KBV: Ballots on their way

[Rifron]

Just had the mail arrive for our two units. It is unconscionable for us to pay the outrageous costs assumed for the repairs. The 53 Mil/5 years is only an estimate! For the amount of time and money they want we could easily get into another property. This is a screwjob and we are the bag holders. VOTE NO!!! Also not to put on my tinfoil hat too much but is even having a vote worthwhile? Wyndham and other special interests can easily get their way here. I expect this expense to be jammed down our throats regardless of the vote.

 

[DeniseM]

I don't trust them either, but Wyndham probably owns half of the units, and they don't want to pay $9,000 per unit either. I thin it is important to vote.

 

[tango]

I have my ballot in front of me. Just to make it clear again to everyone, because it can be confusing. To vote YES on not proceeding is to vote against any remediation. Voting yes means you don’t want to potentially be assessed a special assessment of $7300. I am voting against remediation, and that’s a yes for the proposal.

 

[kbv007]

Has there been any information provided about what owners could possibly receive in the event of a 'no remediation/sell to third party' outcome?

 

[DeniseM]

In general, or the specific amount? It will go up for auction, I don't think the amount is knowable.

 

[kbv007]

I agree the actual amount is unknowable at this point. I'm just wondering if it will be more than the cost of a decent bottle of wine (per week for a 2BR/2BA). If not, I can move on and not spend any more time thinking about KBV -- past, present or future.

 

[DeniseM]

No one has any idea at all...

 

[dioxide45]

The way this vote proposal is worded is making me so nervous. People have to make sure that they understand that to vote against the Special Assessment, they need to vote Yes on the Proposal not to proceed.

That sounds messed up. Kinda like some issues on local or state ballots. THey know people are likely to just vote NO as they think yes means more taxes (or in this case an SA). Kind of sneaky.

 

[magmue]

Our letter & ballot arrived in the mail today. So Denise's sense that they were going out in batches sounds right.

ETA: If the vote leads to dissolution of the resort with auction, I wonder how long the resort would stay open? Would reservations already in the system be honored? Could new reservations be made up to a certain time? I doubt there is anyone who can address that bridge before/unless we come to it, but folks who already have plane tickets might have another layer of hard choices.

 

[bnoble]

I don’t think anyone knows. It won’t be an overnight process. My gut says that 2023 (which everyone has paid for already) will continue as is but it would not operate as a resort in 2024. That’s an uninformed guess.

Most airlines will allow you to cancel airfare and receive credit toward a future flight. There might be an expiration date for using said credit.

 

[Dalownerx3]

So if the resolution passes and the resort is sold off, I wonder what happens to the funds held in reserve for long-term maintenance

 

[bnoble]

If there is a balance in the IOA/AOAO accouints, that will also be returned, I'm sure. Given the amount of attention this is going to get, no one is likely to cut such an obvious corner.

 

[sforgues]

I voted YES to NOT proceed with the remediation. I don't agree that anyone is trying to be sneaky about the wording of the vote as I read somewhere that this is how a vote for something like this is called for in the rules that govern the timeshare. Not sure if it's the law or if it's in the specific documents for this resort. The cost estimates will invariably be low, so that $7k assessment is likely to become $10k and with as many people not paying basic maintenance fees, I don't see how a special assessment will even be able to be collected. (Bad debt expense is about 10% of the total budget)

My family bought this timeshare over 20 years ago on an every other year interval. We always deposited the points with RCI. I feel like I've gotten my value out of it in the early years, but lately the crappy RCI website and poor availability of good resorts has made it a disappointment, so I'm OK with not getting a $7k+ special assessment and ending the escalating maintenance fees. It's sad how a natural event exposed man made problems as well, but it seems to me time to move on.

 

[AndrewSEA]

I voted YES to NOT proceed with the remediation. I don't agree that anyone is trying to be sneaky about the wording of the vote as I read somewhere that this is how a vote for something like this is called for in the rules that govern the timeshare. Not sure if it's the law or if it's in the specific documents for this resort. The cost estimates will invariably be low, so that $7k assessment is likely to become $10k and with as many people not paying basic maintenance fees, I don't see how a special assessment will even be able to be collected. (Bad debt expense is about 10% of the total budget)

My family bought this timeshare over 20 years ago on an every other year interval. We always deposited the points with RCI. I feel like I've gotten my value out of it in the early years, but lately the crappy RCI website and poor availability of good resorts has made it a disappointment, so I'm OK with not getting a $7k+ special assessment and ending the escalating maintenance fees. It's sad how a natural event exposed man made problems as well, but it seems to me time to move on.

I'm in the same boat. I bought this 20 years ago for the points to use elsewhere, but the poor RCI inventory and rising fees lately has made that program not that valuable anymore.

 

[armrecsys]

I received mine, filled it out and returned it.

 

[Dalownerx3]

My family bought this timeshare over 20 years ago on an every other year interval. We always deposited the points with RCI. I feel like I've gotten my value out of it in the early years, but lately the crappy RCI website and poor availability of good resorts has made it a disappointment, so I'm OK with not getting a $7k+ special assessment and ending the escalating maintenance fees. It's sad how a natural event exposed man made problems as well, but it seems to me time to move on.

I also purchased every other year over 20 years ago when my daughter was just a few months old. We've used it each time it was available to us. We've brought our parents on different occasions. As our daughter got older, she's been able to bring a friend with her a couple of times. Two years ago, my daughter's boyfriend proposed to her at the airport gate as we were heading there. It's a nice note to end on. I'll be voting YES on not proceeding with the assessment.

 

[magmue]

FWIW, the online balloting process described in the Instructions went very smoothly, using the owner # and the voting PIN # on the paper ballot.

 

[DeniseM]

CO Skier - Trolls are not welcome in this forum, or anywhere on TUG for that matter. This is an official request for you to stop.

 

[bnoble]

he online balloting process described in the Instructions went very smoothly

My experience as well. It was very simple and easy.

 

[CO skier]

CO Skier - Trolls are not welcome in this forum, or anywhere on TUG for that matter. This is an official request for you to stop.

Can you quote anything I posted (even from what you deleted) that is a violation of TUG rules and justification for "an official request" by a moderator? By PM, if necessary.

I think you just do not like the facts that I post.

 

[Jan M.]

I have a friend who owns at KVB. We've stayed there with her and really liked the resort and the location. In January/February she had a nice long Hawaii trip and stayed at the resort. We've discussed the KBV situation at length before her stay and since her return.

1. From what my friend told me it's only the three oceanfront buildings that are the problem? If that's correct it's sad to see the whole resort sacrificed because of three buildings. I remember from chatting with the front desk people when we stayed there that Wyndham has a very limited amount of inventory in those oceanfront buildings. Some of the units in those oceanfront buildings are privately owned and there are also a number of fixed week owners in those buildings. We've wondered what will happen to the people who live in their privately owned units. Can they stay there while the work is being done? If the property is sold will they receive enough money from the sale to buy another place to live on the island?

2. I'm asking this because I don't know. Is it fair or necessary for every owner of every unit in every building at the resort be assessed rather than just the owners of units in those buildings? If the assessment is $9k for just a single week then 52 weeks would be $468k for the privately owned units with every owner in every building sharing the cost?

3. If I understood my friend correctly owners get one vote for every week they own. Does that give the privately owned unit owners 52 votes? I don't think that Wyndham owns enough to have nearly the voting power some people seem to think they do. However that doesn't mean they aren't in a position to infuence this in other ways to get the outcome they want or one that benefits them. Their perspective is what you would expect of a major corporation and not likely to benefit the little guys, aka you. That doesn't mean they're the bad guy, that's just how things work in this world almost all the time.

4. Those KBV oceanfront buildings are grandfathered. Hawaii/the Island of Kauai? no longer allows buildings to be constructed that close to the ocean. (Side note: From what I was told Hawaii retains ownership of the land so KBV and other timeshares don't own the land just have the right of use.) New buildings cannot be put up in their place. If the resort is sold and the new owner(s) invest the money into making the needed changes and repairs to those buildings will the resort become more valueable? Perhaps much more valueable?

5. I've heard and seen people saying they just don't want to have to pay the special assessment and aren't expecting to get much or maybe not anything if the vote is to disband? and the property is sold. Several things to keep in mind. There isn't an abundance of housing on Kauai so I'd think the property would be quite valueable with or without those three buildings. It's a lovely piece of property. DH says the drive in through the trees is as nice as the tourist Tree Tunnel. For those of us who've stayed at the resorts on the northern part of the island we know that the KVB property is a much more convenient central location.

As a KVB owner are you expecting too little if the property is sold? Possibly not asking enough questions or the right questions? We've all heard the old adage: Follow the money. Is there undue influence at play here? By Wyndham or other parties? Something else that came up in the conversation with my friend. Some people may not understand that this would not be a public foreclosure auction. Who would be handling the marketing of the property and the auction? Good marketing is critical so that would be an extremely important question to ask.

6. We owned a timeshare week at a resort that was on a highly desireable piece of property and took the buyout offer a developer made. Not only did we make several k over what we paid for the week, we also got three years of useage and the developer paid the maintenance fees for those three years. I want to reinforce something some people might have missed or not seen as relevant. The buyout/takeover for our resort took three years to complete during which time the maintenance fees were paid by the developer as part of the offer we took. Not all the owners took the buyout offer and they sued to block the sale. It appears some of the KVB private owners are suing. If the vote goes to disband then from what I understand the owners woudn't have to pay the special assessment? However wouldn't the maintenance fees still have to be kept current for the owners to receive any monies from the eventual sale? I'm not saying this situation is the same or that the KVB owners should expect a deal like we got. What I'm saying is that in my opinion KVB is a highly desireable property and the threat of having to pay the special assessment may be causing some/many? owners to forget that.

I've been hesitant to share our thoughts because I'm not a KVB owner and hope I haven't offended anyone. My friend and I will be interested in seeing what OP's thoughts are on the things we've discussed.

 

[tango]

Speaking to one point you make about restoration needed. While the oceanfront units have a lot of wear and weather damage needing to be fixed, all the buildings have construction defects involving the structure that need to be remediated. At this point there does not appear to be any developer that is interested in taking on any kind of costs for remediation. And valuable as we all know that the property and location is, approval for new construction on the island of Kauai is very very difficulty to come by, as evidenced by the property down the street. The owners who frequent these forums, have extensive and deep knowledge and involvement of the travails of KBV, and are not entering into this vote lightly.

 

[bnoble]

From what my friend told me it's only the three oceanfront buildings that are the problem?

Unfortunately, that's not the case. They were the first ones to exhibit problems, but it turns out the construction defects are property-wide.

If I understood my friend correctly owners get one vote for every week they own. Does that give the privately owned unit owners 52 votes?

Sort of. Each "apartment" gets one vote. The 50 (or 52) timeshare owners who own in one apartment all get to vote individually. If a majority of the timeshare owners votes are Yes (or No), that's how that apartment's vote is cast. If there is no majority (for example, enough owners abstain) then the IOA Board of Directors will cast the vote "in the interests of the IOA."

But yes, the whole owners do get one "whole" vote. And that's reasonable: they own 50x what an individual week owner owns, and are on the hook for 50x the assessment (about $450K for a 2BR).

I don't think that Wyndham owns enough to have nearly the voting power some people seem to think they do. However that doesn't mean they aren't in a position to infuence this in other ways to get the outcome they want or one that benefits them. Their perspective is what you would expect of a major corporation and not likely to benefit the little guys, aka you. That doesn't mean they're the bad guy, that's just how things work in this world almost all the time.

At the last management company transition from GPR to Wyndham, it was claimed that Wyndham owned about 20% of the intervals. There were also a number of intervals that were "non-performing" (meaning: the owners were not paying their fees)--and that went up quite a bit during the pandemic. As part of their proposal Wyndham would aggressively foreclose on non-performing owners, and re-home those weeks, so that other owners would not have to carry the bad debt. Given Wyndham's current sales model, those weeks were presumably put into CWA. That's important because the voting rights for the inventory assigned to the CWA Trust remains with Wyndham. So, over time, Wyndham's voting interest has only grown. How much? I don't know off the top of my head.

Furthermore, the way the vote is structured is also interesting. If the votes for any individual apartment do not constitute a majority of all owned weeks for either "yes" or "no", then the IOA casts the vote for that apartment. Just given the nature of these elections, and the fact that many owners don't bother responding, it will not surprise me if a fair number of IOA apartments do not have a declared majority out of returned owner votes. This potentially gives the IOA substantial power. Guess who makes up the majority of the IOA Board?

In this case, I don't think this is a problem, because I believe that the interests of individual owners and of Wyndham are aligned. If Wyndham were to want to renovate in the hopes of flushing out current owners, they'd be paying at least $30/K give or take for the points they'd generate for CWA sales, and it's probably more. That's probably close to (or more than) the cost to build a brand new shiny resort, and it's significantly more than they are paying to recover inventory via Certified Exit/Ovations/Whatever it is called now. It's also more than it would cost to buy back inventory--even weeks with very low MF/K ratios--on the resale market.

In other words, I don't think Wyndham wants to proceed any more than we do. I could be wrong about that though. I also think that based on the reactions here--I have yet to hear anyone say they want to proceed with the remediation--even if a fair number of owners do not return their ballots, there might still be a majority expressed in most units.

I've heard and seen people saying they just don't want to have to pay the special assessment and aren't expecting to get much or maybe not anything if the vote is to disband? and the property is sold.

That might depend on what people mean by "much". If you bought the week from the developer, you will not get much in comparison. If you adopted the week on the resale market, even a few thousand dollars per week is found money. And if my suspicions are right, there is already at least one vulture who thinks that's a likely outcome, and is trying to grab weeks on the cheap in anticipation of a payout.

Some people may not understand that this would not be a public foreclosure auction.

According to the letter, which cites Hawaii law, the sale is overseen by the court. I assume the court will do at least some due diligence here in selecting the agent handling the sale. It is not clear to me that this definitely precludes an auction, though it is not technically a foreclosure, but instead a different legal mechanism.

The buyout/takeover for our resort took three years to complete during which time the maintenance fees were paid by the developer as part of the offer we took. Not all the owners took the buyout offer and they sued to block the sale.

I don't think that can happen here. Again, according to my understanding of the covenants and Hawaii law, if the vote not to proceed succeeds with 75% or more units voting in favor, then the Partition Action is the resulting consequence. If I am reading the letter correctly, two things happen at that point: (a) the overall resort is no longer a condominium, but owned in common by all owners, and (b) any single one of those owners can force the sale.

That won't stop someone from filing suit if they want to, but it might make short work of it if the Hawaii statutes work the way I think they do.

 

[Jan M.]

@bnoble and @tango, thanks for your answers. I wasn't expecting to hear that the situation is that bad. I can see that it might be hard to find an inventor/developer interested in the property.

My friend wasn't staying in an oceanfront building and did mention that she could hear pumps running when/after it rained. I mistakenly thought that meant it was enough to take care of any problems with the other buildings. From your responses maybe it's just keeping things from getting worse or worse faster?

Are the three oceanfront buildings by far the worst and likely to have reoccurring problems? I think what I'm really asking is it even feasible to sink the money into fixing the problems with those three buildings? I'm guessing the work would go quicker and it would be less costly to do the needed work if the buildings were unoccupied, possibly the whole resort shut down. I doubt owners want to pay the assessment, pay the maintenance fees and not even have anything they could deposit to stay at a different resort for several years. Also it's pretty safe to assume that the maintenance fees would go up alot.

Last week DH and I were talking about where we want to go next year. He said if we go back to Hawaii he definitely wanted to stay at KVB in an oceanfront unit again. After reading your responses I was looking back through the pictures on my phone from our stay at KVB and feeling a little sad about the future of the resort.

 

[tango]

Here is the last report to the board on the condition of the resort: https://tugbbs.com/forums/threads/kbv-news-letter-the-resort-is-in-bad-shape.338006/