the entire time I have been in it. That's why I knew I could get into it and make a business. PCCs were a problem back then and existed even when eBay sales were great. Now, the problem is reaching crisis state where many timeshares will not move at any price. Just look at how many threads there are on the so-called Viking Ship model. I have never seen such a thing, but I wouldn't doubt they exist. Their existence would mean that there is a lack of liquidity for those timeshares. That is by definition what a lack of liquidity is.




If it is viable, then why would an HOA not want free inventory. They should be the market maker.



I am a defender of the model of taking a fee to liquidate a timeshare, not individual PCCs who use unethical tactics to get their inventory. There are a lot of companies who liquidate timeshares for a fee and as far as I can tell do it ethically. I take a transfer fee for people who want me to help liquidate their Bluegreen timeshares. I am not a PCC.

Yes, I get some of my inventory from PCCs. But not because I cut a deal with a PCC. It is impossible being a large player in the market and not get inventory from PCCs. What most people don't understand is that people who sell PCC inventory are not necessarily the PCCs themselves. I am known in the industry as a market maker for Bluegreen timeshares. So, people come to me to unload their BG points and weeks packages. Some we take, some we don't. In a buyer's market, it makes you a very popular person if you can move inventory. Just this past month, someone wanted to unload a bunch of inventory, I asked if they were a PCC, they said no. I expected to get transfers directly from owners. I got LPOAs. That surprised me. That could be from a PCC, from a donation company, from a travel club, a developer taking equity trade ins or from another type of intermediary. I don't know how most of my contacts get their inventory. Quite honestly, I don't care.

I would like nothing more than for PCCs to go away. Then, I would just work with the HOAs. If the HOAs did their jobs, there wouldn't be any PCCs. Resorts can charge a transfer fee and 1 or 2 year's maintenance fees just like a PCC can. I want for them to be confident enough with the value of their timeshares that if they had to take some back, they know they could move it quickly and to the benefit of the owners.

 

[Beefnot]

Carolinian, if nothing else, you are deeply committed to your RCI schtick. When in doubt, blame Bush Obama RCI.

 

[Carolinian]

Carolinian, if nothing else, you are deeply committed to your RCI schtick. When in doubt, blame Bush Obama RCI.

Well, no, it is something that anyone with any knowledge of what is going on would observe. When a longtime reseller observes that after certain RCI changes, suddenly a large proportion of people wanting to sell their weeks cite the negative changes in exchanging as the reason for selling, when prior to that problems with RCI were almost never cited, that tells you something. When a major developer at the Timeshare Stripped Bare conference last year in his presentation cites RCI's rentals to the general public as a major impairment not only of developer sales but also of member retention, based on what he has seen at his resorts, that tells you something. When HOA managers and board members say they were deluged with calls of people wanting out after the change by RCI to Points Lite, that tells you something. I could go on, but there are some on these boards who go so ga-ga over RCI that they would never listen.

 

[Carolinian]

In trying to get a more recent handle on the resale situation, I started taking a look at OBX sales in the August to December 2011 timeframe. I have just had time to do Nags Head before I had to stop for now. I will run Kill Devil Hills 2011 and for comparision both for the same months of 2007 when I get more time.

Here's what I have found so far for all timeshare resorts in Nags Head for these months:

prime red - 3 sales - average price $5,000
pink - 12 sales - average price $1917
white - 4 sales - average price $175
blue - 2 sales - average price $400

There were also 6 intra-family gifts, 1 prime red, 4 pink, and 1 white

There were 6 HOA gift deeds, 2 pink, 1 white, and 3 blue (all from a resort that has been pressing existing members to take on HOA weeks)
There were 5 HOA sales ranging from $100 to $4,000 - 1 prime, 3 pink, and 1 white

During this period, there were no PCC transactions, in or out.

There were 11 deedbacks - 9 blue, 1 white, and 1 pink
There were 10 foreclosures - all blue.

Initial thoughts before running comparisions is that resales are about the same, perhaps slightly down in numbers but not much, intra-family gifts are higher than what I have seen in the past, HOA resales and gifts are about normal, but deedbacks are up, perhaps foreclosures, too.

Kill Devil Hills, which has more timeshare units than Nags Head will be interesting.

 

[ronparise]

In trying to get a more recent handle on the resale situation, I started taking a look at OBX sales in the August to December 2011 timeframe. I have just had time to do Nags Head before I had to stop for now. I will run Kill Devil Hills 2011 and for comparision both for the same months of 2007 when I get more time.

Here's what I have found so far for all timeshare resorts in Nags Head for these months:

prime red - 3 sales - average price $5,000
pink - 12 sales - average price $1917
white - 4 sales - average price $175
blue - 2 sales - average price $400

There were also 6 intra-family gifts, 1 prime red, 4 pink, and 1 white

There were 6 HOA gift deeds, 2 pink, 1 white, and 3 blue (all from a resort that has been pressing existing members to take on HOA weeks)
There were 5 HOA sales ranging from $100 to $4,000 - 1 prime, 3 pink, and 1 white

During this period, there were no PCC transactions, in or out.

There were 11 deedbacks - 9 blue, 1 white, and 1 pink
There were 10 foreclosures - all blue.

Initial thoughts before running comparisions is that resales are about the same, perhaps slightly down in numbers but not much, intra-family gifts are higher than what I have seen in the past, HOA resales and gifts are about normal, but deedbacks are up, perhaps foreclosures, too.

Kill Devil Hills, which has more timeshare units than Nags Head will be interesting.

I dont understand the point of these numbers, And I sure dont see how they make your point that the best place to sell timeshares is to the use it yourself crowd because rci is bad. and there is nothing here to indicate that ebay wasnt involved in any of these sales

There is nothing here to tell me how many timeshares are for sale, and how many would be for sale if there was an effective and efficient market place. These successful transactions may be just the tip of the iceburg, when compared to how many are owners wish they could sell if only there was resale market to go to

But heres what I do understand from your numbers

of 59 transactions the HOAs were involved in 32

It seems to me that you have made Bocas point...In order for there to be an effective resale market place, the HOAs have to be involved just like they are in Nags Head

Boca may want to force them to do it, but I dont think thats necessary, now that Ive seen your numbers. Any HOA board member in there right mind would conclude from your presentation, that they ought to be taking deedbacks willingly

 

[ronparise]

Let's look at where you are coming from, Boca. You have a resale business, and you sell one brand, Bluegreen. It would indeed benefit you personally for Bluegreen's competitors to go belly up. You have already admitted that you are already sourcing supply for your business from PCC's. So you may not be running for office, but you do have obvious conflicts of interest as to why you want timeshares other than Bluegreen to die and for why you support PCC's.

The broad market consists of many, mostly small sales venues, and both eBay and PCC's are a very tiny part of that, and not at all representative. Your own business is one of those small parts of the broad market. Do you sell Bluegreen for $1?

What the heck does this mean...Are you agreeing with Boca

Boca has already said that the timeshare resale market place is fragmented and he is but a small part of it...(it seems to me that if Boca got what he is suggestiong ie hoas take deadbacks and sell them themselves; that would put him out of business) . I dont see any self interest here. and he has made the same point as you...Since HOAs are non profit, and dont have to pay for their inventory, they can provide lodging cheaper than a for profit hotel (and they can probably sell what they do own cheaply.

 

[Carolinian]

What the heck does this mean...Are you agreeing with Boca

Boca has already said that the timeshare resale market place is fragmented and he is but a small part of it...(it seems to me that if Boca got what he is suggestiong ie hoas take deadbacks and sell them themselves; that would put him out of business) . I dont see any self interest here. and he has made the same point as you...Since HOAs are non profit, and dont have to pay for their inventory, they can provide lodging cheaper than a for profit hotel (and they can probably sell what they do own cheaply.

Boca only sells Bluegreen, and I doubt that there are any member-controlled HOA's with Bluegreen (at least they was my impression from the evasive answers I got on a Bluegreen tour), so Boca deals with the corporate hierarchy, and it is corporate operatives who control the nominal HOA's at Bluegreen resorts. I very much doubt that he is suggesting that Bluegreen corporation cut him off at the pass.

 

[ronparise]

Boca only sells Bluegreen, and I doubt that there are any member-controlled HOA's with Bluegreen (at least they was my impression from the evasive answers I got on a Bluegreen tour), so Boca deals with the corporate hierarchy, and it is corporate operatives who control the nominal HOA's at Bluegreen resorts. I very much doubt that he is suggesting that Bluegreen corporation cut him off at the pass.

Again I miss your point.

My point is Boca didnt make his suggestion out of any self interest.

And how is it that you see Boca dealing with the corporate hierarchy at Blue Green...or how they could cut him off at the pass....he is already cutoff...Blue Green a preferred broker for their resales, and its not Boca

 

[Carolinian]

The point is that the market is not as dead as some who only look at eBay would have you believe. Oh, and I would not doubt that eBay was involved in a few of these sales, but many are above the range of eBay prices and that would likely rule them out. I if I limitless hours, I could look at the deeds and count the local attorneys who prepared them, which would logically rule out eBay on those, especially those drawn by the attorney who handles the closings of the local brick and mortar timeshare rental and resale broker.

As to resales, the issue is not ''RCI is bad'' but that RCI's changing exchange policies are undermining confidence among owners who exchange, causing them to bail out. That is reflected in increased deedbacks and increased foreclosures.

Having served for a number of years with the resale portfolio on my HOA board, I quite agree with you that HOA's need to be proactive in getting HOA inventory resold and in the hands of new owners. I agree that HOA's, at least in normal market conditions, should quietly accept deedbacks of owners in distress, but not shout from the rooftops that they are doing so.

When I get a chance to run the comparative numbers for the period before both the economic crash and the time that disillusionment with RCI really set in, that will show whether the market is still as strong at it was then or has declined.

As far as being able to sell weeks on the Outer Banks, I have not done so since just before I moved abroad in mid 2007, but prior to that time in rearragning my timeshare portfolio, I have sold a total of 12 OBX weeks at four resorts, all of which I sold within two months of deciding to sell them, and all for more than I paid for them. Of course I bought at good prices in the resale market myself when I acquired them. So the market always worked up until that time. Further, in holding the HOA's resale portfolio, I probably sold another 50 or 60 HOA weeks, and at that time eBay was functional. Every week we put up sold, and they were mostly blue weeks, and even blue weeks typically brought $200-300., some in the $500 range. So there was no problem with the liquidity of the market then.

I dont understand the point of these numbers, And I sure dont see how they make your point that the best place to sell timeshares is to the use it yourself crowd because rci is bad. and there is nothing here to indicate that ebay wasnt involved in any of these sales

There is nothing here to tell me how many timeshares are for sale, and how many would be for sale if there was an effective and efficient market place. These successful transactions may be just the tip of the iceburg, when compared to how many are owners wish they could sell if only there was resale market to go to

But heres what I do understand from your numbers

of 59 transactions the HOAs were involved in 32

It seems to me that you have made Bocas point...In order for there to be an effective resale market place, the HOAs have to be involved just like they are in Nags Head

Boca may want to force them to do it, but I dont think thats necessary, now that Ive seen your numbers. Any HOA board member in there right mind would conclude from your presentation, that they ought to be taking deedbacks willingly

 

[Carolinian]

Again I miss your point.

My point is Boca didnt make his suggestion out of any self interest.

And how is it that you see Boca dealing with the corporate hierarchy at Blue Green...or how they could cut him off at the pass....he is already cutoff...Blue Green a preferred broker for their resales, and its not Boca

If you had read my original post you should have picked up the two points where Boca has a conflict of interest:

1) He supports PCC's and that is because he does business with PCC's to provide him inventory.
2) He openly supported the closure of lots of timeshares, and those would be rivals to the brand he sells, again in his business interest to see rivals close.

Does every point Boca makes involve a conflict of interest? No, of course not. But those two are enough to show that his own self interest colors the positions he takes on these issues.

 

[timeos2]

I don't buy it...if it really is based on the needs of the budget these HOA/POA/BOD members really need to take IQ tests or atleast learn how to take in comparison bids and not automatically take the highest bid possible...Meh, we've read stories on here all the time about HOA/POA/BOD getting free Ipads, free dinners, free trips to board meeting in Tropical Island, they do everything BUT take MF's and put them in their pockets

These guys hike up the rates every chance they get to profit off of us

You should note also that nine out of ten times or more those outrageous expenditures and excessive fees occur when Developer Controlled Boards and Developer managed resorts are involved. It is seldom the case or the scope of abuse when an Owner controlled Board and independently managed resort is the focus. Lumping all HOA's / Boards into one group is not presenting what is really happening in most cases. The feeling that the Developer control gives them the right to demand virtually anything from owners (and the fees to support it) was a major reason we decided to get out of the Wyndham system despite the fact that we loved it. It is worse with the other even "classier" name brands from what I can see.

On the flip side every owner controlled, independently managed resort I've studied was watching out for the owners and trying to minimize fees. It is human nature to try to hold your own costs to reasonable levels. Corporate operations have no such compulsion.

 

[Carolinian]

Well, now I have 2011 Kill Devil Hills to add to Nags Head, again August through December, and since KDH includes the highest demand timeshare on the OBX, the prices as expected are higher on resales:

prime red - 12 sales - average price $8775
pink - 35 sales - average price $2461
white - 1 sale - price $500
blue - 18 sales - average price $591

blue sales averages are skewed by two Thanksgiving weeks, which have higher demand than any other blue week, all white weeks, and many pink weeks, one selling for $2,500 and the other for $3,000. Most blue weeks sold for $100 or a little more.

There were 29 intra-family gift deeds, 5 prime red, 16 pink, 3 white, and 5 blue

There were 8 gift deeds to individuals that were indeterminate as to whether they were intra-family, 3 prime red, 1 pink, 1 white, and 3 blue

There were 13 deedbacks, 8 pink, and 5 blue (I really expected more with the big special assessment at Golden Strand)

There were 14 foreclosures, 4 prime red, 9 pink, and 1 blue (all of the prime red foreclosures were at Golden Strand which had the big special assessment).

HOA's sold a total of 10 weeks during this period, mostly at OBBCI&II, and SPM management should be commended on the good prices they are getting.

There were 13 weeks deeded to PCC's, 6 blue, 3 white, and 4 pink.
PCC's deeded out 6 weeks, 1 white and 5 blue (one of the blues was a deedback to the HOA)

With Festiva having taken over the Peppertree / Equivest points club that had some weeks at OBBCI&II, it is also interesting that they deeded out 5 weeks, 2 blue, 2 white, and 1 pink (not included in above totals) and received in one prime red (undoubtedly someone suckered into their points club - boy what a bad deal!)

My initial impression without the comparative figures for the same months of 2007 yet is that prices are holding up, and volume probably too, although it may be a bit off. While I have not stopped to count family gift deeds before, my impression is that they are up. Foreclosures, deedbacks, and PCC transactions also appear to be up a bit.

To compare to eBay, the ones I have watched on auction were prime summer weeks, and there those weeks tended to go in the $2-3,000 range on the OBX at eBay. I do wish I could get some summer weeks for $1 or so to rent out, but no such luck.

I would also note the PCC transaction where they seem to have gotten some poor sap to pay them a big fee just so they could turn around and do the same deedback to the HOA that their victim could have done himself without that big fee. And this is hardly the only time I have seen this dishonest practice by PCC's.

In trying to get a more recent handle on the resale situation, I started taking a look at OBX sales in the August to December 2011 timeframe. I have just had time to do Nags Head before I had to stop for now. I will run Kill Devil Hills 2011 and for comparision both for the same months of 2007 when I get more time.

Here's what I have found so far for all timeshare resorts in Nags Head for these months:

prime red - 3 sales - average price $5,000
pink - 12 sales - average price $1917
white - 4 sales - average price $175
blue - 2 sales - average price $400

There were also 6 intra-family gifts, 1 prime red, 4 pink, and 1 white

There were 6 HOA gift deeds, 2 pink, 1 white, and 3 blue (all from a resort that has been pressing existing members to take on HOA weeks)
There were 5 HOA sales ranging from $100 to $4,000 - 1 prime, 3 pink, and 1 white

During this period, there were no PCC transactions, in or out.

There were 11 deedbacks - 9 blue, 1 white, and 1 pink
There were 10 foreclosures - all blue.

Initial thoughts before running comparisions is that resales are about the same, perhaps slightly down in numbers but not much, intra-family gifts are higher than what I have seen in the past, HOA resales and gifts are about normal, but deedbacks are up, perhaps foreclosures, too.

Kill Devil Hills, which has more timeshare units than Nags Head will be interesting.

 

[timeos2]

Real Estate is an issue for the states. The Feds should stay out of it.

Some people on this thread are saying that you can't change what is on a deed. What you can't change is the absolute fact that HOAs have bylaws that can be changed. Laws can be written to govern what HOAs can and can't do. Also HOAs have a lot of power over owners. They can force common assessments onto owners that many don't want. They can create rules where you cannot have a basketball court. They have the power of assessing owners and putting liens on title. Those who don't understand this are clueless about Real Estate law.

The idea of the forced acceptance of deed backs as an option is not a part of any changeable bylaws - it goes to the heart of the original sales agreement / property rights which cannot be changed by the HOA or even Government unilaterally. Any implementation of that plan could only be done if included in new sales - not made retroactive to previous sales or ownerships. Again, simple property law that has been in place for hundreds of years. The needs of a relative hand full of timeshare projects is unlikely to force any attempt to undo laws of that long term standing. Absolutely nothing to prevent it from being part of any NEW purchases but it would have to be disclosed and may prove problematic to those that understood what it is is committing them to.

 

[ronparise]

If you had read my original post you should have picked up the two points where Boca has a conflict of interest:

1) He supports PCC's and that is because he does business with PCC's to provide him inventory.
2) He openly supported the closure of lots of timeshares, and those would be rivals to the brand he sells, again in his business interest to see rivals close.

Does every point Boca makes involve a conflict of interest? No, of course not. But those two are enough to show that his own self interest colors the positions he takes on these issues.

Of course he supports PCCs. Actually I think he has said he supports the PCC business model of accepting ownership with the payment of several years mf paid in advance... He has said clearly that he doesnt much like any deceptive sales practices to encourage sales. It could be argued that we all support the PCCs if we have ever purchased a deed from one of them (god knows I have)

As to supporting the closure of any timeshare resorts...I dont see that in his comments...I only see the suggestion as it relares to "dead men walking" If a timeshare hoa, given that they are non profits and given that they dont have to recover a capital investment, cant compete with neighboring for profit rental properties than they are closing,,,they just dont know it yet.

 

[Carolinian]

Not all of us have bought from PCC's. I have seen too many defective deeds in their transactions. And even many here who have bought from them do not support the way they do business. It is also not just timesharers. Several state Attorneys General have expressed their dissatisfaction through fines and restitution orders. Without deceptive sales practices, PCC's would not be in business.

Of course he supports PCCs. Actually I think he has said he supports the PCC business model of accepting ownership with the payment of several years mf paid in advance... He has said clearly that he doesnt much like any deceptive sales practices to encourage sales. It could be argued that we all support the PCCs if we have ever purchased a deed from one of them (god knows I have)

As to supporting the closure of any timeshare resorts...I dont see that in his comments...I only see the suggestion as it relares to "dead men walking" If a timeshare hoa, given that they are non profits and given that they dont have to recover a capital investment, cant compete with neighboring for profit rental properties than they are closing,,,they just dont know it yet.

 

[timeos2]

I do not believe you disagree with the above.

2) If such a mandate were made to all current timeshares, there is nothing that has to touch any of the deeds. This only impacts how HOAs are allowed to operate. HOAs make changes to bylaws all the time. Every year in some instances. They can choose to take deedbacks or not. If they can make that choice, they can be mandated to do it without touching any deeds.

The deed is based on the highly regulated disclosure which forms the basis of the rights and obligations of buyers/owners. If that does not include the automatic acceptance of deeds into the ownership pool and subsequently the acceptance of those fees as due from the remaining owners then it is adding a condition of legal ownership that was not disclosed or accepted at the time of purchase. Thus it cannot legally be done. There IS a section that makes the owners responsible for the fees of unsold / HOA owned weeks but it requires that those weeks be acquired by a foreclosure process. In effect it that is the litmus test that the ownership obtained in fact wouldn't / couldn't pay the fees. Simply accepting any ownership because the existing owner feels (it may not even be fact) that it is "worthless" or they think legally assessed fees they are committed to by the original disclosure are too high or they simply tire of it is not meeting that test.

If you disagree, please tell me how an HOA can even consider having a deedback program if it violates deeded rights? If it is such a violation, then you need to call out all resorts that do it as violating owners rights. They are not.

In fact our legal representatives at at least two different resorts in two different states have advised that if we as an Association "take in" weeks (ownerships) on demand we as a Board could be subject to owner lawsuits and we would likely lose. Some take the calculated risk that no owner would spend the money to do that but that doesn't mean it is legal.

It turns out that the opposite is more of an issue. If a PCC decides to not pay maintenance fees and will not allow a deed in lieu of foreclosure, then the HOA is hosed. That owner has rights that cannot be violated. The HOA is compelled to go through the foreclosure process and spend a ton of money doing it. If I recall, TUG members applauded the efforts in some states that violated owners due process rights and eliminated the need for full process foreclosures. Where was the outrage there? Those are actual property rights being violated.

And, unfortunately, there is the legal proof that the ownership in fact would go unpaid and thus if taken by foreclosure or deed in lieu of froeclosure legally becomes the responsibility of the remaining owners. It is totally legal. So the proactive Association has a buyer in the wings that (ideally) pays the costs of foreclosure (if a deed in lieu can't be obtained) and that will take ownership of the week(s) once they are foreclosed thus basically holding the Association & Owners harmless except for the 9-15 months that the foreclosure process can take. But in virtually every case I've ever seen that group that is willing to take the foreclosed times are NOT willing to simply take back every week that owners want out of - even for free - as they too realize that is a certain death spiral and will likely swamp them in unsold inventory they can't afford to hold & pay for and still keep the eventual resale price low enough to make sense.

The process already exists to handle the delinquents. The need is an improved resale marketplace that gives the proper value to the USE of timeshares (the only real value) for the annual fees. Setting up the Associations who are not in the business of doing that to be forced to take back any and all ownerships on demand would further hurt, not help, the marketplace we need. I think we disagree on the approach needed but it is a great dialog anyway. Keep up the fresh ideas as they are needed.

 

[Beefnot]

Perhaps the HOAs for all timeshare developments need to consider themselves in perpetual sales mode. Advertise the conditions under which they will accept deedbacks--and potentially have two set of criteria, one for those who are unable to continue paying and one for those who are unwillng to continue paying--and then have rent-a-weasels or local realtors help move the inventory.

 

[am1]

Perhaps the HOAs for all timeshare developments need to consider themselves in perpetual sales mode. Advertise the conditions under which they will accept deedbacks--and potentially have two set of criteria, one for those who are unable to continue paying and one for those who are unwillng to continue paying--and then have rent-a-weasels or local realtors help move the inventory.

Needs to be one criteria. The hoa is in no position to decide who can nd cannot afford to pay.

Dog week owners should be expected to pay more to get rid of it.

 

[Beefnot]

The HOA is in no better or worse of a position than banks who have specific criteria and requirements (e.g. credit history, bank statements, hardship letters, etc.) for determining whether to extend a loan modification or approve a short sale. Those criteria and requirements could be borrowed and adapted by HOAs.

 

[ampaholic]

The problem with some sort of "deed-back system" is not whether HOA's can (legally) or should (morally) take deed-backs.

Nor is the problem whether interval owners can (legally) or should (morally) just walk away from the ongoing obligation of ownership.

The problem with any sort of "deed-back" system is agreement on the value (or lack of) of the intervals involved = appraisals.

Half the HOA can scream "if we take or are forced to take deed-backs it will make my unit worthless and my unit is solid gold" while the other half screams "if we don't take deed-backs it makes the resort topple over under debt and then my unit will be worthless and my unit is solid gold"

Without a system of reasonably accurate appraisals nobody knows who is right.

Add to the mix speculators, landlords and PCC's all adding their own numbers into the value mix and of course you get confused interval owners.

Look at used cars - as the "blue book" became widely available to everyone the "wild west" era of used car buying and selling came to a close and now it is much more orderly.

The FIRST step towards any sort of "timeshare cure" is accurate valuation.

 

[Ridewithme38]

The problem with some sort of "deed-back system" is not whether HOA's can (legally) or should (morally) take deed-backs.

Nor is the problem whether interval owners can (legally) or should (morally) just walk away from the ongoing obligation of ownership.

The problem with any sort of "deed-back" system is agreement on the value (or lack of) of the intervals involved = appraisals.

Half the HOA can scream "if we take or are forced to take deed-backs it will make my unit worthless and my unit is solid gold" while the other half screams "if we don't take deed-backs it makes the resort topple over under debt and then my unit will be worthless and my unit is solid gold"

Without a system of reasonably accurate appraisals nobody knows who is right.

Add to the mix speculators, landlords and PCC's all adding their own numbers into the value mix and of course you get confused interval owners.

Look at used cars - as the "blue book" became widely available to everyone the "wild west" era of used car buying and selling came to a close and now it is much more orderly.

The FIRST step towards any sort of "timeshare cure" is accurate valuation.

The problem with appraisal is the fact that these Timeshares don't sell until they are so indebt that there is no value...If you base a Appraisal value on the land and buildings and divide that by the owners....you aren't accounting for the fact that there is no sell-out plan built in...part of the appraisal for a car is the strip down value...even when it has not worth using, its parts still have value...Timeshares have no 'real' value

When doing appraisals for this type of property you need to account, mostly, for what the deed includes and the time... basically your appraising air

 

[chriskre]

Unless these resale weeks are in the hands of a competent real estate broker who is willing to take on this nightmare, a FSBO can forget it for the most part. So their options are nill in many resorts if HOA's refuse to deal with this situation. Of course there are exceptions in some resorts where obviously some weeks have value, but most owners of off season weeks are stuck like Chuck if a broker does not work in their resort.

Sadly I don't know too many realtors willing to take on the timeshare fiasco. I had proposed it to my broker (I'm a real estate salesperson here in FL) and he laughed it off. He wasn't interested in treading in those shark infested waters where a broker can easily be burned by the FREC. He's got too much at stake to lose with his regular business.

I applaud Boca for trying to be a part of the solution. Yeah he's making a profit and so he should, but at least he's putting those weeks into the hands of paying owners. At least BG allows resale brokers to deal with them directly. Why other brands don't is beyond me. They need a way to move dead inventory off the books quickly. Working with a realtor who is willing to take on the challenge seems like a no brainer, but what do I know.

 

[GHT]

A Better Timeshare Analogy

Timeshares are in the essentially same situation as CRT TV's were a few years ago: Lots of people have them and they are nearly worthless (except to watch TV).

Requiring the stores that sold these CRT TV's to "take them back" would be just as ludicrous as requiring HOA's to take back intervals that they only provide collective management for (didn't even sell).

The CRT TV analogy does not address the primary issue of ongoing, and continually increasing, maintenance fees. It's a poor analogy.

A much better analogy to buying a timeshare is buying a gym or fitness club membership with a huge non-refundable initiation fee, and an annual membership fee which goes on indefinitely. Even if you want to terminate your membership, you can't. Timeshare ownership is more like a gym or fitness club membership in which you are stuck paying ever-increasing annual club membership fees even if you can't use it.