Marriott Aruba Ocean Club Owners Being Ripped Off By Marriott - READ IF AN OWNER

[Dave M]

I agree. It is "a valuable post". Mike suggested getting a restraining order. Eric appropriately made it clear, in his own way, that there is no legal basis for obtaining such an order. Despite your ridicule, Eric has made a number of positive contributions in an effort to help guide you to a realisitc, workable action plan.

You can make light of posts that don't follow your thinking, but the more you ignore the real obstacles in your way, as you have been doing, the more likely it is that you will fail.

Along those lines, I'm still curious as to why you don't respond with the specific language in the CC&Rs that you believe give you the authority to accomplish each of the things you want. So far, the only supporting language you have quoted is for removal of a director and even that language is ambiguous, as I pointed out.

 

[Eric]

As I have mentioned, I own @ Surf Club. As pointed out, I am just pointing out what is not very practical in the real word. The off the cuff suggestions like "give the money back" and "get a restraining order" makes the owners look under qualified for the high level stakes your are in. Also as I have pointed out, if indeed the HOA does not have the owners best interests at heart and if indeed Marriott is short changing the owners then I would hope the owners win out on thier demands. I just think some people comments are the equivalent of taking beebe guns into a nuclear war.

Another valuable post. Eric, you have yet to provide value. At least those who don't agree with this effort ask intelligent questions. WHy do you even post here. You are not an owner or anyone who is asking quality questions.

 

[m61376]

I think what's happened here is that some of the owners are rightfully outraged by a perceived injustice that they are being almost blinded by that anger. What Dave and Eric and a few others are trying to convey is that sometimes it is more helpful to swallow hard and try to let cooler heads prevail and carefully review documents to see what you can legally accomplish.

No one is telling you that you are wrong- but you can be right in theory and your methodology may not accomplish anything. In reality, you are unlikely to accomplish everything you are determined to and, by drawing a line in the sand with Marriott and the BOD, you may accomplish nothing.

Keep in mind that, besides alerting other owners here to join your cause, you are also alerting Marriott and their legal team (my guess is that this thread and similar posts elsewhere are being closely followed) and they are likely one step ahead of you. I think Dave's advice, as usual, is very sound- you really need to sit down with the lawyer(s) that you are working with and decide on what you can reasonably accomplish and be willing to accept that, as unfair as it may be, it may not be reasonable to get everything.

Also, I'd look at how Marriott came up with accepting 43% responsibility for the roof and consider the possible downside of contentious negotiations- could they renege on that, and what will the additional cost be if they do so? I am not saying to roll over and let them trample over you, but keep in mind they do have the upper hand here. Because of its location (prime beachfront situated between 2 Marriott properties) I don't think they would just let the OC fall into disrepair, but getting an injunction could create a stalemate that would even be worse for owners. If nothing is done for a year even, the property damage may increase the costs exponentially, and the resort may never recover from the reputation damage. If so, your investment there may become worthless. I don't think these are considerations you can ignore.

You are right, to a certain degree, in that it is really the business of people who own at the resort. But, sometimes it is worth listening to outside advice, because cooler heads prevail.

 

[lovearuba]

Cooler heads

Hi
I would agree with the comments that folks outside the ocean club have very valuable input. The intent of this thread was to notify and keep the ocean club owners informed of the situation. Marksue has taken a lot of heat for getting the information posted. Many of us are not lawyers and are looking to be treated right. What has happened with the fees for the ocean club and the abrupt removal of our president because he was stepping up to the challenge and openly disputing what was happening is unfair and needs to be addressed.

Many of us have posted suggetions on what should be done and we have received great input on why some of those suggestions would not work given the paperwork we have in our contracts. What we do not appreciate is when our suggestions are shot down by rude and insulting posters. This is why we question their liaison with Marriott. If you truly wanted to help you would treat the posters that own at the ocean with respect as Dave does.

So my suggestion is that people continue to feel comfortable posting suggestions and others that have valuable input on why it would or would not work post their opinion but post it kindly so we are not insulted and we can actually benefit from the information.

Have a great day

 

[ecwinch]

As a number have pointed out, the relief you are seeking does not seem to be realistic given how we know timeshare resorts to operate. For instance, if you were able to get a restraining order, what impact would that have on the resort? So even if you were able to achieve that objective, the outcome would not be favorable. The restraining order would require the resort to operate on less revenue then they currently require, so reductions in service, or personnel, or funding the reserves, or the refurbishment would have to take place.

Also, the elected BOD approved the budget, and based on that budget it is logical to assume that commitments have been made (contracts let, etc.). They have the legal authoritity to take these actions, and what would be the implications if a "pro-owner" BOD attempted to reverse those decisions. For instance if the new BOD decided to reverse the decision to have a seperate mgt team for the Ocean Club. There would obviously be severance costs associated with doing that, maybe even an employment contract involved, and possibly the MCVI mgt contract.

I think there are a number of issues here that have become co-mingled. The core issue that troubles me, is that you have elected BOD that made decisions based on the best information available in a difficult environment of an aging resort with high usage operating in a high cost area. Now a group of owners wants to reverse those decisions, and to some degree is suggesting that the decisions should have been voted on by the general membership. Excluding the costs of operating a resort in that fashion, that method does not seem feasible.

And the costs associated with special election would add more unbudgeted expenses to the resort.

 

[timeos2]

Settlement happens most of the time. Why pay big $$ to get there?

Also, the elected BOD approved the budget, and based on that budget it is logical to assume that commitments have been made (contracts let, etc.). They have the legal authoritity to take these actions, and what would be the implications if a "pro-owner" BOD attempted to reverse those decisions. For instance if the new BOD decided to reverse the decision to have a seperate mgt team for the Ocean Club. There would obviously be severance costs associated with doing that, maybe even an employment contract involved, and possibly the MCVI mgt contract.

And the costs associated with special election would add more unbudgeted expenses to the resort.

As one example from 2000/2001 our resort fought a relatively short (by legal standards) fight with our original developer over issues that practically mirror what is being talked about here. The one difference is the Board was 100% (minus 2 Developer seats) behind the action rather than being in favor of the developer viewpoint. Thus the word got out to owners by official channels in addition to boards such as this, the resort website and other timeshare sources. Even with all that working in the owners favor the end result was a negotiated settlement (based on the urging of a Federal Court which was hearing the two sides) that pleased neither side but kept the resort on track to improve and accomplished a management change. It all lasted about 12 months (as I say, no time at all in normal legal processes) and ended up costing the OWNERS over $225,000. We ended up with only 2 actual court dates. Had there been more or the resolution been hammered out through the court who knows how much it would have cost or how long it would have taken. As it is I can think of many other places we could have spent $225,000 despite the positive result it did buy us.

I shudder to think what it would cost to battle both your Board (which, like it or not, was elected by the rules) and the developer - who would pick up that tab? The Board/resort isn't going to pay for it if they aren't in agreement to undertake such action and, as we discovered, asking for court / Association costs as part of the settlement isn't likely to happen as each side wants it and neither has a better claim than the other (both feel they are right and to some degree they probably are). It is estimated our developer spent close to 3/4 million fighting us - again in a relatively short fight. What if they managed to get a court to order the Association to pay that? The risks are tremendous, the outcome uncertain and what a Court will actually entertain as evidence far more limited than anyone can imagine until they actually experience such a fight. "Great" proof can evaporate when a Judge says "I don't care about that" or "that is past history" as they are very prone to do. Judges know little about timeshare, aren't going to listen to drawn out details and basically look at extremely narrow legal questions or facts of law. It doesn't work in the owners favor at all as they signed on to those hundreds of pages of rules/agreements willingly.

In the end it is all likely to come down to an agreed settlement. That can be done without the court costs provided both sides are reasonable. Going back 10 years and looking for 100% (or even 70-90%) recovery isn't reasonable by any means (and no court is likely to find it is). So, again, I hope the dissident owners come up with an approach that will get their concerns heard (seems that they are) and a reasonable agreement struck. To the degree that they are following the prescribed rules and procedures they are helping themselves and the other owners that support them. Once they step over a carefully planned approach following those rules and time lines into threatened lawsuits and more personal type attacks on the Board members (who DO get to have the Association billed to protect themselves at owners expense) the sides harden and costs sky rocket. I feel strongly the results no matter how it goes won't be anything close to the OP demands, and of course they won't be happy about that. But reality says you go for what you can reasonably obtain and move on. If that answer isn't good enough then sell. Turning the Board actions around is the least likely outcome of all this and it sure isn't helping the resorts reputation while its being fought. Pick a path, follow it and move on.

As one final example from real life experience since that original fight the two sides at our resort have twice nearly come to a second round of legal war. Both times the two sides ended up meeting face to face and coming to a negotiated agreement that avoided all legal fees except those required to review and codify those terms. At each sit down both sides noted they wanted to avoid the costs and uncertainties of litigation and thus where more open to working out an acceptable answer. Both times that's exactly how it ended up going as both understood the pitfalls and expense any lawsuit brings. Both sides learned an expensive lesson in 2001 we have no desire to repeat.

I do hope this thread stays alive both for the information it provides to the owners at the resort and so other Associations can learn what to avoid. It is an interesting thread to say the very least.

 

[Sunbum]

I am trying to find the budget forcast for 2009 and the details of the upcomming renovations. Does anyone know where i can find them?

 

[tank56]

Hello ALL

I have been reading a lot of people's responses here and I'm starting wonder who to believe and why this is all happening. We are owners at both resorts OC, SC and I can't believe the fees are rising every year. Before we know it, the fees will cost just as much as if we were non-owners booking our trips. I know I'm a little off topic here as we are talking about assessments, but why are the fees rising closing in on the cost of actual rentals? Where are all the rental incomes going to??????

Anyways, please keep me in the loop on what's going on and I hope we can get to the bottom of this maint. hikes...

 

[tlwmkw]

Dave M. and timeos2

You are both giving excellent advice. I hope this situation can be worked out but it just sounds like it is getting worse.

Marksue- on another note the building is 10 years old and the you state this roof issue has been ongoing since the building opened. Why are the owners and board only getting upset about this defective roof now? Why wasn't it addressed when the problem began soon after opening the resort? The statute on this may have already passed since it is 10 years since the building was completed. Who actually built the resort (I know Marriott developed it but they are not the actual builder)? These are all questions that an impartial person would want to know in reviewing both sides arguments. Remember also that you are dealing with Aruba which has different laws and where the government may have some interest in keeping Marriott happy since they employ many Arubans and have large economic interests in Aruba. I do hope you get a result which pleases the owners but you must see that this is going to be a very difficult and expensive fight. Ultimately the only ones who will end up 100% happy with any result will be the lawyers when they cash the large checks that you will have to pay them.

 

[Dave M]

I know I'm a little off topic here as we are talking about assessments, but why are the fees rising closing in on the cost of actual rentals? Where are all the rental incomes going to??????

Yes, it is a bit off topic and this thread should continue to be focused on the issues that Mark has raised.

However, the answer to your first question is spelled out completely in this thread. That's much of what this discussion is about - how much the fees have increased, why they have and whether it's appropriate.

The answer to your second question is that rental income goes to the owner of the week that's being rented. If you rent a week you own, you get the rent. If Marriott owns a week and rents it, Marriott gets the rent. If an owner trades the use of a week to Marriott for Marriott Rewards points and Marriott rents it, Marriott gets the rent. All of that is as it should be. Only if the HOA forecloses on a timeshare and rents that week would the HOA be entitled to the rent.

Please start a new thread if you want to discuss this further, or click on my user name (to the left of this post) and send me a private message or an e-mail message and I'll move these two posts to a new thread so that you can continue the discussion.

 

[vincenzi]

I Agree With Lovearuba

Hi
"The intent of this thread was to notify and keep the ocean club owners informed of the situation. Marksue has taken a lot of heat for getting the information posted. Many of us are not lawyers and are looking to be treated right. What has happened with the fees for the ocean club and the abrupt removal of our president because he was stepping up to the challenge and openly disputing what was happening is unfair and needs to be addressed. "

Marksue, thank you for starting this thread on TUG. It has been a valuable source of information. Also, thank you for not "throwing in the towel". I am sure you have felt like it.

Dave, thank you for your knowledgeable input.

All of the owners at the AOC have been notified the amount of money the maintenance fees are going to be for next year. I am sure many don't have any idea for the increase. However, owners who view this website have some idea what is taking place.

 

[gmarine]

Another valuable post. Eric, you have yet to provide value. At least those who don't agree with this effort ask intelligent questions. WHy do you even post here. You are not an owner or anyone who is asking quality questions.

I agree with Dave M. The post has merit and you definitely should start taking some advice Dave M has given. I also agree with Eric that some of the suggestions border on ridiculous. Dont disregard advice just because someone isnt an owner at SC or OC. Much of the adice you have been given is from people who have been involved in timeshares for a long time, regardless of the resort.

I dont agree with the increases but getting even 10% of owners to vote is an enormous task, nevermind getting 50%. You've got a tough road ahead. Good luck.

 

[ecwinch]

Marksue- on another note the building is 10 years old and the you state this roof issue has been ongoing since the building opened. Why are the owners and board only getting upset about this defective roof now?

I wondered the same thing. It would seem that any warranty period (typically 2 years here in Texas) on the original construction has probably lapsed.

And it would appear that MCVI is stepping in to "fill" the warranty on the roof, with the standard warranty on a roof being 20 years, and this one failing 10+ years in. And just like the warranty on the roof on your house, they are offering to pay a pro-rated amount of the replacement cost based on the number of years of usage. Roofing companies do not replace your roof free of charge if the roof fails after 10 years.

 

[Dave M]

All of that's true. Because of that, the only reason that Marriott would likely be held accountable by a court is if it can be proven that Marriott knew the roof was defective when they took over and completed the build-out. After all, even though the roof leaked, the HOA did get the use of that roof for those years.

Although the Board made the "defective" allegation back in January, there is no evidence I have seen that proves Marriott knew the roof was defective way back then. The fact that it leaked during early occupancies doesn't prove that Marriott knew the roof was defective before or at the time they completed the building.

I'm guessing that the problem of proving what Marriott did or didn't know is one major reason why the Board decided to accept a compromise settlement with Marriott.

 

[Luckybee]

, there is no evidence I have seen

I hate being cryptic but that said for the time being I along with others will have to be. Do not make the mistake and assume that Mark or anyone else has disclosed on these boards all the info that they are aware of. Dont make the assumption that legal opinions haven't already been obtained, and dont assume that steps have not already been taken on behalf of the owners. Mark has been using the boards to try and make everyone aware of the problems and to sign up owners. He has not very wisely been disclosing more than he has needed to, although Im sure at times he has had to bite his tongue ...actually I'd guess that has been alot

For a myriad of reasons this is not the time or place for a number of things to come out.

 

[Dave M]

Point taken.

However, you shouldn't make the same mistakes by assuming what’s in your post is fact. As an example, from my discussions with Mark behind the scenes and from some of his statements here on this forum, it's clear that he has not obtained any formal legal opinions, at least not from an attorney who has reviewed the governing documents and who is knowledgeable about HOA legal matters.

I have suggested several times - in posts here and in discussions with Mark behind the scenes - that legal counsel knowledgeable about HOA law be retained. Unfortunately, that costs money - lots of money. That's not something a single person should undertake because the cost would far exceed the potential financial benefit to the owner who funds that expense.

 

[marksue]

I will answer this I have been speaking to legal and other in the know people and I have held quite a bit back. More will be revealed when I am authorized to make statements.

There are a couple of attorneys who are owners working with me on this. So all those that think I am functioning without guidance are incorrect. I do have another meeting with the attorneys this Tuesday. If there is information I can post after that meeting I will. My intent is to share all I can without impacting our plan.

 

[AwayWeGo]

What The Lawyers Generally Say. (Maybe Not In This Case, But Generally.)

I do have another meeting with the attorneys this Tuesday.

You have an excellent case.

Now, how much justice can you afford ?

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

 

[qlaval]

To whom it may interest.

To Amend the articles of the Association at the OC (as per Article 30)

30.1
These articles of Association can only be amended by notarial deed.
The board shall have the authorization to have such deed drawn up, by resolution adopted by an absolute majority of votes cast by the Members in a General Meeting of Members in which at least two-third (2/3) of the total number of Shares is represented.

In the event the number of issued shares required is not represented in this meeting, the meeting shall be be postponed for at least 15 days, but no longer then 60 days. In the second meeting, amendments of the Articles of Association can be adopted by absolute majority of the votes cast, irrespective of the number of shares represented.


Looks like 66.67% is required...

 

[qlaval]

Again...

Article 16.3
At the written request of at least one-fifth (1/5) of the Members the Board is obligated to call a General Meeting, to be held no later than 14 days after notice of the meeting has been given. If this request has not been complied with within 14 days, they may proceed to calling this meeting themselves with due observance of the rules laid down in the Bylaws concerning giving notice of meetings.


Looks like 20% is required...

These articles are from the "Articles of Association".

Priorities in case of conflict. Highest to Lowest
-Articles of Association
-Bylaws
-Rules and Regulations
-Procedures for Reserving Usage

 

[Zac495]

I will answer this I have been speaking to legal and other in the know people and I have held quite a bit back. More will be revealed when I am authorized to make statements.

There are a couple of attorneys who are owners working with me on this. So all those that think I am functioning without guidance are incorrect. I do have another meeting with the attorneys this Tuesday. If there is information I can post after that meeting I will. My intent is to share all I can without impacting our plan.

Thank you for taking YOUR time to try to help no matter what the outcome.

 

[ecwinch]

To whom it may interest.

To Amend the articles of the Association at the OC (as per Article 30)

30.1
These articles of Association can only be amended by notarial deed.
The board shall have the authorization to have such deed drawn up, by resolution adopted by an absolute majority of votes cast by the Members in a General Meeting of Members in which at least two-third (2/3) of the total number of Shares is represented.

In the event the number of issued shares required is not represented in this meeting, the meeting shall be be postponed for at least 15 days, but no longer then 60 days. In the second meeting, amendments of the Articles of Association can be adopted by absolute majority of the votes cast, irrespective of the number of shares represented.


Looks like 66.67% is required...

Is it not 66.67% for a quorum, and then just a majority of those shares present at that meeting.

And if quorum is not achieved, the meeting is postposted for up to 60 days. In the second meeting only a majority of the shares present is required.

Would appear that it is structured to provide provisions to change the Articles even with a large segment of non-participating owners. As you normally see in an HOA.

 

[timeos2]

An uphill battle

To whom it may interest.

To Amend the articles of the Association at the OC (as per Article 30)

30.1
These articles of Association can only be amended by notarial deed.
The board shall have the authorization to have such deed drawn up, by resolution adopted by an absolute majority of votes cast by the Members in a General Meeting of Members in which at least two-third (2/3) of the total number of Shares is represented.

In the event the number of issued shares required is not represented in this meeting, the meeting shall be be postponed for at least 15 days, but no longer then 60 days. In the second meeting, amendments of the Articles of Association can be adopted by absolute majority of the votes cast, irrespective of the number of shares represented.


Looks like 66.67% is required...

That fits with most documents for timeshare resorts. It does appear to have an "out" in the second paragraph after 15-60 days when 51% majority of any amount of votes can institute a change. That is different than most.

Again...

Article 16.3
At the written request of at least one-fifth (1/5) of the Members the Board is obligated to call a General Meeting, to be held no later than 14 days after notice of the meeting has been given. If this request has not been complied with within 14 days, they may proceed to calling this meeting themselves with due observance of the rules laid down in the Bylaws concerning giving notice of meetings.


Looks like 20% is required...

These articles are from the "Articles of Association".

Priorities in case of conflict. Highest to Lowest
-Articles of Association
-Bylaws
-Rules and Regulations
-Procedures for Reserving Usage

This is more absolute. 20% of ALL owners would have to request the special meeting. That could be a very tough number to meet without an owners list to do a mailing.

 

[Dave M]

This is more absolute. 20% of ALL owners would have to request the special meeting.

Not quite, John. As previously linked, it takes only 10% to call a Special Meeting for the purpose of attempting to recall one or more directors. However, you are on the right track. Because the language of the Special Meeting provision covers only director recalls, the Board would almost certainly refuse to discuss any other topic at such meeting. Then, unless the Board called a General Meeting, it would require the 20%, as discussed in these last few posts, to call a General Meeting at which the other topics in this thread could be discussed and acted upon.

 

[timeos2]

Needs to be complete to work

Not quite, John. As previously linked, it takes only 10% to call a Special Meeting for the purpose of attempting to recall one or more directors. However, you are on the right track. Because the language of the Special Meeting provision covers only director recalls, the Board would almost certainly refuse to discuss any other topic at such meeting. Then, unless the Board called a General Meeting, it would require the 20%, as discussed in these last few posts, to call a General Meeting at which the other topics in this thread could be discussed and acted upon.

Ah, yes. That is right Dave. Thank you for the correction. It shows how detailed and confusing these things are and how one wrong assumption or incomplete reading of the rules can throw the whole process of track or end it. It appears that the owners looking to raise their legitimate issues aren't getting the absolutely required paid legal support they will need to actually accomplish anything. As you pointed out that is extremely costly and unless shared by a good number of owners unlikely to be worth it for any individual or even small group of individuals to fund. Without it there is almost bound to be mistakes made that will derail any attempt successful challenge. And that doesn't mean actually suing but simply presenting a proper case as required to the Board toeven consider the things they are asking for. If it actually reaches a lawsuit the costs are staggering.

They need to rally a large group of owners, willing to pay upfront money to fund a proper legal challenge (if that is really a threat that will mean anything) if they want to make this work. Scatter shot claims, threats and picking selected language that fits the complaint while ignoring other requirements will simply be sloughed off by management and the Board. Do it right or don't do it. Hollow threats not backed up with the funds needed to implement them will just be an irritant and accomplish little or nothing I'm afraid.