Timeshare "Sunset" or Self-Destruct clause - 2020! Every timeshare owner should read!

[TUGBrian]

its also outstanding owner votes...which means owners who are delinquent...or resort owned (ie given back intervals) would not be able to cast a vote in most cases.

This further increases the problem of achieving a majority or supermajority

 

[Talent312]

The "safety valve" clause says that the TS will continue, absent a lawful (quorum-held) vote to discontinue, is likely the one to which the TS would default.
.

 

[CO skier]

There is a bit too much ado about this. One thing that noone mentions is that in termination, the underlying real estate (building or condos) would be sold in lue of partition and funds distributed to owners. So why is this termination clause so alarming?

If timeshare termination is so simple and easy, why did the process take 8 years at Sandy Shores?

Imagine how much of the distributed funds would be eaten away by legal fees.

 

[vacationhopeful]

One of my timeshares is worth multiple millions. 150 condos worth more than $1,000,000 each (more likely average is $1.3MM begetting $195,000,000 ASIS which is the figure I used below).

Take away 40% for selling costs; divide by 50 owners per 150 intervals EQUALS $15.600 for each interval.

Use a 30% for selling costs ==> Each interval is now worth $18,133.

If we use just a straight partition without selling costs, each weekly timeshare owner gets something valued at $26,000.

Planning in advance MUST happen when your asset is still worth money....

 

[Retired2025 aka AlmostRetired]

I looked at a recent deed I got from Marriott Monarch purchase. It contained a clause that has a termination date of 2042. SC requires an attorney to close on all property so I reached out to him.

My question
I just got a chance to read the dead and I have one question. The first page says the interval ownership ends in 2042. Does this mean that on that date I do not own week 29? If there are 200 units then after that date I own 1 share of 10400 shares (200 units times 52 weeks each unit) of the Monarch?

His replay
On that date, the interval ownership renews for another 50 years, unless 75% of the owners vote to discontinue. In which case, the project would be sold and you would get 1/10,400 of the proceeds. To my knowledge, that has never happened in SC.

 

[theo]

Incomplete picture in attorney response...

I looked at a recent deed I got from Marriott Monarch purchase. It contained a clause that has a termination date of 2042. SC requires an attorney to close on all property so I reached out to him.

My question
I just got a chance to read the dead and I have one question. The first page says the interval ownership ends in 2042. Does this mean that on that date I do not own week 29? If there are 200 units then after that date I own 1 share of 10400 shares (200 units times 52 weeks each unit) of the Monarch?

His reply
On that date, the interval ownership renews for another 50 years, unless 75% of the owners vote to discontinue. In which case, the project would be sold and you would get 1/10,400 of the proceeds. To my knowledge, that has never happened in SC.

I know nothing at all about Marriott and / or its' resorts and I certainly don't dispute your attorney's assertions. However, that being said, I would note the directly relevant point that there has probably never been a sunset date reached yet at any timeshare within his sphere of experience or knowledge in the first place. Accordingly, while it may very well have "never happened in SC" (...yet), I must respectfully submit that it is entirely likely that there has not yet been any sunset date reached there yet in the first place and therefore, no occasion or opportunity to have ever yet witnessed the "sunset" consequences in SC at all.

How many timeshare even existed here in the U.S. before 1980?

Just sayin'...

 

[vacationhopeful]

........
How many timeshare even existed here in the U.S. before 1980?

Just sayin'...

Shawnee existed in 1976 .... I went to a timeshare pitched there. I believe there were 2 Depuy buildings built and several under construction. Offering 2 weeks on one deed .... about $3500.

 

[RLG]

..each weekly timeshare owner gets something valued at $26,000.

Unfortunately, your chance of getting any of that money is approximately zero because of the people you are partners with.

After reading the comments on this thread and the one I linked do you get the impression your partners are going to be making sure you all get your 26k? Or are they more likely to be bamboozled into signing away their (and your) rights for nothing?

Remember, Tuggers are theoretically the best informed timeshare owners there are.

 

[vacationhopeful]

Unfortunately, your chance of getting any of that money is approximately zero because of the people you are partners with.

After reading the comments on this thread and the one I linked do you get the impression your partners are going to be making sure you all get your 26k? Or are they more likely to be bamboozled into signing away their (and your) rights for nothing?

Remember, Tuggers are theoretically the best informed timeshare owners there are.

I was just pointing out SOME timeshares MIGHT be worth real money.

PS I was using the intro & asking price in a new building of a studio unit (with NO water view of $1.4M) just a couple hundred feet south of my timeshare building.

 

[Larry M]

That makes it easier

BTW, AFAIK, a TS is not a lease-estate where there is a deed... it's a fee-simple. Even if use under the condo docs terminate, you're still own a tenancy in common. Theoretically, you'll still be billed for property taxes for your week and commons.

That's what I was thinking. Why pay lawyers thousands of dollars to find the missing owners? Just wait a few years and look them up at the county tax office!

 

[Retired2025 aka AlmostRetired]

I know nothing about Marriott and certainly don't and won't dispute your attorney's assertions. However, that being said,I would merely note that there has probably never yet been a sunset date reached at any timeshare there in the first place. So, accordingly, while it may very well have "never happened", I must respectfully submit that it is entirely likely that there has not yet been any date reached and / or any occasion or opportunity to ever happen yet at all anyhow.

How many timeshare even existed here in the U.S. before 1980?

Just sayin'...

This was Marriott's first timeshare and they purchased it with 90% of the units sold by the original developer. I will also ask the HOA.

 

[CO skier]

I looked at a recent deed I got from Marriott Monarch purchase. It contained a clause that has a termination date of 2042. SC requires an attorney to close on all property so I reached out to him.

My question
I just got a chance to read the dead and I have one question. The first page says the interval ownership ends in 2042. Does this mean that on that date I do not own week 29? If there are 200 units then after that date I own 1 share of 10400 shares (200 units times 52 weeks each unit) of the Monarch?

His replay
On that date, the interval ownership renews for another 50 years, unless 75% of the owners vote to discontinue. In which case, the project would be sold and you would get 1/10,400 of the proceeds. To my knowledge, that has never happened in SC.

There are different flavors of sunset clauses. Your flavor presents no problem, because 75% of owner have to vote to terminate. It will not happen, and the timeshare continues on.

The problem flavors are those timeshares that are set to self destruct unless 50% (or 75% or 85%) vote to continue as a timeshare, and the HOA is not empowered to dispose of the property on behalf of all the owners. It will not happen.

As mentioned repeatedly, that is the point of this thread; people need to determine exactly what flavor of timeshare they own.

 

[theo]

Yessa!

<snip> ...that is the point of this thread; people need to determine exactly what flavor of timeshare they own.

Concisely and astutely stated. "Flavor", more precisely, means the pertinent "sunset" language existing within a resort's recorded underlying governing documents.

 

[rdyraleigh]

Does this mean the timeshare company would have to resell everything? Or that it would be converted to residential units? What happens to the buildings? Wouldn't this be a good way for owners to know they will eventually be free of the burden of their maintenance fees? I am not understanding....

if this means no maintenance fees, I say hooray.

 

[WinniWoman]

if this means no maintenance fees, I say hooray.

That was my point. If you bought resale or for pennies, what's so bad other then now you have to find another great home resort to go to? For people who laid out a ton of money- and recently- then I can see how this would be devastating.

 

[theo]

Clearly not grasping the broad spectrum of possibilities here......

Posts #89 & #90 above unfortunately both appear to completely miss a directly relevant and critically important point here, which is (...one more time now, with feeling) that sunset language differs markedly among individual facilities.

In other words, a premature "hooray, no more maintenance fees", as cited in post #89 above, may very well be naive and completely misguided optimism if the sunset language (which, one more time, varies among facilities), actually mandates automatic renewal and continuation as a timeshare in the absence of pre-sunset action, rather than termination as a timeshare in the absence of pre-sunset action. There is simply no convenient or universal "one size fits all" here --- underlying governing documents can (and do) vary considerably from one another. Any truly interested or concerned owner would surely be well advised to make the effort to learn exactly what exists for "sunset" language within the recorded governing documents of their own individual timeshare property.

Ignorance is not bliss in this (very facility-specific) matter.

 

[GrayFal]

Brian, this is also included on the deed for Foxrun/Fairway of the Mountains in Lake Lure, North. Carolina.

I remember commenting on it when I first purchased there in 2003 (I no longer own there) from Jerry Wright at Redden Realty (now Lake Lure Realty)

Still have several friends and family that DO own there....wonder what the ramifications will be?

FYI
Found my deed from 2003 and the date is "4 pm on the first Friday in 2020"

 

[TUGBrian]

well thats certainly only a few years away.

any word from your friends and family on updates or notifications from the HOA if they are on top of this?

 

[GrayFal]

well thats certainly only a few years away.

any word from your friends and family on updates or notifications from the HOA if they are on top of this?

Lol, I assume they are unaware of this clause. :ignore:

 

[TUGBrian]

send your friends a link to the thread =)

 

[Orothon]

Hi, I've just purchased a TS at Craigendarroch Suites in Scotland with HGVC and they have a sunset clause which states that the TS lasts until 31 Dec 2050, at which point, UNLESS 2/3rds vote to extend the TS by another 5 years, the suites will be sold (with Hilton having ROFR) and proceeds distributed amongst the members.

As this seems to require 2/3rds majority to extend the TS, does this seem like something I should worry about, and indeed, could this give a reasonable chance of retaining a good proportion of the cost of the TS given property prices in the UK?

Any advice/opinions gratefully received as have already purchased but still in the 14 days cancellation period and wondering if we've gone about this the right way.

 

[theo]

My two pence worth...

Hi, I've just purchased a TS at Craigendarroch Suites in Scotland with HGVC and they have a sunset clause which states that the TS lasts until 31 Dec 2050, at which point, UNLESS 2/3rds vote to extend the TS by another 5 years, the suites will be sold (with Hilton having ROFR) and proceeds distributed amongst the members.

As this seems to require 2/3rds majority to extend the TS, does this seem like something I should worry about, and indeed, could this give a reasonable chance of retaining a good proportion of the cost of the TS given property prices in the UK?

Any advice/opinions gratefully received as have already purchased but still in the 14 days cancellation period and wondering if we've gone about this the right way.

I know nothing about timeshares or property values in the UK. Nonetheless, I'll offer the following observations and opinions which are probably universal in nature.

1. Timeshares are almost never a good "financial investment". Their actual "value" lies in the use and enjoyment of the property (or properties, plural) and you should never expect to recover anything more than a tiny fraction of a developer-direct purchase price (if anything at all) in any subsequent resale --- regardless of whatever drivel and nonsense some commission-hungry sales weasel may have spouted forth to the contrary. I personally believe this observation to likely be a universal truth.

2. Your particular "sunset" date is apparently 35 years away. Accordingly, the fundamental question you should ask of yourself is whether you would potentially get 35 years of use and enjoyment out of the purchase, considering whatever amount it is that you are paying out of pocket up front now, as well as the certainty of annual maintenance fees which will likely increase, at least slightly (and sometimes more than just slightly) each and every year.

3. If you're thinking that there is a big "payout" awaiting at sunset, rest assured that you are likely quite mistaken in that belief, regardless of the property's value. Lawyers (and HGVC) will likley eat up a huge chunk of of the dissolution costs and hefty taxes may apply as well. Don't plan on a huge windfall, in any scenario.

Food for thought, since you've asked. Good luck with your personal decision. If you decide to rescind (cancel), don't delay in doing so; the clock is ticking.

 

[Orothon]

I know nothing about timeshares or property values in the UK. Nonetheless, I'll offer the following observations and opinions which are probably universal in nature.

1. Timeshares are almost never a good "financial investment". Their actual "value" lies in the use and enjoyment of the property (or properties, plural) and you should never expect to recover anything more than a tiny fraction of a developer-direct purchase price (if anything at all) in any subsequent resale --- regardless of whatever nonsense some commission-hungry sales weasel may have spouted forth to the contrary.

2. Your particular "sunset" date is apparently 35 years away. Accordingly, the fundamental question you should ask of yourself is whether you would potentially get 35 years of use and enjoyment out the purchase, considering whatever amount it is that you are paying out of pocket now, as well as the certainty of annual maintenance fees which will likely increase, at least slightly, each and every year.

3. If you're thinking that there is a big "payout" waiting at sunset, rest assured that you are likely quite mistaken in that belief, regardless of the property's value. Lawyers (and HGVC) will likley eat up a huge chunk of of the dissolution costs and hefty taxes may apply as well. Don't plan on a huge windfall, in any scenario.

Food for thought, since you've asked. Good luck with your personal decision. If you decide to rescind (cancel), don't delay in doing so.

Thanks for the advice. I'm definitely not looking at this as an investment as am aware that I could end up with almost nothing back of my original purchase.

As I'm only 37 I'm hoping that I can get good use of it over the next 34 years, my only worry is that given the lack of resorts in Europe, unless I spend a lot of money flying long haul for every holiday I am limited to mainly RCI which I gather is not a good use of HGVC points.

 

[Beefnot]

When I was transferring the deed on my Vacation Villas at Fantasy World timeshare I sold a couple years ago, that is when I learned of the termination clause there. I will have to dig it out, but it was 2030 or 2035 I believe.

Unfortunately, your chance of getting any of that money is approximately zero because of the people you are partners with.

After reading the comments on this thread and the one I linked do you get the impression your partners are going to be making sure you all get your 26k? Or are they more likely to be bamboozled into signing away their (and your) rights for nothing?

Remember, Tuggers are theoretically the best informed timeshare owners there are.

That is an very cynical response. There have been several timeshares mentioned in the forums that have terminated and payouts--some small and some decent--have been distributed to owners.

 

[RLG]

That is an very cynical response. There have been several timeshares mentioned in the forums that have terminated and payouts--some small and some decent--have been distributed to owners.

Do you have a link to one? I already linked to an example where the opposite happened.