HOA selling weeks

[CaliDave]

If an HOA wants to sell weeks that have been either given back with deed in lieu or a foreclosure. Does that HOA need to have a licensed real estate firm to represent them or can someone from the board sign the sales contract and send them to someone like Timeshare Closing Company to process? This would be for a California timesahre, if that matters.

 

[BM243923]

I own 2-1 bedroom units at my resort in Florida. I received my annual report in the mail in August. They talked about the usual stuff and within the letter they said if anybody was interested in purchasing another unit to contact them and they will make the arrangements. I have always wanted to upgrade my units to 2 bedroom since we just had our first grandchild. I emailed them and asked how much would it cost to trade my of my units for a 2 bedroom. They replied back saying they had 2 units available for the week I wanted to trade. They called it an exchange not a sale and the fee would be $250.00 to process the paperwork. I sent them my signed documents giving them back my week on August 21st and I saw yesterday the 2 deeds had been recorded. They did all the paperwork and even notizered the document by there own staff.

 

[Mel7706]

No.

If the HOA owns the weeks they can sell them without a broker. Some states require an attorney to draw the deed
but most don't.

 

[AwayWeGo]

Sella-Sella-Sella.

If the HOA owns the weeks they can sell them without a broker. Some states require an attorney to draw the deed
but most don't.

If the timeshare is not yet sold out, it might be that the timeshare company holds the exclusive right to sell timeshares on site.

In a case like that, all the HOA can do is advertise association weeks off site -- e.g., to owners & other interested persons via TUG classifieds, Yahoo "group" notices, & web sites owned & controlled & operated by the HOA-BOD.

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

 

[thinze3]

I spoke to the Assist. GM at Christie Lodge a few weeks back about HOA ownership of weeks. I was trying to find out why the HOA would not "give" away weeks in order to help us owners keep our MF's down. I told her (Assist. GM) that a giveaway had occured recently at a similar resort recently, Twin Rivers.

I indicated that even the summertime weeks at CL have value as II was offereing AC's for them (also winter), and that alone was value to some people. The lady told me that they were advised against doing this because of liability reasons. The HOA did not want to be held liable for driving down (or keeping down) CL prices.

Anyway, the HOA has a real esate company lined up who is willing to "market" the timeshares, but this company has some stipulations. The company wants a certain percentage of winter weeks included as part of their sale and the HOA does not have that percentage at this time. I was told that the HOA is now hanging on to the HOA-owned weeks until they can get to that percentage.


Terry

 

[ctyatty]

Notary signed without seeing you sign?

even notizered the document by there own staff.

Did you really mean to say that you mailed them a signed deed, and at the resort the notary signed on to your signature without seeing you sign the document?

If so, the Notary Public should be reported to the appropriate authority.

 

[BM243923]

We had the deed notizered at our end. I meant to say they had the new deed notizered in there office. Sorry for the confussion

 

[ctyatty]

OK

Ok sounds good!

 

[BocaBum99]

Not sure the law in California, but in Florida, the law is focused around earning a commission. If the HOA wants to sell its own weeks, it can. However, the agent cannot earn a commission for the sale unless they are a licensed real estate agent. They must be a salaried employee of the HOA.
There are a few organization types that are exempt, but an HOA is not.

 

[Carolinian]

You need to have a local attorney research the law in the particular state involved, as real estate law varies from state to state. In North Carolina, for example, an HOA has to register with the state Real Estate Commission as a developer to sell weeks, or arguably to give them away. There are also requirements as to brokers or attorneys handling the transactions. I would NOT have an out of state closing company handle closings, as that is very likely to violate the law of the state where the timeshare is located as they are not licensed there. Find a local broker and/or attorney instead.

Several OBX HOA's have had their own members who were attorneys or brokers provide such services at reduced fees. Two have had their resort managers licensed as real estate brokers.

 

[CaliDave]

There would be no commission. Basically, we'd list them in the newsletter.
Buyers would call the resort, the front desk would give them the info on the units for sale. They would email or fax a sales contract. Buyer would send the resort a check for the entire amount, made out to the HOA.
HOA would contract with a closing company to handle the paperwork.

Not sure why this would have to be handled in state?

A designated board member would sign the deed.

 

[BocaBum99]

There would be no commission. Basically, we'd list them in the newsletter.
Buyers would call the resort, the front desk would give them the info on the units for sale. They would email or fax a sales contract. Buyer would send the resort a check for the entire amount, made out to the HOA.
HOA would contract with a closing company to handle the paperwork.

Not sure why this would have to be handled in state?

A designated board member would sign the deed.

Carolinian raises a good issue. Some states require an organization to register as a developer if they own more than a handful of weeks. Not sure if California is one of those states. It may be better simply to have a Broker list all of the weeks and pay them a modest commission. Then, you get the benefit of marketing as well. Send me an email as I know a California broker who will do it for cheap.

Jim

 

[Carolinian]

There would be no commission. Basically, we'd list them in the newsletter.
Buyers would call the resort, the front desk would give them the info on the units for sale. They would email or fax a sales contract. Buyer would send the resort a check for the entire amount, made out to the HOA.
HOA would contract with a closing company to handle the paperwork.

Not sure why this would have to be handled in state?

A designated board member would sign the deed.

It has to do with both competence and licensing laws. In many states, an out of state closing company doing a closing is committing criminal offenses such as Unauthorized Practice of Law, and your HOA would not be wanting to facilitate such things. Secondly, I have seen way too many invalid deeds prepared by these out of state closing companies. Your HOA would not want to have to deal with that headache later when it was the seller.

 

[AwayWeGo]

Can't Sell'm? Try Giving'm Away.

If I were on the HOA-BOD of a small, rural, & semi-rustic timeshare in the USA heartland that was suffering financial pain from too many orphan weeks on which nobody was paying annual fees, what would I do ?

Maybe I would urge the HOA-BOD to join RCI Points & immediately convert all the orphan weeks to points.

Then maybe I would see about turning those converted weeks over to a fully licensed timeshare resale broker -- somebody in good standing with the real estate commission, completely official & legal in every way -- & tell the broker to sell'm for whatever they'll bring & as commission keep the sales proceeds -- the whole amount, not just some percentage.

That way the orphan weeks would be orphans no more as they get new owners from among the timeshare points crowd, the HOA-BOD would receive steady income each year off those formerly orphan timeshare weeks, & some semi-savvy resale buyers out there would have got themselves into timeshare points.

Is this a great country or what ?

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

 

[richardm]

RCI pts conversion isn't plausible..

Maybe I would urge the HOA-BOD to join RCI Points & immediately convert all the orphan weeks to points.

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

This suggestion isn't feasible for many smaller resorts. As with everything in life- there can be significant costs for a resort to become an RCI pts affiliate. For most that are struggling financially- it's not possible.

You must also look at exchange affiliation agreements that may already be in place. Many such resort agreements are exclusive, and until they expire- the option isn't even available.

Thirdly, RCI now requires a resort to offer specified amenities or to have attained a specific rating to be eligible.

Finally- you still haven't addressed how these will be sold. Many of the HOA controlled resorts do not have an active sales staff. If you secure a broker's assistance- you've just increased the buyer's cost. Unfortunately- many buyers now consider anything above $100. to be overpriced!

Good try, Alan- but no cigar on this one!


When you start to put all these issues together- you will understand why so many HOA's do not accept deedbacks! However, when a significant turnover occurs on the board- you'll find that often new board members don't fully understand these issues- and they'll start a policy of acceptance.

This can be a very slippery slope for a resort, and there doesn't seem to be any really good answers yet! Please let me know if you come up with anything new!

 

[AwayWeGo]

Lucky For Me I Don't Smoke -- Not Since 1968 & Even Then (Mostly) Not Cigars.

Finally- you still haven't addressed how these will be sold. Many of the HOA controlled resorts do not have an active sales staff. If you secure a broker's assistance- you've just increased the buyer's cost. Unfortunately- many buyers now consider anything above $100. to be overpriced!

Good try, Alan- but no cigar on this one!

Actually, addressing how the units would be sold was the main thing I did address -- turn'm all over to a broker. I take it for granted that the resort itself has no sales staff & possibly not even an appropriate legal footing on which to get in the timeshare selling biz. anyhow.

My no-cigar scenario is imaginary, obviously, but not necessarily completely figmentary. That is, the semi-rural USA heartland points timeshare I bought was sold by a broker. I bought it via eBay (2005) for $152.50 + closing costs & 1st-year MF & points join-up fee. (The week was already converted & stayed converted upon transfer to me.)

The key thing from the HOA-BOD perspective is to get those orphan weeks into the hands of owners who will pay the fees reliably. If that means letting a broker have 100% of the money the broker gets for selling'm -- not just a percentage commission but all the money -- so be it.

If I were on a timeshare HOA-BOD, I would oppose a policy of routinely accepting deedbacks. I would promote policies of aggressively going after the deadbeats, however, & I would be willing to consider (case by case) accepting a deedback if the alternative were to run up collection costs & attorney fees & administrative expenses in the process of going after delinquent fees.

If HOAs make it too easy for owners to shuck off ownership responsibility via deedback, too many owners will take that easy way out instead of going to the trouble themselves of selling off or giving away their unwanted timeshare weeks.

Full Disclosure : I got soundly thrashed the 1 & only time I ran for election to a timeshare HOA-BOD. So it goes.

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

 

[CaliDave]

Richard,

you're right, its too costly and too much time to convert the resort to points.
It's a small resort with few amenities.

The problem we are running into as you say, is that these weeks might sell for $500 on ebay. If we offered them to the current owners, we should be able to get $2K, so going through a broker is difficult. As most of them are going to want close to $2K.
We need to try to at least get back our foreclosure costs or enough in the bank to foreclose on other owners that are delinquent. We have 50 delinquent owners, that we can foreclose on, but no money to do it.

Management has a resale dept that has been selling them. They are doing a good job, getting a good price, but its going slow and they are not willing to drop the price, to what is needed to unload these weeks quickly. The also sell owners weeks and they do not want to upset the owners, by selling these weeks so cheaply. Which is understandable.

 

[Carolinian]

On the OBX, the resorts which have refused to accept deedbacks are the ones stuck with the most non-performing weeks. Foreclosure costs a LOT more than accepting a deedback, so a refusal to accept them is a false economy. The thing to avoid is publicizing the policy of accepting deedbacks among members.

The key is finding a market for off season weeks. Points probably in most cases doesn't work as an offseason week is not cost effective to use in points most of the time because of the ratio between m/f's and number of points assigned. OBBC I and II have found a good market selling off season weeks to local people so that they can have access yearround to the resort amenities. Ocean Villas has marketed weeks to duck hunters since duck hunting season falls at the lowest point of off season and there are duck blinds relatively close to the resort. Seascape takes advantage of the adjacent golf course and the golf priveleges its owners enjoy to market to golfers who like to come down in the off season. The Windjammer has marketed to Canadians for whom the OBX in Jannary or February is not THAT cold. Often there are such markets outside of exchanging. HOA's just have to identify them and work them.

A couple of OBX HOA's have used e-Bay, but that market tends to be rather depressed on prices these days. Many use a local independent timeshare specialist resale/rental broker, Outer Banks Resort Rentals, to sell their weeks.