Barrier Island Station - Duck, NC - Termination Provision

[Goofyhobbie]

Many if not all Barrier Island Station (BIS) interval owners have received a "PACKET" mailing that calls attention to a TIMESHARE TERMINATION AMENDMENT that effectively would remove a major provision in the BIS recorded Owners Agreement.

As an owner at BIS that packet has not yet been received. But I am doing my homework and would like to start a discussion regarding the proposed Amendment or change to the BIS Timeshare Ownership Agreement.

When we purchased our timeshare there was a provision in the Timeshare Agreement, Deed, Contract, By-laws, and/or Amendment documents that made it clear that after a lot of years (sometime in 2024) the Timeshare regime could be terminated, dissolved, or be subject to termination based on a vote of the then owners of the property.

According to a recent Board of Directors (BOD) announcement a proposal to AMEND the AGREEMENT to effectively remove the contingency of a Termination will be brought up and possibly voted on at an October 24, 2015 meeting on the Outer Banks.

No doubt many owners have already voted yeah or nay by letter or are about to do so.

The BOD have an interest in getting a Yes vote to change the termination provision of the Owners Agreement.

It is my understanding that it would take a 75% majority of timeshare owners to remove or terminate the clause that could lead to a termination of the interval ownership (timeshare) regime.

On the one hand, those who want to be rid of their timeshare obligation could vote NO to any removal or amendment to the so-called TERMINATION Provision within the current Owner's Agreement and if more than 25% vote NO the TERMINATION Provision would not be eliminated.

On the other hand, 75% of the timeshare owners could choose to vote in favor of a change that would REMOVE or TERMINATE the clause so that the interval ownership model would continue to exist.

The vote is probably taking place by letter; but it is also possible that a vote will be completed as early as October 24, 2015 if the BOD is successful in selling the idea.

Those of us who are owners or those of us with knowledge of how going through a termination or not would work should discuss this subject.

Many of the original owners, current owners or future owners of a UNIT at BIS may want to terminate the timeshare when ever it can be done.

Hypothetically, if done the owners of a UNIT would own 1/52 of each involved UNIT as Tenants in Common and if they later agree the owners of said UNIT could get together and sell the UNIT.

The proceeds of such a sale (after court costs and fees) could then be divided among said owners.

It would be somewhat complicated; but a lot of owners who would want the possibility of a termination to remain in the Agreement may see keeping the provision for a termination as a future benefit that should not be voted away.

BUT OF COURSE THEY WOULD FIRST HAVE TO APPRECIATE THE POSSIBILITY!

Keep in mind that the current BOD is promoting a YES vote which is supposed to get rid of the Termination provision in the Agreement EIGHT YEARS before any termination could possibly happen.

Those persuaded to vote YES are probably going to do so because they feel it is necessary or because of a perceived fear that they could not then sell their timeshare for a "hefty sum" down the road. :hysterical:

Folks who think that way either look at their timeshare as a financial investment (when it is in fact a liability) or they really like their particular timeshare because of the enjoyment that they and their heirs will get over many lifetimes.

At this time, I am not aware of any developers that would consider taking over BIS in a sale; but with the economy's improvement and with interest from a developer their exist the possibility that a developer like Wyndham Vacation Resorts, or Diamond Resorts International may become interested at some point [AFTER ALL OCEAN FRONT PROPERTY IS SCARCE and this property is on the OUTER BANKS OF NC].

That possibility is reinforced by the fact that there is currently a major three year renovation project taking place at the resort already paid for or to be paid for through a three year assessment on current owners.

Since it is possible that the Board of Directors or the Management Company responsible for BIS possibly could be considering a possible sale of BIS (especially after the paid for renovations) that incentive may be the agenda that is driving the attempt to remove the Termination provision.

A developer would probably not like the fact that there is a contingency such as a Termination provision in the Owner Agreement.

Anyone who has input, please comment.

 

[TUGBrian]

following this with interest, this situation is due to what was discussed here in this thread

http://www.tugbbs.com/forums/showthread.php?t=224998

 

[Fayeoctober]

Brian - thank you so much for the re-direct to the other thread. I hadn't seen it previously although I was well aware of the Termination provision in the deeds at Barrier Island Station Duck. In answer to the question you raised on the other thread, in order for the Termination clause to be changed, a Yes vote of 75% of the Owners is Required. This is a difficult number to achieve even starting 9 years in advance. The difficulty is made even greater when some of the Owners addresses on record are no longer valid.

 

[Goofyhobbie]

You have to wonder what each Interval Owner of a week at each of the 115 Units at BIS, Duck, must have thought or NOT thought about when they received a packet from the Board of Directors (BOD).

Did the owners not know that there was a "Sunset Clause" when they bought their Interval Ownership? Of course the answer to that question is who knows! It is likely that most owners had no idea or could have cared less at the time of purchase. After all the so called termination date (at the time the resort started was roughly 40 years out.)

The "packet" sent out to the owners of record was obviously intended to wake them up and get them to vote Yes or No [with the BOD encouraging a YES Vote] because not voting Yes would result in considerable hassle for the BOD and a great deal of concern among owners who look forward to enjoying the exclusive right of their terrific summer interval week at BIS.

But, there are by now a lot of Blue and White Week owners (many who are Senior Citizens) who have by now recognized that they are paying the same on-going cost as Red Week owners (the same age or younger) without getting the same vacation value that the Red Week owners enjoy at the height of the summer season.

Those owners have or should be awakened to the fact that as time goes by their ownership is becoming more and more of a liability.

If they cannot easily sell their ownership or pass it on to someone who wants it they are or will be reminded that there is a "Sunset Clause" that if left alone may likely result in a partition of their Unit and a Judicial sale of the property as early as eight years from now.

 

[Maple_Leaf]

Are all weeks at BIS-Duck subject to the sunset clause?

I've seen a lot of weeks pass through Ebay over the past few years and I don't recall a single one of the auctions disclosing the sunset clause.

 

[Sandy]

What do the owners get?

If the sunset happens, will the owners realize any financial benefit?

 

[Goofyhobbie]

Sandy,

I am definitely not an attorney and cannot offer a legal opinion; but I will offer my own opinion as an interested party.

Currently, it is my understanding that, in simple terms, IF the "Sunset Clause" remains in effect as of the termination date the resort or the Units within the resort would be partitioned then sold and the proceeds after expenses would be divided among the owners of record.

Bottom line, given that the resort property is Ocean Front property on the Outer Banks of North Carolina and of some value, there should be at least some proceeds that would eventually be divided among the owners of record if and when those owners can be found, verified, and notified.

 

[Goofyhobbie]

The reasoning behind addressing the issue facing the owners of Barrier Island Station (BIS) now is to get a resolution well in advance of the effective date of the "Sunset Clause."

The good news is the BOD has already committed to get as many owners to respond to the issue as soon as possible. But, at some point they may have to face the real possibility that getting a response from all or a needed portion of owners is not going to happen.


The BOD has access to Legal Counsel and should have some idea of how much funds should be expended to get the needed responses and they should know when a quorum has been met.


Questions (some if not all) owners may have or want to comment on:

The cost to pursue owners and get them to vote is obviously a drain on the finances of the Association.

Has the Board determined what the expectations are regarding response?

How much money and effort should the Board expend to try to get the required number of owners to actually vote?

At what point will the BOD concede that the effort is not going to achieve the desired result and seriously consider a Plan B?

 

[Goofyhobbie]

Are all weeks at BIS-Duck subject to the sunset clause?

I've seen a lot of weeks pass through Ebay over the past few years and I don't recall a single one of the auctions disclosing the sunset clause.

MAPLE LEAF:

There are or should be 5,865 owners of record; but not all may ever be found and some may have passed away.

Given that there are 115 Units at the resort the BOD has to be concerned about accounting for all owners of record for each of the 115 Units.

The records are or should be in the Dare County, NC Court House and available for a search of title.

The gross number of 5,865 is achieved by the following calculation:

115 Units x 51 Intervals = 5,865 [Each Unit has one Interval set aside for maintenance.]

Of course it is very likely that the Association owns X number of intervals and it is probable that those intervals owned by the Association would have no vote regarding the termination clause.

 

[harveyhaddixfan]

Would it make sense to include something with the annual MF bill? Also include some legalese doc that says if you don't send your vote back, your payment of MF constitutes an agreement to the amendment? And if you don't pay the MF, a swift foreclosure should occur and take these units out of the voting pool? Just thinking out loud here. Sometimes the stupid ideas are the best!

 

[Goofyhobbie]

Would it make sense to include something with the annual MF bill? Also include some legalese doc that says if you don't send your vote back, your payment of MF constitutes an agreement to the amendment? And if you don't pay the MF, a swift foreclosure should occur and take these units out of the voting pool? Just thinking out loud here. Sometimes the stupid ideas are the best!
__________________
Chris

Chris,

That is thinking outside the "Box."

However, we should keep in mind that an owner, as far as I know, has the right to NOT VOTE, VOTE YES or to VOTE NO.

A person going to a baseball game to watch the Cardinals whoop up on the Pirates in Busch Stadium may have to accept the printed language on the back of the ticket which effectively waives the right of the ticket holder to get upset if he is hit by a Fly Ball in deep left center; but the ticket holder is under no obligation to buy the ticket and use it to sit in harm's way.

Meanwhile, an owner is obligated to pay his maintenance fees or accept the consequences of non-payment. He has the choice to not pay the fee and thereby forgo his usage of his interval; but as far as I know, he should not be compelled to have given up his right to NOT VOTE or to VOTE NO simply because he followed through on his contractual obligation to pay the fee.

As stated earlier I am not an attorney and the above and all comments provided are just my personal opinion as an interested party.

It is my humble opinion as an interested party that a super majority of all owners actually casting a vote would be necessary to change the By-Laws or the Declaration of Interval Ownership.

Just my two cents!

 

[Egret1986]

I was at the HOA meeting last year when this was addressed

It is my humble opinion as an interested party that a super majority of all owners actually casting a vote would be necessary to change the By-Laws or the Declaration of Interval Ownership.

75% is required. This will be a very difficult thing to accomplish, no doubt.

The BOD realizes that the task of getting this percentage of owners to vote and come up with the required 75% will be extremely difficult to accomplish. They hope that by starting a number of years in advance will help with the situation.

I plan to attend the upcoming HOA meeting on October 24. I'm sure this will be on the agenda for the meeting.

 

[Goofyhobbie]

Egret 1986,

As of October 1, 2015, yours truly has not received any "packet" regarding the proposed Amendment; however, I have done quite a bit of research given the very limited resources on the Internet.

It appears to me that the BOD is probably using an "Informal Action by Owners" section of whatever Declaration has been appropriately recorded so that they can take action required or permitted at a meeting of the owners of the Association.

If I am understanding the process correctly, the BOD has come up with an Amendment to the Declaration of Interval Ownership or whatever appropriate document that has been recorded which has the Termination section of the Declaration clearly stated.

I want personally know how that Amendment is worded until I receive the packet or I should say, IF I receive the packet.

The BOD has also probably enclosed in the packet the proposed Amendment and provided some Form for the owner(s) to sign and return to the Secretary of the BOD of the Association. Once received the Secretary will be or should be required to file the Vote as received in the Association records.

It will take a long time to get the needed 75% of the owners of record to provide a YES vote; but it may take less time to get 25% to provide a NO vote.

It will also be interesting to find out how the BOD handles changes in ownership after a previous owner has voted YES or NO over the seven or eight year period of time before the conversion to Tenants in Common has to take affect or when what they think is the final tally has been reached.

Added to the drama is the changes in the economy, desires of owners, and whatever other factors may come into play.

Meanwhile, it is highly unlikely that the BOD knows the addresses of each and every one of the owners of record.

We also know that the targeted audience is a "moving target" for a lot of reasons including recording of deeds that will be an on-going process as Intervals are sold and folks just pass away or sign away their ownership to someone who has never bothered to record the ownership in the proper manner.

Initially the BOD will or should get a reasonably higher percentage of returns than they would get when requesting a proxy for a vote on candidates for the BOD; but as time passes and we get closer to the conversion date the pressure will build and it will be apparent that getting enough YES votes is going to be harder and harder to achieve.

Bottom line, I guess the intent is to somehow find as close to 100% of the recorded owners as possible and then wait patiently to see how many return the requested signed FORM with a vote actually indicated.

 

[harveyhaddixfan]

Here's another "outside the box" idea. Send 2-4 mailings out asking for everyone's vote. Each additional round only going out to those who haven't responded. For round #5, mail out $20 checks attached to a clause stating that the cashing of the check constitutes a "YES" vote. I know this can work as we use measures like this at my work dealing with insurance claims. It's like the foreclosure process where you've made multiple attempts to contact them and you give one last try. Them cashing the check would acknowledge the amendment. Again, just a thought and would have to check with a NC lawyer.

 

[Goofyhobbie]

Chris,

Thinking outside the box and considering ideas that may increase the chances of getting the requisite number of written YES votes for an Amendment to the BIS Association Agreement continues to make sense.

Whether or not the ideas you have proposed will be practical and legally appropriate would have to be determined by the BOD; but keep those ideas coming.

Hopefully, the Board Members and/or other owners will stop by and join the conversation. The goal of exceeding a 75% yes vote is not insurmountable; but it is a goal that is very likely to be difficult to reach.

Meanwhile, a PLAN B, if not already being considered by the Board of Directors should be considered and implemented.

 

[Goofyhobbie]

Update

Owners following this thread may have noticed my comment about not receiving the "packet" sent out by the Board of Directors and possibly felt that I should have contacted the resort and/or the management company.

That was the first thing that was done when an announcement about the upcoming Board of Directors Meeting was received on or about September 25th. The announcement about the Fall meeting comes every year and is routine.

[For the curious - there was a "flyer" [Important Reminder Timeshare Termination Amendment] inside the envelope and it was that "flyer" that alerted me and reminded other owners that something was up.

Unfortunately when the call was made over the weekend a voice message had to be left because the contact person at the resort was unavailable.

Earlier this week when no response to my initial inquiry was forthcoming a follow-up call resulted in getting advice to contact the Management Company. That too was done and a voice mail left in anticipation of a response.

Of course, we have to keep in mind that getting to the right person can be frustrating when attempts are made. After all, those folks are busy people with a lot on their plate so it can take a while.

Today successful contact was made and a very nice lady advised that an e-mail had been sent to my inquiry; but since no e-mail had been received I have to figure that technology interfered in the process. Nevertheless what I wanted to know about the missing packet was resolved.

Turns out it was not mailed to owners of the Unit that I own although it was apparently mailed to the folks who are Interval Owners in other Units at BIS.

As no doubt thousands of timeshare owners have learned over time, not all recorded documents are easily obtainable and/or there may be a need for a more thorough review of said documents before information is sent to certain owners.

That is apparently what happened regarding the documents that tie owners of my Unit with the overall regime of interval ownership at BIS.

So, bottom line, it is my current understanding that at least 51 Interval owners at Barrier Island Station - Duck have not received a packet and probably will not receive a packet until the Legal Counsel of the Association Board has had an opportunity to review and interpret the underlying legal documents.

 

[Goofyhobbie]

On-going Thread RE: Barrier Island Station - Termination Provision

Egret1986,

I am addressing you in particular because it is my understanding that you are also an owner of at least one interval at Barrier Island Station (BIS) and it is my understanding that you probably own other Timeshare weeks at other resorts in the Outer Banks (OBX) area of NC. However, the posting is open as opposed to private in case any other owner or TUG Member/Guest wants to chime in.


As all who are following this thread already know, the owners of record at the BIS VIP (House) have not been sent a packet about the Termination issue that apparently impacts the other Interval Owners at BIS.

The BOD attorney may have found that somehow there is something materially different in the Declaration for the VIP building.

Meanwhile, back in the late 1980's there was a NC General Statute 93A-44 which required developers of a Timeshare complex in NC to offer a Public Offering Statement to all prospective buyers of Interval Ownership.

In 1989, the BIS Public Offering Statement had a Section 13 where in BIS explained that there was a Declaration of Unit Ownership and said the following:

The document creating the Timeshare program is the Declaration of Unit Ownership for the Building in which you are purchasing.

Later in the same section the Public Offering Statement went on to say:

Copies of the Declaration of Unit Ownership for the Building which you are proposing to purchase in along with copies of the Articles of Incorporation and By-Laws of the Association for the Building may be obtained from Barrier Island Station, Inc....upon request.

Following the above wording the next to last sentence went on to say:

Also, attached are copies of the Articles of Incorporation and the By-Laws of the Association for the Building within which you are purchasing and a copy of the proposed contract.

The contract was attached; but the Articles of Incorporation and the By-Laws of the Association for the VIP Building were not attached.

However, it was understood that the Declaration of Unit Ownership for the VIP Building; the Articles of Incorporation and the By-Laws of the Association were filed in the Dare County Courthouse and would be linked to the Interval Ownership Deed.

You may have received a "packet." If so, is it your impression that there exists some "MASTER" Declaration applicable to ALL Buildings at BIS committed to Interval Ownership?

If so, it makes sense that 75% of all Interval Owners of record (regardless of Building) would have to vote YES to amend the “Master” Declaration that has a Termination clause.

But, all the documents that I have indicate that each Building committed to Interval Ownership has its own specific Declaration.

If there is a Termination provision in a Declaration of Unit Ownership for each of the Buildings having Interval Ownership and if there is NOT a "Master Declaration" for all Buildings having Interval owners, why would the Board be seeking a vote from all the Interval Owners of record at BIS?

Why wouldn't the BOD go for a 75% vote of the Interval Owners in each Building where a Termination provision is provided?

If a “Master Declaration” exists do you have a copy or have you seen a copy of the document?

It would be interesting to know exactly how the “Master” Declaration (if there is one in existence) describes the Termination and the process as well as what the Declaration for any particular Building has to say on the subject.

If you do not have a copy of your appropriate underlying documents do you know of a relatively easy way to get a copy of the relevant documents without physically making a trip to the Dare County Court house and researching the recordings?

 

[Egret1986]

We bought our first timeshare in 1984 and it was at Barrier Island Station Duck

The building that we bought into was pre-construction at the time. We may have gotten said documents at the time. We kept and used our blue March week for 25 years. I gave it away on Craigslist a few years ago. I may have the original documents somewhere up in my attic. It wasn't until last year at the HOA meeting that I first heard about the sunset clause.

TUG Member Fayeoctober's husband won a seat on the BOD last year. She had run for the BOD a couple of times herself without success. I can't answer your questions about any of this. Maybe Fayeotober and her husband can assist with your questions.

I'm going down to the OBX for a few days prior to the HOA meeting on October 24 and will be attending the meeting and visiting the resort. I have to believe that this will be a subject that will be addressed again this year and maybe more info will be forthcoming. I would also be happy to print out your post and see if anyone at the meeting can address these questions. Although, I have been an owner at the resort for 30+ years, I forgot about the VIP Building until a few months ago when I saw a week for sale in this building. Recently, I saw some exchanges into this building through RCI, which I didn't remember seeing before. Maybe they were in the system previously and I just never noticed until I was reminded about the VIP Building from that "for sale" listing.

It is my understanding, which may or may not be accurate, is that there are phases for the various buildings, and each has its own set of documents with its own sunset clause and ending date. I believe that each phase has to get a 75% vote. I don't remember hearing anything about a "Master" declaration at last year's meeting.

 

[Goofyhobbie]

Egret 1986,

Thanks for your reply and for sharing your input. Also, thank you for your willingness to print out this discussion and for sharing it with the BOD or with others that you may meet at the meeting.

I look forward to getting your feedback as things develop.

 

[Egret1986]

I attended the meeting on October 24, 2015

Egret 1986,

Thanks for your reply and for sharing your input. Also, thank you for your willingness to print out this discussion and for sharing it with the BOD or with others that you may meet at the meeting.

I look forward to getting your feedback as things develop.

I have briefly posted many of the details of the meeting on my Blog.

http://www.timesharevacationsblog.com/2015/11/barrier-island-station-duck-hoa-meeting/

It is my understanding, and questions were raised at the meeting by an owner in the VIP Building, that the Association documents were reviewed for this house and it has been determined that the VIP house does not have the Timeshare Termination clause that the other timeshare regimes have in their documents. This is why the owners in the VIP Building did not receive a packet.

It was also indicated at the meeting that the VIP Building will receive its exterior and structural renovations during the off-season, along with the remaining buildings. This work is anticipated to be completed by March.

Hope this helps update you.

 

[Goofyhobbie]

Egret1986,

Thanks for the update.

 

[RonB]

I have not heard of the vip building - which building is it?
Thanx,
Ron

 

[Egret1986]

I have been an owner at BIS Duck since 1984 and had never heard of it either.

I have not heard of the vip building - which building is it?
Thanx,
Ron

I saw a listing a few months ago for the VIP building for timeshare ownership.

It's an individual cottage, with four bedrooms, that sets next to the property across from the gate. It is near the road and overlooks the sound. I believe it is the only four bedroom at BIS. I've recently started seeing exchanges into 4BR accommodations on RCI for this resort. I never remember seeing 4BR availability in the past for BIS. I don't know anything else about the VIP Building. I did take some exterior pics while I was down at the resort recently.

 

[harveyhaddixfan]

Here's a new thought. Check out this post and the link in it to a court case:

(Arkansas deeded week) must I convert to RCI Points?
http://www.tugbbs.com/forums/showthread.php?t=231818

Maybe there is some legal steps that could be taken?

 

[Fayeoctober]

Maybe I am being dense but I don't see where the issue of forcing weeks owners to convert to points has anything to do with the BIS Duck Termination provision? At BIS Duck there is a provision in the deed for all the timeshare buildings, except the VIP one, whereby the timeshare form of ownership will end on certain dates with the first one coming in 2024. This applies to owners of both weeks and points and no one is asking anyone to convert to points in connection with the termination provision.