First Lawsuit filed against Viking Ship LLCs / PCCs

[Beefnot]

Would it be viable to try to migrate to a mixed use resort, where the sell full ownerships such that people are basically buying second homes. Maybe these full ownership sections would receive reduced services (e.g., monthly vs. weekly housekeeping, no front desk support, etc), so their MFs would be lower and more attractive for such an arrangement.

 

[Carolinian]

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.

AGREED! State Attorneys General have nailed some of them, banning them from doing business in their states, making them pay civil fines and restitution to their victims. In many cases, the business plans of the PCC's cross the line into criminal offenses, like obtaining money by false pretenses, a felony. I would like to see some of the State AG's up the ante and start prosecuting these dudes in criminal court and jailing them.

 

[vacationhopeful]

RCI's massive program of rental of exchange deposits to the general public has also helped flood the market and drive down rental prices.

And don't forget the VACATION CLUBs who entice resorts with advance payment of a bulk number of weeks UNDER the cost of MFs to sell to their members. I heard my one resort manager JUST GLOAT how he got $300,000 for a "rental" of x number of weeks that year to a vacation club. Less than the MFs, but these are units in non-payment or foreclouser. But these GUESTs just brag how their WONDERFUL purchase in the XYZ Vacation Club got them in there for $575 --- while the lowest MFs are $740. And the resort manager has to GIVE them X number of weeks every week. Of course, the vacation club members NEVER mention, the $10K for the club membership or how many dates they requested at the great resort but got a lesser resort. And I hear that almost every time I am at that pool.

Call "bulk" sales or wholesaled weeks -- I have personally seen lists for Wyndham units. Again, close to 40-45% of the MFs during HIGH season - there is NO SCREENING of these inbounds as being FIRST TIME RESORT guests as sales leads; just a chunk of cash to the developers at the beginning of the year.

 

[DeniseM]

Only BOD of HOA has the power to set the maintenance fees and 100% of the blame and responsibility for the viability of a resort is for BOD HOA
Trying to blame someone else (owners, PCCs or whoever) is simply excuse for BOD that is not doing their job.

Sorry, but this is just not true - look at the recent situation with SDO - Starwood CLEARLY has complete control of the board and all decisions made - this from the President of the BOD!

 

[Beefnot]

Viking Ships are a bad idea. But, so is not assigning accountability to current HOAs to solve the problem of no exit plan for responsible owners who want out in a reasonable way.

I would love to speak to a resort to become their resale and rental broker if they had maintenance fees and reservation rules that allowed their intervals to have value.

Create a holding company for deedbacks owned by the HOA. Have them charge a $400 transfer fee plus 2 years maintenance fees and access to all unused inventory. Let me market directly to the owners in the resort.

If I couldn't make that work, then the resort is not viable. There is plenty of money there to run a successful operation.

How many resorts have actually tried to do this?

Moreover, if a resort did this and it failed economically, how is an individual owner ever going to be able to do it on their own? How can anyone argue that even given this program that moving an interval from one person to another is still possible without a scam?

Yes, I have been a proponent of this. They could have an in-house or contract sales weasel to market the properties to both owners and exchangers and renters and whoever at reasonable pricing to get the unit in the hands of a viable new owner.

 

[Fredm]

Thank you. John and Denise do not believe that the HOA is accountable. They believe the owner is accountable and needs to come up with their own exit plan. I believe the HOA is accountable and they need to come up with a general exit plan that benefits owners who want to stay, owners who want to leave and addresses owners who default on obligations. Equally importantly, they need to determne when the resort is no longer viable as a timeshare resort and must take action to terminate it. These ideas are all important for HOAs to be discussing and determining solutions for.

Owner accountability for an exit plan is what we have now.
Problem is the exit. That's why PCC's prosper

I repeat: A viable alternative to parasitic PCC practices and the Viking ships must be found, if that is the objective.
Fact of the matter is the HOA is the only logical point from which a viable substitute for the PCC's can be implemented.

 

[Carolinian]

ARDA-ROC represents developers interests, not that of timeshare members or HOAs. In fact ARDA-ROC often works against members interests. They try to prop up developer control of HOA's and thwart owner democracy. Nullifying the right of members to vote fits right in with ARDA-ROC's developer dictatorship mentality.

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.

 

[mstoyanov]

Sorry but this is wrong! Starwood may interfere (or pick people sitting on BOD) but they can not tell current BOD to make any decision.
BOD is the ultimately body that makes the decision regardless if the people in that BOD are Starwood stooges or not.
And even if 100% of BOD is picked by Starwood it is still completely different legal entity with different legal responsibilities.
From a legal point of view Starwood is simply a manager of the resort and can either agree to the decisions of BOD or cancel the management contract with that resort.

Sorry, but this is just not true - look at the recent situation with SDO - Starwood CLEARLY has complete control of the board and all decisions made - this from the President of the BOD!

 

[DeniseM]

Did you follow the long thread about the SDO BOD? Per the SDO Board President - they simply rubber stamp all Starwood recommendations. When he encouraged them to consider all options, their response was that "Starwood wouldn't like that," and they refused to even consider other options.

Did Starwood hold a gun to their heads? No, I don't think so. But they manipulate the elections, and made it clear that they expected the BOD to comply - and they did.

Is this a good thing? NO! But it's reality.

That's why Villas of Cave Creek is no longer in the SVN - they would not "cave" in to Starwood's demands to charge a special assessment and renovate the resort, so Starwood left. (pun intended)

 

[timeos2]

Westin Kaanapali Beach Resort can. Please try to prove me wrong. Any Disney Vacation Club property can. Any WorldMark ownership can. There are plenty. The one thing all of these resorts have in common is that it costs a lot more to rent units at these resorts than their maintenance fees.

Disney can't take it back - they never let it go! The buyer of DVC gets nothing but a lease they agree to pay maintenance on. There is no foreclosure for nonpayment as they hold the deed all along. Bad example.

In fact many systems are moving to this type model (trust based not deeded). It is the independents - often much better resorts/operations - that have to deal with resales not tryst systems.

It also tends to be an issue with older resorts that are highly seasonal. Many have fees equal year round while value is concentrated in a limited number of use times. They have the biggest problems.

 

[timeos2]

Thank you. John and Denise do not believe that the HOA is accountable. They believe the owner is accountable and needs to come up with their own exit plan. I believe the HOA is accountable and they need to come up with a general exit plan that benefits owners who want to stay, owners who want to leave and addresses owners who default on obligations. Equally importantly, they need to determne when the resort is no longer viable as a timeshare resort and must take action to terminate it. These ideas are all important for HOAs to be discussing and determining solutions for.

Again you keep repeating a false premise. I (and I assume Denise but I cannot speak for her) absolutely agree that HOA's are accountable. If they aren't performing as they should to operate and maintain the resort (which are the sole reason they exist!) they should be voted out. Period. Far too many (usually Developer controlled) don't do the job yet remain in control.

What I disagree with is the unfair and untrue assumption that HOA's are responsible for resales or resale prices. They are not (unless they specifically try to degrade values like Wyndham - another problem Developer, see a pattern here?) but of course they should be looking to do all they can to support resales & as high a value as possible. They are NOT is a position to be the seller of last resort. That is not their function, never was and never will be.

Yes - they need to help owners. Yes they need to operate as efficiently as possible. Yes they need to be responsive to the owners that PAY the fees. Not those that want an easy way out at others expense. They are not the proper target of the need for a viable resale market - the Developers that created the initial market are.

Saying that HOA's MUST accept deed backs isn't the same as saying they need to have an outlet of last resort for owners to sell through. The good ones do have such an outlet but even that outlet cannot guarantee how / when a sale will be completed. Marriott handles some reslaes but it can take years. They can do their best to bring together sellers and buyers, but they cannot say 100% that it will occur in XX days/weeks or months. Even years.

At the point that they have a reliable reseller to recommend, or a Marriott does it themselves, a way out for any owner needing one - the HOA obligation has been met. They do not owe nor can they guarantee that there will BE a willing buyer until there is one! Forcing them to accept any ownership back no matter how many annual fees may be prepaid assumes all ownerships will in fact be sold within XX years. That is a guarantee no one can offer. Not Disney or anyone else. Saying they can is a lie.

Any plan that says an HOA MUST accept weeks back is doomed to failure. It creates an unworkable requirement no business would ever accept much less a non-profit set up for totally different purposes.

 

[Rent_Share]

160 comments in two days, not a single poster has read the complaint and has any first hand knowledge of the plaintiff's assertions

 

[DeniseM]

160 comments in two days, not a single poster has read the complaint and has any first hand knowledge of the plaintiff's assertions

Not knowing what we are talking about has never been in impediment to lively discussion on TUG.

 

[Carolinian]

More developers should have followed the model of the world's first timeshare developer, Swiss-based Hapimag, which currently has ~50 resorts, mostly in Europe. After a Hapimag member has owned a set number of years, Hapimag will, on request buy it back from the member at a set percentage of the then current developer list price. Hapimag has done this since they started. An independent resort in the UK, Tresco, also has a similar policy. This is not just allowing a deedback, but actually paying the member to buy the week back from them.

But, I am sure if you showed up at a PCC meeting with a Hapimag or Tresco timeshare, the PCC would tell you it is worthless and you have to pay them ~$3,000 to have the PCC take it off your hands. PCC's are nothing but fraudsters.

Owner accountability for an exit plan is what we have now.
Problem is the exit. That's why PCC's prosper

I repeat: A viable alternative to parasitic PCC practices and the Viking ships must be found, if that is the objective.
Fact of the matter is the HOA is the only logical point from which a viable substitute for the PCC's can be implemented.

 

[buzglyd]

I think there is an incorrect assumption that all resorts that are suffering from PCCs have some big, Daddy Warbucks Developer sitting around burning $100 bills while the owners suffer.

There are 3000 TS resorts in the US and many of them haven't had a developer around in decades.

 

[VegasBella]

I think there is an incorrect assumption that all resorts that are suffering from PCCs have some big, Daddy Warbucks Developer sitting around burning $100 bills while the owners suffer.

There are 3000 TS resorts in the US and many of them haven't had a developer around in decades.

OK, so they can't pay owners who want out but maybe they could take deeds back for a fee.

At the very least, they do a little to help owners sell their units. They don't need a sales team, just someone to spend 20 minutes a week maintaining a list of unitis for sale by owner with the basic info about the unit and the owner's contact information along with an asking price. Then, when someone calls up the resort and asks if they have any resales they can give them the list.

It's not much work but it could really help a lot - an HOA could set something like that up.

 

[buzglyd]

OK, so they can't pay owners who want out but maybe they could take deeds back for a fee.

At the very least, they do a little to help owners sell their units. They don't need a sales team, just someone to spend 20 minutes a week maintaining a list of unitis for sale by owner with the basic info about the unit and the owner's contact information along with an asking price. Then, when someone calls up the resort and asks if they have any resales they can give them the list.

It's not much work but it could really help a lot - an HOA could set something like that up.

Not if it's at a resort that no one wants to buy.

I can't tell you how many times owner's have been offered a chance to deed back their week and have said "screw you!"

Not all timeshares are on the beach in Southern California.

Just page through an RCI directory and notice how many resorts are in the middle of nowhere.

 

[bogey21]

Would it be viable to try to migrate to a mixed use resort, where the sell full ownerships such that people are basically buying second homes. Maybe these full ownership sections would receive reduced services (e.g., monthly vs. weekly housekeeping, no front desk support, etc), so their MFs would be lower and more attractive for such an arrangement.

I used to own a Week at Pinecliff Village in Ruidoso, NM. About half the units were owned by full time residents and half were timeshares. I also used to own a Week (I gave it to my Son who now owns it) at Orofino by Straight Creek in Dillon, Co. Same deal. Both resorts seem to thrive under this arrangement.

George

 

[ronparise]

It sounds great on paper - but how do you do it?

Here is the huge weakness in your argument - What if 25% of your owners want to deedback their timeshare???

-Who is going to pay those maintenance fees? I will tell you who - the other owners!

You are going to punish 75% so that 25% can have an easy out? How is that equitable???



Again - you don't understand what's going on here: I have ready hundreds of posts from owners who want out of their timeshares.

10% are dissatisfied with their timeshares.

20% have financial problems.

70% want out because they never should have bought a timeshare in the first place - they don't know how to use it, and never tried to figure it out - they just want an easy out.

I am not willing to finance that "easy out" - maybe you are. After you have paid hundreds of dollars in MF for other owners, you might see things differently...

If 25% of the owners want out, its the same as if just one wants out.

The HOA needs to provide an easy way out. not to help the unwilling owners but in their own self interest.

Denise...I dont understand how you can be so hard-headed about this.I dont understand why you think its better that these unwanted weeks end up in a Viking ship, rather than in the control of the HOA

 

[timeos2]

OK, so they can't pay owners who want out but maybe they could take deeds back for a fee.

At the very least, they do a little to help owners sell their units. They don't need a sales team, just someone to spend 20 minutes a week maintaining a list of unitis for sale by owner with the basic info about the unit and the owner's contact information along with an asking price. Then, when someone calls up the resort and asks if they have any resales they can give them the list.

It's not much work but it could really help a lot - an HOA could set something like that up.

Exactly. Many do just that. But that isn't enough for the "we need out yesterday & you'll do it for me' group. Nothing short of a 100% return of the developer sales price would be enough for them - and they'd want appreciation on top I'm sure!

The point remains the HOA isn't a sales organization. If it were there is a conflict of interests. Saying that they need to be responsible but owners don't have to be is a ludicrous position to take.

HOA's do need to be a lot of things. Proactive in protecting value of the resort and whatever they can do to support - or at least not impede - resales is important too. They are saddled with things like same fees for all weeks when it's clear there should be graduated fees based on use/trade/rental value of the ownership. Spend the time, money and effort being wasted on PCC's & viking ship scaams and focus instead on finding real answers whatever they may be. That would be far more effective and productive than trying to pass rules requiring a bailout of any inconvenienced owner that wants out with their credit unharmed. Make the case to the prime owners that fees for them will go up if they bail & it would pay to reduce fees for non-prime times to keep those owners happy too. Design things like Trusts with RTU use to assure fees for the unowned times. Work with owners to identify when a resort really SHOULD be disbanded for the good of all owners.

Be useful rather than throwing up road blocks or "one solution fixes all" plans that never will fix anything, The best hope we have is that our HOA Boards will be clearheaded and act responsibly to keep the good resorts open & healthy and end those that are better off gone. No PCC's or viking scams required to do it. Just the combined wisdom of the owners, their Board & management acting in everyones best interest would work in every case. At little if any additional cost. Looking for real answers is far better than kicking impossible plans around BBS posts over and over again (but not as entertaining I'm sure).

 

[buzglyd]

Exactly. Many do just that. But that isn't enough for the "we need out yesterday & you'll do it for me' group. Nothing short of a 100% return of the developer sales price would be enough for them - and they'd want appreciation on top I'm sure!

The point remains the HOA isn't a sales organization. If it were there is a conflict of interests. Saying that they need to be responsible but owners don't have to be is a ludicrous position to take.

HOA's do need to be a lot of things. Proactive in protecting value of the resort and whatever they can do to support - or at least not impede - resales is important too. They are saddled with things like same fees for all weeks when it's clear there should be graduated fees based on use/trade/rental value of the ownership. Spend the time, money and effort being wasted on PCC's & viking ship scaams and focus instead on finding real answers whatever they may be. That would be far more effective and productive than trying to pass rules requiring a bailout of any inconvenienced owner that wants out with their credit unharmed. Make the case to the prime owners that fees for them will go up if they bail & it would pay to reduce fees for non-prime times to keep those owners happy too. Design things like Trusts with RTU use to assure fees for the unowned times. Work with owners to identify when a resort really SHOULD be disbanded for the good of all owners.

Be useful rather than throwing up road blocks or "one solution fixes all" plans that never will fix anything, The best hope we have is that our HOA Boards will be clearheaded and act responsibly to keep the good resorts open & healthy and end those that are better off gone. No PCC's or viking scams required to do it. Just the combined wisdom of the owners, their Board & management acting in everyones best interest would work in every case. At little if any additional cost. Looking for real answers is far better than kicking impossible plans around BBS posts over and over again (but not as entertaining I'm sure).

Excellent!

However, the biggest road block to all these answers isn't the HOA. It's the condo docs. In many cases, they are almost impossible to change.

The vast majority of owners are unresponsive to requests for proxies, votes, etc.

 

[BocaBum99]

And don't forget the VACATION CLUBs who entice resorts with advance payment of a bulk number of weeks UNDER the cost of MFs to sell to their members. I heard my one resort manager JUST GLOAT how he got $300,000 for a "rental" of x number of weeks that year to a vacation club. Less than the MFs, but these are units in non-payment or foreclouser. But these GUESTs just brag how their WONDERFUL purchase in the XYZ Vacation Club got them in there for $575 --- while the lowest MFs are $740. And the resort manager has to GIVE them X number of weeks every week. Of course, the vacation club members NEVER mention, the $10K for the club membership or how many dates they requested at the great resort but got a lesser resort. And I hear that almost every time I am at that pool.

Call "bulk" sales or wholesaled weeks -- I have personally seen lists for Wyndham units. Again, close to 40-45% of the MFs during HIGH season - there is NO SCREENING of these inbounds as being FIRST TIME RESORT guests as sales leads; just a chunk of cash to the developers at the beginning of the year.

You do realize that such movement of inventory helps the owners at the resort because those fees go toward maintenance fees that would have otherwise gone unpaid. Occupancy is a good thing at these resorts.

Inventory that moves this way does not go to the general public. Only members who have paid a rather sizable membership fee have access to it. Therefore, it does not deteriorate the value of the resort.

 

[BocaBum99]

Owner accountability for an exit plan is what we have now.
Problem is the exit. That's why PCC's prosper

I repeat: A viable alternative to parasitic PCC practices and the Viking ships must be found, if that is the objective.
Fact of the matter is the HOA is the only logical point from which a viable substitute for the PCC's can be implemented.

Yep. I would expect the developer to want owner accountability for an exit plan. So, it is surprising to me that John and Denise hold that view as well.

Just wait, when owners start coming here in droves with no exit plan when the PCCs are gone, the point of view that it is the owners responsibility to find their own exit plan will be immercifully attacked. It will happen.

 

[BocaBum99]

Denise...I dont understand how you can be so hard-headed about this.I dont understand why you think its better that these unwanted weeks end up in a Viking ship, rather than in the control of the HOA

She is not hard headed about it at all. She wants Viking Ships gone and she wants responsible, maintenance fee paying owners to be responsible for their own exit plan and if they can't find it, she wants them held in indentured servitude toward the other owners until they die or go bankrupt. Her position is very clear. John has the exact same opinion.

There is going to be an avalanche of owner pushback on HOAs who do not provide a reasonable exit plan for owners who want a reasonable way out. I expect lots of law suits against HOAs.

 

[Carolinian]

I think there is an incorrect assumption that all resorts that are suffering from PCCs have some big, Daddy Warbucks Developer sitting around burning $100 bills while the owners suffer.

There are 3000 TS resorts in the US and many of them haven't had a developer around in decades.

. . . and some of the pro-PCC posters here seem to think that the other timeshare members ought to be thrust into that role. When one talks about an HOA, it is actually the other timeshare members that they are talking about. Why do they think other timeshare members should have to bail out deadbeats?

Now, I agree that in many cases HOA's can manage things for those with genuine hard luck stories by accepting deedbacks, but that should not be forced upon them at someone's whim.

Ironically, it is mostly the member-run resorts, not the developer run resorts that are willing to do deedbacks in appropriate circumstances.