[merged] David Walley's Resort - Celebrity Resorts - Trouble

[ace2000]

please note the HUGE difference between a legitimate deed back of your timeshare to the resort...

and simply ceasing to pay for your timeshare.

That's something that ran through my mind also. It seems like it can get complicated though.

Is there a difference between the two if you're one of the remaining owners left paying the fees? I understand that the resort has the potential to rent the week out and all that. Many TUG users have said they wish their resorts would not even accept deedbacks. Would it be alright to stop paying then, especially if there are no other alternatives? It's a very tough problem for many.

In my mind, the core problem is the fact that these weeks cannot be easily rented out for more than the fees... thereby creating a scenario where it's easier for an owner to just give up and 'walk away'. And another scenario where the original timeshare investment is basically worthless.

And you also have situations where the resorts are hesitant to get involved in the time-consuming and money-losing process of renting out the units. And then you have many resorts that don't want to go through the process of selling weeks again.

Where will it all end? We see some of it playing out here in this story. I guess it will be the 'righteous' owners that feel a moral obligation or some other attachment to their timeshare, that will be left holding the bag, right?

 

[TUGBrian]

That's something that ran through my mind also. It seems like it can get complicated though.

Is there a difference between the two if you're one of the remaining owners left paying the fees? I understand that the resort has the potential to rent the week out and all that. Many TUG users have said they wish their resorts would not even accept deedbacks. Would it be alright to stop paying then, especially if there are no other alternatives? It's a very tough problem for many.

In my mind, the core problem is the fact that these weeks cannot be easily rented out for more than the fees... thereby creating a scenario where it's easier for an owner to just give up and 'walk away'. And another scenario where the original timeshare investment is basically worthless.

And you also have situations where the resorts are hesitant to get involved in the time-consuming and money-losing process of renting out the units. And then you have many resorts that don't want to go through the process of selling weeks again.

Where will it all end? We see some of it playing out here in this story. I guess it will be the 'righteous' owners that feel a moral obligation or some other attachment to their timeshare, that will be left holding the bag, right?

of course there is a difference, in one situation both parties are agreeing to the transaction.

in the other, only the owner is agreeing to it.

 

[dougp26364]

Hope you're not advising others to walk away... We've had that discussion on TUG before. This scenario is exactly what's going to happen across the whole industry, in the future . Of course, everyone around here is going to advise you to keep paying your fees, no matter how bad they get.

This isn't walking away so long as you're current. This is voting no on a SA that's the result of a HOA/BOD not setting enough money aside for a rainy day. This is a management company holding a gun to the head of those who are responsible and pay their bills to cover the owners who did walk away. This is not having a plan in place to agressively collect from those who don't pay. This the cost a management company or HOA/BOD pays by not having some sort of deed back/resale policy in place or other form of assistance when an owner(s) are down on their luck.

If the resort goes out of business and shuts down, bills cease. Those that are current aren't likely to suffer damage. Those that are deliquent still face the same collection actions and damage to their credit as before. The only difference will be that the bills won't keep going on for the rest of their lives. This last bill will be the last bill.

This looks like a BIG wake up call to timeshare HOA's. Have a plan! Some timeshare companies do have ways to deed back weeks, even though it's not free it's cheaper than the chilling effect a bad debt write off can have on your credit worthiness. Two of our resorts increased bad debt write offs in their budgeting by nearly 900%. While some might not consider those move great plans, at least they have recognized the potential and have addressed it ahead of time rather than what it appears Celebrity has done. That is ignore it until it's critical, then expect the responsible owners to bail them out with no promise it will happen again.

Would vote yes on this SA that is tatamount to blackmail? No I wouldn't. At least not without a detailed plan of how they are going to correct this mistake and what they were going to do to not have it happen again. If the only plan is to keep increasing MF's while others continue to default, I'd be saying close that sucker down and let me find another resort on the resale market that's maybe a little bit more responsible with their obligations.

 

[dougp26364]

Folks, let the 'shaming' begin...

psst... don't tell anyone else, and just between you and me... i'm in full agreement with you.

What shaming? This isn't about owners walking. This is about an HOA/BOD and their hired management company failing to plan for the future. This resort is about to cease operations because of failed planning. It's not just non-payment of MF's by 40% of the owners. It's about a poorly executed plan by the HOA/BOD and a management company that doesn't appear to communicate well with either the owners or the HOA.

There is no shame here other than that of the management company, the HOA and the BOD of this resort. IMHO, since they were the ones in charge of stearing the ship, then they're the ones to blame for running it into the ground. If there's any shame it's on their faces, not the owners who are current.

As an aside, I had the opportunity to trade a studio unit for a two bedroom unit at this resort. I didn't pull the trigger on that exchange because I wasn't convinced that David Walley's was on firm financial ground. Looks like I made the correct decision to go with the one bedroom for two bedroom exchange into The Ridge Tahoe instead. If I could see potential problems with this resort from such a distance, I wonder why the HOA was apparently blind to it when they're right there?

 

[ondeadlin]

If I were an owner, I'd vote no hoping to force a closure. That's clearly a better option right now than being stuck paying special assessments at a resort were only 60 percent of the owners have paid 2010 MF.

And that 60 percent number will only go down with an assessment.

 

[Tennwa]

Timeshare Going Broke?

We received a "Special Assessment" for over $900.00 and, as I suspected, it is reported if not paid by all members (Like that's going to happen) David Walley's at Genoa NV will go under. Where does this leave those of us who are owners? Has anyone else run into this problem? Any chance you could use your "membership" elsewhere? Help, please.

 

[ace2000]

If I were an owner, I'd vote no hoping to force a closure. That's clearly a better option right now than being stuck paying special assessments at a resort were only 60 percent of the owners have paid 2010 MF.

And that 60 percent number will only go down with an assessment.

Many miss the whole point here, or else many just don't want to see what's happening. Just last Friday, the Wall Street Journal posted an article stating that it is ok to 'walk away' from your house debt.

http://online.wsj.com/article/SB100...43144657512.html?mod=rss_Today's_Most_Popular


What do you think is going to happen to the timeshare industry when this logic goes mainstream? As if the Wall St. Journal is not main stream enough. Of course, based on previous discussion, many on TUG still say they're going to pay their fees no matter how bad the fees are. Just because it's the right thing to do.... sure they will. Yep, sure they will...

 

[TUGBrian]

another story on this topic

http://www.recordcourier.com/article/20100226/NEWS/100229885/1062&ParentProfile=1049

 

[dougp26364]

Many miss the whole point here, or else many just don't want to see what's happening. Just last Friday, the Wall Street Journal posted an article stating that it is ok to 'walk away' from your house debt.

http://online.wsj.com/article/SB100...43144657512.html?mod=rss_Today's_Most_Popular


What do you think is going to happen to the timeshare industry when this logic goes mainstream? As if the Wall St. Journal is not main stream enough. Of course, based on previous discussion, many on TUG still say they're going to pay their fees no matter how bad the fees are. Just because it's the right thing to do.... sure they will. Yep, sure they will...

I agree with what your saying but, this isn't a case of walking away at this point. It's a case where so many have walked away do the remainded want to hold the bag or let it go.

Those financial guru's who speak of stratigic walking from debt are preaching the doom of all financial instrument. If enough people head this advice we'll go back to a cash only basis. Banks will rightly not want to lend money and those that have invested in banks will no longer be willing to do so.

I'm wondering what's happened to our society when we preach that it's OK to give your word that you'll pay a debt, then change your mind when it's more of an andvantage to not pay. What they forget is it's not just the banks that lose out. It's everyone that has a dime in those banks. It's all of society when your word means nothing. It's a foolish thing to preach to the masses but, then again, we're talking about those fools on Wall Street who's narrow sighted ways only see the profit at hand, not the results for the future.

 

[Mel]

Hope you're not advising others to walk away... We've had that discussion on TUG before. This scenario is exactly what's going to happen across the whole industry, in the future . Of course, everyone around here is going to advise you to keep paying your fees, no matter how bad they get.

There is a big difference between "walking away" and deeding back your week. I paid a much larger SA at one of my resorts - and would do it again, given the particular circumstances.

Unfortunately, it is the responsibility of the paying owner to cover the costs of operating the resort, and to cover those costs not paid by the non-paying owners. The cost of running the resort must be shared among those who use it.

Obviously, the owners need to watch what happens with the weeks belonging to the owners who don't pay. If the Management company, through the HOA, decides to accept deedback, or to forclose on the non-paying owners, those weeks should be revert to the HOA, not the management company. If the management company wants to take ownership, they should be changed any back fees owed on those week - much as we would be charged if we tried to purchase a forclosed house.

Watch to make sure the developer-controlled board doesn't decide to simply turn those weeks over to the management company on the grounds that the board is not in a position to sell them (it has been done at many resorts). If owners have outstandingloans from the purchase of their weeks, the developer could forclose on them, but again, the back fees are still due to the HOA - the HOA should insist on collecting them when the ownership transfers back to the developer.

 

[timeos2]

Most timeshares would be considered great to hold 75% of retail price!

Many miss the whole point here, or else many just don't want to see what's happening. Just last Friday, the Wall Street Journal posted an article stating that it is ok to 'walk away' from your house debt.

What do you think is going to happen to the timeshare industry when this logic goes mainstream? As if the Wall St. Journal is not main stream enough. Of course, based on previous discussion, many on TUG still say they're going to pay their fees no matter how bad the fees are. Just because it's the right thing to do.... sure they will. Yep, sure they will...

Heck, according to the article logic if one is 25% underwater (your property is worth 75% or less of what you paid) then it's best, financially, to walk away. Under that criteria 99% of every retail timeshare purchase made would be dumped on the day after the rescind period ended! The only possible way to stay above 75% of cost would be a resale at good pricing.

Yes, this is a crisis time in timeshare and this example is just one of many we're likely to see over time.

 

[ace2000]

Let me try one more time...

Everyone wants to clarify the difference between 'walking away' and deeding back the week. That's ok. However, the real problem is that 40% of the maintenance fees are going uncollected. I'm sure that 40% is made up of a large percentage of owners that have decided to 'walk away'... that's my point.

 

[ricoba]

Let me try one more time...

Everyone wants to clarify the difference between 'walking away' and deeding back the week. That's ok. However, the real problem is that 40% of the maintenance fees are going uncollected. I'm sure that 40% is made up of a large percentage of owners that have decided to 'walk away'... that's my point.

Your point is clear to me and it is a good one.

I really would have to ask myself what to do if I was in the shoes of these owners who have paid MF's. They are caught between a rock and a hard place and there doesn't seem to be an easy answer for them.

They could walk away as some are obviously doing and just consider it all water under the bridge. Who knows what will happen to the resort then if everyone up and quits paying?

Or they can pay they fee, yet again, will this really save the resort? Probably in the short term, but I don't know how this can help long term???? No guarantees that this will fix the long term liability etc.

It's a tough spot to be in.

 

[Mel]

If I were an owner at this resort, having paid my fees, I would watch carefully to see what the HOA does with the weeks the non-paying owners are "walking away" from. I wouldn't be surprised if the board members, being employees of the management group/developer vote to turn those weeks over to the management company to be sold by them.

If that happens, the management company should be held liable for all back fees (and interest and any penalties) due from those week. Realistically, they should be made to buy those weeks from the HOA, but we all know they will claim on the one hand that they are "worthless" and yet turn around and try to sell them for thousands of dollars.

I paid a rather large SA at one of my resorts, due to shenanigans between the HOA and the developer - the developer "sold" the loans from non-paying owners to the HOA, and the HOA was left with the bag. When it was time to rebuild after a hurricane, is ended up costing $3000 per week as an assessment - and turned out to be worth every penny.

Even if the resort in this case has to close, there is underlying value in the property (if run as a commercial resort, rather than as a timeshare). So long as the developer doesn't own a majority interest, the owners should be able to recover some value by selling the resort - and splitting the proceeds among those owners who remained current with their obligations to the resort (the HOA can and should forclose and those who do not pay, and the paying owners all end up owning a "share" of those weeks). Also, if some portion of the resort (a single building for instance) could be converted to another use and sold, the timeshare could be reorganized much as my resort did - amend the timeshare documents and reassign units as necessary to "move" everyone into the buildings that will remain as timeshares.

 

[TUGBrian]

IMO if an owner deeded back his week to the resort, the resort isnt listing that week as "delinquent"...as its now owned by the resort.

the week may indeed be empty as it currently doesnt have a paying owner for the interval, but thats different than those who ARE owners, but are not paying their maint fee bills.

however, as stated above...either way the resort is not being paid the MF for the week, i just dont think situations where the resort ACCEPTS a week back from an owner, can consider that a delinquency.

 

[ricoba]

But isn't the question if they resort will take a deed back? If they are in the bad shape that they apparently are in, are they going to accept deed backs? Seems sensible to us here, but not sure management would see it as a winning proposition for them. I just don't know.

 

[dougp26364]

But isn't the question if they resort will take a deed back? If they are in the bad shape that they apparently are in, are they going to accept deed backs? Seems sensible to us here, but not sure management would see it as a winning proposition for them. I just don't know.

If the resort goes out of buisness and is sold off, they won't be collecting future debts. Past debts will still be owed in the bankruptcy proceedings and still be collectable. But deeds will be worthless pieces of paper except for where owners stand to collect the proceeds if the resort is sold off.

As for the current non-paying weeks, if they're deeded weeks then they'll have to go through the foreclosure process. That costs money and, depending on the laws in that area, can take time. It doesn't sound as if this resort has that sort of time and money to foreclose.

This is were trust based ownership systems have an advantage. They can take back ownership for simple violations of the rules such as non-payment of fee's. They can also crank up the MF's to cover losses from those that don't pay. When I say advantage, I mean advantage to the management company, not the owners.

 

[pamandgary]

Does anyone have an update on the David Walley's situation?

 

[mmills0012]

This was in an email from the president of the HOA (Gary Grottke)

In short, the special assessment was not approved, two Celebrity Directors were removed from the board and it was announced that the 3 non-Celebrity Directors had brought suit on behalf of the association to have Quintus appointed as a "Receiver" for the resort. Quintus has assumed that role and is working with the board to regain control of the resort and clear up the many open financial issues. We are in process setting up a website for owners to get current info, which should be up by the end of the day tomorrow.

Please log in tomorrow afternoon and learn more at www.dwrinfo.com

 

[dougp26364]

There was an article (sorry, don't have the link) about some sketchy withdrawls from the reserve funding by Celebrity. Now it looks as if the HOA/BOD will be going after Celebrity for mismanagement of the funds. If they win it could open a floodgate of owners looking to either remove Celebrity as their management company or looking for reimbursement for funds withdrawn but nothing to show for it.

 

[ricoba]

While I don't have any dog in this fight, it's good to see owners step up and take back control of their resort.

I hope it works out well for the owners.

 

[MJD@MTR]

Board Members Names

Last week I received a letter from David Walley's Property Owners Association indicating a special assessment of $964 with no other information. A Special Meeting is scheduled for February 21, 2010 at the property. There is also a "Proxy" form enclosed to sign as well.

After researching a bit, this looks like a conccerted effort accross multiple propertys controlled by Celebrity to wring money out of property owners for dubious reason.

I intend to write a letter to the Nevada Department of Real Estate and Nevada Attorney General.

Any other suggestions or thoughts?

Hello Tarooka,
I am trying to find out who the board members names are for the Reno property. Would you have any info on who they are? Much appreciated. Thank you MJD

 

[UWSurfer]

I got this from an e-mail from Timeshare Today:

Celebrity Resorts, LLC Files Chapter 11

Celebrity Resorts, which owns, operates or has rights to 13 resorts in six states, has filed a Chapter 11 Bankruptcy Petition as "debtor-in-possession," and is continuing to operate the resorts. Celebrity's court documents place the blame for the company's present financial plight on an intra-family dispute among owners of the company, the credit crunch being experienced by the timeshare industry, and revenue declines from the decrease in discretionary spending.

 

[DWOwner]

To other DW owners:
Did anyone attend or hear what happened at the Feb 27 follow-up meeting regarding the David Walley's special assessment? I really appreciated reading this owner's description of the Feb 21 meeting.

I also just emailed David Walley's and asked them to post minutes from Feb 27 to see their version of the meeting.

 

[tarooka]

Wally World - Status - Rant

Chaos, bad logistics and not enough coffee set the tone of the meeting on February 21 in Genoa. 400 people with seating for 40 added to the shouts of discontent. Brutal information unfolded for the first time underscores the fact no one actually reads the fine print of their sales agreement.

"40% of the owners are not paying their dues" said our HOA board Secretary. A person who is a former Quintus principal who still owns 500 weeks worth of inventory. Seems like an Ok person. At least he was articulate enough to keep things cogent in our meeting. Yes, there was seperate parallel meeting; one upstairs and one downstairs. I was downstairs.

Upstairs, the mood was worse. Windbag speakers who couldn’t keep on point. Rude attendees yelling out “fat boy liar” (the speaker is weight challenged).

The net is the HOA only owns the timeshare units. Not the Lodge or Spa. The HOA pays Celebrity close to a 900K dollars a year to “use” the Spa. Celebrity collects that whole amount on the first business day of January. Money left over is used to maintain the time share units.

There was not enough people present to form a quorum to vote and another meeting was scheduled for the following Saturday.

Since that time Quintus asked the state of Nevada to become the receiver on behalf of the DW POA.

Celebrity filed for bankruptcy in Florida, effectively blocking the Nevada judge.

The Celebrity website is not taking reservations for David Walley’s resort. Allegedly Interval International is freezing banked weeks for trade waiting for clarification.

My payments are all up to date. Unfortunately, I paid by check in December.

I now completely understand what I do not own with my Walley's time share. I suspect we are in a very uphill battle with a slim chance to recover any status quo due to the separate state of the lodge / spa.

The big grey area for me is the new Quintus helping hand; friend or foe? I do notice the no so subtle wording as to the new units waiting to be built and the opportunity to deed back your unit to escape this cluster suck.

I feel like I am in an expensive soap opera with a lot of dialog about law suits and dissed promises.

Caveat Emptor or Semper Fidelis?