Timeshare Resorts Management and the resorts useful life...

[timesharevb]

Trying to find out, what resorts, as I know there are some that I own at and I am sure others do... That have been around a very long time and are past their useful life or are nearing the sunset clause on their ownership.
If you own at a resort like this please let me know.
Also, if you own at a resort that has horrible management or could use a new management company, I would like to know which resorts those are also. We are looking into management companies also...
I know of a few personally I have dealt with that need new management and others that are coming close to their sunset clauses and I am on the board of one with a sunset clause upcoming in a few years and we are trying to decide what to do and how to deal with this and wondering how many other resorts that are out there that are dealing with the same thing(of course the owners decide but there has be a majority of owners that want to keep it a timeshare and not sure we have that)....... when you have less and less owners paying their fees every year and using their weeks, and/or the building is very old or owners are ready to be done with the timeshare maintenance fees and use at the resort, etc.
I am sure the one I am on the board for is not the only one dealing with issues like these and timeshares aren't how they used to be...our building is at least 40+ years old
Just trying to get an idea of how many other resorts are dealing with the same thing!
Thanks for any info you can provide!

 

[Carolinian]

I have owned at a UK resort that was a leasehold and the lease, and consequently the resort, expired. I owned at a Dutch resort where the board members were getting old and asked for new blood to step up, and when nobody did, they proposed selling the resort, which the members voted to do. I made a nice profit on that one.

The OBX resort where I served on the board for over ten years, and three as president, had a professional Reserve Study done which calculated every component of the resort, when it was likely to need replacing, and what it would cost. They then crunched the numbers to determine how much we needed to charge for our reserves in the m/f to be sure we had the money on hand. We actually got ahead of the game thanks to a hurricane and insurance replacing a lot of stuff, including all new wiring plumbing, cabinets, doors, carpet, appliances, etc.

As to management companies, there was one local one which was very good, but the rest of the local ones were fair to poor. The national management companies active on the OBX did a reasonably good job but were very pricy. The self managed resorts seemed to have the best and most reasonably priced management. Having a hands-on board with a good relationship with the members is the key. There were several situations where a management company either got control of the HOA board or tried, and that was NOT a good situation.

 

[SOU11]

In my experience, the board that is composed of owners can act with honesty to serve the interests of all the owners and execute an equitable plan of termination. But individual owners do have rights that vary among jurisdictions.

In one case, the physical condition of a Florida resort with a dwindling owner base led the owner-based management to develop a plan of termination that required owners to pay a special assessment to join with the management and work on a liquidation. An element of trust in the selfless board led to a developer buying the real estate in an arm-length transaction.

In another case in which I have experience, a corporate timeshare conglomerate, Zealandia Holding Company aka Festiva, has, as that guest commendation summarized, unfortunately gained control of the HOA of Southcape Resort on Cape Cod. The real estate is valuable and the intent of the corporate interest is to eliminate most of the senior owners and, in the end, use so-called trustees to buy out the hesitant for a minimal offer.

 

[rickandcindy23]

Foxrun's management, BOD and owners voted to keep it a timeshare. I was disappointed in the decision, but even TUG members wanted to continue it as a timeshare. The value of the underlying real estate wasn't much.

We have great management companies at our Colorado resorts, Val Chatelle and Twin Rivers.

 

[Carolinian]

In North Carolina, the older resorts fall under a statute that requires unanimous consent to dissolve a timeshare unless it has suffered major damage, when it becomes a supermajority instead. Newer timeshares fall under a later statute where it takes a supermajority at any time. NC's statutes are based on model statutes, so other state may well have similar provisions.

Within each resort's Declaration of Covenants, there is usually a prescribed time when it is required for the members to vote on whether to continue the timeshare, and then again at set intervals. Sometimes this is automatic and sometimes it requires someone to call for the vote, but it only happens at long intervals.

 

[markwest17]

classic or legacy properties have unique challenged which requires a professional management approach that both offers sound solutions but is capable of assessing the association, its statutory requirements both under its doctrine but state laws for which it operates. Ultimately, the decision to unwind is great and should be cautiously approached, once other solutions have been exhausted and the ownership has proper data supplied explaining the various options. My company recognizes these nuances and offer the level of knowledge and solutions to its boards and has been successful in both continuation of the TS property where it makes sense as well as repurposing a property where it to makes sense and in the best interest of its ownership as a whole. my suggestion is to tread lightly and get all facts, look at all options, i.e., continuation (professional solutions for a vital and economically sound future) versus unwinding and how these options will be in the best interest of the association.

 

[moonstone]

Our first timeshare purchase (yes from the developer but only for $2,500.) at the Beach Club at St Augustine Beach (RCI#0890) from 1982 has a sunset clause ending in March 2024. It is in a fantastic location right on the beach with many restaurants and shops as well as a major chain grocery store within walking distance. About 10 years ago all the balconies and some outside stairs were replaced due to rusting rebar inside of them. During the Covid shut-down all the plumbing was replaced in the whole building due to the copper pipes pitting from salt air over the last 40 years. We have had 1 special assessment (equal to 1 years maintenance fee) about 25-30 years ago but a healthy reserves budget and good management have prevented others.
Voting by the owners on whether to continue as a timeshare or sell the pace has begun and will continue until March 2023. At that time, if a large enough percentage of owners have voted, we will find out what is going to happen. We don't mind if the place sells and ceases being a timeshare as we loved the area so much that we bought a condo just up the road from it about 10 years ago. We really don't need a timeshare in the same town and we don't really need the week to exchange to another location since we get 3-5 weeks from our points and we have the condo for our winters. We don't even care if we get any pay-out for it since we figure we have gotten our money's worth from our ownership. DH & I are really looking forward to our 2 weeks (last years & this years) there this November. We were able to reserve an ocean front unit on the 2nd floor so we will have a great view when we aren't over at our condo overseeing minor renos or out shopping for furnishings so we can move into it after we check-out of The Beach Club!


~Diane

 

[daverunfast]

Consolidate title and increase rental income. Less owners paying/using is a net benefit for the HOA. The HOA should be able to make more rev renting the property than collecting maint fees.

Re-bid your management contract, consolidate title, look for real estate exit.

 

[moonstone]

Consolidate title and increase rental income. Less owners paying/using is a net benefit for the HOA. The HOA should be able to make more rev renting the property than collecting maint fees.

Re-bid your management contract, consolidate title, look for real estate exit.

We attended our timeshare annual general meeting yesterday. It was announced that 87% of owners pay their maintenance fees and if their fees are not paid the HOA rents out their week. It also rents out the weeks of the few owners who pay their fees but do not reserve a week by the deadline. The rental income from those weeks has risen to over $27,000. for last year, up from $15,700. the year before. The annual maintenance fee is just under $600. for a 1 bedroom but the same unit rents for between $990 and $1095 per week depending on the season. The winter monthly rental charge is $3000. for a 1 bedroom. The Beach Club owns 30 one bedroom units and 5 two bedroom units that they also rent out, but those are also for sale. Those units are either abandoned by their (now deceased?) owners or were taken for non-payment of maintenance fees. Management is very pro-active with foreclosing on owners who haven't paid their maintenance fees in a few years. They first try to work out a payment schedule with them, if they can be found, then serve notice of foreclosure and start the procedure.


~Diane

 

[Maple_Leaf]

Lemonjuice Capital recently turned a lemon into lemonade for the owners at Palm Beach Resort & Beach Club.

Lemonjuice Capital and Solutions Announces Palm Beach Resort & Beach Club Timeshare Resort sale for $9.75 million

/PRNewswire-PRWeb/ -- Lemonjuice Capital and Solutions has announced the sale of Palm Beach Resort & Beach Club (PBR) timeshare resort in Palm Beach, FL, for...

www.prweb.com

 

[Carolinian]

Consolidate title and increase rental income. Less owners paying/using is a net benefit for the HOA. The HOA should be able to make more rev renting the property than collecting maint fees.

Re-bid your management contract, consolidate title, look for real estate exit.

Here is the reality of that. High season owners, when rental income would be high, are rarely going to bow out. Low season owners are more likely to do so, but the rental income there would be less significant. Less owners paying is NOT a net benefit. It will ratchet up the m/f for those remaining.

Another factor is that most state laws on the subject (all or most are mostly verbatim of the Uniform Acts from the National Conference of Commissioners on Uniform State Laws) will require that the portion of sale proceeds from HOA owned weeks be given to charity. If an HOA is winding up and has many of those, they might consider selling them to members who want them before the windup gets underway.

Who gets what portion of the proceeds also varies. In some deeded resorts, owners have an undivided interest in the entire resort and others an undivided interest in a particular unit. Blue week owners get the same as red week owners, so there is an incentive of the former to push to wind up and the later not to.

 

[daverunfast]

Less owners paying is NOT a net benefit. It will ratchet up the m/f for those remaining.

Another factor is that most state laws on the subject (all or most are mostly verbatim of the Uniform Acts from the National Conference of Commissioners on Uniform State Laws) will require that the portion of sale proceeds from HOA owned weeks be given to charity.

undivided interest

Thanks for that, interesting.

I kinda disagree about the first part. If they're looking at selling, less owners = more equity. If they're staying a timeshare, high season owners want the rental income and low season owners want to give the deed back. If those things aren't easy, almost any real estate deal is better than staying a timeshare.

It's in the interest of HOA members for the organization to be in position to take advantage of a sale if there is one to be had. Less owners should make that easier too.

Second one sounds more like a hurdle than a blocker. Same for undivided interests, sticky but plenty of fair resolutions there.

 

[Carolinian]

Thanks for that, interesting.

I kinda disagree about the first part. If they're looking at selling, less owners = more equity. If they're staying a timeshare, high season owners want the rental income and low season owners want to give the deed back. If those things aren't easy, almost any real estate deal is better than staying a timeshare.

It's in the interest of HOA members for the organization to be in position to take advantage of a sale if there is one to be had. Less owners should make that easier too.

Second one sounds more like a hurdle than a blocker. Same for undivided interests, sticky but plenty of fair resolutions there.

The problem with less owners is that they do not get to divide the proceeds from the HOA owned weeks. That money has to go to charity. The HOA needs to find an equitable way to get those deeded back to existing members for those existing members to share that part of the proceeds.

 

[daverunfast]

The problem with less owners is that they do not get to divide the proceeds from the HOA owned weeks. That money has to go to charity. The HOA needs to find an equitable way to get those deeded back to existing members for those existing members to share that part of the proceeds.

I understand where you are coming from, but it's a borrowed problem. I've never seen a charitable donation on any HOA budget. Long way to go in reducing maint fees before we'd have to worry about paying out a dividend.

 

[Carolinian]

I understand where you are coming from, but it's a borrowed problem. I've never seen a charitable donation on any HOA budget. Long way to go in reducing maint fees before we'd have to worry about paying out a dividend.

That only comes about if the HOA winds up the timeshare. HOA's are organized as non-profit corporations, and unit / weeks that are corporate property and the proceeds for them have to go to charity instead of being distributed to members. That is why in winding up a timeshare, any HOA owned weeks need to be offered for purchase by members before the winding up, or that money has to go to charity.