Deeding Back Timeshares

[Mel]

Fred continued to use the car himself, driving to work.

The "patent unfairness" of this situation is that the people who are profiting from the old clunker of a car are the same ones who are in a position to prevent Ron from being released from his no-longer-desired interest in the car. It is a win-lose situation that Fred, George and Ginny are determined to keep. In all likelihood, if the persons who used the car were the only ones who contributed to its maintenance, they would decide it was no longer worth owning and dispose of it. If Fred, George and Ginny were decent people, they wouldn't continue to profit from Ron's misfortune knowing that he wants out.

How many of us would purchase a car in a similar arrangement? Not many. Yet similar inequities occur all the time with vacation property.

That's why when buying into a plan like this, one should consider not only the current situation, but possible future situations. Perhaps the night-shift share should have had a lower buy-in to compensate, but that would need to be negotiated at purchase time. The other thing that should have been done at that time would be to set a time when the car would be sold unless ALL owners agreed to extend the existing plan. That would have given any one of the owners an out.

I don't know anyone who owns a car this way, but there are plenty of other examples with Real Estate - particularly when there is a divorce, or when an unmarried couple purchase a home together and themsplit up. In such a case, one person may want to stay in the house, but might not be able to pay off the other. The other could sell his interest in the house, but this new person will then own WITH the other person.

 

[Dave M]

In my moderator capacity....

Kurt has obtained permission from Timesharing Today to post his well-written article here in its entirety. Thus, I have edited the first post in this thread to insert full article.

I encourage all to read it!

Dave

 

[rickandcindy23]

Bugzapper, Rick and I bought a blue week from the developer 23 years ago (paid about $4,500). Do we regret the purchase? Not at all, because it trades VERY well; but it used to trade a little better (California coast resorts in summer). Those who think that a blue week in RCI is worthless are wrong. As a matter of fact, we bought an identical week, same fixed rotation, and plan to use it to our advantage, much in the same way we used the other one. Of course, we paid $252.00 with closing costs for that second identical week. It was a bargain, believe me. I have traded into Gold Crown resorts in Hawaii with that week (three times now), six months to one year out, including Poipu Point Embassy (salesman hated us). I am pretty happy with a blue Colorado week.

Hopefully, RCI won't see this and reduce the trading power of my blue weeks because I am bragging it up here. :annoyed:

I know that Kurt has a point. He is saying resorts should take weeks back, exactly what I want our resort(s) to do, but even being on the board is a battle against other board members that feel that it is the owner's responsbility to find a buyer for their week. I understand both sides, but I know which side is more sympathetic, and I tend to lean toward that side. I know some owners will take the weeks, even the off-season ones. We just have to market them as valuable.

Bugzapper is touting knowledge that 99.9% of timeshare owners, or prospective timeshare owners, do not have. As a board member, it would not be in the resort's best interest to tell people about Extra Vacations in RCI or Getaways in II. That would be defeating the purpose.

I have not seen any cheap Hawaii weeks in Extra Vacations, yet tonight I can trade my little old Twin Rivers timeshare week for a Hanalei Bay Resort 2 bedroom for mid-December (also three Marriott Ocean Club one bedrooms for the first two weeks of December). I looked at airfare from Denver and the price is not any more than if I planned ahead six months. That is the value I plan to talk up to owners at Twin Rivers.

Our maintenance fees at Twin Rivers include a $184 (3 bedroom) and $168 (2 bedroom) assessment for two more years, then the fees will go down to more like $425 and $475. That is something we need to remind owners of, too. We remodeled and upgraded everything with that assessment.

 

[rickandcindy23]

That's why when buying into a plan like this, one should consider not only the current situation, but possible future situations. Perhaps the night-shift share should have had a lower buy-in to compensate, but that would need to be negotiated at purchase time. The other thing that should have been done at that time would be to set a time when the car would be sold unless ALL owners agreed to extend the existing plan. That would have given any one of the owners an out.

I don't know anyone who owns a car this way, but there are plenty of other examples with Real Estate - particularly when there is a divorce, or when an unmarried couple purchase a home together and themsplit up. In such a case, one person may want to stay in the house, but might not be able to pay off the other. The other could sell his interest in the house, but this new person will then own WITH the other person.

Hopefully people don't ever choose a deed/ tenancy that allows the spouse to sell half of the house. I know there is a tenancy like that, learned about it a long time ago in real estate school, but no one really uses it in Colorado. I guess it would work in a roommate situation where both roommates agree to own exactly half of the property and give one another the latitude to sell to another person that would take over that half of the house. (What is that tenancy called? John knows. )

 

[T_R_Oglodyte]

Clearly there are logical and compelling arguments on both sides of this question.

It seems to me this is a textbook situation where free market forces can be effectively deployed. Some resorts will choose to accept deedbacks; others won't. Whichever strategy is smartest will be sorted out in the end by the marketplace.

Owners who want to own at a resort that has a specific deeback policy can migrate that direction, over time. in accordance with their preferences. Those who choose wisely will benefit; those who choose poorly will suffer accordingly.

***

It's probably worth noting as weel that the appropriate strategy may differ for different resorts. What is effective for one resort may not work for another.

Effectiveness in handling delinquent accounts can also be a differentiating element among management companies. VRI, for example, is pretty aggressive in encouraging their client HOA's to develop policies for managing delinquent accounts. VRI's recommended policies include an aggressive program to put units associated with delinquent accounts into the rental market. That includes making those units availabe to other owners at the resort, to owners at other VRI resorts, and to general renters via travel agents and sites such as hotels.com, Expedia, Travelocity, etc.

VRI also encourages HOA's to move aggressively to foreclose on deinquent accounts and to recycle foreclosed units. Most of the VRI resorts I have checked with will transfer foreclosed weeks to new owners for transfer costs only.

****

I mention VRI because I am more familiar with that particular company. I'm sure there are other management companies that offer similar servies. And I am equally sure that there are some independently operated resorts that operate equally effectively.

But knowing how to deal with delinquent accounts and develop an effective program to generate revenue from those units requires skill and knowledge that many resorts will not possess. IMHO - this is one of the principal reasons why the HOA at an owner-controlled resort should consider retaining a professional management company, and effectiveness in managing delinquent acounts should be one of the most important factors an HOA considers when evaluating proposals from management companies

Of course, if a resort has a person on staff who knows how to do this function effectively, they don't need a professional management to handle this for them. But I suspect that most owner-controlled resorts don't have an effective internal capability to handle this function. If resort management is uncertain about their ability to recycle delinquent ownerships that come back to them, naturally they are going to be more reluctant to accept deebacks or to go through foreclosure.

 

[rickandcindy23]

Foxrun has many foreclosed weeks that VRI has turned over to a real estate company to sell (not cheap, either). I don't understand why they don't just let current owners in good standing take the weeks. I would have taken a few more, and so would some others on the Foxrun Yahoo Group.

I talked to one of the new board members about giving weeks away to get fees coming in, so we will soon see if that comes to fruition. He thought it was a good idea, but he is only ONE board member, and I know what it is like to be the one lowly voice............

 

[bugzapper]

I have not seen any cheap Hawaii weeks in Extra Vacations, yet tonight I can trade my little old Twin Rivers timeshare week for a Hanalei Bay Resort 2 bedroom for mid-December (also three Marriott Ocean Club one bedrooms for the first two weeks of December). I looked at airfare from Denver and the price is not any more than if I planned ahead six months. That is the value I plan to talk up to owners at Twin Rivers.

Cindy,

Every week I see at least half a dozen last minute Hawaii timeshares appear on getawayweeks. Unfortunately, I've already spent my vacation budget for the year. Oh well! There's always next year!

I'm glad you've had such a great experience with your timeshares. I wish I had discovered TUG when all the kids were in year-round school. We might have had some wonderful off season vacations when the kids were off track.

Enjoy,

Keith

 

[bugzapper]

Every week I see at least half a dozen last minute Hawaii timeshares appear on getawayweeks.

Tonight I see 8 Hawaii weeks available in December. I wish I could use the Ka'anapali Beach Club on Maui or the 2 bedroom unit at The Point at Poipu on Kauai...

Keith

 

[AwayWeGo]

Trying To Do The Right Thing.

VRI's recommended policies include an aggressive program to put units associated with delinquent accounts into the rental market. That includes making those units availabe to other owners at the resort, to owners at other VRI resorts, and to general renters via travel agents and sites such as hotels.com, Expedia, Travelocity, etc.

Just guessing, but I wonder if an HOA-BOD Rent'm Out policy for delinquent timeshare weeks isn't also double-edged.

Put too high a rental price on'm & nobody rents'm. Rent'm out too low -- on the basis of Getting Something Beats Getting Nothing -- & fee-paying owners who get wind of rentals at below-fee rates are apt to get honked off bigtime.

Just guessing again, but I expect there are plenty of conundrums like this that can lead HOA-BOD members to tear their hair.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[rickandcindy23]

Tonight I see 8 Hawaii weeks available in December. I wish I could use the Ka'anapali Beach Club on Maui or the 2 bedroom unit at The Point at Poipu on Kauai...

Keith

I know! The last-minute exchanges are the best thing about blue/ green weeks, because literally anything can get those weeks.

 

[Dave*H]

In my moderator capacity....

Kurt has obtained permission from Timesharing Today to post his well-written article here in its entirety. Thus, I have edited the first post in this thread to insert full article.

I encourage all to read it!

Dave

After reading the full article, there is definately a me vs the resort theme. In owner controlled HOAs, it is actually me vs us. The fist step in finding a solution is to frame the problem with the proper context. The OP doesn't seem to understand that he is a member of the group he refers to as the resort. I wonder how often the OP attends HOA meetings or votes in HOA elections?

 

[rickandcindy23]

After reading the full article, there is definately a me vs the resort theme. In owner controlled HOAs, it is actually me vs us. The fist step in finding a solution is to frame the problem with the proper context. The OP doesn't seem to understand that he is a member of the group he refers to as the resort. I wonder how often the OP attends HOA meetings or votes in HOA elections?

I agree with your assessment of the article because as I read it in the magazine, I was thinking about all of the HOA boards of the generic timeshares, that have no means to sell these weeks no one wants, and only want to do what is best for the whole.

In an earlier thread, a few months back, I suggested that MANY timeshares have outworn their welcome as timeshare and should be sold off as condos.

For example, at Twin Rivers, you can buy a prime ski week for under $2K from an owner. The resort is very generic, not many amenities (no pool or organized activites), but all of the comforts of home (including sleep number king beds that were added November 9th, 2007, so we do the best we can with what we've got). So the summer weeks can go for about $1K, the ski weeks $2K, and we cannot give away the other 12 weeks of the year. So you can buy an entire unit for $40K or so, give or take a few thousand $$$. Those 3 bedroom units sell for over $200K, about $219K.

The value is in the whole ownership, not in timeshare. I think it would be best to end the timeshare aspect of the business. 33 of the 60 units are already whole owned because they were sold that way originally.

The problem with my plan is that we paid a lot of money for the weeks, but the whole units were cheap back then. So the ski week owners that have no idea about resales would be horribly offended and not on board at all. I don't see how you can give those people much less than they paid back then (probably over $8K for a ski week, easily), when the property as a whole has gone up in value 5 times.

 

[Carolinian]

I agree with your assessment of the article because as I read it in the magazine, I was thinking about all of the HOA boards of the generic timeshares, that have no means to sell these weeks no one wants, and only want to do what is best for the whole.

In an earlier thread, a few months back, I suggested that MANY timeshares have outworn their welcome as timeshare and should be sold off as condos.

For example, at Twin Rivers, you can buy a prime ski week for under $2K from an owner. The resort is very generic, not many amenities (no pool or organized activites), but all of the comforts of home (including sleep number king beds that were added November 9th, 2007, so we do the best we can with what we've got). So the summer weeks can go for about $1K, the ski weeks $2K, and we cannot give away the other 12 weeks of the year. So you can buy an entire unit for $40K or so, give or take a few thousand $$$. Those 3 bedroom units sell for over $200K, about $219K.

The value is in the whole ownership, not in timeshare. I think it would be best to end the timeshare aspect of the business. 33 of the 60 units are already whole owned because they were sold that way originally.

The problem with my plan is that we paid a lot of money for the weeks, but the whole units were cheap back then. So the ski week owners that have no idea about resales would be horribly offended and not on board at all. I don't see how you can give those people much less than they paid back then (probably over $8K for a ski week, easily), when the property as a whole has gone up in value 5 times.

There is one problem most places with that scenario, and that is the law. To wind up a timeshare requires a supermajority, usually of all owners, not merely of those who show up in person or by proxy. For timeshares in North Carolina organized under the Unit Ownership Act, it requires 100%, and the same language in that act appears inn the law of the majority of states. At various times in the middle 1980's, states adopted the Uniform Condominium Act, which looses that some, not is still out of reach as a practical matter.

All timeshares, or at least most of them, have an expiration date where there is a vote that should be held on whether to continue as a timeshare, and this keeps rolling around at intervals. At this point, a majority vote is what is required, but again, often of ALL owners not just of a quorum, and consequently difficult to get. Some covenants have language that makes it even more unlikely, such as one that I am aware of which requires any member wanting such a vote at these intervals to give a one year notice or there is no vote.

 

[Carolinian]

Having read Kurt's article in full, I tend to disagree with much of it, other than that any smart HOA should take deedbacks rather than going through the much more expensive process of foreclosure, and they should do it early in the process rather than letting delinquincies fester for several years.

I remember one elderly lady I helped find a home for her summer week at Dunes South. She and her husband had bought it new from the developer when they lived in eastern Virginia and used it many years. Then her husband died and she relocated to Florida, but her son, still in Virginia continued to use it and pay the m/f. Finally he got transfered too far away to practically use the timeshare. In early December she wrote the management company and said she could no longer use it and wanted to deed it back, the m/f's through that year being fully paid. She was told that if she used their attorney and paid various fees, all of which came up to over $1,000 they would consider taking the deedback, although they usually did not. She told them that the cost would be more than her social security check and she could not do that. The management company than said that they would ruin her credit if she did not either pay the m/f or the big fee for a deedback. She responded that at 90 years old, she really didn't care what they tried to do to her credit, that they could have at it. Mind you, this is a summer week, that they could easily sold for several thousand dollars before the use week, and had that money plus the m/f just by doing a reasonable deedback which the lady would have paid for, a win-win for everybody except that the management company was too dense to see it. To make a long story short, she got my name from somewhere, and I found someone happy to take her week and pay the real deed cost plus the m/f plus at that point a late fee. The old lady ended up happy, as was the new owner, and the HOA lost a bundle it could have had. It is too bad the old lady had to go through the grief she did. The new owner had their eyes open as to the mismanagement there at the time, but was willing to risk it given that they had gotten an almost free summer week.

Kurt's concept of a resort arbitrarily closing during the off season is also not realistic. The savings are negligible, and by law the owners during that period are entitled to use of their units. The HOA cannot deny them that.

 

[rickandcindy23]

There are many owners that have good weeks they need to deed back to the resort, so not all are blue weeks. Heck, the PCC's get a fair amount of bright red weeks. I don't understand the choice of paying the PCC's to get rid of the burden of a Hawaii Gold Crown or a Colorado ski week.

I don't understand why management companies think it is their right to deny deed backs, but ours at Twin Rivers was doing just that, until a few of the board members insisted that the policy change. The management company seems to have made up the policy on its own, without direction from the board. Some of these weeks were prime summer and winter ski.

I have the means for getting rid of green weeks (here, on TS4MS, MRN, VTR, etc), so I offered to give them away. The board members that aren't familiar with eBay or PCC's are not willing to give them away at all, so we have them listed for sale on Redweek. They won't sell there. I just need to keep the listing until it expires, then maybe they will believe me, that we need to give away the weeks. I think of all of those friends of my kidlets that would take a free green/ blue week.

 

[rickandcindy23]

There is one problem most places with that scenario, and that is the law. To wind up a timeshare requires a supermajority, usually of all owners, not merely of those who show up in person or by proxy. For timeshares in North Carolina organized under the Unit Ownership Act, it requires 100%, and the same language in that act appears inn the law of the majority of states. At various times in the middle 1980's, states adopted the Uniform Condominium Act, which looses that some, not is still out of reach as a practical matter.

All timeshares, or at least most of them, have an expiration date where there is a vote that should be held on whether to continue as a timeshare, and this keeps rolling around at intervals. At this point, a majority vote is what is required, but again, often of ALL owners not just of a quorum, and consequently difficult to get. Some covenants have language that makes it even more unlikely, such as one that I am aware of which requires any member wanting such a vote at these intervals to give a one year notice or there is no vote.

We couldn't get that kind of majority. We would also have to clean up those deeds, which would be tough. I remember you pointing that out before, Carolinian.

The weeks 51 and 52 sold originally for over $20K per week, I believe. The prime ski weeks would never give up their "luxurious" resort, especially in light of our vastly-improved interiors.

 

[AwayWeGo]

H.O.A.-B.O.D. Should Be In The Driver's Seat . . .

The management company seems to have made up the policy on its own, without direction from the board.

. . . not the management company that works for the HOA-BOD.

The management company is supposed to be carrying out the HOA-BOD's instructions. If it isn't & the HOA-BOD isn't causing a course correction pronto, then that's on the HOA-BOD.

That's not to suggest that the management company shouldn't have input. They're the pros with the experience & they're supposed to know what they're doing. But any way you shake it, the buck stops with the HOA-BOD.

I still don't think it's a good idea for the HOA-BOD to open up a too-easy path for individiaul timeshare owners to shuck off their ownership responsibilities.

To the idea of taking back deeds, that is, the HOA-BOD should perhaps never say Never, but for sure they should never say Always.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[rickandcindy23]

. . . not the management company that works for the HOA-BOD.

The management company is supposed to be carrying out the HOA-BOD's instructions. If it isn't & the HOA-BOD isn't causing a course correction pronto, then that's on the HOA-BOD.

That's not to suggest that the management company shouldn't have input. They're the pros with the experience & they're supposed to know what they're doing. But any way you shake it, the buck stops with the HOA-BOD.

I still don't think it's a good idea for the HOA-BOD to open up a too-easy path for individiaul timeshare owners to shuck off their ownership responsibilities.

To the idea of taking back deeds, that is, the HOA-BOD should perhaps never say Never, but for sure they should never say Always.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

The majority of the board feels we should not advertise deed backs, but when we are asked, we should go ahead and do it.

The management company is no longer acting on its own, but we DO have a problem with voting on something, or wanting something in particular to be included in the next newsletter, but the management company completely forgets about it. I find that very annoying. We decided to give away weeks in the last newsletter, but when it went out, the silent auction for weeks went out, as usual. :annoyed: We only bill three times per year. It's just too long to wait for the next newsletter.

 

[AwayWeGo]

E-Mail, Etc. ?

It's just too long to wait for the next newsletter.

What about putting the pertinent information on line at the HOA-BOD web site where owners can log in ?

What about sending owners the pertinent information at frequent intervals via E-Mail ?

What about a dedicated Yahoo-Dot-Com Internet group that the HOA-BOD controls for the benefit of any of your owners who care to sign up ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[bogey21]

......the PCC's get a fair amount of bright red weeks. I don't understand the choice of paying the PCC's to get rid of the burden of a Hawaii Gold Crown or a Colorado ski week.

Based on the one PCC meeting I attended I think there are two main reasons: (1) The owners are usually old, haven't used their Week in years, don't have any idea what their options are, and are scared by the PCC into believing that they are going to leave a big problem to their heirs. (2) They are told (Don't jump on me. I know it isn't legal) that they can deduct from their FIT the sum of what they paid for the Week plus what they are paying the PCC. They tell them all they have to do to qualify for this treatment is to say they bought their Week for "Investment Purposes".

That's what I took away from observing the PCC's presentation and talking to many of the people in attendance. IMO they wen't home happy being out from under an unwanted Week,

GEORGE

 

[Carolinian]

The result of your policy is
1) very expensive foreclosures paid by the HOA rather than cheap deed prepatation paid by the member - a huge increase in expenses for the HOA
2) likely delay in the time for the week to be back in inventory to resell, meaning at least one more year of lost m/f for the HOA compared to the much quicker deedback procedure.

I know it smarts to seem like the deadbeat is ''getting over'' on the other members, but one has to look at the realities in terms of costs to the HOA including speed in getting the week back in inventory to be resold.

Deedback policies should never be bandied about where they will encourage people to do so. They should be used one-on-one with delinquent accounts as a possible way out after all other options, such as a payment plan, have been exhausted.

In terms of billing delinquent accounts, resorts that have gone to monthly billing of delinquents have found it really paying off. The key is to stay on top of delinquencies.

. . . not the management company that works for the HOA-BOD.

The management company is supposed to be carrying out the HOA-BOD's instructions. If it isn't & the HOA-BOD isn't causing a course correction pronto, then that's on the HOA-BOD.

That's not to suggest that the management company shouldn't have input. They're the pros with the experience & they're supposed to know what they're doing. But any way you shake it, the buck stops with the HOA-BOD.

I still don't think it's a good idea for the HOA-BOD to open up a too-easy path for individiaul timeshare owners to shuck off their ownership responsibilities.

To the idea of taking back deeds, that is, the HOA-BOD should perhaps never say Never, but for sure they should never say Always.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[PA-]

After reading the full article, there is definately a me vs the resort theme. In owner controlled HOAs, it is actually me vs us. The fist step in finding a solution is to frame the problem with the proper context. The OP doesn't seem to understand that he is a member of the group he refers to as the resort. I wonder how often the OP attends HOA meetings or votes in HOA elections?

The oddest thing is that the OP is a real estate attorney who seems to have a side business dealing in timeshares.

 

[alanraycole]

So what's the problem?

There seems to be an industry (until now, completely unknown to me) in place to address the issue... these organizations that are immune from judgements... I gather they are called PCC's. Either the boards come up with a plan or one is imposed upon them... sounds simple to me. There must be more to the story that is not being addressed here or this wouldn't be worth debating. How, exactly, do these organizations work... and why isn't this solution good enough.

The boards have to do what they have to do and the individuals that want out have to do what they have to do. That is how it works... unless they want to work together to come up with a more amicable solution... it seems clear that some do, some don't... so, all carry on as they please... I hate guilt trips!

By the way, I never knew I could get free timeshares... learning that is the best thing about this thread! That's what works for me. Tell me where I can see what's available... other than the dozen or so that are listed on this site... I found a couple that seemed interesting, but I would like to see more options before picking some up.

 

[DeniseM]

By the way, I never knew I could get free timeshares... learning that is the best thing about this thread! That's what works for me. Tell me where I can see what's available... other than the dozen or so that are listed on this site... I found a couple that seemed interesting, but I would like to see more options before picking some up.

Here you go - There are 12 listed on TUG and I would consider TS's listed on ebay for $1 to be free, too, although you will have to pay the transfer fees.