Dissolving a Florida Timeshare?

[rjwehr]

We have been owners at the Summit in Panama City Beach for the last 12 years. We hold a deeded week at the resort. Of the 200 units in the building, only 32 are timeshares. The rest of the units are wholly owned by private individuals. We recently received a letter stating that the Homeowners Association Board was considering “dissolving the timeshare program" and selling the 32 units to a private company. In the 30+ years we have owned timeshares, we have never encountered anything like this.

My questions for the group are: Is this a legal process? If so, have other TUG members encountered anything like this and what should we expect if they do “dissolve” the timeshares?

Thanks in advance for your thoughts.

 

[TheTimeTraveler]

We have been owners at the Summit in Panama City Beach for the last 12 years. We hold a deeded week at the resort. Of the 200 units in the building, only 32 are timeshares. The rest of the units are wholly owned by private individuals. We recently received a letter stating that the Homeowners Association Board was considering “dissolving the timeshare program" and selling the 32 units to a private company. In the 30+ years we have owned timeshares, we have never encountered anything like this.

My questions for the group are: Is this a legal process? If so, have other TUG members encountered anything like this and what should we expect if they do “dissolve” the timeshares?

Thanks in advance for your thoughts.

Is your ownership a Deed or a RTU (Right to Use) ?



.

 

[rjwehr]

It's a deeded, fixed week. We get it every July.

 

[dioxide45]

It is pretty much as simple as they say at a high level. There are of course legal costs involved. They will fold the timeshare HOA and sell off the units. Any owners still on those timeshare deeds will get a split of the final proceeds. minus any costs. It may be a lot or it may be a little. When it is all complete, you won't own the timeshare anymore and will no longer have any usage rights.

 

[tschwa2]

It is legal. Under normal situations it would take a majority of the whole ownership to agree to dissolve the TS. Most Florida (and many other states) have sunset clauses written in where they dissolve automatically at a specific date unless the majority votes to continue and remove that clause. I don't remember is sunset clauses are in the deed or the offering statement. They are typically for 20-40ish years from when the timeshare was set up with the idea that it might be the tipping point where maintaining an older timeshare becomes more than the value of doing so for many of the owners.

 

[TUGBrian]

can search the forum for "sunset clause" to find what they might be likely discussing!

 

[dioxide45]

It is legal. Under normal situations it would take a majority of the whole ownership to agree to dissolve the TS. Most Florida (and many other states) have sunset clauses written in where they dissolve automatically at a specific date unless the majority votes to continue and remove that clause. I don't remember is sunset clauses are in the deed or the offering statement. They are typically for 20-40ish years from when the timeshare was set up with the idea that it might be the tipping point where maintaining an older timeshare becomes more than the value of doing so for many of the owners.

The sunset clauses of our Grande Vista and Harbour Lake timeshares are written into the deed. Additional details in the CC&R.

 

[KProuty]

Yikes, what is the sunset clause for Grande Vista @dioxide45 ?

 

[dioxide45]

Yikes, what is the sunset clause for Grande Vista @dioxide45 ?

First Saturday of January 2056.

 

[buzglyd]

Not sure what you paid for it but with the FL real estate market being nuts right now, You might get a nice little windfall.

 

[rjwehr]

Thanks for the information, everyone. I only paid $600 for it back in 2008 so I'm definitely not upside down on it. It does make for a good rental when we're not using it, so it would be a bummer if they do take it back. I'll post back to the thread when I hear something, one way or the other.

 

[rjwehr]

We recently got a letter from the Homeowners Association which said that they have decided not to dissolve the Timeshare program. False alarm I guess. Thanks for all the information about the process.

 

[theo]

I don't remember if sunset clauses are in the deed or the offering statement. They are typically for 20-40ish years from when the timeshare was set up with the idea that it might be the tipping point where maintaining an older timeshare becomes more than the value of doing so for many of the owners.

So-called "sunset clause" language and specific details are found within the original recorded CC&R's, usually within a section entitled (appropriately enough) "Termination".
The "sunset" date might sometimes be overtly mentioned in deeds (it's not, more often), but it is the recorded CC&R content that is the actual legal source and instrument.

It is also worthy of note that a "sunset date" mentioned in passing within a deed can be (and sometimes is) obsolete and flat out wrong, if / when said deed recording preceded a subsequent owner / HOA vote to extend (by CC&R amendment) the original "termination" date specified in the underlying CC&R's --- as has been occurring with some frequency in Florida in recent years as many timeshare properties built there in the early / mid 1980"s approach or reach their original CC&R "termination" date.

 

[daverunfast]

We recently got a letter from the Homeowners Association which said that they have decided not to dissolve the Timeshare program. False alarm I guess. Thanks for all the information about the process.

Did they say why?

 

[theo]

We recently got a letter from the Homeowners Association which said that they have decided not to dissolve the Timeshare program. False alarm I guess. Thanks for all the information about the process.

I do not know anything about the "mixed use" nature of your property at issue, but I have seen no reference to this unexpected notice being "sunset date" related.
Accordingly, a question that immediately comes to my mind is how the referenced HOA is somehow able to make (and then "proclaim") decisions on continuation and / or termination entirely on their own, apparently without seeking and / or obtaining any actual owner input (or vote) on the matter. To the best of my knowledge and belief, such decisions and "proclamations" are not usually made unilaterally by a mere handful of people.

 

[rjwehr]

Did they say why?

I suspect there was a good amount of "feedback" from timeshare owners. (I believe they had a portion of timeshare owners that were in maintenance fee default so they were losing money.) Moving forward, they decided to more aggressively repossess, resell and rent where possible.

 

[rjwehr]

I do not know anything about the "mixed use" nature of the OP property at issue, but a question that immediately comes to my mind is how the referenced HOA is somehow able to make (and then "proclaim") decisions on continuation and / or termination entirely on their own, apparently without seeking and / or obtaining any actual owner input (or vote) on the matter. To the best of my knowledge and belief, such decisions and "proclamations" are not usually made unilaterally by a mere handful of people.

That was exactly my thought as well, which was why I was looking for guidance.

 

[theo]

That was exactly my thought as well, which was why I was looking for guidance.

Fwiw, if in your shoes, I would certainly be leaning very hard on your HOA Board President for a more clear explanation (rather than just unilateral announcements and proclamations) regarding how or why (if not "sunset date" related) this issue even came up at all in the first place, as well as describing exactly by what process (and by whom and on what authority) these unilateral decisions regarding potential "termination" are apparently being made without any input (or vote) from deeded owners like you.

Frankly, this does not sound or smell quite right to me on its' face, although the "mixed use" nature of the property, with the overwhelming majority of units reportedly being wholly owned, is surely a big (but still not adequately explained) factor here.

 

[tschwa2]

The original post said the HOA was considering dissolving,,, To actually dissolve they would have to get the required votes after they investigated the actual nitty gritty to the process of dissolving and selling. They probably did a little investigating and decided it would be too difficult or too much effort so they decided not to pursue the dissolution. No votes or owner input really needed to considering dissolving when the HOA is potentially teetering on collapse due to defaults.

 

[troy12n]

FYI, in Florida, the sunset clause for HOA's is 30 years for residential deed restricted communities. I'm a FL resident and my neighborhood recently went through this. We had to vote to keep or evict the HOA because it had been 30 years since the HOA was initially founded. Luckily cooler heads prevailed and the majority of residents voted to keep it.

I'm almost 100% sure that COA (not a HOA) is different, and depends more on the founding documents for the COA and their covenants. There may or may not even be a COA sunset clause in Florida simply because of the fact that unlike an HOA, who does not OWN the underlying property, a COA does, and simply running out the clock and saying "well, the COA is dissolved, we are selling, you have 30 days to depart" doesn't fly.

But again, this is FLorida and we have some odd laws... like a mechanics lien law which allows a subcontractor (who wasn't hired by the homeowner) who has not been payed by the GC (who was hired by the homeowner) to file a lien and foreclose on a homeowner... even if the homeowner payed the GC.

This is playing out here right now where a pool company didn't pay any of their subs, and 160 people are possibly losing their homes because this shady company didn't pay their subs, and the subs can go after the homeowners because of this law

 

[DrQ]

We have been owners at the Summit in Panama City Beach for the last 12 years. We hold a deeded week at the resort. Of the 200 units in the building, only 32 are timeshares. The rest of the units are wholly owned by private individuals. We recently received a letter stating that the Homeowners Association Board was considering “dissolving the timeshare program" and selling the 32 units to a private company. In the 30+ years we have owned timeshares, we have never encountered anything like this.

Do you know the name of the company?

We had this happen to us at Inverness by the Sea in Galveston TX. They instituted a $6k/week assessment to "encourage" owners to give up their weeks.

 

[daverunfast]

Do you know the name of the company?

We had this happen to us at Inverness by the Sea in Galveston TX. They instituted a $6k/week assessment to "encourage" owners to give up their weeks.

Who's "they"? I imagine it would be hard for the HOA to find the votes for that

 

[DrQ]

Who's "they"? I imagine it would be hard for the HOA to find the votes for that

The company installed employees as members of the HOA board. What is the current state of the timeshare finances?

 

[daverunfast]

The company installed employees as members of the HOA board. What is the current state of the timeshare finances?

The management company? Which one?

 

[DrQ]

See:

Inverness By the Sea Galveston to Reopen

The long wait is over. I was told on the phone that the property will re-open May 31 2009. I was surprised to get a person as I have been calling for many weeks with no answer. It turns out my week begins May 31.

tugbbs.com

The company:

Team - TOWB

www.towb.life