Massachusetts signs non-judicial foreclosure bill for timeshares! Good news

[theo]

Since you asked...

How many timeshares are in Massachusetts?

There are about (50) Massachusetts facilities listed in the RCI directory, about half that number in the II directory. I don't know how many of that total of about (75) might be dual affiliated, so there may well be some redundancy in those figures.

 

[dawnalt]

Owner's state or the resort's state?

What determines the state laws? The state where the owner lives or is it the location of the resort?

 

[timeos2]

What determines the state laws? The state where the owner lives or is it the location of the resort?

The State where the resort Association is chartered - usually the State where the resort is located.

 

[Sou13]

Take a closer look at this law!

Southcape and Sandcastle owners appealed to Massachusetts legislators to take a closer look at how passage of this law paves the way for developers to take back control of resorts to the detriment of deeded MF-paying owners.

The text of this law is found at http://www.malegislature.gov/Laws/SessionLaws/Acts/2010/Chapter350

I have published the changes spelled out in this law at http://f1.grp.yahoofs.com/v1/MN_BTA...ITWFQtM4_Fhk2w/Legal Documents/HOUSE 4496.pdf

At the annual meeting of the "Community Association" in May 2010, Southcape owners learned that the resort has been taken over by the Festiva Resorts Adventure Club as the result of the sale of more than 500 "developer-owned" weeks to the Festiva Development Group. The $1 million sale included the transfer of "management" from New England Vacation Management Services to the Festiva Hospitality Group.

Owners in attendance at the meeting were introduced to two representatives of the Festiva organization and to what takeover by Festiva means to us. One of the issues addressed was the delinquent weeks (there are fewer of them than there are developer-owned weeks) and how the developer hopes to foreclose on these weeks.

The issue here is, who owns those delinquent weeks? What right does the developer have to foreclose on them? Shouldn't they be foreclosed by the Community Association because it is the Community Association that has been owed the maintenance fees for these weeks?

Meanwhile, the Sandcastle owners were told that delinquent weeks would be sold in a block rather than individually, which would make it impossible for anyone but a developer to buy those foreclosed weeks!

I am convinced that Festiva had a hand in the passage of this law and that some legislators received some benefit from voting in favor of it.

BTW one representative who was sympathetic to Southcape and Sandcastle owners is not on the ballot for re-election.

 

[timeos2]

Developers do not have control & Associations shouldn't give it to them

The issue here is, who owns those delinquent weeks? What right does the developer have to foreclose on them? Shouldn't they be foreclosed by the Community Association because it is the Community Association that has been owed the maintenance fees for these weeks?

Meanwhile, the Sandcastle owners were told that delinquent weeks would be sold in a block rather than individually, which would make it impossible for anyone but a developer to buy those foreclosed weeks!
.

The Association - NOT Festiva (or any other developer/management) is the party due the fees and thus the eventual owner, if the week is foreclosed on. Once it is foreclosed then it needs to be sold.

At that point the Association has control again- not the Management or Developer - the Association can sell it in a lump thus getting a fast slug of money either from the sale or the future fees but risk a developer jumping on them to gain enough votes to take control (assuming the State doesn't have regulations/law prohibiting developer take overs of Independent resort BOD's) OR they can (try to) find individual buyers for a bunch (maybe hundreds?) of weeks - that means no money (the paying owners continue to cover the delinquencies) until they get sold. As most Associations are not set up for sales many resorts fall victim to the fast sale of the block of time either ignoring the risks or unaware of them.

The group calling the shots is the Association as they hold all the cards (the ability to foreclose). It is up to them (the Board) to act in the best interest of the owners.

 

[Carol C]

This is somewhat the reversal of the situation with local taxes. They take precedence over a mortgage, and m/f should as well. Why should the association suffer by failing to collect m/f due when a developer sits on a mortgage in default without foreclosing?

Good point, Carolinian. I for one hope this law gains steam, nationwide.

 

[Sou13]

Southcape and Sandcastle owners appealed to Massachusetts legislators to take a closer look at how passage of this law paves the way for developers to take back control of resorts to the detriment of deeded MF-paying owners.

The text of this law is found at http://www.malegislature.gov/Laws/SessionLaws/Acts/2010/Chapter350

I have published the changes spelled out in this law at http://f1.grp.yahoofs.com/v1/MN_BTA...ITWFQtM4_Fhk2w/Legal Documents/HOUSE 4496.pdf

At the annual meeting of the "Community Association" in May 2010, Southcape owners learned that the resort has been taken over by the Festiva Resorts Adventure Club as the result of the sale of more than 500 "developer-owned" weeks to the Festiva Development Group. The $1 million sale included the transfer of "management" from New England Vacation Management Services to the Festiva Hospitality Group.

Owners in attendance at the meeting were introduced to two representatives of the Festiva organization and to what takeover by Festiva means to us. One of the issues addressed was the delinquent weeks (there are fewer of them than there are developer-owned weeks) and how the developer hopes to foreclose on these weeks.

The issue here is, who owns those delinquent weeks? What right does the developer have to foreclose on them? Shouldn't they be foreclosed by the Community Association because it is the Community Association that has been owed the maintenance fees for these weeks?

Meanwhile, the Sandcastle owners were told that delinquent weeks would be sold in a block rather than individually, which would make it impossible for anyone but a developer to buy those foreclosed weeks!

I am convinced that Festiva had a hand in the passage of this law and that some legislators received some benefit from voting in favor of it.

BTW one representative who was sympathetic to Southcape and Sandcastle owners is not on the ballot for re-election.

Oops! The link I provided to the "changes" won't get you there, so try this one:
http://xa.yimg.com/kq/groups/41573436/1907943696/name/HOUSE

 

[zeld]

California is already non judicial

It appears that it has the basics for non judicial foreclosure which is a process that does not require a judge. There is a notification, 90 day waiting period, publication of the auction date 30 days before a public auction. The winner of the auction will own the timeshare presumably free of any liens. California uses non judicial foreclosures for all real estate property. It is in the loan contract.

I wonder whether there wil be any issue with existing contracts that do not specify a non judicial foreclosure as an option.

 

[e.bram]

i don't see how this helps the HOA. The non payers would in most cases be glad to deed the TS back to the HOA. How could it possibly hurt the non paying "deadbeats". It more or less dictates the way the State would like non paying owners should treated.

 

[T_R_Oglodyte]

i don't see how this helps the HOA. The non payers would in most cases be glad to deed the TS back to the HOA. How could it possibly hurt the non paying "deadbeats". It more or less dictates the way the State would like non paying owners should treated.

In many cases the non-paying owners ignore any and all correspondence related to the timeshare. In other cases, they may have moved and not left any forwarding address, so there is no way to get in contact with them.

Without this law, the HOA would need to do a formal court proceeding, at great cost, to foreclose on the timeshare so that they could resell it.

 

[timeos2]

i don't see how this helps the HOA. The non payers would in most cases be glad to deed the TS back to the HOA. How could it possibly hurt the non paying "deadbeats". It more or less dictates the way the State would like non paying owners should treated.

Not all would be willing to deed back (why, I don't know as it doesn't make sense, but they won't!) It hurts the debtors by giving a negative credit mark or two - it helps the resort by lessening the costs and time required to get the week back & (hopefully) in the hands of a new paying owner.

Hey- here's an idea.

It would be a great test if all of your ideas for "betterment" of the operation and collections at timeshares were implemented at a resort. Would you volunteer one of yours to test them out? If not, why not? They are so good it should improve things greatly as any and all owners would be free to quit paying fees, freely return weeks to the Association when they tire of them and any foreclosures would have to be through the longest, most costly process possible. Yup, sounds like a great plan for the survival of any resort, no? Care to make your resort the test run? I didn't think so. So why are they a good idea for other resorts also trying to survive or even thrive?

 

[e.bram]

Timeos2:
My question is. What is the benefit to a HOA to foreclose(regular or non judicial)as opposed to just taking back the TS?

 

[TUGBrian]

had a call the other day from an individual who claimed to work for a very large HOA...he mentioned they had over 1700 owners they were UNABLE to make any sort of contact with.

phone disconnected, no response to regular mail..etc etc.

I can only imagine the sort of financial cost to the HOA to actually foreclose on all those intervals the old way.

 

[e.bram]

Brian:
That does not answer MY question. Since I am sure most non payers are willing to give back their units. Are you implying that making yourself unavailable is a better way to dump a TS?

 

[TUGBrian]

how are you able to turn your timeshare back over to the resort if they dont have any way of contacting you?

you seem to take for granted that the average person would even think to ask the resort to take the unit back.

 

[timeos2]

Timeos2:
My question is. What is the benefit to a HOA to foreclose(regular or non judicial)as opposed to just taking back the TS?

IF the ownership has been proven to be noncollectable then a deed back, if it is offered, is the best route. But that is NOT offering a blanket option to simply turn the week in vs the current owner finding a new buyer. The onus is on the current owner to do the work & pay the fees until the new owner takes over. If an Association simply takes weks back on demand then those owners have the responsibility of finding a new buyer & covering the fees until one is found. The majority did not sign on for that - they have enough costs covering their own fees without taking over another share for others.

So there is no advantage to foreclosure over deed back if the week has been through the collection process and has no other option. If it hasn't been through all collection channels then allowing a deed back may not be a good choice for the Association. If it is they will take them - if not they won't. Simple economics. Foreclosure is always the last choice.

 

[e.bram]

Timeos2:
What are the "all collection" channels are you talking about.

 

[timeos2]

Timeos2:
What are the "all collection" channels are you talking about.

In most cases that is notifying the owner they are locked out from use at the first possible date they are delinquent. Then the account is sent to a collections agency for 30-90 days (whatever the minimum is in that area) and often a "secondary" collection company for another 30-60 days. If that doesn't resolve the delinquency (and I am always surprised how many do pay up) then the first notice of foreclosure is sent out. That again triggers a surprising amount of people that pay in full. But for those that don't a well run resort will follow up the notice with a foreclosure action filed ASAP after the first notice. That is the the process to ensure the week is truly going to remain unpaid and requires foreclosure to be resolved.

 

[cptfran]

fran weber story on stratigis timeshare selling process

i have two week timeshares in Kamaoli beach club Maui Hawaii...late on fees, collection agency wants me to pay $1200 for each week in back fees ($800.00 is my original maintanance fee) and i also owe for 2011 ($1600)...can any body give me direction on a game plan?

for those that pay their bills and want their resort/Association to stay on top of delinquents without the excess costs and time required for traditional, full court process to foreclose.

It includes the ability for timeshare owners to be bidders for any weeks offered under these new rules for foreclosure/sale.

A BIG win for timeshare owners and Associations that now have a new weapon to get control of non-paying weeks quickly and to minimize past due fees.

Great job all that helped get this process enacted.

 

[timeos2]

i have two week timeshares in Kamaoli beach club Maui Hawaii...late on fees, collection agency wants me to pay $1200 for each week in back fees ($800.00 is my original maintanance fee) and i also owe for 2011 ($1600)...can any body give me direction on a game plan?

You need to pay up IF you want to keep the weeks. If not now is the time to ask the resort what they would settle for & take the weeks back. Don't wait. Ask them now so they know you are willing to make a settlement.

 

[bobby]

Our timeshare only has 15 owners. Two have just stopped responding. One is a Canadian and refuses to get the IRS forms needed to take back his timeshare - just doesn't respond, hangs up the phone. The other owner disappeared. Now these are in foreclosure process under the new law, so we'll finally be able to get them into the hands of new owners. So, not all owners even bother with turning in their timeshares. They just stonewall you, but the bills still need to be paid. The old foreclosure process took about 2 years and cost more.

 

[timeos2]

Our timeshare only has 15 owners. Two have just stopped responding. One is a Canadian and refuses to get the IRS forms needed to take back his timeshare - just doesn't respond, hangs up the phone. The other owner disappeared. Now these are in foreclosure process under the new law, so we'll finally be able to get them into the hands of new owners. So, not all owners even bother with turning in their timeshares. They just stonewall you, but the bills still need to be paid. The old foreclosure process took about 2 years and cost more.

Lower cost & faster turn around is the goal of non-judicial foreclosure. As you point out not all owners even bother to respond and yet have to be dealt with for the benefit of the resort. The faster and less expensively that can happen is a plus - thus the need for non-judicial process as an option.

 

[Sou13]

Upcoming auction

It looks as though the new law is about to bear fruit at Southcape Resort. A recent issue of the Mashpee Enterprise contained a notice of auction of 330 forclosed weeks to be held on the premises of Southcape Resort on June 10, 2011.

To obtain a back issue of the newspaper, contact 508-299-8379 or email circulation@capenews.net.

 

[Sou13]

Notice of Sale of Time-share Estate or Estates Under M.G.L. Chapter 183B, Section 29B

It looks as though the new law is about to bear fruit at Southcape Resort. A recent issue of the Mashpee Enterprise contained a notice of auction of 330 forclosed weeks to be held on the premises of Southcape Resort on June 10, 2011.

To obtain a back issue of the newspaper, contact 508-299-8379 or email circulation@capenews.net.

I have obtained a copy of the back issue of the above-mentioned weekly newspaper, dated Thursday/Friday, May 5/6 2011, by calling 508-299-8379 and putting the $3 charge on my credit card. It took 2-3 days to arrive in my mailbox. If you live nearby you can pick up a copy for $1 by calling and requesting it. The Falmouth office is at 50 Depot Avenue, Falmouth, MA 02540; the Hyannes office is at 390 Main Street, Hyannis, MA 02601. Go to Mashpee Enterprise to find the nearest office to you.

The auction will be held on the premises of Southcape Resort, 950 Falmouth Road, Route 28, Mashpee, MA 02648 at 10:a.m. on June 10, 2011.

"TERMS OF SALE: Certified check for the full amount at the time of sale. Other terms to be announced at the sale.

"For more information, please contact Denise Daly at NEVS, LLC. Phone number is 774-994-0450 or email at nevmsllc@gmail.com"

I called the above # to obtain the terms of sale.

Q. How does one know what amount to bring to the sale?

A. Bring a check in the amount of the maximum you will bid for a week. Each week will be auctioned individually, starting at a minimum of $1,200. The winning bid must cover the entire back due amount + 20% foreclosure expenses.

Most of the weeks are off-season weeks, but if you don't obtain a copy of the notice you will not know which units and weeks they are until you arrive at the resort on the day of the auction. Be aware that Units 1-31, weeks 1-20 and 38-52 are "float" weeks while all weeks in units 32-55 are fixed weeks. If you don't know whether these units are ranch, loft, or townhouse style you may not find out until you place the winning bid. I strongly advise you to find out in advance what kind of unit is up for auction before the day of the sale.

I will be publishing the list of units/weeks within the next few days.

 

[Sou13]

As promised

I've published the Units/Weeks and Weeks/Units at http://xa.yimg.com/kq/groups/41573436/132534299/name/FORECLOSURE AUCTION OF TIMESHARE WEEKS.docx

I've also published the original workbook at http://xa.yimg.com/kq/groups/41573436/325585410/name/Foreclosure_Auction.xlsx

It works best if you Save the files and then open them.