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

[timeos2]

good point

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.

Good thought - that's one of the reasons timeshare associations have a very tough time getting a loan. But it can be done pledging future revenues - perhaps based on the RHC income - and common arreas if controlled/owned by the resort not the owners. Once the accounts are seized it ends the same - auction to pay back loan or assess owners to pay it off. Most owners may prefer the auction at this point.

 

[bizaro86]

No pledging of title=no foreclosure

That would be true. But if the resort is closed, I would imagine most/all of the owners would be willing to sell/quit claim their week. Why pay fees on something that you can't use? It seems to me that resorts with high seasonality are better served by a points system than a week system, as off-season weeks can pay a lower MF more in tune with their actual value. Maybe this is an opportunity for this location to move in that direction, and thus preserve the value of the location. That would probably depend on how much it would cost to redeem the RHC weeks. Does anyone know the outstanding balance on the loan?

Michael

 

[mamiecarter]

Your right, it is not a forclosure

Looking at the letter from DRV homeowners association I see the problem is a shortage of operating funds not a foreclosure.The $285,000 loan was secured by maintenance fee income. The lender has called for the acceleration of the loan due to diminution of capital. But that isn't the immediate
problem. The resort has only a little over $100,000 in operating funds.

 

[beanb41]

I guess that there are now some pretty cheap units available from RHC. Has anyone thought of approaching them and taking some of the units off their hands.

 

[mamiecarter]

You are right, the problem is not pending forclosure

I just read the letter from the HOA again. the problem is no operating funds not impending fore closure. The HOA has just $108,000 in operating funds. The lender has called the $285,000 note that was secured by maintenance fees. So the monthly payments RHC was making would have covered loan repayment and a lot of operating fees.

 

[Hoc]

That's fine. No operating funds can cause a problem, but perhaps the owners can get together and create a new HOA with new operating funds, etc. Put the old HOA into bankruptcy and clear off any encumbrances on that, and the resort can operate in the interim.

A little creative thinking, and that can resolve the issue.

Edit: The other thing that I was just thinking is that the HOA would naturally have Officers' and Directors' Liability Insurance. A smart lawyer would negotiate with the carrier to place some funds into an account to continue to operate the resort for a year, plus a cushion, as a settlement of the liability for negligent management. If done via the bankruptcy, such funds could not be touched by the lender and could be used to operate the resort until the bankruptcy is completed. Otherwise, the carrier's liability could be the entire policy limits, as the damages for negligent management would be the value of the weeks that go unused.

 

[mamiecarter]

If the individual owners would just sighn over there deeds...

This resort would be worth a lot as condos or regular rentals. So if the interval owners could just be persuaded to sign over their deeded weeks someone could get rich out of this deal.

 

[MaryH]

Sorry, if Deer Park had 35% unperforming units which they give or sold to RHC in 2004 and now has another 15-16% unperforming units 3-4 years later, something is either wrong with how the times for peak and off-peak are structured or the management company are not very good. I persume they were charging the same MF for seasons that are less desirable.

 

[mamiecarter]

News on Deer Run Village

I just got a letter from the Deer Run Village Board of Managers. As I guessed they want to sell the resort. I don't see what else can be done at this point. It takes the consent of 80% of the owners qualified to vote to do this. There is a meeting scheduled June 14.

The plan is to sell the resort and they have decided to listed it at $,1950,000. If they fail to find a buyer they plan to sell it at auction and divide the money proportionately among all owners with priority going to those who pay a new special assessment. Apparently Royal Holiday club has agreed to cooperate and pay their share of the new assessment that ranges from $95 for a studio to $171 for a two bed room.

I do not see any other solution and will be happy if I get my assessment back and the $700 I spent on EBAY for the week. That is probably too much to hope for.

Next to Deer run Village sits an abandoned Ski Lift. When it had a major ski lift and slopes, plus bar, restaurant and outdoor pool attached the resort was very successful. The original developer ran the project into bankruptcy in the 1980s and the homeowners association was able to keep only the lodgings part.

If someone wanted to buy the ski lift buildings and the lodgings and restart the whole operation it could be a real money maker but this is not a good time to be starting up a major real estate project.

So thats the end of my Deer Run Village timeshare. I could see it being sold for condos or residential rentals or an assisted living facility. Someone will make money on this but not me.

Any one have any thought about this?

 

[Holly]

That's too bad. Am I reading your post correctly that the asking price is just under $2M. That seems awfully low.

 

[mamiecarter]

They said it was appraised at 2,100,00.00

The listing price is a little under what they said it was appraised at. Probably need a quick sale.I hope there is not an insider profiteering on a bad situation.

It is an old game to create a bankruptcy in order to transfer assets on the cheap. I am not convinced that is what is going on here however.

 

[Holly]

I spend quite a bit of time up near there. The land alone is worth more than that, even in this economy. However, it's only worth what they can find a buyer to pay for though.

So sad.