Calling ALL TUGGERS - Advice and Help Needed - Southwind Management - What to Do?

[got4boys]

I am in the process of selling my timeshare (listed on TUG) - Palace View at Spinnaker in Branson and received an offer from a buyer. - $1. (Basically free other than the buyer paying minimal closing cost and transfer fee)

Now the story gets better...

As the details are being worked out, I found that the HOA - Southwind Management company is requiring the NEW owners to prepay $1,500 in maintenance fees before they transfer can happen. This would be on top of the transfer fee (in the amount of $125, instead of $50)

Note, since this is an every other year and maintenance fees are approx. $497, they are asking to pay 5 years (even usage - 2012, 2014, 2016)

I was also told that this change happened as of the 1st of January 2011.

The owner, me, (who own many here) have not been notified of this at all. The letter to all owners is in the process of being drafted and not yet sent out.

Does any TUGGER know to who or what I can do to protest this new change and how "LEGAL" is this? Southwind Management is in Hilton Head, South Carolina.

I know that I can write HOA and copy the Attorney General Office and open a file with the better BBB.

The property that I am selling is in Branson, MO.

Peggy

 

[Tia]

Hmmm sounds like the resort needs $$$. Hope someone has a suggestions. If you really want to get rid of it offer to split it or pay it to be done.

 

[Maple_Leaf]

New Transfer Requirement?

As the details are being worked out, I found that the HOA - Southwind Management company is requiring the NEW owners to prepay $1,500 in maintenance fees before they transfer can happen. This would be on top of the transfer fee (in the amount of $125, instead of $50)

Note, since this is an every other year and maintenance fees are approx. $497, they are asking to pay 5 years (even usage - 2012, 2014, 2016)

I was also told that this change happened as of the 1st of January 2011.

The owner, me, (who own many here) have not been notified of this at all. The letter to all owners is in the process of being drafted and not yet sent out.

Peggy

Is Southwind requiring this advance payment of MF on transfer for all Spinnaker properties or just Branson? Talk about a way to kill their resale market.

 

[got4boys]

Is Southwind requiring this advance payment of MF on transfer for all Spinnaker properties or just Branson? Talk about a way to kill their resale market.

All Properties that is managed by them.

Peggy

 

[Steve NH]

Have you actually brought this up with the new potential buyer.

Just because they offered you $ 1.00 does not mean they couldn't pay the maint fee.

If I were interested I would have offered $ 1.00
Then - as with all my TS - I'd pay the maint fees at least 2 yrs up anyways

In the end it will really cost him nothing xtra (maybe interest earned..) He would have to be paying the fees anyways.

 

[PortableTech]

Intresting idea.. Af first I was thinking what a crock, but it actually makes sense. Especially if the resort has had to deal with defaulting PCCs or other such issues. It keep the turn and burn companies from causing them major issues in the short term.

In your specific case, if the document says three years pre-paid you may wish to see if it says use years or calender years. That would make a difference for EOY ownerships.

-- PortableTech

 

[fishingguy]

blame it on the shell companies...

That new policy by Southwind is going to cause a stir in the eBay sales. They manage more than just Spinakker properties. I guess the rubber will really meet the road when the resort transfer is supposed to occur; there'll be quite a few surprises then.

I'm sure the policy was to stem the increase in defaulting shell companies and PCC's, that have hurt MF for the legitimate owners. Let's face it, not many of these "bailers" would fork out 2-3 years in MF, if they were going to dump the property into bankruptcy/foreclosure in less than a year.

On the other hand, we would have paid MF 2 or 3 years ahead for the resale purchases we made. But we were serious about getting these properties. So, it will be interesting to watch what the reaction will be.

 

[PortableTech]

How are they calculating the MFs 3 years out? I mean they change every year, so in year 2 and 3 are you expected to make up the difference betwee your closing MF and your billed MF? If not there could be a savings here.

 

[MichaelColey]

Wow! If this is true, this could really hurt the PCCs and help protect resorts from defaulting owners. As an owner, I think I like it.

I'm in the process of buying another unit there, and they haven't said anything about prepaying maintenance fees. I'm certainly willing to.

I've prepaid maintenance fees at a couple resorts, and the prepayment is always an estimate. Once maintenance fees are adjusted, you owe the difference (or get a credit towards future fees, if they drop).

I have a couple contacts there. I'll ask about it.

 

[fishingguy]

How are they calculating the MFs 3 years out? I mean they change every year, so in year 2 and 3 are you expected to make up the difference betwee your closing MF and your billed MF? If not there could be a savings here.

The OP said that Southwind was using $1500 for a number. I just took it upon myself, to translate that into an estimated 2 or 3 years worth of MF. However, exact MF would be dependant on the resort, unit size and maybe other factors.

It really is no different than what some resorts require when you deposit future years TSs. Which I doubt that PCC's and shell companies would do anyway.

It might impact some PCC's, who transfer a property into their name. But the PCC's that operate with POA wouldn't take ownership anyway, so the previous owner is still on the hook. What is scary is that the PCC's will adapt to this change [in the later case], and just increase the up-front fee that an owner who is looking to get out of thier property will have to pay. Then they can run away with even more of the original owners money!

 

[PortableTech]

The OP said that Southwind was using $1500 for a number. I just took it upon myself, to translate that into an estimated 2 or 3 years worth of MF. However, exact MF would be dependant on the resort, unit size and maybe other factors.

It really is no different than what some resorts require when you deposit future years TSs. Which I doubt that PCC's and shell companies would do anyway.

It might impact some PCC's, who transfer a property into their name. But the PCC's that operate with POA wouldn't take ownership anyway, so the previous owner is still on the hook. What is scary is that the PCC's will adapt to this change [in the later case], and just increase the up-front fee that an owner who is looking to get out of thier property will have to pay. Then they can run away with even more of the original owners money!

This is true, the PCCs will just raise rates, and this means the desperate sellers will pay more, but on the flipside the HOA is still better protected. Odds are within that 3 year window the PCC will either sell it (should be more sellable with pre-paid fees) or die a horrible death and with a little watching the HOAs should be able to pick up on this prior to be becoming a serious issue.

 

[fishingguy]

...not much help, but here's what I suspect.

got4boys wrote:
Does any TUGGER know to who or what I can do to protest this new change and how "LEGAL" is this? Southwind Management is in Hilton Head, South Carolina. I know that I can write HOA and copy the Attorney General Office and open a file with the better BBB. The property that I am selling is in Branson, MO.

I was hoping another Tugger would jump in and touch on the OPs original question. Without that, I'll take a whack at what I've been able to garner so far, since I own TSs in MO.

My gut tells me that the resort HOA might have just as much to do with this change, as the management company itself. There is a lot of focus right now, on the increased defaults or bankruptices stemming from shell companies and/or owner transfers. You'd need to check with both to find out where it actually originates -- but chances are it started with the HOA who directed [or endorsed], that the management company take some type of action.

MO updated/revised some of the TS laws/legislation, in an effort to stem bankrupticy and defaults from shell companies and owner transfers. Your TS is located and legally recognized in MO, and the resort is essentially providing pre-approval of ownership transfer [which might be argued is consistent-with or pursuant-to the revised legislation]. Regardless, I think it would be difficult to show, that they are not acting in the interests of all owners with this action.

This is the 2nd resort in MO that I've heard about, that has made a similar and recent change.

 

[MichaelColey]

Probably a discussion for another thread, but I'm surprised that HOA's haven't done more to combat PCCs (educating through newsletters, HOA sites, etc.) and provided alternatives (allowing owners to deed back, classified listings, etc.).

 

[e.bram]

This gives potential bailers a legal defense for defaulting. Inhibiting an attempt to sell the TS. I don't think the HOA can legally use future default as a reason to levy this charge.

 

[Bourne]

Confirmed with my contact with Southwind that it is indeed the case... As an owner of multiple units, I am for this change. That said, it may not work out for Peggy...sorry that you got caught on the wrong side of the deadline.

This impacts all properties under management... i.e. Waterside, Southwind, Egret Point etc. at Hilton Head...

I don't see it as this ruling inhibiting an attempt to sell the TS. Its not like you are paying a huge chunk as transfer fees a.k.a. The Mexico timeshares. Every penny you pay is going towards maintenance fees.

The buyer just needs to make a bigger commitment from a time perspective. Most of us do. The PCCs do not...


P.S. At my contact's request, I am not posting the official doc. If anyone wants it, please pm me and I can email it.

 

[fishingguy]

e.bram wrote:
I don't think the HOA can legally use future default as a reason to levy this charge.

I'm not sure that the HOA's aren't just trying to comply with the changes enacted by the MO State Legislature. But maybe they are and maybe they aren't -- TBD I guess.

However, I seriously doubt that any PCC's (or thier shell companies), will be around long enough to see a challenge through to completion anyway. That's not thier M.O.

 

[Steve]

I think this is going to make selling timeshares that are managed by Southwind MUCH more difficult. It is hard enough to get buyers to pay for even one year of maintenance fees these days. Trying to get them to pay for multiple years in advance is going to be a huge deal killer. I agree that this policy could help HOAs collect more maintenance fees, but it is going to hurt owners that need to sell.

Some of the enthusiasm for this policy may be premature. I think that the principle of unintended consequences could be a major factor down the road...and probably sooner rather than later.

Steve

 

[teepeeca]

Since "ADVANCED" maintenance fees are being collected, what system does the management company and/or the HOA have, to keep those funds in a seperate, interest-bearing account, to be taken out ONLY in the year paid-for, and NOT taken "early" to help with their on-going costs????

Sounds like "TROUBLE" if not having a close-watch by actual owners and the HOA !!!

Tony

 

[TimeshareTraveller]

But many of the Post Card Companies don't bother to transfer the deed/ownership until the next sucker...er, buyer, is found. I bought a timeshare from one of them years ago and what struck me as odd was that the deed had already been made out by the seller, but hadn't been recorded by the PCC. The seller had signed, but the buyer was blank on the deed.

(Shady, shady, shady)

And it will just lead to more Quit Claim style deeds where the recording of ownership is not done by the PCC at all.

This doesn't sound like insurance by the resort against PCCs. This sounds like the resort is raising fees to cover other losses. Maybe to stem the tide of resale and force more owners to just hand over their deed to the company.

Kind of like a 'first right of refusal' after-the-fact. They can't stick in a FRoR, so they are slipping it in the backdoor by making it impossible to sell the unit.

I'm not sure, but this might be open to a court challenge if you don't get immediate access to the rights of the week as soon as you pay the maintenance fees. The right to deposit your 2016 week in a trading company right off the bat or reserve your week several years in advance in a desirable time.

 

[TimeshareTraveller]

And I'll also mention that as a buyer, I wouldn't touch a timeshare unit with a management company that was doing this upfront maintenance fee nonsense. It would be a huge warning that I couldn't sell it.

 

[BetaJoe]

I am in the process of selling my timeshare (listed on TUG) - Palace View at Spinnaker in Branson and received an offer from a buyer. - $1. (Basically free other than the buyer paying minimal closing cost and transfer fee)

Now the story gets better...

As the details are being worked out, I found that the HOA - Southwind Management company is requiring the NEW owners to prepay $1,500 in maintenance fees before they transfer can happen. This would be on top of the transfer fee (in the amount of $125, instead of $50)

Note, since this is an every other year and maintenance fees are approx. $497, they are asking to pay 5 years (even usage - 2012, 2014, 2016)

I was also told that this change happened as of the 1st of January 2011.

The owner, me, (who own many here) have not been notified of this at all. The letter to all owners is in the process of being drafted and not yet sent out.

Does any TUGGER know to who or what I can do to protest this new change and how "LEGAL" is this? Southwind Management is in Hilton Head, South Carolina.

I know that I can write HOA and copy the Attorney General Office and open a file with the better BBB.

The property that I am selling is in Branson, MO.

Peggy

I would obviously try any legal method to get the $1,500 "advancement" removed or at least reduced. Let's assume they(Southwind Management) do not budge on the $1,500.
I would then discuss with the potential buyer everything that you discussed with us. I.E that maintenance fees are $500 or so every other year. I do not think it would be unreasonable to have him pay the "2012" or $500 of the(Advanced Maintenance Fees) no questions asked. Then with the remaining thousand pretend he had a CD at 5% -- if I understand the even year payments correctly assume it was 4 years or so.(do not compound it) Therefore, the $1,000 would be $50 a year in interest times 4($200). Therefore, you contribute $200 to $1,500. He pays the $1,300 you pay $200 equals $1,500.
Seems more than fair to me.

 

[Egret1986]

I have two Waterside units in Hilton Head. Major negative in my opinion.

I think this is going to make selling timeshares that are managed by Southwind MUCH more difficult. It is hard enough to get buyers to pay for even one year of maintenance fees these days. Trying to get them to pay for multiple years in advance is going to be a huge deal killer. I agree that this policy could help HOAs collect more maintenance fees, but it is going to hurt owners that need to sell.

Steve

I agree that this is going to hurt owners that NEED to sell or WANT to sell. :annoyed:

Since "ADVANCED" maintenance fees are being collected, what system does the management company and/or the HOA have, to keep those funds in a seperate, interest-bearing account, to be taken out ONLY in the year paid-for, and NOT taken "early" to help with their on-going costs????

Sounds like "TROUBLE" if not having a close-watch by actual owners and the HOA !!!

Tony

I look forward to looking at the document that another TUGGER is willing to share. Definitely sounds like Big Trouble. I was a little leary of Southwind after purchasing and they were upgrading their computer system last year. It took nine months for them to complete an ownership transfer and acknowledge me as an owner. I was left in limbo for the most part. At the 7-month mark, after much run-around, lots of phone calls and emails, I was able to finally get them to put my Renter on the Reservation (which to them did not really exist since the transfer hadn't been completed). What a nightmare.

This doesn't sound like insurance by the resort against PCCs. This sounds like the resort is raising fees to cover other losses. Maybe to stem the tide of resale and force more owners to just hand over their deed to the company.

I agree....covering other losses and stemming the tide of resale. I won't be handing over my deeds since these are prime summer weeks and I can rent them, but it sure is a detriment to attempting to sell these weeks.

And I'll also mention that as a buyer, I wouldn't touch a timeshare unit with a management company that was doing this upfront maintenance fee nonsense. It would be a huge warning that I couldn't sell it.

Believe me, if I had known this was coming down the pike, I never would have purchased based on this policy. I don't care if they are summer weeks and someone had been giving them away at the time (which they weren't).

I'm glad this thread was started because I would have been blind-sided like the OP if and when a buyer comes along. Better to know what's going on. It's crazy that they have instituted this policy without notifying owners first.

 

[Maple_Leaf]

Southwind is just a property management divison of Spinnaker

So these Spinnaker resorts managed by Southwind (e.g. Waterside) are really just developer-managed resorts. This new rule for resales evidently has been established retroactively to Jan 1 without yet notifying the owners. Once again, we have another example of why Tuggers should avoid owning at developer-controlled resorts.

 

[fishingguy]

more....?

Well at first glance it appears that more than just the Spinnaker resorts would be affected. Southwind also manages Branson Grand Regency, French Quarter, etc.

 

[Maple_Leaf]

This may need to be clarified

All Properties that is managed by them.

Peggy

This may need to be clarified as "All Spinnaker properties managed by Southwind." Is Southwind enforcing this at Branson Grand Regency, a property not owned by Spinnaker?