I need someone to clarify the default clause 13 in my lease that states "In the event that default in payment in not remedied within 16 months from the date of such default, then the Lessee shall be deemed to have offered to sell the Lessee's leasehold interest to the Lessor for an amount equal to fifty percent of one fortieth of the purchase price..." It goes on to say how much the Lessor would owe the Lessee if they sold it within a year of taking it back. How do we get NM to take back our leases, as I am offering mine back to them? I have been in default now for almost five years, thanks to the advice of one who shall go unnamed. My lease also specifically sets out a late charge of 2% per month of the amount past due. So 24%. That may not seem like much difference from 26.8%, however that is not a rate I ever agreed to pay.
This is how I would interpret Clause 13, and I will explain by use of an example:
Let's say you bought a two bedroom, one week timeshare in year 2000 for $16,000 on a 40-year Lease agreement. One year is then deemed to have cost 1/40 x $16,000 = $400.
Then let's say you default in year 2013, which means you have used 13 years and there are 27 years remaining, valued at 27 x $400 = $10,800.
According to Clause 13 you have deemed to have offered to sell your leasehold interest to the Lessor for 50% of value of remaining time or 50% of $10,800 = $5,400.(The percent varies for different time periods) In other words, you give the timeshare back and they reimburse you $5,400, which is half the value of remaining time. Seems like a reasonable deal for both sides.
But they have latched onto the part that says, "If the Lessor accepts the deemed offer.....etc." In other words, they are saying they can choose to pay you for a fractional value of remaining timeshare or they can choose not to pay you..its up to them to decide..., and the Courts have sided with them.
In my opinion, this is an obvious miss-representation of the Clause, and a serious breach of the Lease agreement for these reasons:
1. Why is there a lengthy formula for remedy of default in the lease if the formula was not intended to be used? And why instead can they arbitrarily make up their own formula for default, which is not in the Lease, and to which we have not agreed? If nothing else, that is a deceptive lease-writing practice and should be illegal.
2. They have taken the position that the meaning of "If the Lessor accepts the deemed offer...." is that they can choose not to pay you if they so decide. But that's not what the Clause says. It says that
if they accept the deemed offer to take back the timeshare as remedy for default, then they have to pay you a fractional value of remaining timeshare, less "all monies then owing under the Lease to the Lessor." Simply put, if they decide to take back the timeshare, they owe you money.
This is one more point that our defense team seems to have given little attention, but one that seems perfectly clear and a serious breach of our contracts.
It almost seems Northmont's legal dream team have convinced an easily convinced, if not complicit, court system that the timeshare owners will pay for re-construction of a faulty product that we bought in good faith would meet normal construction standards, and our leases are meaningless. This is a Third-World court decision and we need someone in authority with the will to do something about it.
