First Lawsuit filed against Viking Ship LLCs / PCCs

[ronparise]

Repeating that owners "have no way out" over & over doesn't make it true. In fact they always have a way out - but they want an easy way, even if it costs money, not the correct way. Hardly equates to no choice merely means choices they don't like. Too bad. Don't buy if you don't like the rules. They are well known before any purchase even retail.

I agree completely - most people just want the easy way out - to hell with the consequences.

What's wrong with wanting out and what's wrong with wanting it to be easy. It should be as easy as selling any other real estate

But it's not

Hence the pccs

 

[DeniseM]

Ron - You are involved in a TS "disposal" company - what do you do with timeshares that you can't sell?

 

[bogey21]

Reading all this just makes me happy that I divested my 6 TS Weeks the right way (deed backs, sales, gifts to real people, etc.) although it took a lot of effort. I agree that many who used the PCCs just wanted it done, damn the cost.

George

 

[TUGBrian]

keep it on topic folks

 

[lilpooh108]

As Ron pointed out, it is very easy to get out without dying, just stop paying the MFs.

How is not paying the MFs a way out? Not trying to be argumentative. I really don't know.

What if the resort simply refuses to foreclose on the lien? They can sue in civil, get a judgment, then garnish your wages.

 

[ronparise]

Ron - You are involved in a TS "disposal" company - what do you do with timeshares that you can't sell?

In the early 1940's the United States was working to develop an atomic bomb. The project was called the Manhattan project, and it was top secret. The question was; how do you maintain secrecy with a project that employed over 120000 people and where research was being conducted at several universities and government sites

The answer was to break the project up into several smaller projects. The folks working on one problem could not see the big picture and had no idea what they were part of. Business was conducted on a "need to know" basis and there were only a few people that needed to know everything

My involvement with a PCC is much like that. I know what I know, and I see what I see, but I dont know everything and I dont see the see the big picture...I dont have a need to know

What I do know is that from time to time, I am offered timeshares, by a closing company.. I assume that these timeshares come from a certain PCC, but I dont even know that...I am the buyer (or perhaps one of the buyers) for one timeshare, and only one. I suspect that they have buyers for other timeshares as well, but since I dont need to know; I dont know

 

[Carolinian]

I hope they put these fraudsters out of business, and the clients of the fraudsters deserve to be on the hook as well.

 

[Carolinian]

In my view the PCC business model can serve a constructive purpose if performed in partnership with an enlightened HOA. Essentially, a contractor relationship. But, it does require HOA's to wake up. Meanwhile, lack of action by the HOA's has created the void that these bad actors fill.

Well, no. The smart HOA's take deedbacks and do not rip off the member for a large fee to do so. Why in the world would they want a stinking PCC ripping off their members?

One of the frauds I see too often perpetrated by the PCC's is taking timeshare deeds in and charging a large fee to clients for resorts that they know take deedbacks, and then doing the simple deedback that the member could have done himself without the big fee. In their spiels, the PCC's tell their timeshare owning victims either directly or by iimplication that the resorts will not take them back. That is obtaining money by false pretenses, a felony. These sleazabags should be defendants in criminal court as well as civil court.

 

[ronparise]

How is not paying the MFs a way out? Not trying to be argumentative. I really don't know.

What if the resort simply refuses to foreclose on the lien? They can sue in civil, get a judgment, then garnish your wages.

You answered your own question If I dont pay my mf the hoa forecloses. or at the very least they deny me access to the unit and rent it themselves. I dont think they have a choice

I dont work for wages and neither does my LLC, so that wouldnt be an issue for me, but I dont think garnishment is the answer in any case... That might get past due fees, but what about next year. They will have to do it all over again

 

[Carolinian]

You answered your own question If I dont pay my mf the hoa forecloses. or at the very least they deny me access to the unit and rent it themselves. I dont think they have a choice

I dont work for wages and neither does my LLC, so that wouldnt be an issue for me, but I dont think garnishment is the answer in any case... That might get past due fees, but what about next year. They will have to do it all over again

Garnishment is not the only remedy to collect a judgment. They can also seize and sell your house, car, bank accounts, and other property.

 

[Carolinian]

The PCCs business is similar to point system schemes. If one one the point system goes belly up because the members don't psy dues can the club members be sued?

The difference is that the Viking Ships are intended as a fraud from the beginning, while those involved in the points schemes at least intend for it to function successfully, so the fraudulent intent is not usually present.

Now the impact can be the same. There was a US based points club that a few years ago had a problem with its own members not paying, so they arbitrary refused to pay the money they owed on m/f's to a timeshare in the Poconos. The timeshare could have sued the points club, but that would have taken more time than they had. Their own budget crashed quickly and the resort went belly up. Several South African timeshares have had some tough financially times when points clubs there went belly up. One of them which is popular with US timesharers, Mt. Amanzi, was one of them. They managed to hang on, however. It is risky for a timeshare to depend on a points club for substantial amounts of their m/f's.

There is a new animal out there in Europe however, that is a cross between a points club and a PCC. Not surprisingly it was created by the notorius Stewart ''The Bullfrog'' Lamont of South Africa and is operating in the Canary Islands. It was originally called Spice and has changed its name to Aroma. It sells ''points conversions'' to a points club with an exit clause, allowing the member to surrender his points back to Aroma after three years. The question that has been unanswered is what will The Bullfrog do with those weeks after he starts getting them back in three years? Aroma has not been operating long enough for that to start happening yet. The ''exit program'' aspect of Aroma is a major part of their sales spiel, so I suspect they will be getting a lot of these weeks back. Of course, one of The Bullfrog's business plans over the past few years in South Africa has been to use his points clubs to get control of resorts, then crash them in a manner that lets him acquire lots of the members interests for virtually nothing, and then sell / rent / use the valuable timeshare property for other purposes. He started with The Seapointer at Capetown, and has crashed 6 or 8 resorts since. His scheme with Aroma may be something similar.

 

[e.bram]

Carolinian:
The owner could also file a counter complaint for HOA mismanagement suing the HOA , board members. and management company) Expensive lawsuit for MFs. Venue would also be an issue. (ie TS location, owner residence, or management company main office)

 

[buzglyd]

Well, no. The smart HOA's take deedbacks and do not rip off the member for a large fee to do so. Why in the world would they want a stinking PCC ripping off their members?

One of the frauds I see too often perpetrated by the PCC's is taking timeshare deeds in and charging a large fee to clients for resorts that they know take deedbacks, and then doing the simple deedback that the member could have done himself without the big fee. In their spiels, the PCC's tell their timeshare owning victims either directly or by iimplication that the resorts will not take them back. That is obtaining money by false pretenses, a felony. These sleazabags should be defendants in criminal court as well as civil court.

Often times now, the PCCs will contact the HOA once they have accumulated inventory and offer to "sell" it back to the HOA.

It has been amazing watching all this unfold over the past few years. I look forward to the day when all these scammers are out of business or behind bars.

 

[VegasBella]

even if the vacation club proves their case and wins; Whats the remedy?

My 2 cents...I think the vacation club is going to regret bringing this action. because the end result will be a justification of the PCC business model.

I agree.

I find it odd that so many Tuggers think PPC and Viking Ships ought to be illegal yet think that what developer sales teams do is perfectly legal. From my perspective, they're both immoral. But they're both legal.

I also think that lawsuits and negative media attention about any aspect of the timeshare industry is bad for the entire industry. As I've said elsewhere, most of my friends think the words timeshare and scam are synonymous. Negative media attention just affirms their ideas about timeshares. There's a lot of discussion here on TUG about how the industry will survive as their primary market ages and dies... Well, it's not going to survive if all the 20-40 year olds I know (smart, wealthy people) think that ALL timeshares are scams.

 

[DeniseM]

I find it odd that so many Tuggers think PPC and Viking Ships ought to be illegal yet think that what developer sales teams do is perfectly legal.

I don't think the vast majority of Tuggers feel that way at all - you will find a few "developer fans," but most Tuggers despise the hard sell tactics, and lies told by the developer.

First of all - a PCC company is a Post Card Company. Some provide services, others don't. What we are actually talking about here are "upfront fee companies," that collect an upfront fee and simply steal it without providing any services. (Or they just go through the motions for appearances, and provide worthless services.)

The difference is "intent" -

Even though the developer's tactics are deplorable, they INTEND to sell and deliver a product.

The Viking Ship companies INTEND to defraud the HOA.

The worst upfront fee companies INTEND to collect a high upfront fee, and then steal it.

None of them are ethical, but if you look at "intent," the PCC's and the Viking Ship LLC's are even more unsavory than the developer - but not by much.

Plus, the developers have teams of smart lawyers, and airtight contracts, and a lot more experience with cheating people.

 

[Fredm]

Well, no. The smart HOA's take deedbacks and do not rip off the member for a large fee to do so. Why in the world would they want a stinking PCC ripping off their members?

One of the frauds I see too often perpetrated by the PCC's is taking timeshare deeds in and charging a large fee to clients for resorts that they know take deedbacks, and then doing the simple deedback that the member could have done himself without the big fee. In their spiels, the PCC's tell their timeshare owning victims either directly or by iimplication that the resorts will not take them back. That is obtaining money by false pretenses, a felony. These sleazabags should be defendants in criminal court as well as civil court.

All true.

Did you read everything I wrote?

The fact of the matter is if HOA's did deedbacks PCC's would be out of business. Those that do deedbacks don't have a serious Viking Ship problem. Unfortunately, even the few that do are not open enough about it to keep owners from seeking help elsewhere. "Smart" HOA's are few and far between.

So, let's talk about solving the problem.

What is holding HOA's back?

Keep in mind that owners who fall for a PCC pitch are ALL current on dues.
They do not present an immediate problem for the HOA precisely because they are current. So, the HOA's rather not bother. They have their heads in the sand. Like all procrastinators, they deal with the effects of non-action after the fact.
One reason could be that they are not equipped to handle the process. Or don't want to. Well, sorry, the world has changed.

At the end of the day HOA's that are not proactive in somehow managing the issue, contribute to the problem. The time is long past for HOA's to ignore owners who are responsible dues paying owners that simply want out.
They want out so much that they are willing to pay someone an EXTRA 3k to be done with their obligations!

As I said, HOA's ignoring reality creates a void that bad actors fill.
Unless a rational process exists to absorb an owners share and reconstitue it to a productive use, the problem will only grow.
There is no denying that some fraction of deedbacks will ultimately become non-performing. The question is how much will it cost the HOA in the meantime?

There is little doubt in my mind that if PCC's are getting rich, HOA's can somehow turn a similar above-board service into a modestly paying proposition. In the process the bad actors get starved out and owners are not subject to the foibles inherent in the current bad practices.

Formally contracting with a service to assist owners is a potential solution.
Just trying to keep an open mind about this. It would not take the same form as the current sleezy PCC practices, because it would be a managed process on terms defined in an agreement with a contractor.

Got a better idea? I would love to hear it.

 

[BocaBum99]

The difference is that the Viking Ships are intended as a fraud from the beginning, while those involved in the points schemes at least intend for it to function successfully, so the fraudulent intent is not usually present.

OMG. Am I dreaming? Carolinian said something positive about point systems in general.

 

[BocaBum99]

Carolinian:
The owner could also file a counter complaint for HOA mismanagement suing the HOA , board members. and management company) Expensive lawsuit for MFs. Venue would also be an issue. (ie TS location, owner residence, or management company main office)

I stated this earlier. I believe this will be the next stage in the timeshare market. When the PCCs go out of business, there will be no acceptable way out for the owners (defaulting on MF, dying or doing it without the help of a third party are not acceptable options). Therefore, I believe that what will happen is a large number of lawsuits directed at HOAs to create a solution for the owners.

At the end of the day, deedbacks is the only solution. We all know it. Many of us just won't admit it.

Okay. I have another proposed law or amendment. Make it illegal for any timeshare developer or HOA to report negatively to credit agencies for deficiencies on maintenance fees. Then, default is a viable option.

 

[BocaBum99]

All true.

Did you read everything I wrote?

The fact of the matter is if HOA's did deedbacks PPC's would be out of business. Those that do deedbacks don't have a serious Viking Ship problem. Unfortunately, even the few that do are not open enough about it to keep owners from seeking help elsewhere. "Smart" HOA's are few and far between.

So, let's talk about solving the problem.

What is holding HOA's back?

Keep in mind that owners who fall for a PCC pitch are ALL current on dues.
They do not present an immediate problem for the HOA precisely because they are current. So, the HOA's rather not bother. They have their heads in the sand. Like all procrastinators, they deal with the effects of non-action after the fact.
One reason could be that they are not equipped to handle the process. Or don't want to. Well, sorry, the world has changed.

At the end of the day HOA's that are not proactive in somehow managing the issue, contribute to the problem. The time is long past for HOA's to ignore owners who are responsible dues paying owners who simply want out.
They want out so much that they are willing to pay someone an EXTRA 3k to be done with their obligations!

As I said, HOA's ignoring reality creates a void that bad actors fill.
Unless a rational process exists to absorb an owners share and reconstitue it to a productive use, the problem will only grow.
There is no denying that some fraction of deedbacks will ultimately become non-performing. The question is how much will it cost the HOA in the meantime?

There is little doubt in my mind that if PCC's are getting rich, HOA's can somehow turn a similar above-board service into a modestly paying proposition. In the process the bad actors get starved out and owners are not subject to the foibles inherent in the current bad practices.

Formally contracting with a service to assist owners is a potential solution.
Just trying to keep an open mind about this. It would not take the same form as the current sleezy PCC practices, because it would be a managed process on terms defined in an agreement with a contractor.

Got a better idea? I would love to hear it.

I agree with you 100%. The only thing I would add is we need a law that protects owners against HOAs that won't take action to fix the problem. When the PCCs are gone, there will be no reasonable out for these owners. And, since they are locked into the resort, the resorts can more easily raise miantenance fees and extort special assessments because hard working, honest, credit worthy owners do not want to ruin their credit.

We need an HOA accountability act. Simply make it illegal for any timeshare developer or HOA to report any information to credit agencies for failure to pay maintenance fees or special assessments.

 

[timeos2]

I agree with you 100%. The only thing I would add is we need a law that protects owners against HOAs that won't take action to fix the problem. When the PCCs are gone, there will be no reasonable out for these owners. And, since they are locked into the resort, the resorts can more easily raise miantenance fees and extort special assessments because hard working, honest, credit worthy owners do not want to ruin their credit.

We need an HOA accountability act. Simply make it illegal for any timeshare developer or HOA to report any information to credit agencies for failure to pay maintenance fees or special assessments.

And , of course, the same would apply to all condominium developments, homeowners HOA's, car loans, home loans, boat loans - why should anyone that fails to pay on an obligation be reported in a negative way for doing so?

What an utterly ridiculous statement and proposal. Seems like the threats of shutting down these sham "help" groups is making the supporters desperate. The fact remains that no one is required to pay any fee's "forever' nor are they somehow held hostage to a timeshare HOA that isn't exactly the same for a "regular" property ownership. In every case there are ways out, but at a cost. Those who don't want the cost to apply to THEM (when it may be inconvenient or hurt their personal life) somehow want timeshares to be demonized as if the buyers were forced to accept it at gunpoint.

They were (are) free to not purchase and thus avoid any obligation. They are free to follow the rules and sell or otherwise cease to be the reponsible party for an existing ownership. They are not free to use a third party group to defraud the resort (the other OWNERS) by avoiding what they rightfully owe and agreed to by making a payment to and letting that group abandon the ownership. If they try they can expect both the group / person(s) using such a fraudulent process and the original owner will be treated as what they are. Fraudsters. Let the full weight of the law come down on them as hard as possible.

It isn't about an inability to get out of a now unwanted purchase and obligation. It is about doing it so THEY aren't hurt - who cares about everyone else who also bought under the same rules and are living by them. Hold everyone equally accountable and apply the rules across the board. Those trying to cheat the system are rightfully being vilified for it.

The laws are all on the side of the majority of owners and the HOA's. The problems of Developers and their practices are certainly intertwined but cannot be passed off to the HOA's as they exist for totally different reasons. Virtually every accepted law of cooperative type ownership of property would have to be altered. Not going to happen nor should it.

 

[BocaBum99]

And , of course, the same would apply to all condominium developments, homeowners HOA's, car loans, home loans, boat loans - why should anyone that fails to pay on an obligation be reported in a negative way for doing so?

What an utterly ridiculous statement and proposal. Seems like the threats of shutting down these sham "help" groups is making the supporters desperate. The fact remains that no one is required to pay any fee's "forever' nor are they somehow held hostage to a timeshare HOA that isn't exactly the same for a "regular" property ownership. In every case there are ways out, but at a cost. Those who don't want the cost to apply to THEM (when it may be inconvenient or hurt their personal life) somehow want timeshares to be demonized as if the buyers were forced to accept it at gunpoint.

They were (are) free to not purchase and thus avoid any obligation. They are free to follow the rules and sell or otherwise cease to be the reponsible party for an existing ownership. They are not free to use a third party group to defraud the resort (the other OWNERS) by avoiding what they rightfully owe and agreed to by making a payment to and letting that group abandon the ownership. If they try they can expect both the group / person(s) using such a fraudulent process and the original owner will be treated as what they are. Fraudsters. Let the full weight of the law come down on them as hard as possible.

It isn't about an inability to get out of a now unwanted purchase and obligation. It is about doing it so THEY aren't hurt - who cares about everyone else who also bought under the same rules and are living by them. Hold everyone equally accountable and apply the rules across the board. Those trying to cheat the system are rightfully being vilified for it.

The laws are all on the side of the majority of owners and the HOA's. The problems of Developers and their practices are certainly intertwined but cannot be passed off to the HOA's as they exist for totally different reasons. Virtually every accepted law of cooperative type ownership of property would have to be altered. Not going to happen nor should it.

Even Ken McKelvey, Chairman of ARDA-ROC agrees that many if not most HOAs are sitting on their arses doing nothing or not nearly enough. He even answered my direct question about why HOAs don't take all deedbacks by saying "I can't get people to do the right thing"

His big issue outside of the PCCs is fixing legislation that will allow timeshares to go into bankruptcy and then to nullify the owners right to vote by allowing a judge to terminate the plan even without owner vote.

So, timeshares are a different animal. In Florida, law that regulate timeshares are different than those that regulate condos. So, if they can put in language that makes timeshare brokers accountable for buyers that pay maintenance fees when they don't do it for Condos. They can do the same thing for credit reporting for timeshares, especially when the HOAs are specifically exerting majority influence to hold owners who want out hostage into lifelong indentured servitude to the majority in the resort who will not let them out.

 

[Fredm]

Let's not confuse matters.

PCC's (or resorts that can replace them) deal with owners who are current on fees.
These owners are not in a default situation.
They are willing to pay someone a extra cash kicker to be out of a performing ownership interest.

No need to create another layer of protection for these owners.
HOA's should take the deed and the cash kicker, and let them out if that is what the owner wants.

Non-performing owners are another matter entirely.
Of course, if HOA's allowed deedbacks while an owner was current, then there would likely be less delinquencies to deal with.

 

[VegasBella]

None of them are ethical, but if you look at "intent," the PCC's and the Viking Ship LLC's are even more unsavory than the developer - but not by much.

Plus, the developers have teams of smart lawyers, and airtight contracts, and a lot more experience with cheating people.

Oh, I see. So go after the small time crook (that often actually provides a useful service to many timeshare owners - an exit strategy) despite the fact that nothing good will come from it. In fact, what will surely come from it is more bad press for the industry. But just leave the big time crooks alone. Makes perfect sense.

The simple, obvious solution to this problem is to offer better, easier exit strategies for owners who want out. Lawsuits won't do that.

 

[Tia]

Agree re the developer then they also intend to milk the HOA as long as they can by managing to make more $ maintaining control by sitting on the boards or putting their favorite owners on it

Even though the developer's tactics are deplorable, they INTEND to sell and deliver a product. ............

........None of them are ethical, but if you look at "intent," the PCC's and the Viking Ship LLC's are even more unsavory than the developer - but not by much.

Plus, the developers have teams of smart lawyers, and airtight contracts, and a lot more experience with cheating people.

 

[DeniseM]

Agree re the developer then they also intend to milk the HOA as long as they can by managing to make more $ maintaining control by sitting on the boards or putting their favorite owners on it

I agree completely! I am not a "Developer Fan"!