[2012] [Sheraton Vistana Resort - Courts] Proposed Amendment to Continue As Timeshare

[Fredm]

Rule Against Perpetuities

It's my understanding that this clause was originally intended to give owners the options of selling (as a whole) or renewing the plan. If the owners decided to renew the plan, it would be a fresh start -- and a new manager could be appointed.

Just about every deeded timeshare resort has an expiration of the timeshare plan. Time frames vary, and rules vary by State. But the expiration exists because of the Rule Against Perpetuities.

Simplistically put, "perpetuity" as in "never ending" does not exist. It must be defined.

An interesting example is Marriott Desert Springs Villas II.
Rather than a fixed time frame, the governing documents define "perpetuity" as the death of the last living direct descendent of either George H. W. Bush, or, Bill Clinton (the then former and current Presidents). No joke.

So, the timeshare documents must be re-established (or entirely re-written). If they are not then each deed holder owns an undivided fractional interest in a specific condo. No master association, or anything for that matter, unless a majority of individual owners agree.

Can you imagine? It can turn into quite a mess.
No red, white, and blue weeks. Just a 52nd interest, where a Blue Season owner has exactly the same ownership interest as a Red owner, and all must agree on a equitable disposition.

Vistana Courts is being proactive about this. They better be. They have to get a majority in line. Not a majority of those who vote, but a majority of all owners. An owner who does not vote, is a vote against.
I would not be surprised if some owners get the idea that their condo should be sold. Or, or, ...

This will be interesting.

 

[bizaro86]

It seems to me that the courts owners would be dramatically better off selling the units as whole ownership condos. They're certainly worth $1000 or less on average, and each unit would almost certainly be worth 100k or more as a whole resort.

Anyone who is concerned about losing their use value/trading value could easily take their proceeds and use them to purchase an interest in one of the other Sheraton timeshares in Orlando. There certainly aren't a shortage of resale units of other sections or svv units available.

 

[VacationForever]

An interesting example is Marriott Desert Springs Villas II.
Rather than a fixed time frame, the governing documents define "perpetuity" as the death of the last living direct descendent of either George H. W. Bush, or, Bill Clinton (the then former and current Presidents). No joke.

Is Marriott DS HOA going to track lineage/family tree of the 2 former presidents then? IMHO, this is not well thought out. Possibly started out as a joke...

 

[Fredm]

Is Marriott DS HOA going to track lineage/family tree of the 2 former presidents then? IMHO, this is not well thought out. Possibly started out as a joke...

Have no idea how they will track it. It is what it is.

My point being that timeshare documents do expire.

 

[Ken555]

This will be interesting.

Let the drama begin! :hysterical:

 

[jerseygirl]

It seems to me that the courts owners would be dramatically better off selling the units as whole ownership condos. They're certainly worth $1000 or less on average, and each unit would almost certainly be worth 100k or more as a whole resort.

Anyone who is concerned about losing their use value/trading value could easily take their proceeds and use them to purchase an interest in one of the other Sheraton timeshares in Orlando. There certainly aren't a shortage of resale units of other sections or svv units available.

That was the point I was trying to make earlier (you said it much better!) for many resorts, but I'm not so sure about SVR. I have a couple of jumbled thoughts about that:

- I think Starwood, or any major player, gets a much better risk weighted return by managing the resort than by owning it (they're guaranteed 100% occupancy - even the delinquencies are covered by other owners). That wouldnt happen if we werent captive owners. That's why these developers got into the timeshare business in the first place - they made $$$ on sales, and now have a huge income stream in the form of a management contract. I guess I'm saying I'm not confident there's a "resort buyer" out there who would want the place as a pure rental resort given the glut of availability in Orlando.

- It's not a great location for residential condos - smack in the middle of tourism/traffic central. And I would think all phases would have to expire at the same time to make a conversion to whole ownership even remotely feasible from a consumer interest standpoint - although, it would be fairly easy to separate Lakes and the two Fountains phases into one complex ... and perhaps some of the older phases in the SE corner as well. But, there's still a real estate glut in Florida ... So they'd have to practically give them away ... but that may be a good solution someday if the majority of owners wanted out.

So I completely agree with your premise for some timeshares (like the beachfront one I referenced in an earlier thread) ... but not necessarily for SVR.

 

[jerseygirl]

Just about every deeded timeshare resort has an expiration of the timeshare plan. Time frames vary, and rules vary by State. But the expiration exists because of the Rule Against Perpetuates.

Simplistically put, "perpetuity" as in "never ending" does not exist.

Thanks Fred. So, interesting that Starwood didn't define the new term in their FAQs, eh? Personally, I wouldn't vote to extend more than 10 or so years, perhaps 20, but I'd be more comfortable with 10. Maybe it's just me, but I like a defined term a whole lot better than waiting for the Bush and Clinton families to fade away.

 

[Fredm]

Thanks Fred. So, interesting that Starwood didn't define the new term in their FAQs, eh? Personally, I wouldn't vote to extend more than 10 or so years, perhaps 20, but I'd be more comfortable with 10. Maybe it's just me, but I like a defined term a whole lot better than waiting for the Bush and Clinton families to fade away.

I'm sure the proposed time frame was specified in the detailed amendment included with the mailing. A Courts owner will probably come along shortly to tell us what it is. My guess is that it will be at least as long as the original (40 years).

 

[richardm]

The extension will be approved...

While some may talk about how "values" may be greater as whole ownership condos, that discussion will fall on deaf ears. For most owners, the value isn't financial- it lies in the usage and enjoyment of ownership.

Besides, the housing and condo market in Orlando is already flooded to the point of ridiculousness, and that is with the vast majority of foreclosures currently being withheld by banks.

To convince someone to end their timeshare regime now on the hope that the Central Florida housing market will recover sufficiently in eight years to result in a large financial gain- sounds like that argument would take quite a bit of convincing... How would that message even be spread?

Starwood is being proactive- and they are the group holding all the cards.. They have direct and instant access to owner communication, hold a large stake of weeks which is consistently growing, and have just gotten "EVERY" owner who is financially current to spend thousands on refurbishment- thereby renewing their sense of ownership and "investment"..

There are times when a majority base of owners is so disillusioned and frustrated with ownership that dissolving the timeshare regime is the only reasonable course of action- but those times are extremely rare.

This instance is not even close to that type of situation.

 

[jerseygirl]

The extension will be approved...

While some may talk about how "values" may be greater as whole ownership condos, that discussion will fall on deaf ears. For most owners, the value isn't financial- it lies in the usage and enjoyment of ownership.

Besides, the housing and condo market in Orlando is already flooded to the point of ridiculousness, and that is with the vast majority of foreclosures currently being withheld by banks.

To convince someone to end their timeshare regime now on the hope that the Central Florida housing market will recover sufficiently in eight years to result in a large financial gain- sounds like that argument would take quite a bit of convincing... How would that message even be spread?

Starwood is being proactive- and they are the group holding all the cards.. They have direct and instant access to owner communication, hold a large stake of weeks which is consistently growing, and have just gotten "EVERY" owner who is financially current to spend thousands on refurbishment- thereby renewing their sense of ownership and "investment"..

There are times when a majority base of owners is so disillusioned and frustrated with ownership that dissolving the timeshare regime is the only reasonable course of action- but those times are extremely rare.

This instance is not even close to that type of situation.

I agree completely, but would still prefer shorter extensions in case that day comes. It's a lot cheaper to pay for minimal maintenance, security, taxes ... then to run a resort where the majority of owners have lost interest, defaulted, etc.

I think the end dates were smart planning and just hope owners don't get bamboozled into a form of potential perpetuity (e.g. Clinton/Bush scenario).

 

[ada903]

I heard from a broker that he has a client who has been buying weeks at Sheraton Vistana - not sure which section - like crazy - massive amounts. I wonder if that has something to do with this. I first suspected that maybe he knew some section was going to be invited to join SVN. Not sure, but I thought I'd throw that interesting fact out there, why would someone buy those weeks in bulk?

 

[jarta]

ada, ... "he has a client who has been buying weeks at Sheraton Vistana - not sure which section - like crazy - massive amounts. ... why would someone buy those weeks in bulk?"

Because they are being sold/dumped in bulk by owners who no longer can afford to pay the MF?

Because the broker represents Starwood and Starwood has the ability to turn a profit on resales of the units?

Because the client thinks that if the resale price rises from $1 to $500 dollars there is money to be made by buying now?

Because the client thinks massive amounts of timeshare units can be rented for a profit?

Because buying timeshares "like crazy" indicates the client is crazy?

Or, finally, because the story is not true, the broker has inventory for sale at SVR and wants to move it? (When a timeshare salesman ...) Salty

 

[jjlovecub]

I own at the courts but haven't gotten this letter

 

[maggiesmom]

I know this question is a little off topic, but does anyone know when SVR-Cascades contract ends??. In my SDO Governing Documents - I found out that it expires in 50 yrs( *wood purchased it in 1998,can remember the month).And can renew for 10yrs unless it was voted different.

TIA

maggiesmom

 

[DeniseM]

I just added the proposed amendments to post #4.

 

[maggiesmom]

Thanks DeniseM about:
I just added the proposed amendments to post #4.

But with SOOO much of it scratched out its hard to understand .
So could you in simple English, tell me when it expires??
Thanks again

maggiesmom

 

[Ridewithme38]

Thanks DeniseM about:
I just added the proposed amendments to post #4.

But with SOOO much of it scratched out its hard to understand .
So could you in simple English, tell me when it expires??
Thanks again

maggiesmom

By changing the requirements from 'continue' to 'terminate', they've basically said it will go on in perpetuity, or until the owners gang up(70%) and decide to vote to terminate, with no set date...or at least that's how it reads to me

 

[DeniseM]

Thanks DeniseM about:
I just added the proposed amendments to post #4.

But with SOOO much of it scratched out its hard to understand .
So could you in simple English, tell me when it expires??
Thanks again

maggiesmom

This is the proposed amendment for Courts - not for Cascades.

 

[jarta]

Right now, the timeshare ownership plan is set to terminate by terms of the declaration in 2020 (unless extended by a 70% vote of the unit-week owners).

The amendment would make the timeshare ownership plan last until 70% of the unit-week owners vote to terminate it.

In either case, as stated in the Declaration, termination would cause the unit-week owners to become tenants in common of the unit they own an interest in. In either case, the termination would cause the condo association to ask the court to declare a partition of the individual unit-weeks at the resort (decide who owns what unit and in what percentage).

The Rule Against Perpetuities has nothing to do with the amendment. Under both Florida case law and Chapter 718.104, Paragraphs 4(o) and 5 of the Condominium Act.

http://www.leg.state.fl.us/Statutes...ng=&URL=0700-0799/0718/Sections/0718.104.html

http://www.4dca.org/May2007/05-02-07/4D05-3601.op.pdf Salty

 

[maggiesmom]

DeniesM ,
See post #16 in RED.


maggiesmom

 

[DeniseM]

DeniesM ,
See post #16 in RED.


maggiesmom

I saw your post - but I don't know the answer.

However, I would expect the same amendments to be offered to Cascades' owners when the time comes, since the Cascades phase is also under Starwood management.

 

[RLG]

the housing and condo market in Orlando is already flooded ...currently...
end their timeshare regime now on the hope that the Central Florida housing market will recover sufficiently in eight years

You seem to think that owners need to decide now and then wait 8 years to find out if they made the right decision. I think you have the decision timing completely backwards.

Under the original documents, the owners can wait 8 more years before making any decision. If they wait, they can make the choice whether to terminate the timeshare based on their own situations and on market conditions in 2020. Instead, they are being asked to give up that choice 8 years in advance. It's not clear how any owner is better off making the decision now rather than making it based on the situation at the time.

I agree with you, however, that it will likely pass. No one ever went broke underestimating the intelligence of the average timeshare owner.

How many of the owners do you think will vote yes and then end up paying a PCC to take their unit off their hands?

 

[YYJMSP]

Spas/Cascades, termination clause already dealt with?

Just went through the docs for Spas, and found the Termination section of the Declaration of Condominium (dated Aug 1985), which states that "... the condominium form of ownership may be terminated (1) prior to June 1, 2025 only by agreement of all Owners and (2) after May 31, 2025 by agreement of Owners entitled to cast at least forty percent (40%) of the votes..."

In the docs for Cascades, the Termination section of the Declaration of Condominium (dated Aug 1997), states that "... may be terminated if the Owners and holders of liens and mortgages affecting all of the Condominium Parcels execute and duly record an instrument terminating the Condominium, or if termination arises as set forth in this Declaration due to destruction or condemnation..."

I didn't see any reference to some arbitrary number of years after which it would automatically expire.

There are references to Chapter 718 of the Condominum Act, Florida Statutes, and whatever is included in them with regards to I assume boilerplate in the absense of an explicit termination.

Does that mean that they've already dealt with any automatic expiry date on the agreement?

 

[Ridewithme38]

For the record, when this comes up at my two resorts, i will be voting to terminate...Mostly just to see what happens

One vote won't matter, but its interesting...

 

[Beefnot]

For the record, when this comes up at my two resorts, i will be voting to terminate...Mostly just to see what happens

One vote won't matter, but its interesting...

We would expect nothing less from you.