What do you think, the KBV 2024 surprise.

[schreff]

Just got this in my email. What do all you owners think? OWNERS ONLY PLEASE REMEDIATION NIGHTMARE IS BACK
Aloha Kauai Beach Villas Interval Owner—


January 24, 2024

Please read this important information from the Kauai Beach Villas Association of Apartment Owners (AOAO) Board of Directors regarding an upcoming special assessment. Please click on this link to access the letter directed to the Interval Owners, the letter directed to whole apartment owners within the Kauai Beach Villas AOAO, and the Board Resolution approving the special assessment. As you know, the Interval Owners Association (IOA), wherein ownership is based on weeks rather than a full apartment, is a sub-association within Kauai Beach Villas AOAO. The IOA special assessment is therefore only a fraction of the assessment to be paid by whole apartment owners.(below is the most significant part of the letter) PLEASE REVIEW YOUR LETTER BUT IT SEEMS STRANGE THAT THE LETTER IS NOT SIGNED BY THE BOARD AND THAT NO EXPLANATION IS GIVEN ABOUT ALL THE LACK OF INFORMATION SUPPLIED BY OUR BOD CONCERNING THE FUTURE BALANCE OF REMEDIATION. IS OUR BOARD OF DIRECTOR BLEEDING US BY A DROP OF BLOOD AT A TIME INSTEAD OF CUTTING THE CAROTID? WHAT IS WYNDHAM'S POSITION ON THIS, BOTH AS THE POSSIBLE MAJORITY AND ALSO AS THE RESORT'S MANAGER?

 

[sforgues]

The board resolution detailing all of this is part of the document and signed by the secretary. So, this seems legit and not some scheme by Wyndham. One thing that concerns me is that the board overseeing the entire complex states in the board resolution that they issued letters to all owners in July 2023 (3 letters) and in October 2023 about the progress on all this and the interval owners board kept us in the dark. It looks like the final decision was made in December but even the complex board didn't notify the owners but decided it was an emergency and committed to the project. Maybe I'm reading it wrong, but that my impression.

It seems that that the board of the entire complex (not just the timeshare owners) decided that they needed to immediately put a band-aid on this problem. As an every other year owner, the cost is manageable. I don't like it, but it is what it is. For me, it's a one time 16.5% increase. I bank my unit every 2 years with RCI points and have concluded I'm getting my value out of it. Maybe not so much this time, but my other timeshare (Shell) increased by 20% on the last bill.

However, there is the possibility that a bigger fix is in the future. Using their estimates, full remediation would cost a 2 bed full share condo owner over $600,000. I really wonder is that will ever happen because no bank is going to give the condo owners that kind of money unless they maybe own their units free and clear. I suspect the long term solution will either be that another storm comes and wipes the place out and insurance will cover part of the loss or the entire property is sold after the band-aid is in place to a developer for a fire sale price that the full share owners can live with. I don't know much about this stuff but that seems like a possible scenario.

 

[bianchicycle]

I agree that the amount, right now, is tolerable, the whole thing is out of control. I was told by some of you that we could not get an attorney, etc, until the year-round owners law suit was settled..... what do ya think now? Has anyone figured out how to not pay when they send you a bill? What are ya going to do when the BIG assessment comes (without a members vote) and your credit gets killed when you don't pay.

 

[MMusselwhite]

My questions are what happened to the original vote that we had to sell or remediate? I have heard nothing. And how much is this really going to cost us as interval owners? How do we find our answers to these questions. Can we get together as owners and sue? I will not pay an unlimited assessment that keeps going up and up - this property needs to be sold to a developer with deep pockets! And what are the best steps to begin for us that will not pay the assessment? I have owned there since the 1999 the property was beautiful, but since all this started we have not been back as we can't even get a reservation. Marcia M

 

[MMusselwhite]

Anyone got the name of an attorney dealing with this issue?

 

[DeniseM]

Hi Marcia - I can't answer your other questions, but the resort is open, and you can definitely make reservations.

 

[bnoble]

As I read this, this is just for the repairs necessary for Buildings G and H to be able to be occupied. This is not The Big One. And, honestly, $650/2BR week is not out of line, IMO. We'll pay it and won't sweat it much. However, it will be interesting to see how many people do not pay up. I bet it will be a non-trivial fraction of the ownership given the existing bad debt levels.

Has anyone figured out how to not pay when they send you a bill?

It's easy. Don't write the check, go into default, lose the usage of your week(s), and wait for someone to foreclose. If you want to speed things up, offer a deed in lieu of foreclosure, but I bet the IOA/management company won't accept it. I wouldn't.

I was told by some of you that we could not get an attorney, etc, until the year-round owners law suit was settled

I don't think anyone said you couldn't. I do think some people (and I include myself among them) said that there isn't much point in doing so. But, you do you. If you want to hire a lawyer, go for it. No one is stopping you, and it is your money. Spend it how you like.

What are ya going to do when the BIG assessment comes (without a members vote) and your credit gets killed when you don't pay.

I don't think this is a likely scenario, so I am not going to worry about a hypothetical. I believe that once the whole-ownership lawsuit is resolved, the vote to NOT PROCEED with the remediation will be rescheduled, we will vote on it, and then we'll see what happens.

Until something happens, nothing has happened. I'm not going to lose sleep over something that hasn't happened.

My questions are what happened to the original vote that we had to sell or remediate?

It was tabled. I suspect nothing happens regarding the larger issue until the whole-ownership suit is resolved. That is currently scheduled to go to trial in September of this year.

Can we get together as owners and sue?

On what grounds? You own part of a resort in which two buildings are uninhabitable and require repairs. The costs of those repairs are borne by the collective owners of the resort. "I don't want to pay it" is not a reason to sue someone.

Anyone got the name of an attorney dealing with this issue?

You can find the attorneys currently representing the whole owners by looking at the ongoing case documents in Hawaii's online court system. Call them and see what they say. You can see how to find the case in this post. https://tugbbs.com/forums/threads/kbv-ballots-on-their-way.350984/post-2940540

 

[bnoble]

Using their estimates, full remediation would cost a 2 bed full share condo owner over $600,000. I really wonder is that will ever happen because no bank is going to give the condo owners that kind of money unless they maybe own their units free and clear

Even then, I think it is unlikely. That's why I've been saying all along that once the dust settles, I expect the ownership will vote to terminate, and we will all move on with our lives.

 

[MMusselwhite]

The board resolution detailing all of this is part of the document and signed by the secretary. So, this seems legit and not some scheme by Wyndham. One thing that concerns me is that the board overseeing the entire complex states in the board resolution that they issued letters to all owners in July 2023 (3 letters) and in October 2023 about the progress on all this and the interval owners board kept us in the dark. It looks like the final decision was made in December but even the complex board didn't notify the owners but decided it was an emergency and committed to the project. Maybe I'm reading it wrong, but that my impression.

It seems that that the board of the entire complex (not just the timeshare owners) decided that they needed to immediately put a band-aid on this problem. As an every other year owner, the cost is manageable. I don't like it, but it is what it is. For me, it's a one time 16.5% increase. I bank my unit every 2 years with RCI points and have concluded I'm getting my value out of it. Maybe not so much this time, but my other timeshare (Shell) increased by 20% on the last bill.

However, there is the possibility that a bigger fix is in the future. Using their estimates, full remediation would cost a 2 bed full share condo owner over $600,000. I really wonder is that will ever happen because no bank is going to give the condo owners that kind of money unless they maybe own their units free and clear. I suspect the long term solution will either be that another storm comes and wipes the place out and insurance will cover part of the loss or the entire property is sold after the band-aid is in place to a developer for a fire sale price that the full share owners can live with. I don't know much about this stuff but that seems like a possible scenario.

We have to figure out what is the best response. Any ideas?

 

[MMusselwhite]

Even then, I think it is unlikely. That's why I've been saying all along that once the dust settles, I expect the ownership will vote to terminate, and we will all move on with our lives.

So do you believe that there will be a vote?

 

[DeniseM]

I hope they are going to tell us exactly what will be done in Bldgs. G & H.

 

[bnoble]

So do you believe that there will be a vote?

Not for this one. But I do think there will be before they commence the resort-wide remediation.

 

[RNF]

Here are my questions:

1. What are the names and contact info for the AOAO Board of Directors. I would have thought easy to find. I cannot.
2. The $2.5 million project went to $4.1 million in thirty days. We deserve an explanation. When I hired contractors (perhaps 50 over the course of my career I would always tell them. "I'm going to put $4.1 million (in this instance) in a checking account. That's all I'm depositing and you are the only payee. Tell me NOW it's sufficient because that's all there is." You might not be surprised by the answer. I wonder if the AOAOBofD negotiated a fixed price not to exceed AIA contract.
3. What happens if some owners just say "I'm not going to pay" this first go around. Does the deficit fall to those who paid their fair share? If yes ... expect another assessment.
4. Lastly, for the next potential assessment of roughly $30,000 per full week. Good luck. I suspect many will walk away and the burden, my opinion, will be carried by those who stay. I wonder how many will pony up that kind of cash? What are the odds the AOAOBofD will ask for a vote which leads me back to item 1...

I wonder what the property is worth if sold as is. I wonder if we have a voice in that conversation to sell or repair. And if we do - when and how will that voice be heard?

 

[DeniseM]

Lastly, for the next potential assessment of roughly $30,000 per full week. Good luck. I suspect many will walk away and the burden, my opinion, will be carried by those who stay. I wonder how many will pony up that kind of cash? What are the odds the AOAOBofD will ask for a vote which leads me back to item 1...

The full-time owners have already filed a lawsuit against the BOD, et al.

I recommend that you go back and read all of the info that has already been posted.

 

[bnoble]

What are the odds the AOAOBofD will ask for a vote

They already did. That's the vote that was tabled when the whole owners pressed their suit, and that I expect will be resumed.

As Denise mentioned, probably worth reading up.

 

[ecwinch]

In my mind it is a obvious path to dissolution of the resort. The number of defaulting owners will likely be high, resulting in an additional assessment to bridge that gap - especially given the important footnote that they could not find a lender as originally intended.

The money has to come from somewhere. And this assessment will serve as an indicator that can guide the BoD on the next phase while proving some air cover in the apartment owners lawsuit.

 

[bnoble]

And this assessment will serve as an indicator that can guide the BoD on the next phase while proving some air cover in the apartment owners lawsuit.

I hadn't thought about this, but it is a good point.

 

[DeniseM]

I think it's unlikely that a "certified exit," will be offered to owners. You will probably have to default on your next fees that are due. You will receive some warning letters, and then your account will go into default, and eventually, they will take back your deed(s). It's possible that you will take a credit ding, or be turned over to collections, but at this point, it's hard to say. *If Wyndham offers a certified exit I will be suspicious about how it benefits them.

 

[bnoble]

Last we heard Certified Exit was refusing these. I doubt that's changed.

 

[sforgues]

For me, paying this initial assessment is worth avoiding a potential credit ding and potentially being able to continue to deposit my every-other-year week for points in 2026 (I already deposited for 2024). I suspect that barring any new big storms, the work will allow the property to be usable for a few more years while all the big work is considered or some sale or termination is completed. I don't think I would pay an assessment of several thousand dollars for the full correction of the problem and take the chance regarding any credit ding. I'd be happy to turn in my deed at that point. I suspect more than a few of the full unit owners would not want to pay multiple hundreds of thousands of dollars for remediation work on perhaps a building they don't even live in...it makes no sense. I suspect the plan iwill be to get a few more years of life out of the place then sell in a fire sale to some developer who will demolish the buildings and build completely new.

 

[bnoble]

I suspect more than a few of the full unit owners would not want to pay multiple hundreds of thousands of dollars for remediation work on perhaps a building they don't even live in...it makes no sense.

This is exactly why I think the vote to NOT PROCEED with remediation will pass. The value of the timeshare weeks is zero, or less. We "adopted" two oceanfront 2BRs for the cost of transfer fees, but we were given a year's free use, so our cost was negative. The $650-ish is not too big of a deal, particularly given our fees are decent-to-good for Hawaii. But it makes no sense at all for a timeshare owner to vote to proceed with remediation and spend high-four/low-five figures on a deed that is worthless.

The whole owners have a different calculus, but even so: the cost of remediation is within spitting distance of what the apartments would be worth. That's ignoring the fact that there will be a prolonged period of time when each building (and hence a whole-owner's apartment) is unusable. That's also ignoring the fact that some owners won't pay if it comes to that, and just declare bankruptcy and get it over with.

A clear-eyed whole owner would vote with the timeshare owners in favor of NOT PROCEEDING, and liquidating. They are going to get dimes on the dollar, but that's better than nothing. (Though I suppose for some it is still going to mean bankruptcy.) The real question is how many of them are clear-eyed. Given the progression of the lawsuit, it's my opinion that at least some of them are not.

 

[Uchwki7]

I, for one, am not going to pay anything else. If enough of us do that, it will force bankruptcy and we might get some money in return. Or just default and turn in our deeds.

 

[CO skier]

A clear-eyed whole owner would vote with the timeshare owners in favor of NOT PROCEEDING, and liquidating. They are going to get dimes on the dollar,

Maybe not even that, if KBV heads down a path similar to the Coco Palms. Kauai is not exactly "supportive" of redevelopment.

 

[tango]

I did not initially respond to this post because i thought it was directed at the whole unit owners. So far I don’t think any of them have answered, which is understandable as things is a site for interval owners. However, it is a dilemma that is becoMing more clear to me that while paying $325 as an every other year owner is not that big a deal, I have a hard time imagining that they whole owners will find it logical to pay $30k+. Which then begs the question, however will they ever get enough to fund the $4mil. Which might lead to a further assessment on everyone. In which case, what’s the point in even starting down this road. Better for the board to see that no one is interested in throwing good money after bad. So, I don’t know.

 

[sforgues]

I did not initially respond to this post because i thought it was directed at the whole unit owners. So far I don’t think any of them have answered, which is understandable as things is a site for interval owners. However, it is a dilemma that is becoMing more clear to me that while paying $325 as an every other year owner is not that big a deal, I have a hard time imagining that they whole owners will find it logical to pay $30k+. Which then begs the question, however will they ever get enough to fund the $4mil. Which might lead to a further assessment on everyone. In which case, what’s the point in even starting down this road. Better for the board to see that no one is interested in throwing good money after bad. So, I don’t know.

I think I saw something that said the value of the full units are in the $600k to $800k range. I'm pretty sure that the owners of those units will find a way to get $30k so their $600k investment and home doesn't get wiped out.