[2008] Southcape Resort

[ecwinch]

Oh, Eric, am I reading this correctly? If he gave my deed to some college kid to set a home meeting and lie to me about Festiva Adventure Club and ask me for 3 grand....I certainly wouldn't want him running my resort.

My read is the same as yours. Here is mine:

Then you need 10% of the timeshare owners to sign a petition putting the item to a member vote.

Then you need 66 2/3% of all time-share owners to vote in favor of discharging the manager, and those votes must total at least 33% of all votes allocated to all owners.


If at least sixty-six and two-thirds per cent of all of the votes allocated to all time-share owners, which votes represent at least thirty-three and one-third per cent of the votes allocated to all owners, favor discharging the manager, the developer also shall be notified of said result,

And you are entitled to recover your expenses if obtain more than 50% of the vote, but fail to attain the vote % required to discharge:

The reasonable expenses incurred by any owner in obtaining offers and preparing and mailing ballots pursuant to this section, including reasonable attorney’s fees, shall be promptly collected by the managing entity from all owners as a common expense and paid to said owner if a simple majority of the vote calculated pursuant to subsection (c) favors the discharge of the manager. Similar expenses incurred by the developer also shall be so collected and promptly paid to the developer.

I do not see any prohibit to the managing entity being rehired.

 

[Carolinian]

It is just mindboggling that this Hagberg creature turns the membeship list over to Outfield Marketing, which is trying to scam owners but not to the members themselves. The members have a legal right to the list but it is probably a violation of fiduciary responsibilities to turn it over to Outfield.

 

[ecwinch]

At this point I would reach out to Edgewater and see if you can follow the trail they blazed.

 

[JackB62]

Owner's List

Sou 13,

Did the current management refuse to give you the list of interval owners?

Thanks for all you've been doing!

Jack

 

[Sou13]

I don't want to rain on your parade, but

When you Google "Outfield Marketing," the company Cliff is referencing, this is the address you get:

212 E Hickory St Denton, TX

Hmmm...does this look like the headquarters of 'one of the top sales and marketing organizations in the country"? Click on street view to take a tour.

http://maps.google.com/maps?oe=utf-...vMsF&sa=X&oi=geocode_result&ct=title&resnum=1

Oh, wait, there is more! Mapquest has them at 135 Hickory...take your pick of ramshackled buildings along that street. The interesting thing is, they also list them as Festiva Resorts, LLC. http://www.mapquest.com/maps?city=Denton&state=TX&address=135 E Hickory St&cat=Festiva Resorts

Cliff tries to downplay the relationship between Festiva and Outfield, but I fail to see how a business run out of a run down shed on E Hickory in Texas could afford a $2.5 million dollar loan for Southcape and Sandcastle...unless of course Festiva holds the cards.

I don't want to rain on your parade, Fig, but here's the Outfield Marketing address:

Outfield Marketing

--------------------------------------------------------------------------------

Outfield Marketing Ltd.

Thomas C Franks RRP
President


135 E Hickory Street

Denton, TX 76201-4215

Ph: (443) 994-4581
Fx: (410) 295-5486
http://www.tugbbs.com/forums/showthread.php?p=698986&highlight=Outfield+Marketing+Denton#post698986

See also:

Outfield Marketing was hired by New England Vacation Services to contact owners of Southcape deeded weeks and present them with the "opportunity" to convert deeds to the "points" system within the Festiva Adventure Club.

I called the toll-free # (800-436-9094) and learned that the Texas-based office can be reached from 9 a.m. to 9 p.m. Eastern time.

I wanted to know how NEVS had "acquired" ownership of Southcape Resort. The customer rep speculated(?) that they had to own more than 50% of the unsold inventory in order to have a controlling interest in the Resort!

Whoa! If this is true, how is it that more than 50% of the inventory remains unsold? Look at the inventory offered for sale by Hagberg's realty listing. Does that look like more than 50%?

There's got to be something illegal going on here. We're being handed a "special assessment" of $400 to pay for "upgrades" that have already taken place!

Furthermore, if we refuse to pay, we'll be unable to use our weeks and be turned over to Monterey Financial for collection!

Why didn't Mr. Barth and Mr. Woods ever resort to these tactics? Why didn't they put more effort into selling the inventory and divesting themselves of the controlling interest in the Resort?

The rep also provided me with the telephone # of NEVS, which is 508-477-3197.

Am I alone in my anguish and anger over this? SOS! SOS! SOS!
http://www.tugbbs.com/forums/showthread.php?p=672700&highlight=Outfield+Marketing#post672700

 

[Carolinian]

Can you find an owner who is a lawyer in that state? If so, he can probably get him to force the issue on the lists. The management may be liable for court costs and attorney fees if you have to go to court to get the list.

I also remember the former Treasurer of the HOA at Ocean Villias II telling me that when they kicked the developer management out at that resort the new owner controlled HOA also recovered a six figure sum from the developer for not paying maintenance fees on the weeks he owned, as well as forcing him to deed those weeks to the HOA. That was one of the First Flight cases that settled out of court after Dunes South fought the same developer all the way to the State Supreme Court and whipped his tail in court at every turn.

 

[Sou13]

Sou 13,

Did the current management refuse to give you the list of interval owners?

Thanks for all you've been doing!

Jack

Yes, not only was I refused but Rosaleen couldn't even find my email request. She had forwarded my earlier email question about the meeting minutes to "capeguitarguy" Cliff Hagberg who has not replied to my email. She was gracious as always and reminded me that we had been told at the annual meeting that we could not have access to the list because of the "privacy" laws.

Here's my post to the [merged] Sandcastle Shift to "Festiva" Points discussion:

Two owners who went to the Southcape Resort manager asking for these records were turned away because the owners' list is "confidential" and supposedly protected by the privacy laws.

I emailed the resort manager with a request to inspect the books and copy the owners' address list while at the resort today. When I asked her whether she'd received my email request she couldn't find it. She had forwarded a previous message to Cliff Hagberg, who has yet to reply. Her answer is the same, that we were told at the owners' meeting that the mailing list is confidential and protected by privacy laws.

Your suggestion about the real estate commission may be worth pursuing. In the meantime, my request to inspect the books while I'm on-site has been stonewalled, JUST AS I EXPECTED.

 

[Fig]

I don't want to rain on your parade, Fig, but here's the Outfield Marketing address:

Outfield Marketing

--------------------------------------------------------------------------------

Outfield Marketing Ltd.

Thomas C Franks RRP
President


135 E Hickory Street

Denton, TX 76201-4215

Yes, Russ and I have posted about this. Have you looked at 135 E Hickory? Here is the link:

http://maps.google.com/maps?q=135+E...ntAw&sa=X&oi=geocode_result&ct=title&resnum=1

You will be in front of a brown building that is a police station. Hit the street view and shift left until you see a white shed with a white truck out in front. Pretty sad looking building. Do you really think a former president of Silverleaf works out of that? Something is awry.

 

[Sou13]

Well, there's no leave for doubt that Outfield Marketing and Festiva Resorts are both listed as located there.

Now can you see why I want to protect what little privacy I may have left? I didn't realize that Google has street views as well as satellite views. And "capeguitarguy" is using "privacy" as an excuse for refusing to let us copy our own owners' list? Methinks it's his own private dealings he's trying to protect!

 

[Stricky]

I would think an afternoon at the county deeds office could result in a list of the owners.

 

[Carolinian]

I would think an afternoon at the county deeds office could result in a list of the owners.

Yes, but many addresses would be out of date. As a former HOA board member, I am well aware that you need the resort's list. People move after deeds are recorded and the resort has the new addresses but not the Register of Deeds. Unless you are in one of the few states that taxes timeshare unit/weeks to individual owners rather than the resort as a whole, the tax office is not of any help either.

Instead of email, the demand to the resort for the list should be sent snail mail, certified, return receipt requested, with a copy to the state AG and to the Real Estate Commission. It should specifically cite the statute, by number that gives the right to the list, and include a copy of that statute. You should give them a date by which you expect a response or you will take other legal remedies.

 

[ecwinch]

Yes, but many addresses would be out of date. As a former HOA board member, I am well aware that you need the resort's list. People move after deeds are recorded and the resort has the new addresses but not the Register of Deeds. Unless you are in one of the few states that taxes timeshare unit/weeks to individual owners rather than the resort as a whole, the tax office is not of any help either.

Instead of email, the demand to the resort for the list should be sent snail mail, certified, return receipt requested, with a copy to the state AG and to the Real Estate Commission. It should specifically cite the statute, by number that gives the right to the list, and include a copy of that statute. You should give them a date by which you expect a response or you will take other legal remedies.

Yes. A Demand Letter. You really need to start building and documenting the case. If nothing else, when or if this escalates to the courts, you have a case file that legal representation can work from, rather than having to build it from scratch. There is a lot of steps you can take without representation that would help lower your costs if you did need representation.

I know we all have this Perry Mason concept of how the law works. But courts really like to see that the respective parties have followed due process in getting to the court house, and not just rush to court when they disagree.

 

[ecwinch]

That was one of the First Flight cases that settled out of court after Dunes South fought the same developer all the way to the State Supreme Court and whipped his tail in court at every turn.

The Dunes South case is interesting in the context of Southcape. The facts were/are:

1) Developer was not paying m/f on developer inventory
2) Developer was not paying m/f on units reacquired by the developer
3) Developer passed an amendment to the by-laws, exempting their units from m/f

Court ruled:

Section 47A- 12 explicitly states that each unit owner is " bound to contribute" pro rata toward maintenance expenses for the common areas. N.C.G.S. [section] 47A- 12 (emphasis added). In addition, this section also addresses two methods by which an individual unit owner might attempt to unilaterally exempt itself from paying its share of maintenance expenses, providing that "[n]o unit owner may exempt himself from contributing toward such expense by waiver of the use or enjoyment of the common areas and facilities or by abandonment of the unit belonging to him." Id. In light of the purposes behind Chapter 47A and the language of N.C.G.S. [section] 47A- 12, we do not believe that the legislature intended to allow a developer, as a unit owner, to unilaterally exempt itself from the payment of its pro rata share of the maintenance expenses for the common areas. This is exactly what defendant attempted to do. Accordingly, we conclude that the Supplemental Declaration filed by defendant in this case was ineffective to exempt it from paying the maintenance assessments at issue here."

Or course that is North Carolina law. But here is what Mass law says:

Except for assessments under subsections (c), (d) and (e), all time-share expenses shall be assessed against all the time-shares in accordance with the allocation set forth in the time-share instrument pursuant to section thirteen

 

[Fig]

The Dunes South case is interesting in the context of Southcape. The facts were/are:

1) Developer was not paying m/f on developer inventory
2) Developer was not paying m/f on units reacquired by the developer
3) Developer passed an amendment to the by-laws, exempting their units from m/f

Court ruled:

Section 47A- 12 explicitly states that each unit owner is " bound to contribute" pro rata toward maintenance expenses for the common areas. N.C.G.S. [section] 47A- 12 (emphasis added). In addition, this section also addresses two methods by which an individual unit owner might attempt to unilaterally exempt itself from paying its share of maintenance expenses, providing that "[n]o unit owner may exempt himself from contributing toward such expense by waiver of the use or enjoyment of the common areas and facilities or by abandonment of the unit belonging to him." Id. In light of the purposes behind Chapter 47A and the language of N.C.G.S. [section] 47A- 12, we do not believe that the legislature intended to allow a developer, as a unit owner, to unilaterally exempt itself from the payment of its pro rata share of the maintenance expenses for the common areas. This is exactly what defendant attempted to do. Accordingly, we conclude that the Supplemental Declaration filed by defendant in this case was ineffective to exempt it from paying the maintenance assessments at issue here."

Or course that is North Carolina law. But here is what Mass law says:

Except for assessments under subsections (c), (d) and (e), all time-share expenses shall be assessed against all the time-shares in accordance with the allocation set forth in the time-share instrument pursuant to section thirteen

Nice find, Eric. It kinda begs the question, if so many lawyers looked at this deal, as Cliff says they did, how could they be so ignorant of Mass General Laws?

In connecting the dots here, some mixture of Outfield Marketing peeps, Cliff Hagberger and possibly Fesitva peeps got a $2.5 loan to buy units at Southcape and Sandcastle. As part of the deal they also got appointed as trustees. In being trustees they get to secure the investment because they can up m/fs and not have to pay them themselves. In upgrading the properties at other's expenses on borrowed money they get to sell their hundreds of units down the line for a profit...hopefully...we will see where the economy takes this along with other real estate investments.

Now Festiva may be financially involved in this because all the legal documents are going to NC. If it were Outfield Marketing and Cliff alone, which make up the trustees, you would think some legal documents would be going to Outfield Marketing's Office in TX. But Google maps shows that to not be much of an office at all...a little shack of a shed that most people would find just big enough to store garden tools. Does Outfield Marketing really exist independent of Festiva? Third party? Hmmm...one wonders.

If Festiva is in on the deal, you would think their legal folks would have done due diligence to protect their investment. Things like seeing if Cliff can totally control the membership lists...which state law says he can't. This obviously puts the investment at risk because an owners group can form and throw out Cliff....another thing Massachusetts General Laws support. The same group can cause real problems as evidenced at Edgewater when they get a board going that does not act in interests of the developer.

And now Eric has uncovered a law that says a developer can not skirt m/fs. If Cliff is using a Mass lawyer, he or she should know this. If Festiva lawyers looked at this, they, of all people should know it...cause a similar ruling took place in NC where Festiva is headquarted.

Hey but, then again, Festiva lost in MO....has the AG in NC investigating it as well as complaints filed with AGs in Tennessee, Florida, South Carolina, Wisconsin, Maine and Louisiana...so maybe the legal dept is stretched a little thin these days?

 

[ecwinch]

Keep in mind that this case had to go to the NC Supreme Court. So you need to have the resources to fight the battle.

So a simple answer is that they think that the issue is grey enough that they can out lawyer the owners. And these guys know exactly how timeshare associations operate, and that the playing field is slanted in their direction. They are reasonably sure they can extract their investment before this issue would impact them from a legal standpoint.

And as much as I wish it said explicitly that the developer has to pay m/f, it does not say that. Just like the NC law, a court would have to interpret that from the statue. So it is not cut and dry.

Also is it possible that Festiva is providing the loan?

 

[Fig]

Also is it possible that Festiva is providing the loan?

Sou13 uncoverd loan docs for this company.

http://www.colebrookfinancial.com/index.htm

Makes sense. They are an ARDA member. Cliff was a past president there, as I recall and so was Tom Franks of Outfield.

They seem to specialize in loans for the timeshare industry...they say on their webpage that they are doing okay financially, but you gotta wonder.

 

[ChrisH]

NOT very easy to do!

I would think an afternoon at the county deeds office could result in a list of the owners.

There are about 45 units in one section of Sandcastle and another 45 or so in the other building. Then Sandcastle is open from sometime in March to sometime in Nov - so say 40 weeks. 90 units x 45 weeks is over 4000 deeds to find!!!!

And then the addresses on them are from the time of purchase. I bought mine over twenty years ago - moved since then - address no longer valid, phone number no longer valid = dead end.

If we can get/demand a current list - its a lot better.

 

[ChrisH]

From the Barnstable County Registry of Deeds with named Attorney:

Bk-Pg:23138-185 Recorded: 09-04-2008 @ 3:44:18pm Inst #: 46645 Chg: Y Vfy: N Sec: N
Pages in document: 82
Grp: 1
Type: Mortgage Doc$: 2,500,000.00
Desc: SEE INSTRUMENT

Town: MASHPEE Addr: 950 FALMOUTH RD
Town: PROVINCETOWN Addr: ROUTE 6A

Gtor: NEW ENGLAND VACATION SERVICES LLC (Gtor)

Gtee: COLEBROOK FINANCIAL COMPANY LLC (Gtee)


Ref By: 03-18-2009 Partial Discharge In book: 23537-176
Ref By: 03-18-2009 Partial Discharge In book: 23537-181

Return addr: DUNNING KIRRANE MCNICHOLS & GARNER LLP
REGISTRY BOX # 9
P. O. BOX 560
MASHPEE, MA 02649


Recording Fee: 150.00 State excise: .00 Surcharge: 25.00

The Deed can be viewed on line except it won't open for me with Java script even though I have the latest version. So I cannot see the specifics which should include all the rules and regs re: owners. It may be that we have to go back to the original deed with Fred Sateriale way back in the early 80's - I also found that one but cannot SEE the document because of the download problem.

 

[ecwinch]

Sou13 uncoverd loan docs for this company.

http://www.colebrookfinancial.com/index.htm

Makes sense. They are an ARDA member. Cliff was a past president there, as I recall and so was Tom Franks of Outfield.

They seem to specialize in loans for the timeshare industry...they say on their webpage that they are doing okay financially, but you gotta wonder.

But Festiva would have to have some standing on the loan to be listed on the docs. Maybe as guarantor?

 

[Fig]

But Festiva would have to have some standing on the loan to be listed on the docs. Maybe as guarantor?

Maybe. Be nice to get a copy of it. All the legal documents are going to NC. Festiva's paralegal was listed on one of them. Also, the notorious letter that started this whole tread, I think, if I recall correctly, was based on a letter that Festiva routinely sends out when they are trying to get into a resort...even though it had Cliff's name on it.

"Your resort is in trouble financially....but fear not, we are professionals here to rescue you. First we will need to do a "special assessment" to replenish funds"...or something to that effect. In the rush to get the letter out, they did not put it on any letterhead...maybe 'cause NEVS has none...'cause it is more of a business relationship than a company. This put owners at Southcape and Sandcastle on guard because it was so scammy looking. But what were they gonna do, use Festiva's letterhead? Outfield probably doesn't have any...they are known for having no paper at all...maybe so their claims can't be documented? Then again, Outfield saves a ton on office space and office supplies since they appear to have neither.

I would think Festiva would have to "pay to play" in some way if they hoped to enroll more victims in their points program. Plus, Outfield seems too small to have taken on the bulk of the loan....I guess Cliff is less than a 50% stakeholder.

I may be all wrong...but that's my connect of the dark dots for now.

 

[Sou13]

Here's where Festiva fits into the mix:

Bk-Pg:23537-176 Recorded: 03-18-2009 @ 10:05:13am Inst #: 13836 Chg: N Vfy: N Sec: N


Pages in document: 2
Grp: 1
Type: Partial Discharge
Desc: UNIT 409 TIME 9
Refers to Book: 23138-185

Town: PROVINCETOWN Addr: ROUTE 6A

Gtor: COLEBROOK FINANCIAL COMPANY LLC (Gtor)

Gtee: NEW ENGLAND VACATION SERVICES LLC (Gtee)


Return addr: FESTIVA RESORTS
1 VANCE GAP ROAD
ASHEVILLE NC 28805


Recording Fee: 50.00 State excise: .00 Surcharge: 25.00

and

Bk-Pg:23537-181 Recorded: 03-18-2009 @ 10:05:13am Inst #: 13838 Chg: N Vfy: N Sec: N


Pages in document: 2
Grp: 1
Type: Partial Discharge
Desc: UNIT 403 TIME 9
Refers to Book: 23138-185

Town: PROVINCETOWN Addr: ROUTE 6A

Gtor: COLEBROOK FINANCIAL COMPANY LLC (Gtor)

Gtee: NEW ENGLAND VACATION SERVICES LLC (Gtee)


Return addr: FESTIVA RESORTS
1 VANCE GAP ROAD
ASHEVILLE NC 28805


Recording Fee: 50.00 State excise: .00 Surcharge: 25.00

https://72.8.52.132/ALIS/WW400R.PGM

Here's the original deed:

DOCUMENT ABSTRACT
Bk-Pg:23138-109 Recorded: 09-04-2008 @ 3:44:18pm Inst #: 46644 Chg: Y Vfy: N Sec: N


Pages in document: 76
Grp: 1
Type: Deed Doc$: 1,200,000.00
Desc: SEE INSTRUMENT

Town: MASHPEE Addr: 950 FALMOUTH RD
Town: PROVINCETOWN Addr: ROUTE 6A

Gtor: BARTH, VINCENT J (AS ID AS TR &O) (Gtor)

Gtor: WOODS, ROBERT P (AS ID AS TR &O) (Gtor)

Gtor: SOUTHCAPE TRUST (BY TR &O) (Gtor)

Gtor: ACQUISITIONS INC (&O) (Gtor)

Gtor: SOUTHCAPE RESORT & CLUB COMMUNITY ASSOCIATION INC (&O) (Gtor)

Gtor: JEC PROPERTIES INC (&O) (Gtor)

Gtor: SAND CASTLE NOMINEE TRUST (BY TR &O) (Gtor)

Gtor: ROYAL COACHMAN CONDOMINUM TRUST (BY TR &O) (Gtor)

Gtor: SAND CASTLE CONDOMINIUM TRUST (BY TR &O) (Gtor)

Gtee: NEW ENGLAND VACATION SERVICES LLC (Gtee)


Return addr: DUNNING KIRRANE MCNICHOLS & GARNER LLP
REGISTRY BOX # 9
P. O. BOX 560
MASHPEE, MA 02649


Recording Fee: 100.00 State excise: 6,840.00 Surcharge: 25.00

It looks as though the original sale price was $1.2 million but that the mortgage is for $2.5 million, and whatever became of "capeguitarguy"? He told us he has plenty of money or something to that effect. He told us he owns only 25% of NEVS but 100% of NEVMS. (He also told us that I'm all mixed up, which is why I have yet to post about the "agenda.")

 

[Carolinian]

Keep in mind that this case had to go to the NC Supreme Court. So you need to have the resources to fight the battle.

So a simple answer is that they think that the issue is grey enough that they can out lawyer the owners. And these guys know exactly how timeshare associations operate, and that the playing field is slanted in their direction. They are reasonably sure they can extract their investment before this issue would impact them from a legal standpoint.

And as much as I wish it said explicitly that the developer has to pay m/f, it does not say that. Just like the NC law, a court would have to interpret that from the statue. So it is not cut and dry.

Also is it possible that Festiva is providing the loan?

After First Flight lost the Dunes South case, they settled with the homeowners at their other three resorts, deeded over all their remaining weeks to the HOA's and in one case, Ocean Villas II, also paid a cash payment in six figures to the HOA.

 

[Sou13]

Talk about being mixed up!

Wow! How "mixed up" can one get? It's Outfield Marketing that owns 75% of NEVS, not "capeguitarguy" Cliff Hagberg!

Has anyone complained to the AG since reading the above posts? Is anyone able to download the special program needed to read the deeds? Can anyone clue us in on what that "partial discharge" entails?

 

[ChrisH]

Partial Discharge - Deed Copies

From Ask.com
A mortgage provision allowing some of the pledged collateral to be released from the mortgage contract if certain conditions are met.

Investopedia Says:
In other words, the partial release allows some of your collateral can be taken off the mortgage once a certain amount of the loan has been paid.

I can't get the java aplet to work on the Barnstable Registry of Deeds - it says in the FAQs they are trying to fix it, but I tried again yesterday and still no luck.

Chris

 

[ChrisH]

FYI - Festiva Club Rules

FROM: Festival Resorts Adventure Club
Commonwealth of MA
Public Offering Statement

6) Other Club-Related Information
a)As of December 31, 2008, there were a total of 13,200 Members in the Club.

(Gee I was told that Festiva had 100,000 plus members and millions in reserve money)V)

Managing Entity (ies)
…. Each Member, other than the Developer, will be a Class A Member of the Association and is entitled to cast 1 (one) vote for each Point that he or she owns. The Developer (or any Appointee) is a Class B Member of the Association and is entitled to cast 3 (three) votes for each Point that the Developer owns.

…The Developer currently controls the Association, and the Developer has the right to retain control of the Association after a majority of points have been sold.

The Management Agreement has an initial term of five (5) years, commencing August 10, 2006 and expiring August 11, 2011, and will thereafter be automatically renewed for additional five (5) year terms, unless the Members by a vote of at least seventy-five (75%0 of the Voting Power residing in Members other than Developer at a meeting at which at least fifty percent (50%) of the Voting Power residing in Members other than Developer participate, by person or by proxy, elect not to renew the Management Agreement, or the Manager gives the Club sixty (60) days prior written notice…

VII
2)
i) Standard Assessments. After the Board of Directors Approves and establishes the Budget, the Board of Directors determines the respective Standard Assessment to be levied on each Member according to the provisions of Section 11.2 of the Declaration. Each Member, including the Developer, shall pay a Standard Assessment for each membership owned.

… Base Standard Assessment: $330.00 per Member
Points Standard Assessment: $0.75 per Point for Members with up to 5,999 Points: $0.65 per Point for Members with 6,000 or more Points.

And then there are those 'special assessments' on top of the Standard Assessments - was anyone told that??????