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Timeshare "Sunset" or Self-Destruct clause - 2020! Every timeshare owner should read!

tschwa2

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If the resort doesn't have a truly independent HOA, I don't think it really matters. If the Developer is the one in control they will make the outcome be what they want. I can't imagine someone like Wyndham ever saying, we want to be out of a job as manager in x years so we are going to let this end. They are going to make sure that if the clause exists they warn everyone that they need to take action now and they will find a way to make voting as easy as possible for this.
 

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Thanks for the post theo, great info!

in the 2nd resort example you mention they were able to obtain a majority vote...was this just 50%+1? or did that resort have an extremely high (say 90%) requirement? if so how did the resort succeed in getting all those votes from owners?

I honestly don't believe the issue is so much the clause in itself, but in getting the owners notified...and actually voting on the matter in enough numbers to get the CCRs changed!

thanks again!

I can't (and won't) speak to specific legal details about which I am not fully and precisely informed regarding that CBC situation. However, I can and do state with certainty that they did not even get a simple (50+%) majority of owners to respond at all. I believe they obtained less than a 40% response, but I don't claim to know the exact response figures. Truth to tell, I was already very actively and very energetically "closing the exit door behind me" there before things reached that point.

I can say with certainty that the BoD acknowledged needing a specific percentage of owners to vote in order to attain a valid quorum. The BoD openly admitted barely attaining that "quorum" --- and even then only after "extending" the voting period beyond their originally stated intentions. How many owners actually understood the underlying issue(s) at all and / or how many fully (...or even partially) understood the potential future impact of their vote is surely a matter for conjecture.
Suffice it to say that you can just "color me extremely dubious" on that particular latter point.

For us, ownership there is now "not my circus, not my monkeys", to borrow (with proper attribution) that old Polish proverb. We sold at a small loss, but got out.

=================================================================================================

P.S. If I can somehow unearth accurate figures on the above described CBC "vote", I will report back here with same ASAP, for whatever use or interest that info may be to others. I am no longer a CBC owner, so I no longer have access to the "owners only" portion of the CBC web site (they have individually issued owner passwords), but the relevant info may well be available somewhere else of a more open source nature. My individual CBC site password was (appropriately) deactivated soon after the new deed transferring our ownership to someone else was officially recorded and the facility so notified by new recorded deed copy being provided to the resort.

=================================================================================================

P.P.S. A day later, I've found some facts & figures in statements posted by a CBC BoD member on a Yahoo group bbs (i.e., it's not taken from the internal CBC site). I've culled out and condensed some straightforward and basic facts and figures directly from that BoD member's own posted statements regarding the CBC vote to be a "timeshare in perpetuity"; a decision which supposedly can be reversed by a later vote (...according to a posted statement by that same CBC B0D member, anyhow).
In short, "in perpetuity" may or may not literally or ultimately mean "forever".

I should note for background that this particular facility was not initially constructed or sold as / for interval ownership. It started out as a motel (early 1960's? :shrug:).
I do not know when it was converted to interval ownership or when the newer condo sections and units were later constructed there, but those details seem irrelevant to the topic at hand anyhow. We didn't own there for long and I cared little about the underlying CC&R's there. All that being said, now "just the facts" --- with no confidences being violated and no legal opinion of any sort offered, implied or intended:

1. There were reportedly 2000 "owner owned" CBC weeks at the time (late CY 2014) of CBC BoD-initiated voting on the conversion to "timeshare in perpetuity".
HOA-owned weeks were not included or counted in that 2000 figure and HOA-owned weeks had no vote.

2. Ballots were reportedly sent to every owner with maint. fee bills; at least one owner openly claimed to have received bill but no ballot and had to chase one down.

3. CBC bylaws reportedly require 34% of owners to vote to constitute a quorum. Simple math says that's 680 votes minimum (34% of the aforementioned 2000).

4. A majority (in this instance, apparently anything over 50%, i.e., 341 votes out of 680 minimum would suffice) required for or against the issue being voted.

5. Same BoD member reported vote total of 680 (the bare minimum); 640 for, 40 against. CBC is now officially a "timeshare in perpetuity" --- for better or worse.
 
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bogey21

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I am fuzzy on this as I sold my Week many years ago but I recall that I owned a Week at the Emerald Seas in Deerfield Beach, FL that had a clause in one of the documents that provided for automatic dissolution and sale of the property somewhere between 2025 and 2035 (don't remember the exact year) with the proceeds to be divided up among the Owners of the Weeks. This was of interest to me as the TS sits on a valuable piece of oceanfront property.

George
 

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An article, "In Perpetuity" Doesn't Mean Forever, by George Leposky was printed in TimeSharing Today issue #58, July/August 2001. This article discusses this subject and the applicable laws in various states.

The magazine has also reprinted the article in issue #119, September/October 2011, prompted by the difficulties of the Sandy Shores Resort in Daytona Beach. That resort was destroyed by hurricanes in 2004, but was still having problems trying to dispose of the property in 2011.
 

Harry

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This is interesting and maybe I should have taken Fl Bar exam as urged years ago. It seems, Theo, that we have a very clear lease estate created by the CC&Rs. Thus the estate ends when it ends regardless of what the Board does. What interests me is that the deed may say otherwise. If so we have an interesting problem. A portion of land was conveyed lets say in fee simple or tenant in common or what ever. This could be.argued the original deed is invalid (void).
With an invalid deed the owner unfortunately has nothing. However, a lease can always be renewed.

Harry

It is most likely I am not authorized to practice law in your state so do not consider this legal advice.
 

tugnut

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This is an example of how messy a timeshare termination can get:

http://www.tstoday.com/members/magazine/issue119/issue119.pdf

"At about the same time as the Board’s
letter to owners, its attorney notified owners
that he would be recording a document
which would terminate the condominium
and the timeshare program. When that
was done, all of the unit owners became
tenants-in-common (co-owners) of the
property. In order to sell the property,
every owner would have had to sign the
contract of sale and the deed."


The termination was due to hurricane damage, but owners who have a sunset termination clause in their governing documents will face the same issues.

As tenants-in-common, they would still own the property and be responsible for property taxes and other costs, but they would no longer have their occupancy rights.
Sez who and why not? The owners of each unit separately (now tenants in common) would have to decide amongst themselves how to use/ sell/rent the property. They could simply decide to occupy by the same TS schedule. They just wouldn't have the onerous TS management costs.
 

tugnut

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I just got a Newsletter from the resort after I previously posted and there was inclusion about this issue, which I have noted below.

John Gaw, Attorney-at-Law, was invited to attend the meeting in order to address owners on the timeshare termination clause written in the Master Deed and By-laws. Mr. Gaw reported that according to the documents, some timeshare regimes would end in 2024 and some would end in 2027. Mr. Gaw explained that he was hired by the Board of Directors to help amend the declarations which would abolish the termination clause.

Termination Provision Update: In the coming months, a proposal of an amendment of the Declaration and Condominium Interval Ownership will be presented to our owners. The amendment will delete the Timeshare Interval Ownership termination date of all the various condominium regimes at the Barrier Island Station-Duck Resort. In lieu, thereof, a provision will be added that the timeshare interval ownership weeks and ownership interest will not terminate unless and until the timeshare/interval ownership form of ownership has been terminated by vote of the Owners. Owners will receive a packet in the mail containing information regarding this proposal. All Owners will be encouraged to vote “yes” for this amendment.

Owners getting suckered again. Reversing TS termination language just perpetuates a broken Time Share model that needs to be destroyed permanently. Can't believe Owners would fall for this stupidity.
 

chriskre

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I wonder if this is why the Golden Strand here in Miami beach was sold to Trump. :shrug:

I have a friend who owned there and they were paid $32K for their week.
From what he told me, they have 3 more years until Trump takes over fully.
 

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Owners getting suckered again. Reversing TS termination language just perpetuates a broken Time Share model that needs to be destroyed permanently. Can't believe Owners would fall for this stupidity.

not every timeshare is in dire straits where owners are desperate for a way out...this clause will impact many timeshares that are otherwise well off and very popular with owners.
 

theo

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This is interesting and maybe I should have taken Fl Bar exam as urged years ago. It seems, Theo, that we have a very clear lease estate created by the CC&Rs. Thus the estate ends when it ends regardless of what the Board does. What interests me is that the deed may say otherwise. If so we have an interesting problem. A portion of land was conveyed lets say in fee simple or tenant in common or what ever. This could be.argued the original deed is invalid (void).
With an invalid deed the owner unfortunately has nothing. However, a lease can always be renewed.

It is most likely I am not authorized to practice law in your state so do not consider this legal advice.

Not to worry --- I most certainly wouldn't and won't for a moment consider the above viewpoint in any such way.

For the record, I too do not practice law in the state of Florida and have had neither any interest nor any authority to ever do so at any time --- past, present or future.
I am merely reporting, as objectively and as factually as I am able, on original CC&R filings content and upon the current discussions and plans at a very few Florida timeshare properties with which I am intimately familiar by virtue of long term association, HOA / BoD involvement and ownership of several weeks.
No more, no less --- with no legal advice and / or legal opinion proffered, implied or in any way intended on this matter.

The BoD belief at my remaining facilities (whether or not this belief is legally sound is a determination I leave to black robes in FL) is that the CC&R "end date" is not a doomsday scenario at all and that "termination" can be averted merely by formally implementing a date-specific "renewal", well in advance of the CC&R "end date", via supermajority vote approval of current owner populace. That supermajority requirement is the "catch-22" --- back to TUG Brian's previous astute and correct observation that statistically achieving this objective is much easier said than done. My experience and observation is that many owners can't even be bothered to thoroughly read their quarterly newsletter and / or vote for HOA / BoD candidates, let alone analyze and vote on complex decisions regarding the future of their facility. :shrug:
 
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Talent312

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I bought my last TS without reading anything other than the closing instructions.
But then, my total out-of-pocket was ~$500, so I figured that I'd learn as I go...

I'd be unhappy to find that I'd be up the creek with a few thousand other co-owners.
But if it went belly-up, I wouldn't shed many tears...
At least I wouldn't have to spend time with my in-laws every friggin' year!

--------------------
BTW, AFAIK, a TS is not a lease-estate where there is a deed... it's a fee-simple.
Even if use under the condo docs terminate, you're still own a tenancy in common.
Theoretically, you'll still be billed for property taxes for your week and commons.

<arm-chair quarterback, not a R/E attorney, but know enuff to be dangerous>
.
 
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theo

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<snip> AFAIK, a TS is not a lease-estate where there is a deed... it's a fee-simple.
Even if use under the condo docs terminate, you're still own a tenancy in common.
Theoretically, you'll still be billed for property taxes for your week and commons. <snip>

I share this particular belief, while acknowledging that my personal belief and a dollar won't even get you a small cup of coffee at a FL Dunkin' Donuts.
 

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here is a sample excerpt from a small resort that details the termination clause and date for those of you looking for similar terminology

the comments along with this document provided are as follows:

You'll see on page 9, in the consumer disclosures, it clearly talks about the intent to terminate the plan at a specific time. Under Section XVII B f the Declaration, on page 36, is the specific language. Although there are some variations, this is pretty typical.

This Declaration is actually a little better because it directs the Board to file suit for partition. Many other declarations are silent on that, which could add to the conflict or confusion resulting after the plan terminates.

The fact that the property gets liquidated (eventually) and the net proceeds distributed in itself isn't a bad thing at all. If it's not handled properly, legal fees could eat up a lot of the net proceeds at many of the more marginal resorts.


additionally, the major concerns for these clauses are:

1. Timeshares are being sold to consumers today as an interest in perpetuity - but the use rights could end in as few as 5 or 6 years. Better disclosure and explanation are needed.

2. Most boards don't understand the issue. They don't realize that the quorum requirement is 50% of all intervals outstanding - not just the active ones - and they can't use HOA-owned weeks toward quorum or to vote. So many boards are being complacent about it, and will find that they won't be able to accumulate the proxies they need if they really want to try to continue the timeshare program.

note that these comments were provided by a 3rd party, and its not that I dont agree with them, but wont take credit for someone elses information and thoughts!

This individual is currently drafting up a much more detailed article in which he hopes to publish soon.
 

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Harry

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Property partition actions vary depending on jurisdiction. I own property in Florida plus a timeshare and have since 1980's. Courts there are very traditional especially in areas such as the Gulf area and counties other than Dade. Thus I suspect common law real property rationale would be implemented. My documents clearly state I have a fee simple. No "possessory interests" for me in the CC&Rs. But from what I read hear, others especially boards have a problem. They should be talking to their attorney and I would be interested in how they might concur with me.

Harry
 

theo

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Dealing proactively with timeshare "sunset" clauses...

While I had heard the term before, until the recent presentation I attended I had not had it explained to me in great detail to a point where I believed it was as bad as everyone said it was.

<snip>

As it was explained to me, this particular clause was thought up in the late 60s, and continued to be included in most documents well into the 90s. The gentleman explaining this said that he has yet to see the documents for a florida Timeshare built between 1980 and 1990 that does NOT have this clause in it.

So for those of you that own resorts in florida, its time to dig out or request the governing documents and start asking your HOA what their plan is to address it (and cross your fingers they don't look at you with confusion).

Hi Brian:

I certainly don't seek to put you "on the spot" here, but are you at liberty to identify (either openly or by PM), the actual source and nature (and future availability) of the above referenced "presentation" which you report having attended?

I firmly believe that you have absorbed some entirely correct and astute input. I know that I have certainly seen numerous of these "sunset" clauses for myself in FL timeshare documents and I know that some (...certainly not all, but some...) SW FL timeshare Boards are already well aware of the clauses's existence. Whether or not those same Boards know where / to whom to turn for specific and issue-targeted legal and procedural advice and guidance is another matter entirely. A "garden variety" attorney who customarily deals with simple real estate closings, for example, would be completely clueless and useless --- and no Board wants to pay billable attorney hours for completely clueless and useless, nor do any Boards want to have to "underwrite" a confused attorney's self-education to develop from scratch a (...maybe, maybe not) workable strategy to address the matter. Knowledge and experience in dealing with this situation clearly and certainly exits out there somewhere; it's important for as many people as possible to learn, in advance, exactly where to find that first hand knowledge and experience.

My point in asking for a specific FL source is not only to be better able to make some Boards much more aware of this lurking issue / ticking time bomb, but also to be able to steer them in a very specific direction option to seek out specific, competent and well-informed legal guidance and strategy on efficiently planning for and appropriately tackling this very specific "niche" issue --- head on, well in advance and in a calm, deliberate, thoughtful --- and effective --- manner.

I realize and respect that you can't (and shouldn't) actually "endorse" anyone here, but specific source info of some sort, by whatever means or method with which you are comfortable and deem appropriate, might well prove to be of great assistance to numerous FL timeshare Boards now essentially "asleep at the wheel" on this important issue. Proper planning now will aid in good performance in dealing with it later, while inadequate (or no) planning now will virtually guarantee panic, confusion and poor, hasty decisions (even if by the default of inaction) later. I for one do not for one moment buy into the easy, lazy, hasty and lame (...IMnsHO, anyhow) approach of "let's just vote ourselves to become a timeshare in perpetuity" approach either (where that option even exists at all); some places clearly don't warrant or deserve any such benevolent "grant" of guaranteed longevity.

There is surely a prudent, effective and appropriate strategy for each and every individual facility, but one size never fits "all".
 
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TUGBrian

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As I understand it, he is working to release an official statement (that will provide info and assistance directly for this matter) very soon. I will update the thread with that and his information when its done!

for now this thread was merely meant to get owners looking into it!
 

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has the same feel as the y2x fear in 1999. I suspect long before any of this transpires lawyers will have a salvation package they can peddle to the timeshares effected. the HOA Just pay a substantial fee and everything will be fine.:rolleyes:
 

Talent312

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Looks like HGVC owners have no worries...
At Seaworld, they used 2094 - 99-years from inception - in their sunset clause.

"At 12:00 noon on the first Sunday in the year 2094, each Owner of a Unit Week shall become a tenant in common with every other Owner of a Unit Week in that Unit, unless all of the Owners have voted to continue the Component Site Timeshare Plan by a majority vote of the Owners present at a duly called meeting... In the event the Owners vote not to continue... the Board of Directors of the Association shall file suit... for partition."
 

theo

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has the same feel as the y2x fear in 1999. I suspect long before any of this transpires lawyers will have a salvation package they can peddle to the timeshares effected. the HOA Just pay a substantial fee and everything will be fine.:rolleyes:

Pretty cynical (and woefully uninformed) input, if you'll forgive my so bluntly saying so. We are talking about very real and very specific existing language within important, legally binding, officially recorded instruments. There is nothing "hypothetical" about this matter; any comparision with (ultimately unfounded) Y2K fears and speculations of yesteryear is a lame and irrelevant non sequitur. :annoyed:

Regardless of whether or not affected owners want their particular facility to live on as a timeshare beyond the "sunset" date, this is a matter to be taken seriously --- at least by those certain to be impacted by virtue of existing legal, recorded, legally binding documents. Inattention and inaction and / or denial is not much of a strategy, but it is clear (...at least to me) that some Boards are just completely clueless about this matter lurking within their own recorded Declaration documents.

Clueless or not, it's still "tick tock" for some facilities...
 
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I apologize if I'm off base. I don't visit very often any longer, and admittedly I have not gone all the way through this thread.

If you are referring to the expiration dates of the condominium declarations, these documents do expire after 30 years (and for some timeshares they already have done so). The HOA is required to go through a process where the legal framework of the condominium regime is renewed. In the few cases I've seen involving timeshare, the voting percentage needed to actually "dissolve" are so high that it's incredibly difficult to do so- even if the property desperately needs to be killed off.. If enough owners don't vote to "dissolve", the renewal is approved. The biggest issue with this law in Florida was that it impacted residential HOA's because those deeds often failed to refer back to the original condo declaration- and thus made it difficult for those HOA's to enforce their rules and regulations. Timeshare deeds (when properly prepared by a legitimate closing agency) have a reference back to the condo docs and amendments.

You can find an article which explains all of this at http://www.floridabar.org/divcom/jn/jnjournal01.nsf/Author/A8A8DA7514A6718885256FF10060DF88

For those who are concerned, my understanding is that even if the renewal isn't approved- the property ownership doesn't actually end. It's the condominium regime itself that is impacted. If the property is sold, the deeded owners would receive a share of the proceeds (if any) that result. I believe the purpose of this law in Florida was to ensure that all properties were regularly reviewed to determine their highest and best use.
 
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its actually the opposite in the cases mentioned here Richard...where if enough owners dont vote (for either option)...the default is to dissolve!

now granted, I fully believe that there are plenty of CCRs out there that do indeed default to renew...or in the case where the default was to dissolve noone ever read or did anything about it so its just keepin on keepin on!

The risk however is that some crafty real estate atty/disgruntled/creative owner comes along and brings this before a court...for various reasons.
 

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As tenants-in-common, they would still own the property and be responsible for property taxes and other costs, but they would no longer have their occupancy rights.

Sez who and why not?

It is written into the Bylaws of the resorts where the default of the sunset clause is to automatically terminate. The timeshare plan terminates, so owners cannot occupy the units, but their ownership does not terminate (it's federally protected), so the owners continue with the financial obligations -- taxes, property maintenance, insurance (if they can get it) without the benefit of unit utilization.


The owners of each unit separately (now tenants in common) would have to decide amongst themselves how to use/ sell/rent the property. They could simply decide to occupy by the same TS schedule. They just wouldn't have the onerous TS management costs.

The owners could only "decide amongst themselves how to use/ sell/rent the property" before the timeshare plan terminates, and that would take a majority or super-majority vote of all owners, not just of the quorum of owners that votes. Most resorts can barely get enough owners to vote to meet a 15% quorum; meeting just a 50% majority of all owners to vote for something, anything is practically impossible. Many timeshare require a vote of 75 or 85% of all owners to amend the timeshare bylaws and declarations. It is not going to happen, and that is the problem.
 

dioxide45

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Looks like HGVC owners have no worries...
At Seaworld, they used 2094 - 99-years from inception - in their sunset clause.

"At 12:00 noon on the first Sunday in the year 2094, each Owner of a Unit Week shall become a tenant in common with every other Owner of a Unit Week in that Unit, unless all of the Owners have voted to continue the Component Site Timeshare Plan by a majority vote of the Owners present at a duly called meeting... In the event the Owners vote not to continue... the Board of Directors of the Association shall file suit... for partition."

For our Marriott's Grande Vista week it is 2056 and for Marriott's Harbour Lake it is 2060. This is actually written in to our deeds though there is more detail in the CC&Rs. At least for Grande Vista it spells out that on the first Saturday in 2056 unit owners will become Tenants in Common with the other owners. The BOD is to at no less than 30 days and no more than 60 days before this date, call a meeting of owners to vote. A quorum requires a one third of owners to vote. Owners can vote to extend the component timeshare plan for a term of 10 years. At which time the whole voting game starts again. They can also vote to otherwise dispose of the units. It gets messy if a quorum isn't met.
 

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Brian, this is also included on the deed for Foxrun/Fairway of the Mountains in Lake Lure, North. Carolina.

I remember commenting on it when I first purchased there in 2003 (I no longer own there) from Jerry Wright at Redden Realty (now Lake Lure Realty)

Still have several friends and family that DO own there....wonder what the ramifications will be?

I have a deed for Fairways of the Mountains, it indicates that it will terminate on the first Sunday in 2028. So it seems there are still about 13 years left there.
 

RLG

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My opinion is that the vast majority of timeshare owners would get a windfall if they they took advantage of the one time opportunity to terminate the timeshare and sell the property to a developer. Unfortunately, savvy owners won't be able to realize the windfall because they are in a partnership with gullible people who will be lead by the nose to do what's best for the developer.

Sheraton got the owners to remove this provision almost a decade in advance. There was discussion about here:
http://tugbbs.com/forums/showthread.php?t=167845

Here's what I had to say about it then:

Under the original documents, the owners can wait 8 more years before making any decision. If they wait, they can make the choice whether to terminate the timeshare based on their own situations and on market conditions in 2020. Instead, they are being asked to give up that choice 8 years in advance. It's not clear how any owner is better off making the decision now rather than making it based on the situation at the time.

I agree with you, however, that it will likely pass. No one ever went broke underestimating the intelligence of the average timeshare owner.

How many of the owners do you think will vote yes and then end up paying a PCC to take their unit off their hands?
 
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