KBV: Ballots on their way

[CO skier]

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?

This is easily the most interesting aspect of this vote. I have never heard of a timeshare structured in this way, so I doubt this is part of the KBV governing documents. Is this just a case of the HOA asserting "if the owners do not like it, they can just sue us" and the HOA can simply invent such a vote?

This would be precedent setting throughout the timeshare industry for aging timeshares that are buried in bad debt with no alternative.

If the whole unit owners want a legal challenge, then challenging this voting structure would seem to be a fairly strong case, if the governing documents do not specifically allow this. What then, if it drags on for years? Blame the whole unit owners or blame the HOA for acting outside its authority?

 

[bnoble]

doubt this is part of the KBV governing documents.

Your doubt is misplaced. The letter quotes them.

This structure is probably unusual and likely does not occur in many timeshares, but it is a consequence of the IOA (timeshare) being structured as part of a larger comdominium (the AOAO) that includes the whole owned units. It’s probably also due in part to the fact that the AOAO predates the IOA. So it is reasonable that the AOAO voting method was defined first (one vote per unit), and the IOA had to fit into that somehow and this is how. And, this special election is on behalf of the AOAO, not the IOA.

 

[CO skier]

Your doubt is misplaced. The letter quotes them.

This structure is probably unusual and likely does not occur in many timeshares,

This "unusual" sunset clause is certain to mean the beginning of the end of KBV on May 2nd, and the whole unit owners will be SOL and looking for a new home/vacation home with whatever proceeds they may get from the auction.

 

[bnoble]

Many of the whole owners might well vote in favor of it. if I understand the market correctly, the remediation costs about as much as or more than these condos are worth. Even if there is some value left, getting there would take five years. I strongly suspect that many of them are ready to just cut their losses and move on, because they’d just be throwing good money after bad.

In fact I think some of them will have to or it won’t pass, because I think more than a quarter of the units are wholly owned.

 

[CO skier]

In fact I think some of them will have to or it won’t pass, because I think more than a quarter of the units are wholly owned.

As I recall from my stay at KBV, there were three ocean front buildings and at least 5 or 6 "lagoon" buildings (it has been more than a few years and my memory is not what it used to be). Some of the oceanfront units were personalized and obviously someone's home, so I could see that maybe a quarter of the oceanfront units might be wholly owned, but a quarter of the whole resort being wholly owned seems quite a stretch.

 

[bnoble]

The TUG user @jacknsara was on the Board at one point, and shared these numbers. There are 45 whole owners out of 150 total, so 30%.

there are three associations at the site
one covers the 150 condos - that is the Association Of Apartment Owners AOAO
one covers the timeshare that includes 105 of the 150 condos - the Interval Owners Association IOA
the third includes the AOAO, the KBR hotel and the owner of the land (currently undeveloped) south of the hotel; the formal name escapes me at the moment and is not relevant to this thread

Post in thread 'New Board letter. Special Assessment estimate.'
https://tugbbs.com/forums/threads/new-board-letter-special-assessment-estimate.346323/post-2871517

 

[bnoble]

Just as a reminder: proxies have to be received (not sent) by April 27th. The easiest way to make sure that happens is to vote electronically.

 

[lotus921v]

Whatever happened with this?

 

[bnoble]

The AOAO vote was postponed indefinitely. Per a post in another KBV thread that shared what was described as an email from KBVAOAO@gmail.com, it was postponed due to a pending suit against the AOAO.

The Partition Vote was delayed due to a pending lawsuit against the AOAO.

 

[bianchicycle]

The AOAO vote was postponed indefinitely. Per a post in another KBV thread that shared what was described as an email from KBVAOAO@gmail.com, it was postponed due to a pending suit against the AOAO.

Well then, Where does that leave us all as far as paying maintenance fees next year?

 

[bnoble]

AFAIK the resort is still operational. So I plan to keep on keeping on until something different happens.

 

[jacknsara]

AFAIK the resort is still operational. So I plan to keep on keeping on until something different happens.

Aloha,
This aligns with the BOD's president's answer to a question I asked after the conclusion of the May 2023 formal board meeting when owners who have dialed in get to ask questions.
Jack

 

[DeniseM]

Thanks, Jack - What exactly was your question? (In your post above.)

 

[jacknsara]

Thanks, Jack - What exactly was your question? (In your post above.)

Aloha Denise,
I don't remember my exact wording but I expressed a general concern about what we owners were supposed to do about next year given all the info about potential liquidation of the resort.
The prez also indicated that it was a good idea to start working on the next KBV newsletter. I have no idea when that might get issued.
Jack

 

[tango]

So, what a teaser! I can’t wait for the next KBV newsletter. What did the president say to your general concern about what to do next year? It is a very reasonable concern for an owner to pay $1837.89 and not be able to use a reservation due to a closure. Would be money be refunded? At the very least, reassurances are in order.

 

[magmue]

Sales prospects for wholly owned condos seem to be looking up. In November, there was 1BR oceanfront listed - and contingent/pending for $399K. There's another 1BR for sale currently for $725K. This one at least can be occupied, unlike the other. "Remediation of structural issues in process. Unit is being sold in As-Is Condition."

Remediation in process? Wonder what they know that we might not know?

 

[DeniseM]

I don't think they know anything: They are trying to unload their condo before the resort closes and that is just a CYA statement.

 

[bnoble]

Yeah, I think they know that there is a sucker born every minute. Even if the partition vote fails, that would place the total cost of that condo pushing close to $1M. Real estate has gone up, but I don't think it has gone up that much.

 

[tedtomkins]

So, what happened that the BOD cancelled the vote on the remediation motion? You would think the board would provide an explanation? Does anyone know what's going on?

 

[bnoble]

The AOAO vote was postponed indefinitely. Per a post in another KBV thread that shared what was described as an email from KBVAOAO@gmail.com, it was postponed due to a pending suit against the AOAO.

Presumably, the vote is tabled until there is some resolution of (part of) the suit.

I've tried looking up any filings for the AOAO on eCourt Kōkua, but am not sure if I've found it---it's also not obvious how to pull the complaint remotely. I can order some of the other documents, but not the original complaint. Case # 5CC191000088 looks like it might be it, but I am definitely not sure.

 

[schreff]

As a former member of a retirement system BOD, I know what fiduciary responsibilities are and how they relate to a large pension fund. Of course, those of a BOD of an HOA would differ but the question brought forth whether we should we pay next years maintenance fees is an important one considering that the resort may go into bankruptcy, be put up for sale or not able to fulfill the use of the week we paid for. Certainly, communications from the BOD as to why the vote was postponed is common sense. The BOD along with Wyndham knows a lot more than we, the owners, do and are keeping us in the dark. The excuse of waiting until a legal action is resolved is not valid as this could take years of appeals, etc.
Here is a list of fiduciary responsibilities enumerated on:
https//www.hoamanagement.com/fiduciary-responsibility-of-ho; a-board-members/

1. DUTY OF LOYALTY (DUTY OF GOOD FAITH)​

Duty of loyalty requires HOA board members to act in good faith to promote the best interests of the entire association. HOA board fiduciary responsibility prevents board members from making decisions to further their personal interests. Board members must also avoid an HOA board of directors conflict of interest. This includes choosing a family-related vendor or voting on issues with a bias.

2. DUTY OF CARE​

Duty of care requires HOA board members to make informed decisions regarding HOA matters. However, corporate law acknowledges that board members are constantly faced with countless decisions and it is impossible to thoroughly review information related to each decision. As such, the board of directors can rely on other people such as an HOA manager or staff to provide the information necessary to make a decision. However, the HOA board of directors is still responsible for making the final decision.

The duty of care board of directors is expected to uphold can apply to several situations, including imposing fines on homeowner violations. An HOA board member must first make sure that he/she is up-to-date on the association’s rules and regulations. You can’t simply fine a homeowner for doing something that you don’t like. HOA boards must follow the protocol for fines, which is clearly outlined in the bylaws.

3. DUTY TO ACT WITHIN THE SCOPE OF AUTHORITY​

In this third component, board members are required to only act within the scope of their authority. They cannot act or make decisions on matters that are outside the boundaries of their roles and HOA responsibilities to homeowners. HOA board members must read their governing documents to educate themselves on the limitations of their authority.

Board members must also know that governing documents do not supersede local, state, and federal laws. As such, a community that prohibits pets cannot refuse a homeowner with a disability who has a service animal. A board member who rejects the disability needs of the homeowner is acting outside the scope of authority because he/she is already violating the Fair Housing Act.

Hope this helps. What are your thoughts as to whether this BOD members have fulfilled their duty?

 

[DeniseM]

Clearly, no - we knew this board was corrupt when they rigged the election that allows Wyndham to complete a hostile takeover of the resort.

 

[bnoble]

Case # 5CC191000088 looks like it might be it, but I am definitely not sure.

That was not it. I was searching the wrong business names (I think). When I did a partial search on Pahio at Kauai Beach I turned up case# 5CCV-22-0000029; you can search for the case on the eCourt Kōkua web site by going to the Hawaii Courts page and clicking on the "Enter Kōkua" link. Once there (after accepting terms) you can search by case number, and plug in the number above (including dashes). I have not decided yet how many documents to pull (Hawaii courts charge ten cents per page, with a minimum of $3/document), but here's a brief summary of I believe has happened so far from reading the docket entries:

Original complaint filed 4/22 on behalf of sixteen named plaintiffs--I am willing to bet these are the whole owners in G and H that were evicted that month. The IOA (not the AOAO) moved to dismiss in 7/22; that motion was denied later that month. Around that time it looks like another four plaintiffs joined the case, and (some of?) the Directors of either IOA or AOAO Board were served individually, and the AOAO filed an answer to the complaint. The IOA likewise filed an answer to the complaint about a month after their motion to dismiss was denied.

Discovery appears to have taken place between about September '22 and February of '23; the three firms that were named in the 2022 V3 IOA Newsletter were included in that discovery: J. Uno (provided the initial estimate of costs in '21), Wiss Janney et. al. (who recommended evacuation and closure of G and H in 4/22), and John Hardy (the firm that did the final remediation plan).

A couple of the plaintiffs filed a motion for summary judgement, but withdrew it on more or less the eve of the hearing. The last entry in the docket is that the parties are in mediation--that was mid-May of this year.

I am inclined to pull the Complaint and the Answers to the Complaint by the various defendants. If I do, I will drop it in the same folder as the the letter I linked to above so that the rest of y'all don't also have to pay the document fee.

 

[bnoble]

I pulled those five documents. They were only $3 each (plus tax). I'll be checking in to Kings Land on the Big Island a week from today. After that, we move to Kauai for a week at Shearwater and finish our three-week jaunt with a stay at Marriott's KBC. If you are there as well and feel so moved, you can pay me back by buying me a (non-alcoholic) drink.

Anyway, here is the folder with the complaint and the four responses.

KBV-suit - Google Drive

drive.google.com

Going back and reading them, they are not very illuminating. I suspect the meat and potatoes are in the deposition transcripts of and documents provided by the three named firms.

 

[CO skier]

Maggie - I dont want to sound like a broken record, but you might have more information about this issue than I do. I only know what has been reported here - that there was a vote for three positions. That vote failed to seat a candidate that would have met the residency requirements of the by-laws. It was then decided - by whom and under what authority (?) - that the top two vote-getters would be seated and a special election be held to fill the residency requirement BoD position.

And that in the general election, the vote totals for the SaveKBV.org endorsed candidates were:

Trish Harrington, 965.75
Brian Reichel, 633.45

Now since the general election was for three BoD positions, cumulative voting rules in our by-laws meant that each every full interval owner could cast 1 vote per open BoD position - or 3 votes.

Given the assumption that SaveKBV.org would have only voted for the candidates they endorsed, that suggests no more than 533 intervals (out of 5000+) fully supported the SaveKBV.org candidates - under the best conditions.

Vs how many intervals on the Wyndham side (~20% of the resort)?

Does any owner at KBV want to speculate about what Grand Pacific would be doing now if they were the management company, versus the deep pockets of Wyndham?

Did the Grand Pacific management contract have the typical resignation clause of 60 days? and the owners are then on their own, not our (Grand Pacific) problem?