Try reading the article!
If it's that simple, Kurt, why haven't you answered my specific questions to you. Is it that there are no legitimate answers?
I'LL START BY SUGGESTING THAT YOU READ MY FULL ARTICLE IN TIMESHARING TODAY. I BELIEVE THAT IS A LEGITIMATE ANSWER. THAT IS WHY I WROTE IT.
I'LL TRY TO RESPOND TO YOUR SPECIFIC QUESTIONS. THE ANSWERS I HAVE ALREADY GIVEN, YOU HAVE DISCOUNTED, SO I AM NOT SURE HOW WORTHWHILE THIS WILL BE.
"Having participated on numerous HOA boards of various types over the past 35 years, and having considered this type of issue on numerous occasions, I agree with John. It might well make sense to try to find a third party to refer owners to if they want to sell, but for the HOA (that's all of us as owners) to readily take back every timeshare that individual owners no longer want would seem to be a foolhardy policy.
THE FOLLOWING HAS TO DO WITH FULLY PAID UP TIMESHARES, FOR WHICH THERE IS NOTHING OWING EXCEPT THE NEXT YEAR'S MAINTENANCE FEES.
I HAVE SUGGESTED TO PEOPLE SEEKING MY ADVICE THAT THEY OFFER TO HAVE THEIR OWN ATTORNEYS DRAW UP A QUITCLAIM DEED AND THAT THEY OFFER TO PAY RECORDING FEES, SO THAT THE RESORT AND OTHER OWNERS DO NOT INCUR ANY COSTS IN TAKING BACK TIMESHARES; THAT THE SELLER FIRST CONTACT THE HEAD OF THE HOMEOWNERS ASSOCIATION OR THE LEGAL DEPARTMENT AT THE RESORT, SINCE MOST RESORTS TRAIN THEIR STAFF TO TELL ANYONE WHO ASKS THAT THE POLICY IS NOT TO TAKE THEM BACK.
THESE SUGGESTIONS ARE MADE TO PEOPLE WHO ARE SINCERE IN TRYING TO SOLVE THEIR FINANCIAL AND HEALTH PROBLEMS; WHO WANT TO DO THE RIGHT THING; WHO HONOR THEIR FINANCIAL OBLIGATIONS AND WHO ARE TROUBLED BECAUSE THEY CANNOT CONTINUE TO PAY.
THIS PROCESS IS LESS TROUBLESOME AND LESS COSTLY TO THE OWNERS THAN TO HIRE AN ATTORNEY TO FORECLOSE ON THE DEED, WHEN THERE IS LITTLE LIKELIHOOD OF GETTING ANYTHING BACK.
When taking back a timeshare, the first thing that happens is that no one is responsible for the MFs on that timeshare until a new owner is found. For some timeshares that can't even be sold on eBay for $1, that could be forever. That means our MFs go up because someone isn't paying their share on that timeshare.
THAT IS THE PROBLEM. MANY CAN'T EVEN BE SOLD ANY MORE, EVEN FOR $1. THAT IS NOT THE SITUATION THAT EXISTED WHEN YOU AND I FIRST PURCHASED. THAT IS THE NEW REALITY. IF WE KNEW THAT WE COULD NOT EVER GET RID OF THEM, AT ANY PRICE, WE WOULD NEVER HAVE PURCHASED IN THE FIRST PLACE. THE PROBLEMS AT THAT TIME WERE DISHONEST SALES PEOPLE, THEN PROBLEMS WITH GETTING DECENT EXCHANGES WITH ALL OF THE CONFLICTS OF INTEREST AT RCI - MAKING IT POSSIBLE FOR NON-OWNERS TO GET VACATIONS AT A CHEAPER PRICE THAN WE PAY FOR MAINTENANCE FEES/SPECIAL ASSESSMENTS/EXCHANGE FEES/GUEST FEES.
IF THE RESORT DOESN'T DO SOMETHING PRO-ACTIVE, AS I SUGGEST IN MY ARTICLE, THIS WILL HAPPEN WHETHER YOU AND I LIKE IT OR NOT. AND, I AM ONLY TALKING ABOUT PEOPLE WHO ARE SINCERE IN TRYING TO WORK SOMETHING OUT. WE BOTH KNOW THAT THERE ARE MANY WHO WILL SIMPLY IGNORE EVERYTHING AND FORCE A FORECLOSURE ACTION - AT GREAT COST TO THE OWNERSHIP.
I AM A TIMESHARE OWNER ALSO. I WANT TO CONTINUE TO BE ABLE TO GO TO MY RESORTS AND ENJOY MY VACATIONS ALSO. BUT, I ALSO REALIZE THAT IF THINGS ARE NOT DONE, THAT IF THE SITUATION IS IGNORED, THAT THE TIMESHARE RESORT MODEL WILL COLLAPSE.
WHO KNEW THAT RCI WOULD DESTROY THE SYSTEM THROUGH ABSOLUTE GREED, AND MAKE TIMESHARES ESSENTIALLY WORTHLESS?
AND, RESORTS REFUSING TO HELP WITH THE NATURAL REALLOCATION OF THE INTERVALS IS CONTRIBUTING TO THE INCOME OF ALL THOSE SCAM ARTISTS OUT THERE. MANY PEOPLE WHO CONTACT ME HAVE ALREADY LOST MONEY TO THEM. IF THE RESORTS HELPED WITH THIS PROCESS, SOME OF THOSE SCAM ARTISTS WOULD BE OUT OF BUSINESS.
Also, the costs associated with facilitating such sales by the HOA could be horrendous. How does the HOA pay for the advertising, personnel and closing costs on timeshares that won't sell for more than a few bucks without adding significantly to the net costs of the HOA - meaning even more increased MFs for the rest of us.
THERE WILL ALWAYS BE OUTSIDE SALES ORGANIZATIONS THAT WILL SELL THEM FOR A PERCENTAGE OF THE SALES PRICE, WITH NO NET COST TO THE RESORT. THERE ARE INEXPENSIVE WAYS THAT THE RESORT CAN OFFER INTERVALS TO THEIR MEMBERS - THROUGH WEBSITES; THROUGH FLYERS AT THE FRONT DESK.
"THAT WON'T SELL FOR MORE THAN A FEW BUCKS" - THAT IS AN ATTITUDE THAT IS COMPLETELY DIFFERENT FROM ONE YOU SEEM TO BE ESPOUSING. MANY RESORTS WILL SELL THEM "FOR A FEW BUCKS" TO THEIR OWNERS AND TO OTHERS WHO ARE INTERESTED BECAUSE THEY REALIZE THAT PAYING OWNERS, OWNERS WHO PAY MAINTENANCE FEES ARE THE REAL LIFEBLOOD OF THE RESORT - NOT MAKING A BIG PROFIT ON RESALES. LOOK ON THE INTERNET! LOOK AT THE NEW REALITY! OTHER THAN "GREATER FOOLS", WHO IS GOING TO PAY A LOT FOR MOST TIMESHARES??
The developer sells us a product. Then the developer or a third party will maintain the property at a cost - our MFs. Isn't that a lot like many businesses? A car manufacturer sells us a car. Then, at a cost, the car manufacturer or a third party (at our option) will maintain it for us. We don't even think of suggesting that the manufacturer come get it and haul it away if it breaks down or otherwise has no value to us. What's so different about a timeshare that suggests the developer or HOA should take it back?
AS I SAID EARLIER, AND AS YOU IGNORED, I SAID WHEN A CAR IS PAID OFF, ONE CAN GET RID OF IT. I AM TALKING ABOUT PAID OFF TIMESHARES.
AS TO TIMESHARES WHEN THERE IS STILL A SIGNIFICANT BALANCE OWING. WHEN A BUYER PURCHASES A TIMESHARE FROM A DEVELOPER, THEY USUALLY SIGN A STATEMENT THAT AT THE TIME OF PURCHASE, THAT THEY HAVE NO SIGNIFICANT FINANCIAL PROBLEMS THAT WILL KEEP THEM FROM MAKING PURCHASE PAYMENTS. YES, SOME PEOPLE GET INTO FINANCIAL PROBLEMS WHILE THEY ARE STILL PAYING ON THE PURCHASE. JUST LIKE THEY DO WITH HOSPITAL BILLS AND CREDIT CARDS. SOME ARE DEADBEATS WHO SIMPLY DECIDE THEY DON'T WANT TO PAY ANY MORE. SOME ARE SIMPLY IN OVER THEIR HEADS. I DON'T HAVE A ONE SIZE FITS ALL ANSWER.
MY TYPICAL SUGGESTIONS INCLUDE THE FOLLOWING. CONTACT AN ATTORNEY OF YOUR CHOICE. UNDER ATTORNEY-CLIENT PRIVILEGE, GIVE A TRUTHFUL ACCOUNTING TO YOUR ATTORNEY OF YOUR HEALTH/FINANCIAL PROBLEMS. HAVE YOUR ATTORNEY CONTACT THE HEAD OF THE HOMEOWNERS ASSOCIATION OR THE LEGAL DEPARTMENT. PERHAPS THEY CAN WORK OUT A PAYMENT PLAN OR A RESOLUTION WITHOUT GOING THROUGH A FORECLOSURE, THAT IS IN THE BEST INTERESTS OF BOTH THE PURCHASER AND THE RESORT.
ANOTHER SUGGESTION IS TO CONTACT THE HEAD OF THE SALES DEPARTMENT OR THEIR SALES PERSON AND OFFER TO PAY A SMALL COMMISSION OF THE SALES DEPARTMENT WILL RESELL. THEY WOULD BE GIVING UP ALL EQUITY, INCLUDING DOWN PAYMENT AND PAYMENTS MADE. THEIR "USED" TIMESHARE WOULD BE CHEAPER TO A NEW BUYER THAN WOULD A "NEW" ONE. SO, THE PROCESS WOULD MAKE SENSE FOR CLOSING BUYERS WHO BALK AT THE INITIAL PRICE. REMEMBER, PEOPLE WHO OWN MONEY ON THEIR ORIGINAL PURCHASE ALMOST ALWAYS OWN AT A RESORT STILL IN A SALES MODE.
A THIRD OPTION IS TO FIND A FRIEND, FAMILY MEMBER, CO-WORKER WHO WILL HELP WITH PAYMENTS IN EXCHANGE FOR HAVING THEIR NAMES ON THE DEED AND SHARING IN THE USAGE. THE NEW PERSON PROBABLY PAYING A LOT LESS THAN THE OWNER DID PAY ALREADY. OBVIOUS? I CAN'T TELL YOU HOW MANY PEOPLE HAVE TOLD ME THAT THEY NEVER THOUGHT OF THAT. YES, THERE CAN BE PROBLEMS WHEN SUCH A PARTNERSHIP IS FORMED. BUT, IT IS AN OPTION FOR SOMEONE WHO IS DESPERATE.
I'll concede that there are some high-end timeshares, especially those with year-round high seasons, where the HOA would make a nice profit by accepting unwanted timeshares. But there are very few of those resorts.
AGAIN, SELLING AT ANY PRICE BRINGS IN A MAINTENANCE FEE PAYING NEW OWNER. AND, THE QUICKER THE SALE, THE LESS DRAIN ON THE RESORT BUDGET. SO GET OUT OF THE THOUGHT PROCESS THAT THE RESORT HAS TO MAKE SOME SORT OF BIG PROFIT ON THE RESALE AND TAKE ON A DEVELOPER STYLE SALES TEAM.
As a further example, suppose I own a timeshare at a Florida resort that is partially destroyed by a hurricane. The insurance limitations result in a special assessment of $5,000 per timeshare, more than the average resale value of any of the off-season timeshares at that resort. So, because the resort has adopted the policy that some of you espouse, about half of the owners (most of the off-season owners) deed their timeshares to the HOA. That leaves all of the remaining owners with double the proposed special assessment and double the normal annual MFs! Then the deed-backs accelerate until the BOD finally votes to stop accepting deed-backs. Since I was away on an extended deserted island trip, it turns out that I’m the only owner left when I find out about the mess. And my MFs to make the budget balance, before considering the SA, are up to $2,340,000 for my single week (52 weeks X 100 units X $340 normal MF). I don’t think I can pay!
YOU ARE BIG ON OWNERS TO DO THE RESPONSIBLE THING AND PAYING NO MATTER WHAT. THE SITUATION YOU HYPOTHESIZE ABSOLVES THE RESORT OF ITS RESPONSIBILITY - TO MAINTAIN SUFFICIENT INSURANCE AND RESERVES, TO PAY FOR NATURAL DISASTERS AND FORESEEABLE REPAIRS. THAT IS NOT RESPONSIBLE MANAGEMENT AND SHOULD NOT BE A REASON FOR SPECIAL ASSESSMENTS, IN MY WAY OF THINKING. AT SOME RESORTS, INCREASING MAINTENANCE FEES AND ASSESSING SPECIAL ASSESSMENTS ARE A WAY TO INCREASE PROFITS FOR MANAGEMENT! DO I HAVE TO NAME NAMES? AT SOME RESORTS, SPECIAL ASSESSMENTS ARE DUE TO MANAGEMENT IGNORING PROBLEMS OVER MANY YEARS UNTIL SOMETHING HAS TO BE DONE. DO I HAVE TO NAME NAMES?
BASICALLY, MY POSITION IS IF A RESORT IS RUN PROPERLY, AND IT WAS BUILT AND SOLD ORIGINALLY AS A GOOD ECONOMIC PROPOSITION, THEN THERE WILL BE SUFFICIENT RESERVES AND REASONABLE POLICIES SUCH THAT THE RESORT CAN ABSORB A FEW DEEDBACKS EACH YEAR - GETTING THEM QUICKLY INTO THE HANDS OF NEW PAYING OWNERS. IF THE RESORT WAS NEVER A GOOD ECONOMIC PROPOSITION AND WAS BASED ON SELLING TO A BUNCH OF FOOLS, THEN IT SHOULD FOLD AND SELL OFF THE REAL ESTATE FOR WHATEVER AMOUNT, DISTRIBUTING THE PROCEEDS TO PAYING OWNERS.
Bottom line? Except in a few situations, such as where all timeshares at a resort have decent resale values, an HOA has to rely on the legal obligation to pay MFs for financial stability. If that were changed to a voluntary obligation, because an owner could deed a timeshare back, there would be financial chaos at many timeshare resorts.
AGAIN, IF THE UNDERLYING VALUES ARE NOT THERE, IT IS GOING TO COLLAPSE SOMETIME ANYWAY. YOU ARE ONLY PUTTING OFF THE INEVITABLE.
Lastly, each owner made a purchase with certain obligations (e.g., MFs and SAs) detailed in the legal documents that each new owner is supposed to read during the purchase recision period. I don’t know of very many businesses that if I don’t like what I purchased, I have the right to give it back years later for credit (e.g., no further MF obligation). Why should the developer or a timeshare HOA be different from any other business?
THE PEOPLE THAT I ENCOUNTER, AND I AM DISCOUNTING AS I SAID EARLIER THOSE WHO SIMPLY DON'T WANT TO FACE THEIR OBLIGATIONS, ARE PEOPLE WHO TAKE THEIR OBLIGATIONS SERIOUSLY. THEY HAVE PAID FOR YEARS, AND NOW THEY ARE ENCOUNTERING HARD TIMES. THEY WANT TO DO THE RIGHT THING. I BELIEVE, AS I SAID IN THE ARTICLE, IF MEMBERS STOPPED BANKING WITH COMPANIES THAT ARE INTENT ON DESTROYING TIMESHARING, AND IF RESORTS ARE WELL RUN, THAT THE RESORTS CAN DEAL WITH A RELATIVELY FEW DEEDBACKS, AND GET THEM INTO THE HANDS OF NEW PAYING OWNERS.
IN MY ARTICLE, I SUGGEST A NUMBER OF WAYS THAT THE RESORTS CAN ALSO OFFSET COSTS BY VIGOROUSLY PURSUING RENTAL INCOME. INCLUDING, ACTIVE MARKETING OF BONUS TIME TO PRESENT OWNERS, GETTING INTO THE RELOCATION BUSINESS WITH REAL ESTATE AGENTS, PURSUING COMPANY GETAWAYS AND RETREATS AND CONFERENCES, POOLING INVENTORY WITH OTHER RESORTS TO OFFER "EXCHANGES" TO THE MEMBERS OF ALL THE RESORTS, BANDING TOGETHER WITH OTHER BRICK AND MORTAR BUSINESSES TO DEVELOP OFF-SEASON EVENTS TO DRAW TOURISTS, COOPERATING WITH HOSPITALS TO PROVIDE HOUSING FOR FAMILY MEMBERS OF PATIENTS, AND OTHERS. SEE THE ARTICLE.
I think it’s great that a few resorts believe they can assist owners. But I definitely believe it’s not the resort’s obligation to do so.
I THINK IT IS THE RESORT'S OBLIGATION TO HELP DEAL WITH THE PROBLEM - TO PROP UP RESALES. THE RESORTS SOLD THE INTERVALS ORIGINALLY. IT IS NOT GOOD ENOUGH TO SAY THAT THE DEVELOPER HAS FLED, WE DON'T KNOW HOW TO RUN A MULTI-MILLION DOLLAR BUSINESS, POOR US. RUN IT OR GET OUT AND SELL IT OFF.
