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

[Niche]

That info is often not actually found described in deeds anyhow. If it exists at all, it's found within the original, underlying CC&R (Condo Covenants & Restrictions) documents associated with the establishment of the property as a timeshare facility in the first place. It ain't often gonna be found overtly and openly described in detail in deed content, except by reference (i.e., a book and pages number reference to the underlying recorded CC&R documents --- which are often 20+ pages long, btw).

The Sunset Clause was put into the CC&R because of the life expectancy of the units and the cost (assessments) to update/rehab generally 40 years. Plus timeshare is not successful or viable everywhere especially resorts which are very seasonal. If the owners feel it is time to move on and get out, then the property is sold to a third party and and the revenue minus expenses is divided amongst the owners in good standing. A lot of owners would love to walk away from distressed properties so it is not always a bad thing.

 

[Heap111]

http://www.tugbbs.com/forums/showthread.php?t=223720

I have looked over my Westin Riverfront and Westin Kierland SVN paperwork and do not see anything that resembles this, but I am not a lawyer.

 

[dioxide45]

I have looked over my Westin Riverfront and Westin Kierland SVN paperwork and do not see anything that resembles this, but I am not a lawyer.

Your deed would likely carry some sort of language like this'

each said estate succeeded by the next in unending succession by said Declaration of Condominium until 10:00a.m. on the first Saturday in 2060 on which date said estate shall terminate unless, extended in accordance with the of the provisions of the Declaration of Condominium

 

[skimeup]

I have looked over my Westin Riverfront and Westin Kierland SVN paperwork and do not see anything that resembles this, but I am not a lawyer.

Curious about what would happen to someone who is paying for their purchase when the ts runs up against dissolution. Do they still owe what's left on their mortgage? Looks like the big cheeses such as Marriott and DRI have this in hand, but smaller places?

 

[skimeup]

Curious about what would happen to someone who is paying for their purchase when the ts runs up against dissolution. Do they still owe what's left on their mortgage? Looks like the big cheeses such as Marriott and DRI have this in hand, but smaller places?

I have numerous points with Royal Holiday, consolidated over several purchases. Every time I bought and consolidated, the RTU was extended to the latest RTU in the purchase. I assume when the RTU expires, though, I am left with nothing - no property and no obligations.

However, my favorite place I own is Inn at the Opera - across the street from San Francisco War Memorial Opera House and I am an opera nut. Currently, Shell Vacations Club owns some weeks (in points) which is now actually owned by Wyndham I think. And there are also hotel units (not sure if those are unsold weeks owned by Wyndham or hold backs by management, as they rent for double or triple what I pay in my mf's. Haven't a clue as to how to get ahold of CC&R's in California but I now wonder if there is an expiration date on this place as well. There is no developer involved - every week is sold through private party, ebay, etc. Even take backs from management. But folks are paying a lot of money for those Wyndham/Shell points

 

[dandjane1]

Wyndham Ocean Walk

I went through my 6 Wyndham Ocean Walk deeds and there is no mention of a sunset or escape clause, or any wording pertaining to it in any of them. My VIP Platinum ownership has a deed associated with Ocean Walk and I don't want to lose it. The VIP membership alone has value, not to mention the location for rentals during high demand events/timeframes.

We also have deeded Platinum VIP at Oceanwalk - thanks for doing our homework for us! We're also Platinum at DRI, so we need to check on this. Does CWA suffer from this possibility of "sunset" as well? (We're Platinum there also).

 

[OldGuy]

Your deed would likely carry some sort of language like this'

each said estate succeeded by the next in unending succession by said Declaration of Condominium until 10:00a.m. on the first Saturday in 2060 on which date said estate shall terminate unless, extended in accordance with the of the provisions of the Declaration of Condominium

Is that the way it's actually worded, or did you make a mistake copying it?

I ask because I am surprised how often I see grammatical errors on legal documents like deeds.
- - - - - -
You never know what you might find in legal documents. Here's what one of our resort docs says:

7. Miscellaneous

A. Termination. Unless sooner terminated as provided herein, this Declaration of restrictive Covenants shall terminate twenty-one (21) years after the death of the last survivor of the issue of Richard Lamm, Governor of the State of Colorado, living on the date of this agreement.

Now, that's a statement that takes a little bit of time to analyze, and, when that time comes, whenever it is, who would have any idea that this clause exists???!!!

It took a little snooping, but "issue of Richard Lamm . . . living on the date of this agreement" would be daughter, Heather, and son, Scott, and it would take someone better than me to determine when the death of their last survivor would be (if ever).

 

[dioxide45]

Is that the way it's actually worded, or did you make a mistake copying it?

I ask because I am surprised how often I see grammatical errors on legal documents like deeds.

It was wrong in my post. I copy and pasted but since it came from a scanned document, I had to make a lot of fixes and must have missed that one.

each said estate succeeded by the next in unending succession by said Declaration of Condominium until 10:00a.m. on the first Saturday in 2060 on which date said estate shall terminate unless, extended in accordance with the of the provisions of the Declaration of Condominium

 

[curtjones]

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.

I am not convinced this is an extremely real issue that will impact many many resorts in florida where most have no idea it even exists, much less the ramifications of it going into effect on the scheduled date (which should start in 2020...and thats only 5 years away)

This in essence, was written into most Timeshare governing documents as a way to ensure the timeshare was not a "for life" issue and set dates in the ranges of 25-50 years for the timeshare to completely terminate unless a vote was passed from the owners to have it continue to operate.

While this sounds very simple, why wouldnt owners vote to keep it going if it was a perfectly sound timeshare? As you have seen in the past, some timeshare governing documents state that in order to pass votes like these, an overwhelming majority of owners must participate int he vote and vote yes.

This is simply not only unreasonable, but in most cases impossible to get these high percentages due to a wide variety of reasons. Heck in most cases resorts claim its impossible to even contact 90% of its members, much less get them to not only read a letter to vote, but send it back in time to have the vote counted.

What does this mean if this clause is in your Timeshares governing documents? This means your timeshare will BY DEFAULT cease to operate as a timeshare when this kicks in and for legal/insurance/etc reasons...cannot be allowed to operate any longer as a Timeshare.

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 dont look at you with confusion).

I am also hoping the gentleman who spoke about this issue at the presentation will chime in here on the discussion should it pick up.



List of Resorts owners have confirmed this Clause to exist in:

1. Foxrun/Fairway of the Mountains in Lake Lure, NC
2. Wyndham Kingsgate - Williamsburg VA
3. Barrier Island Station-Duck Resort - Duck NC

I may be able to add something to this discussion. I am a board member of an HOA in Florida. We recently received some information from our lawyer concerning this topic. Florida has law on the books governing HOA's and it was recently changed to address this issue (the old law had language indicating that the HOA would terminate 30years after it was established unless voted to continue by the HOA members). I am assuming that our time shares are governed by the same laws since they have an HOA and all HOA's in florida must comply with these laws. The original text on sunset rules probably came from the florida HOA law. The text from the lawyer is as follows:

The Governor signed into law two bills that passed in the 2018 legislative session impacting
community associations. HB 617 expands the procedures for the preservation and revitalization
of covenants and restrictions under the Marketable Record Title Act (“MRTA”) to all property
owners’ associations, provides homeowners’ associations with an easier way to preserve existing
restrictions, and mandates a yearly consideration of preservation of the covenants by all
homeowners’ associations. HB 841 updates numerous sections regarding the governance and
operation of community associations.
The changes to homeowners’ association laws required by these bills are detailed below.
Commentary is italicized. Should more information or context be necessary, please consult the
full version of each statute instead of these isolated pieces.
COVENANTS AND RESTRICTIONS (MRTA)
(effective October 1, 2018)
MRTA now defines “community covenant or restriction” and adds a definition for “property
owners’ association,” a term which is then substituted for “homeowners’ association”
throughout the chapter.
See: §712.01(1) through (7). Definitions
The board is no longer required to approve the renewal of covenants by a two-thirds vote, nor
must affected owners receive notice of the board meeting to vote on the issue of preservation.
There is a new §720.3032 which can be used as a substitute for the requirements in §712.05 and
§712.06. Another substitute for those requirements is an amendment to a covenant or restriction
which is indexed under the legal name of the association and references the recording
information of the covenant to be preserved.
See: §712.05(1) through (4). Effect of filing notice
See: §712.06(1) and (3). Contents of notice; recording and indexing
Once a year, a homeowners’ association’s board of directors is now required to consider
whether to avoid covenant extinguishment under MRTA by filing a notice to preserve; this
consideration is mandated to take place every year at the meeting after the board’s annual
meeting. Note: this is an important change for Associations. The text is below.
§ 720.303. Association powers and duties; meetings of board; official records; budgets;
financial reporting; association funds; recalls
(2) Board meetings.—
(e) At the first board meeting, excluding the organizational meeting, which follows the
annual meeting of the members, the board shall consider the desirability of filing notices
to preserve the covenants or restrictions affecting the community or association from
extinguishment under the Marketable Record Title Act, chapter 712, and to authorize and
direct the appropriate officer to file notice in accordance with s. 720.3032.
Newly added §720.3032 creates a statutory form that homeowners’ associations are to use to
provide notice of preservation. Completing and filing this form is a substitute for the notice
requirements in §712.05 and §712.06.
See: §720.3032(1) through (4). Notice of association information; preservation from
Marketable Record Title Act

Hope this helps.

 

[TUGBrian]

ha, its amazing how a typo of "not" vs "now" really changes things!

thanks for the info on the new laws!

 

[Heap111]

Your deed would likely carry some sort of language like this'

each said estate succeeded by the next in unending succession by said Declaration of Condominium until 10:00a.m. on the first Saturday in 2060 on which date said estate shall terminate unless, extended in accordance with the of the provisions of the Declaration of Condominium

I have re-read both of my Warranty Deeds and there is no terminology of this nature in either document....

 

[brianfox]

Is that the way it's actually worded, or did you make a mistake copying it?

I ask because I am surprised how often I see grammatical errors on legal documents like deeds.
- - - - - -
You never know what you might find in legal documents. Here's what one of our resort docs says:

7. Miscellaneous

A. Termination. Unless sooner terminated as provided herein, this Declaration of restrictive Covenants shall terminate twenty-one (21) years after the death of the last survivor of the issue of Richard Lamm, Governor of the State of Colorado, living on the date of this agreement.

I can easily imagine some part of the Apple/Microsoft/Google agreements we so easily accept on our phones (without reading) selling us or our issue into indentured servitude.

 

[tahoeJoe]

is this issue different than the 75 year Right to Use (RTU) clause many Hyatts have?

 

[OldGuy]

is this issue different than the 75 year Right to Use (RTU) clause many Hyatts have?

Assuming you are asking if the Sunset Clause is different than RTU, yes, it is.

RTU applies to each individual's "Right To Use" their ownership, and when that expires.

Sunset Clause applies to the entire resort, that at some point in time the owners have to decide to continue it as a timeshare, or not.

 

[dropngo]

SUBJECT TO that certain Ground Lease which by its terms ends on December 31, 2075 by and between HTS-Ground Lake Tahoe, Inc., a Delaware corporation and HTS-Lake Tahoe, Inc., a Delaware corporation authorized to do business in the State of Nevada; dated January 28, 1998. Official Records of Washoe County, Nevada (“Ground Lease”), and subject to easements and restrictions of record.

THIS CONVEYANCE IS MADE SUBJECT TO THE FOLLOWING:

1. All of the terms, provisions, conditions, rights, privileges, obligations, easements, liens and limitations on title as set forth in the Declaration and the Plat, including the right of HTS-Lake Tahoe, Inc. to add units to the Condominium and diminish the Grantee’s ownership interest in the Common Elements as provided for in the Declaration.

2. The Ground Lease which among other things effectively limits the term of the Declaration and the Condominium and the Time Share Plan created by Declaration. Upon expiration or termination of the Ground Lease, the Unit Week conveyed hereby and any ownership and occupancy rights associated therewith shall also terminate or expire and Grantee or the Association shall have no right to redeem any reversion, nor will Grantee or the Association have any right to use or remove any improvements after such expiration or termination.


I copied above contents from my deed of Hyatt Sierra Lodge. As today 56 years ground lease remaining on HSL. Now my husband & I are 65 years old, so if we are lucky we will continue to enjoy our week till we age 121!

 

[OldGuy]

Now my husband & I are 65 years old, so if we are lucky we will continue to enjoy our week till we age 121!

or not

 

[dropngo]

or not

As long as Hyatt/Marriott keep up HSL in tip top condition. Maintenance fee are lower than renting. If my children do not want to inherited it, they can give it away free here!

 

[OldGuy]

As long as Hyatt/Marriott keep up HSL in tip top condition.

& as long as you keep yourselves in tip top condition until you're 121.

 

[OldGuy]

Someone, elsewhere, asked if I was planning on introducing legislation.



Regarding Sunset Clauses, and the dissolving or extending of legacy resort timeshare plans in Florida, I did not have to. In 2017, legislation regarding that passed 115-0. There was a mention that legacy resorts, Sunset Clauses, and all that stuff, affects more than 300,000 timeshare owners in Florida.

https://www.flsenate.gov/Session/Bill/2017/829/Analyses/h0829e.COM.PDF

 

[Xan]

I wonder how this affects Hawaii Timeshares that originally started out as a Leasehold property but the Associations purchased the land and now they are Fee Simple?

My concern is with the Pono Kai Resort and its 3 main associations, in Kapa’a, Kaua’i, Hawaii.

The associations did not inform the owners that they went through with the purchase from Leasehold to Fee Simple, (at least I never was notified, and I had to ask the two timeshare associations I own at the Pono Kai Resort), and Hawaii law (as it was told to me), doesn’t have to include that newer information or dates of occurrence on the several page deed.

A few plus years ago I finally got around to legally changing my name on my Pacific Fantasy unit I purchased in the late 1980’s from the developer (as a foreclosure), and also removed a friend that was on the deed mistakenly as my husband (that had to be noted as a mistake), plus finally put my “real” husband on the deed. (That’s how I found out a lot of information!)

We also own two Pono Kai Association units, but when we purchased them for pennies off eBay years ago, there was no issues getting the correct names on those deeds.

I have all my original documents from when I purchased my Pacific Fantasy unit, but since developers and associations had changed a couple of times, hence Pacific Fantasy (PFTSOA) only having 17 units left, and they don’t predict them to ever merge with the Pono Kai Association (PKIOA). The only other major association in the complex is the major Apartment Owners Association (AOA) that covers the whole Resort and everyone must belong to that association, (including whole owners, VI owners, Bluegreen owners, which I’m assuming those two last ones probably belong to PKIOA for voting), any fee is automatically rolled into your yearly individual associations maintenance fee.

I wonder if that is where I would find out if there is a sunset clause? Considering they went through the process many years ago to purchase the land the resort sits on, I don’t foresee a sunset clause with any separate association within the property that holds the whole Pono Kai Resort.

If anyone knows anything different or has any information, considering our associations are very poor at communication with the owners, even to let us know who won the current board members positions, please feel free to let me know, even if you message me privately to not clog up this feed. (The Resort is very well maintained though, and I love my vacation time there!)

I miss the old days of the first decade plus with Pacific Fantasy and the constant newsletters, (all snail mail back then), or at least a minimum quarterly, plus the proxy info, and the maintenance fee time we always got detailed information of what was going on and who our board members were and how to contact them easily. The Pono Kai Association isn’t any better at keeping us informed.

Thank You for anyone that has information.

 

[OldGuy]

I have not looked into this one, but it sounds like it gave owners more options:

1. In February 2018, the board of directors of Cedar Village Resort in Beech Mountain, North Carolina accepted a “tender offer process” from an investment company that allowed the owners to decide simultaneously what to do with their timeshare interests. The owners were given options to either sell or exchange their timeshares outright, remain as an owner and participate in proceeds from the eventual sale of the property, or acquire whole units at the resort. This allows the resort to continue operations until the sale of every unit is complete, thus giving the remaining owners continued enjoyment of the resort.

 

[goaliedave]

Do I understand correctly that the resorts where weeks owners have exchanged for points club trust ownership with DRI, (etc), that DRI owns those votes at the HOA meeting and so (likely) having a majority of votes they will vote to continue the timeshare model, in the same way they elect their own choices to the HOA Board of Directors?

 

[Cassie2019]

I realize the original post is old but still relevant.
I received the sunset clause letter last summer for my Barclay Towers timeshare in Virginia Beach. I had no idea this clause even existed! I own 3 prime summer weeks there and I really would like it to continue. My family and I have been going every summer for the past 20 years. It’s our tradition. Hopefully it remains a timeshare.

 

[jp10558]

As we're getting to 10 years past the original post, I'd be interested in more people reporting what happened / is happening cause we're on some of these dates now.

 

[theo]

I realize the original post is old but still relevant.
I received the sunset clause letter last summer for my Barclay Towers timeshare in Virginia Beach. I had no idea this clause even existed! I own 3 prime summer weeks there and I really would like it to continue. My family and I have been going every summer for the past 20 years. It’s our tradition. Hopefully it remains a timeshare.

Such sunset clause correspondence may contain notification of imminent termination of the timeshare or, far more often, formal notice of a required vote by owners to amend (...or decide not to amend) the existing CC&R's to "extend" the sunset date currently identified within those existing, officially recorded CC&R's.

Can you elaborate on the intent / nature / actual content of the "letter" you received last summer regarding "sunset" at your particular timeshare property?