HELP!!!My Favorite Timeshare Just Closed Down BY RHC Pullout!!!!!

[mamiecarter]

Deer Run Village is not a fancy resort but I love it. It is hard to get a place to stay in the Catskills in the Summer without Spending big Bucks. It was the first timeshare I bought.

I just got a letter with the heading "Notice of Resort Closure"
that Said Royal Holiday Club had unilaterally terminated it's relationship with Deer Run Village and quit paying maintenance fees on its 667 units. RHC payments are made monthly and comprise 35% of the resorts income.

So It looks like My week 32 vacation is gone, plus my Memorial day trade to Deer run Village made through Dial an Exchange.

Now it is going to be a big legal mess. Timeshare owners cannot just walk away from their maintenance fees. The rules apply to RHC. However having to go to court against a large corporation is expensive.

Does anyone else own a timeshare that RHC is involved in? Has RHC done this before? Is RHC having major financial
problems? If they are on the verge of bankruptcy this could be just the first of many disasters for timeshare owners. Then there is the question of what is in store for people who bought into RHC and hope to get decent vacations out of their membership.

Does anyone know anything useful about all of this?

Will the owners just loose their timeshares?

Anyone been through this before?

 

[dougp26364]

That really sucks and highlights the problem of having one very large owner at resort. If that owner goes belly up or quits paying for any reason, the resort is likely to be S.O.L. This isn't like a management company like Marriott or Hilton dropping their contract. This sounds like a travel club that actually purchased a bunch of units just walking away.

I agree that RHC could be held responsible for what they owe but what is the resort to do in the meantime? The only other option would be to raise everyone else's MF's to cover the lose. Some, if not most, HOA/BOD rules won't allow for that sort of increase. This would be something to be concerned about since there are other "travel clubs" out there who may force other resorts into a similar situation.

 

[timeos2]

Held hostage by RHC?

I wonder if there was any warning this was coming? I'm involved with a couple resorts that do have large blocks of ownership with trusts or a developer - representing about 30% of all fees. Because of that large number we watch those payments very closely each year to be sure it's in on time and in full. If it was delayed - even a few days - we would be on it to find out why and to take the proper steps immediately to enforce collection. If Deer Run had any inkling they weren't going to pay they should not have sat on that news and should have taken every step they could to collect or recover the fees.

It is sad and I hope things work out for you and the other owners and that you don't get shafted by RHC if they are still a going concern. If the resort is worth it there should be an immediate special assessment to keep things going (and automatically adding to the fees due from RHC who caused it) and to go after RHC. If the other owners would rather just let it close then a vote to that effect should be taken.

 

[AwayWeGo]

Unilaterally, Shmoonalaterallee.

Royal Holiday Club had unilaterally terminated it's relationship with Deer Run Village and quit paying maintenance fees on its 667 units. RHC payments are made monthly and comprise 35% of the resorts income.

Wait a minute -- regular, walking-around timeshare owners are not allowed to quit making maintenance fee payments any time they want. The only way ordinary people can "terminate" their "relationship" with a timeshare that they own is by selling their timeshare weeks to other people -- new owners.

Why should it be any different with some company or organization that owns a bunch of weeks at the timeshare?

What gives some major owner the right to quit making payments unilaterally ?

Sheesh.

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

 

[bnoble]

Of course. But, the realities are that bills must be paid while payments are not forthcoming. While it is true that eventually RHC would be brought to task, and possibly even compelled to cover legal costs, that will take some time. The resort can't pay in IOUs between now and then...

 

[AwayWeGo]

Keeping The Doors Open In Tough Times.

I'm involved with a couple resorts that do have large blocks of ownership with trusts or a developer - representing about 30% of all fees. Because of that large number we watch those payments very closely each year to be sure it's in on time and in full. If it was delayed - even a few days - we would be on it to find out why and to take the proper steps immediately to enforce collection.

Can the HOA-BOD dip into reserve funds as a temporary expedient if necessary to keep the timeshare going while the big-bloc owners are hit with immediate collection enforcement in case they ever drag their feet on ponying up their mandatory payments?

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

 

[timeos2]

Reserves are separate but there are provisions for emergencies

Can the HOA-BOD dip into reserve funds as a temporary expedient if necessary to keep the timeshare going while the big-bloc owners are hit with immediate collection enforcement in case they ever drag their feet on ponying up their mandatory payments?

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

Technically, no. In reality it probably could be worked out on a short term basis. If a resort suddenly loses 25% or more of its income it is an emergency. On the other hand if it occurs early in the year - just as all other fees are due and being paid - the resort should have a good portion of the other 75% in hand so that should carry them for at least 4-6 months. The crunch would occur as the last 25% became the only income they had left to collect for the year. If it was being monitored that 75% should allow them time to make emergency moves to prevent a resort collapse. Thats why I wondered if Deer Run had warning about this issue. We don't have enough information to make a call on that yet.

 

[mike130]

I don't know if this has anything to do with it but Dear Run is a former VRI resort (It's no longer listed on their web site). Many of RHC resorts are VRI managed. Perhaps RHC got their inventory from VRI. Also interesting, on RHC's web site VRI was listed under STRATEGIC ALLIANCES, it's no longer there.
http://www.aboutus.royal-holiday.com/index.php?fuseaction=home.section&id=40

Mike

 

[mamiecarter]

VRI is apparently being helpfull on this

The Mailing I got from Deer Run Village said VRI which is the resorts management company was being very helpful.

The problem here is the resort doesn't have much of a cash reserve and the lender is trying to force immediate repayment.If they can do this the result will be a foreclosure.

The overall economic situation makes it very unlikely that anyone will want to try to bail the resort out or attempt a takeover.

 

[caribbean]

Most of the units that RHC resorts use are not actually owned by them. They own a lot of units in Mexico at several wholly owned resorts, but other than those, most of the units are leased by annual contract with the various resorts. The list of available resorts changes every quarter as resorts are deleted and new ones are added. It is no longer listed on the RHC website. To the best of my memory, I do not think RHC actually owned any units at Deer Run. It was not on my list when I originally bought and has only been on the list for about 3-4 years. I suspect that the contract came to an end and RHC did not renew which leaves VRI holding the bag. Their statement that RHC "unilaterally terminated it's relationship" would seem to indicate that the contract was not renewed.

I really don't mean to step on any toes, but when I rented at Deer Run for a couple of nights about 4 years ago, it was really in pretty bad shape. We had to cut the circuit breaker on/off in order to turn the heat on and off. I complained, but they would not move us. The carpet was terribly stained and smelled and the furniture needed a complete redo. I don't know if they have done any rehab since then, I certainly hope so. RHC is continually checking reviews for its units and may have dropped the contract due to maintenance issues based on owner reviews. JMO

 

[mamiecarter]

RHC Actually owned over 600 intervals

RHC actually owns over 600 weeks at Deer run village. They took title to them for free because the resort needed someone to pay fees on them. I know because I was pissed and said I would like the resort to give me another prime Summer week for free.

Most of the units are now renovated according to RHC's specifications. Doing that is how the resort acquired a large debt. So the resort is now looking much less run down but RHC has done a real wrecking job on it financially.

 

[JudyS]

RHC actually owns over 600 weeks at Deer run village. They took title to them for free because the resort needed someone to pay fees on them. I know because I was pissed and said I would like the resort to give me another prime Summer week for free.

Most of the units are now renovated according to RHC's specifications. Doing that is how the resort acquired a large debt. So the resort is now looking much less run down but RHC has done a real wrecking job on it financially.

Well, if RHC is just walking away and the resort has been renovated, then the HOA should own some weeks that have value. Maybe they can sell those to become solvent again?

 

[Mel]

Forclose on them!

Legally, they have no right to terminate their relationship like that if they own 600 units. Of course, forcing them to pay ill not be easy. The first step should be to forclose on all those units, and get them back into HOA inventory. The resort does have the mechanism to spread the cost out over all the other owners - either by special assessment or higher annual fees. Doing so with the annual fees would be a matter of increasing the line item for bad debt (to account for the fees they anticipate will go unpaid). I like the idea of doing it as an assessment, and then tack that onto the lawsuit to recover fees RHC owes.

The "sale" of those weeks to RHC is not that different from what happened at Tropical Breeze - our resort was closed for 10 years, trying to rebuild, but couldn't get financing. We sold our HOA weeks to a developer (Coopershare, now known as Escapes! Resorts). I would contact the Attorney General to see if something can be done - does RHC have other inventory in the same state? Maybe the threat of keeping them from doing any other business in the state could get them to pay up.

What would worry me is the appeaance of a sweetheart deal. All of my resorts require the fees for a given year be paid by the end of the previous year - my October 2008 week and my March 2008 week both had to be paid up in December 2007. Does Deer Run have a different payment system, or have they simply allowed RHC to run a tab? If the fees has been paid in December, the resort should have enough funding to operate for the year - and plenty of time to find something to do with those weeks (or plan to spread the cost accordingly). Whether those weeks are used of not, as the deeded owner, RHC should be responsible for the maintenance fees on those units until such time as they are transferred to someone else.

On the positive side, if the resort cannot reopen, and has to be sold, the proceeds would be split among the owners, and RHC's share would be net of what they owe. Whatever the bank thinks it will do to secure its loan, they can't take title to the resort - they would hae to file forclosure on every owner. It's the same reason why Tropical Breeze had trouble securing finncing in the first place - the HOA has nothing to offer as colatteral.

 

[timeos2]

Maybe RHC - maybe not

You guys don't understand how RHC works. First, you need to know that RHC members don't want to go to Deer Run, you can tell that because if you can see their reservations site DR is always available.

Second, RHC doesn't 'own' 667 unit-weeks or whatever it is you are quoting. RHC has annual contracts with its affiliated resorts. They surely pay MFs on their contracted units but they don't 'own' them so they don't have that long term obligation. Whether they're aborting their contract or just not renewing would be the question, I bet their lawyers have it covered no matter what.

Maybe, maybe not. Mamie owns there and she seems to think they purchased the weeks. Not unheard of - at one of my resorts three different club/trusts own thousands of weeks for their members. They own them. They owe the fees.

If RHC really just had an agreement to pay fees & get use of 600+ weeks then there must be time frames for notice, use , etc involved. If they agreed to pay for 2008 then backed out that might be grounds for a suit to collect the fees even if they don't own the time. But if they properly notified the resort/Association that 2007 was the last year they planned to pay, and it met the terms of the agreement, then the resort/management/Association has a ton of responsibility and owes some explanations. We don't know enough to judge on what we've heard so far.

 

[Hoc]

Without knowing the terms of the RHC contract with Deer Run it would be foolish to speculate. Certainly the HOA will cast it as if RHC walked away from an obligation, because the alternative is that the HOA screwed up by not getting the units owned by someone who would pay fees. But without knowing the details, who can say why the resort is now in trouble, and whose fault that is?

 

[mamiecarter]

If you want to hear how nice RHC is to Deal With Read Echanges

Look up RHC under Exchanges on this BBS if you wish to find out how reasonable the people who run Royal Holiday Club are. The consensus seems to be that RHC has the worst customer service on the planet.

So no surprise that they do a wrecking operation on one small resort.

I hope Deer Run Village is able to reopen. I am really in love with the Catskills and I haven't found a better deal.

 

[wackymother]

So Deer Run is really closed, as of right now? If you dial their phone number, what do you get?

 

[mamiecarter]

Website Gone, Phone on answering Machine Only

Web Site disappeared from Google. At 1120 AM all I got was the answering Machine.

 

[Teresa]

Don't give in without asking some questions

Deer Run Village is not a fancy resort but I love it. It is hard to get a place to stay in the Catskills in the Summer without Spending big Bucks. It was the first timeshare I bought.

I just got a letter with the heading "Notice of Resort Closure"
that Said Royal Holiday Club had unilaterally terminated it's relationship with Deer Run Village and quit paying maintenance fees on its 667 units. RHC payments are made monthly and comprise 35% of the resorts income.

So It looks like My week 32 vacation is gone, plus my Memorial day trade to Deer run Village made through Dial an Exchange.

Now it is going to be a big legal mess. Timeshare owners cannot just walk away from their maintenance fees. The rules apply to RHC. However having to go to court against a large corporation is expensive.

Does anyone else own a timeshare that RHC is involved in? Has RHC done this before? Is RHC having major financial
problems? If they are on the verge of bankruptcy this could be just the first of many disasters for timeshare owners. Then there is the question of what is in store for people who bought into RHC and hope to get decent vacations out of their membership.

Does anyone know anything useful about all of this?

Will the owners just loose their timeshares?

Anyone been through this before?

I have a bunch of questions because most of what you have relayed doesn't make sense to me.

35%?

If RHC owns 667 units - does that mean 667 unit/weeks or 667 year-round units? If it's unit/weeks then we're talking 12.83 units. Unless the resort is very small (37 units based on the RHC 35% ownership) then how does RHC contribute 35%? 37 units sounds too small based on others' comments on this thread.

How many actual units are at Deer Run? If you're talking 667 units owned by RHC then that means there are 1905 units at Deer Run. Why can't the resort shut down part of the place in order to keep operating for those who want to use it? You can still keep the pool open. Might have to cut way back on 'activities directors' and such. Maybe cut back front desk hours - especially on days that are not check-in days.

It appears to me that your resort management is trying to scare the rest of the owners into thinking the worst and then they will come across as 'saviors' when they come up with a plan to keep the place open. This is priming the rest of the owners to be ready for a special assessment to 'cover what RHC has done to the resort'. This happens more than you think. And if none of the owners come forward - well, maybe they'll get the impression that no one really cares. Who knows? Maybe it will be 'cheaper' for most of the other owners for the resort to close. They won't have to pay any more m/fs - right? Some will consider this a solution to their own problems.

There is probably something in your 'Docs' that spell out what happens to an owner who stops paying. Some resorts are instructed to rent out weeks and credit the income against back m/fs. Some can't do anything with the weeks until foreclosure. What do the 'docs' say?

If RHC actually owns the weeks and has flat out said 'no more' then they should not be adverse to giving the weeks back to the resort to save on the time and expense of foreclosure (to the resort).

RHC shouldn't be able to do that you say? Well, you can be right - or you can go forward and try to avert bigger problems. As several people have mentioned, 'give them away' to other owners who can pay the m/fs. Maybe the resort can let other owners have an additional week this year to use if they pay the m/fs. Is RHC going to complain about it? Unlikely. RHC has given up already.

If RHC was simply leasing the weeks or units and they let the lease run out, then resort management didn't do its job by keeping abreast of the situation.

Don't just sit back and bemoan losing your week 32 and forgetting about your week you got through DAE. Ask questions of the board members. You can google them (look at your last election ballot) and give them a call AT HOME to find out what is really happening.

Unless of course, you'd like to be rid of your Deer Run week.

 

[mamiecarter]

What Happens If RHC Folds? If Deer Run Village goes under What do I owe?

The economic situation we are in has been characterized as the worst since WWII. So I expect to see more threads about resorts closing.

Deer Run Village hired Attorney John Funk of Gallagher, Callahan and Gartrell. From his bio this is a timeshare legal eagle of the first magnitude.

The letter I got from DRV states RHC took ownership of 667 intervals in 2004. DRV has 2,295 total intervals but 363 are non performing. That means not paying fees. So with the RHC pullout about half the intervals are now non-paying.

All the details I know about this is from a 3 page letter the owners association sent out. Out of 45 apartments 27 have been remodeled, 5 are almost complete, so that leaves 13 units to remodel. A lot of other major repairs to the common elements have been done.

Actually I have seen a lot of these improvements myself.So the whole project was going well and was on schedule. RHC played a major role in setting the schedule and approving the remodeling plans.

My guess is RHC isn't selling memberships like it used to. Maybe it is also experiencing Club Members who stop paying their fees.

The fall in the dollar means trips to Europe do not look so appealing to those of us who pay in dollars. RHC's big strength has always been it's weeks in major European cities. Now it has to pay for it's inventory in a very weakened currency and some of those contracts are probably coming up for renewal about now.

RHC is probably in trouble itself. I think it is fair to ask "what happens if you own an RHC membership and RHC folds?"

Maybe you just stop paying money. Could you be liable for RHC's debts? What if you haven't paid off your purchase fee yet?

Actually the same questions come to mind for owners at DRV. If I just loose my cheap EBay purchased week and this years already paid maintenance and special assessment I can live with it. But maybe owners can be held liable for a lot more. Any one know anything about this?

 

[AwayWeGo]

Overhyped -- Bigtime.

The economic situation we are in has been characterized as the worst since WWII.

Fear not.

It's all a matter of perspective & expectations. For instance, the unemployment rate that some pundits deplore today is actually better than the unemployment rate that they were applauding back in the economically rosy 1990s. Who'd a-thunk? Some housing values have tanked & foreclosures are up -- but sales of existing homes are up as the savvy bottom feeders snap up the bargains.

Sure, there are ups & downs but today's economy in all is somewhere between pretty good & not bad -- surely nowhere near "the worst since WWII" that some of the media ax-grinders & agenda-thumpers are promoting.

Over the past 5 years, real GDP has increased by 16% (3% annually). The unemployment rate has hung right under a historically low 5%. Nearly 10 million jobs have been created. Household net worth is up by $20 trillion. Industrial production has expanded by 13.5%. Even home prices, despite the current correction, have increased by 20%.

-- hotlinked --​

Note To TUG-BBS Grand Pro : Please just delete this entry & forget about the whole thing if there is the slightest worry in your mind that it verges too closely to controversial political & social topics, which I strive to avoid like the plague on TUG-BBS, just to preserve peace & harmony & goodwill & all that. I'm just offering a little reassurance here, not trying to get anything started. Thanks.

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

 

[timeos2]

Update from Streettalk

Some more details are available on this weeks streettalkblog.

Seems the HOA took a loan to pay for the renovations required by RHC, RHC does OWN over 600 weeks and they did unilaterally pull the plug on payment. The bank grabbed all the Association accounts toward the loan thus the resort has no cash & closed.

RHC seems like the heavy here and should be made to pay but, given the situation, there may be no one willing to pay what it would cost. Because of the defaulted loan the resort may end up auctioned which would end the timeshare owners rights (its possible but not likely they'd get a few dollars from the sale).

Sound like this resort was screwed over by RHC.

 

[mamiecarter]

So was this planned in advance by RHC?

Sometimes foreclosures are planed events. It may be that someone is sitting by waiting to buy the resort for a song. Would not be surprised if the resort is purchased by some one or some entity with ties to RHC. Or maybe things just happen that way?

The moral of the story is Do not do deals with RHC without having the resources to cope if RHC pulls out suddenly. That can be generalized to other companies. Big fish eat smaller fish.

 

[somerville]

Some more details are available on this weeks streettalkblog.

Seems the HOA took a loan to pay for the renovations required by RHC, RHC does OWN over 600 weeks and they did unilaterally pull the plug on payment. The bank grabbed all the Association accounts toward the loan thus the resort has no cash & closed.

RHC seems like the heavy here and should be made to pay but, given the situation, there may be no one willing to pay what it would cost. Because of the defaulted loan the resort may end up auctioned which would end the timeshare owners rights (its possible but not likely they'd get a few dollars from the sale).

Sound like this resort was screwed over by RHC.

This is a perfect example of how it is not healthy for a points based timeshare system to own a substantial number of units in a resort. First, it gives them the ability to control the board, and then, if they don't like the economics, they can stop paying maintenance fees and put the resort in a financial bind.

 

[Hoc]

Because of the defaulted loan the resort may end up auctioned which would end the timeshare owners rights (its possible but not likely they'd get a few dollars from the sale).

I don't see how that could happen. The HOA cannot pledge title to units it does not own as security for a loan. Only the titular owner can pledge the property. No pledging of title=no foreclosure.