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.