What happens if my home resort closes or is otherwise shut down?

[aero_captain2003]

I was having a discussion with some relatives about my points purchase at Wyndham Cypress Palms (my home resort), and one thing that I was asked was, "what happens if something happens to your resort?"

I honestly couldn't answer this question.

If something happens to my resort (i.e. destroyed due to natural disaster, goes out of business, is torn down, etc.) what happens to my ownership?

 

[ronparise]

To answer a question with a question...What happens if your beach cottage washes away in a hurricane?

Its gone.

I own 3 converted fixed weeks at one wyndham resort. Not to make too light of your question, but If the place washes away I guess id lose the Dollar I invested in the contracts

 

[chellej]

A good example is perigrine resort on the texas coast. It sustained severe damage during hurricane ike. They really had 2 choices to liquidate and sell the property in which case the proceeds would be diffied up between the owners or as they did take the insurance and rebuild. I bieleve the owners lost the use for 2-3 years and still had to pay maintenenace fees but they did eventually get everything rebuilt.


Now if a company goes bankrupt, that is a different situation and most likely you would loose your investment.

There are clauses in your bylaws on how some of these things would be handled

 

[aero_captain2003]

A good example is perigrine resort on the texas coast. It sustained severe damage during hurricane ike. They really had 2 choices to liquidate and sell the property in which case the proceeds would be diffied up between the owners or as they did take the insurance and rebuild. I bieleve the owners lost the use for 2-3 years and still had to pay maintenenace fees but they did eventually get everything rebuilt.


Now if a company goes bankrupt, that is a different situation and most likely you would loose your investment.

There are clauses in your bylaws on how some of these things would be handled

In the event that it DID rebuild, my ownership would go on as stated in my contract, more than likely?

 

[LannyPC]

Some might wonder though if the resort would use the insurance money to rebuild the resort (assuming it was destroyed by a natural disaster) or if the insurance money would be used to "buy" the property from the owners and totally close the resort down.

 

[bogey21]

I own at Peregrine and advocated shutting down and distributing the proceeds to the owners. I expected a major Special Assessment. I was wrong. The Board and Management did an amazing job in rebuilding the Resort. We did lose a couple of years use and did have to continue to pay our Maintenance Fees while it was closed down, but all in all it worked out ok.

George

 

[aero_captain2003]

I own at Peregrine and advocated shutting down and distributing the proceeds to the owners. I expected a major Special Assessment. I was wrong. The Board and Management did an amazing job in rebuilding the Resort. We did lose a couple of years use and did have to continue to pay our Maintenance Fees while it was closed down, but all in all it worked out ok.

George

And escaped any major fee increases? Wow, that sounds pretty amazing to me.

 

[Passepartout]

If OP's home resort were washed away, burned down or otherwise destroyed, being a Wyndham property, I'd surmise it would be rebuilt, MFs would continue, and being part of a major group, he'd be able to use other resorts- just not his own until it is rebuilt. Wyndham has plenty of extra capacity- evidenced by them bulk depositing, renting, and accepting exchanges from other TS system owners.

Kyle, there are enough REAL risks to vacationing in general and TSing in particular, that there's no use worrying about the highly unlikely. In other words, you are far more likely to have an auto accident driving to your resort than it being destroyed before you get there.

Jim Ricks

 

[massvacationer]

OP: Cypress Palms is an established, stable, resort that just had most/all of its units renovated. I would call this a low-risk place to own. Maint fees are middle range (not the lowest in the wyndham network - but little risk of big swings or surprises). You'll be fine with this purchase.

 

[aero_captain2003]

OP: Cypress Palms is an established, stable, resort that just had most/all of its units renovated. I would call this a low-risk place to own. Maint fees are middle range (not the lowest in the wyndham network - but little risk of big swings or surprises). You'll be fine with this purchase.

Being in a vulnerable area of the country, my thoughts are that it could someday be a real worry. Think of New Orleans in 2005. There are establishments in that area that will most likely never be rebuilt. I wonder how the owners fared - Were they offered new home resorts? Were they paid out in a settlement and had their contracts cancelled?

The above are rhetorical questions based on a real situation. It could happen, and I just would like to figure out the best way to handle the situation before it happens, not after.

 

[vacationhopeful]

If OP's home resort were washed away, burned down or otherwise destroyed, being a Wyndham property, I'd surmise it would be rebuilt, MFs would continue, and being part of a major group, he'd be able to use other resorts- just not his own until it is rebuilt. Wyndham has plenty of extra capacity- evidenced by them bulk depositing, renting, and accepting exchanges from other TS system owners.

Jim Ricks

WRONG ANSWER.

Case in Point: Wyndham Santa Barbara - was blown away via Hurricane Wilma. Chain link fence was installed. 3+ years closed. Thousands of dollars in special assessments. MFs paid for all years closed were paid by owners. Fixed Week owners totally closed out of any usage. No RCI weeks. No usage at other Wyndham resorts. Just pay the monies.
Converted points owners? Don't remember, but I am sure there are TUG members who owned converted Fixed Weeks.

Almost all employees let go (as Ft Lauderdale Beach Resort hired several, who still work there).

I brought several fixed weeks off eBAY after the special assessments were paid. No communication to owners other than buy Wyndham Points or pay another Special Assessment.

Added on edit:
Work included (some not covered by insurance estimates as considered upgrades but required by local/state code to reopen):
New hurricane rated windows and patio doors. (not cheap
Totally new kitchens.
Totally new baths including tile showers (reused ugly jetted tubs).
Totally new tile floors.
New interior door including entrance door to units.
New interior soft good - furniture, TVs, drapes, kitchen stuff.
New HVAC for each unit - after most were found to not work.
Plumbing - not sure about rough plumbing.
Not sure as to electrical wiring; new smoke alarm system.
Ugly jetted tubs were recoated 2 years after resort was reopened.

 

[Passepartout]

WRONG ANSWER.

Case in Point: Wyndham Santa Barbara - was blown away via Hurricane Wilma. Chain link fence was installed. 3+ years closed. Thousands of dollars in special assessments. MFs paid for all years closed were paid by owners. Fixed Week owners totally closed out of any usage. No RCI weeks. No usage at other Wyndham resorts. Just pay the monies.
Converted points owners? Don't remember, but I am sure there are TUG members who owned converted Fixed Weeks.

WOW! That is the pits- and a terrible way to treat owners. I would have thought Wyndham's insurance would have rebuilt quickly and the owners would have been made whole- even with a likely SA. So sorry if my assumption misled the OP.
Jim

 

[aero_captain2003]

Makes me glad I went the points route...

 

[vacationhopeful]

WOW! That is the pits- and a terrible way to treat owners. I would have thought Wyndham's insurance would have rebuilt quickly and the owners would have been made whole- even with a likely SA. So sorry if my assumption misled the OP.
Jim

A major direct hit. The immediate 2 motels south and the resort directly across the street from those two motels (3 different masonry buildings) were totally destroyed as well. All three are vacant lots now on A1A. The Wyndham Santa Barbara insurance was not enough to rebuild without the special assessments and the new level of construction code updates required.

Also took out both North Oceanview and South Oceanview buildings at Wyndham Sea Gardens. North Oceanview had more damage and was reopened (after a rebuild) in late 2009. South Oceanview had some water damage - was repaired. One of those buildings lost it roof. Both also got hit with special assessments (as one HOA; Sea Gardens has a HOA for each building group - Cabanas, Waterfalls, Key West, Ocean Palms are the others) - the SA money was spent rebuilding North Oceanview.

 

[Carolinian]

Hurricane Isabel did major damage to a number of resorts on the Outer Banks some years ago Here is a rundown on the results at each resort:

1) Dunes South - all oceanfront units sustained substantial damage and were condemned. As they were still structually sound, they were thoroughly renovated with the insurance money. Those units were out of use for owners for about 6 months, but the resort tried to accomodate those owners as possible in uneffected units while their own units were being renovated. No special assessment.

2) Ocean Villas I - enitire resort condemned, but still structually sound except one unit on the oceanfront was a total loss, and CAMA regulations did not allow it to be rebuilt as its former site was then too close to the ocean. Owners of destroyed unit were paid a share of insurance proceeds and deeded their weeks back to HOA. Thorough renovation of other units took about 8 months. No special assessment necessary.

3) Ocean Villas II - oceanfront building, containing 12 of the resort's 15 units condemned. Other building had moderate damage. Resort closed 6 months for renovation. Structural soundness of oceanfront building questioned by local authorities but structural engineers brought in gave it the green light. No special assessment. Indeed, good negotiating skills by HOA rep got major work unrelated to the hurricane done out of the insurance money as well by agreement by contractor.

4) Bodie Island Beach Club - all three buildings had substantial damage, and local autorities questioned structural soundness of oceanfront building. Structural engineers examined oceanfront building and gave it the green light. Thorough renovation undertaken, and oceanfront and northern wing buildings reopened in 10 months, with minor electrical issues remaining on south wing building. After two months, closed again, due to insufficient operating funds. Management company had written a clause into their contract giving them a substantial rakeoff of insurance proceeds for ''supervision'' and they had taken that out of HOA operating acoount. At that point, a former secondary develooper of the resort, the whole owners who owned several of the units, and a local investor got together to try to crash the resort and the investor went to court and demanded a vote of members on whether the resort had been substantially destroyed and should be closed. The investor started aggresively buying up weeks. A majority of the HOA board was whole owners at that point and they did not even answer the lawsuit, so a vote was ordered by the court. The investor bought up enough weeks, that they got the votes to close the resort and sell it at the courthouse door. Investor bought it for a song and what proceeds there were got distributed among the members. The investor deeded the whole ownership units back to the whole owners. The former developer got doublecrossed and did not get what he expected out of the deal.

5) Sea Ranch II - resort building severely damaged, and local authorities questioned structural soundness of it but structural engineers gave it the green light. Former developer made a bid to close it and sell it off but was outvoted by members. Was the last of the damaged resorts to reopen. Same management company as Bodie Island Beach Club, and same rakeoff from operating account. Management company had also failed to properly apply insurance proceeds to some commercial areas of building still owned by former developer, leading to a lawsuit. HOA dumped management company and brouoght in VRI. Between legal fees and rakeoff by former management company, ran out of operating funds and closed again. With lawsuit and legal fees, a special assessment was determined not viable, and resort stayed closed. Agreement was reached for sale of resort and distribution of proceeds among members.

6) Golden Strand and Strand South - had major damage and was closed about 5 months for major repairs. There was a moderate special assessment covering a few things that were not covered by insurance such as the pool. Their oceanfront pool had been washed away and they had to rebuild it at a new site on the highway side of the buildings. They were the only resort to lose a pool in the hurricane, although Ocean Villas II had lost one earlier that year in a Nor'easter.

No other resorts had significant damage from the hurricane.

 

[vacationhopeful]

Carolinian:
I am sure there were discussions as to if Wyndham Santa Barbara was structurally sound. It sat for 2+ years without any visible activity behind the chain link fence. It was originally built as a motel, 16 single rooms per floor which was reconfigured as 4 studios, 4 one bedroom, and 2 two bedrooms.

After Santa Barbara was reopened, the other 3 neighboring buildings were torned down. I was staying at Wyndham Santa Barbara during some of that destruction - it was during the first 2 months after it had reopened.

 

[Carolinian]

It does not take 2+ years to get structural engineers in to see if a building is structurally sound. On the Outer Banks, it was more like 2 weeks.

Carolinian:
I am sure there were discussions as to if Wyndham Santa Barbara was structurally sound. It sat for 2+ years without any visible activity behind the chain link fence. It was originally built as a motel, 16 single rooms per floor which was reconfigured as 4 studios, 4 one bedroom, and 2 two bedrooms.

After Santa Barbara was reopened, the other 3 neighboring buildings were torned down. I was staying at Wyndham Santa Barbara during some of that destruction - it was during the first 2 months after it had reopened.

 

[vacationhopeful]

It does not take 2+ years to get structural engineers in to see if a building is structurally sound. On the Outer Banks, it was more like 2 weeks.

You and I know that . But perhaps some resort management politics were involved :ignore: .

I know I was surprised as to how much "Wilma work" on big highrises in Pompano Beach was still being done 4 years after the storm hit. A two tower highrise condo building 1 block south of Wyndham Sea Gardens only finished exterior repair of balconies and replacement of all glass about a year ago. After the hurricane hit, much more plywood existed on the glass buildings did actual glass. Even without elevator service, both buildings remained occupied - during the entire "repair".

 

[Tia]

Hurricane Isabel did major damage to a number of resorts on the Outer Banks some years ago Here is a rundown on the results at each resort:
.....

Were the Outer Banks resorts in any resort group or individually controlled?

 

[Carolinian]

Were the Outer Banks resorts in any resort group or individually controlled?

Golden Strand / Strand South, Ocean Villas I, and Ocean Villas II were individually controlled, with hands-on HOA boards and self managed with a hired manager rather than a contracted management company.

Bodie Island Beach Club, Sea Ranch II, and Dunes South all had the same management company, and all subsequently terminated their relationship with that management company.

At one time, Dunes South, Ocean Villas I, and Ocean Villas II were all managed by First Flight Builders, which had developed them, but at all three resorts long before the hurricane, the members had organized and kicked the developer out. The other resorts are not related to any other timeshare, on or off the OBX.

 

[california-bighorn]

What would the MFs be used for?

I own at Peregrine and advocated shutting down and distributing the proceeds to the owners. I expected a major Special Assessment. I was wrong. The Board and Management did an amazing job in rebuilding the Resort. We did lose a couple of years use and did have to continue to pay our Maintenance Fees while it was closed down, but all in all it worked out ok.

George

During the time the resort was shut down I can see paying maintenance fees to pay for the property taxes, but overall shouldn't the MFs have been greatly reduced? I mean there would not be any reservations, housekeeping nor landscape staff that needed to be paid and there was nothing to repair nor maintain since it was all new.

 

[Carolinian]

There are a couple of other issues that timesharers should consider,
1) how can a resort close or shut down
2) how are the assets divided

On the first issue, there are really three sets of laws that apply. The Uniform Condominium Act, which all 50 states have adopted, applies to all timeshare resorts organized after it was adopted in that particular state (roughly mid to late 1980s depending on the state). Prior to that, timeshare resorts were under state laws that fall in two groups. The largest group were those based on the HUD Model Condominium Act. NC is one of them, so it is the one I am familiar with. The smaller group of states had laws based on the Puerto Rico condominium laws.

Closing a resort in most circumstances requires a supermajority. Under the statutes based on the HUD model act, it take unanimous consent. Under the Uniform Condominium Act, it is a substantial supermajority, 75% if memory serves. I have never read any of the statutes based on the Puerto Rico laws, but my understanding it was stricter than the later Uniform act.

If a resort is substantially destroyed, and the test for that is stringent, then the vote required is less but still a supermajority, and passage of a resolution requires an affirmative vote at or above the supermajority of all owners, meaning an absention or someone who could not vote because they were not current on m/f counts as a ''no'' vote.

On the second issue, if a resort is closed, all owners are paid based on their ownership percentage. Whether it is a prime red week or a dog off season week does not matter. Some smaller resorts deed all weeks as undivided interest in the entire resort, so those are easy to do the math on, but most resorts deed weeks based on an undivided interest in a particular unit, and that unit's relationship to ownership of the totality of the resort is included in other legal documents, so it may take more detective work to figure out percentages. So, if a resort is closed and sold, then blue week owners come out way ahead and prime red week owners take it on the chin.

 

[bogey21]

During the time the resort was shut down I can see paying maintenance fees to pay for the property taxes, but overall shouldn't the MFs have been greatly reduced?

The MFs helped fund the reconstruction. Reduced MFs = Special Assessment. Pick your poison. The worst is pay MFs and have a Special Assessment. Perregrine avoided this double hit.

George

 

[Carolinian]

The important thing is to have the resort properly insured. After a major disaster, several big disaster repair contractors come in and look for major business. They will seek out the timeshares. These guys will wheel and deal and absorb the deductibles in order to get the work if you are fully insured. Some things, however, cannot be insured, like swimming pools. Those will have to be paid for otherwise if they are destroyed. If an HOA has to pay a SA to cover deductibles, it means either that they did not properly insure the resort or that they had poor negotiating skills.

 

[ghopfer]

Having owned at Santa Barbara Resort prior to the "rebuild" there are a few comments to be addressed. The MF during the shutdown period WERE substantially reduced. There was a special assessment but if my records are correct it was only about $1000 for a one bedroom unit, and for that the resort was completely redone. It was actually in better shape than when we originally purchased shortly after it was converted. We understand that the main delay was to due with having to meet the upgraded code requirements for hurricane protection, that was why the delay as it required substantial redesign, not merely replacement.

We had converted from fixed week to points some time prior to the damage and we lost no ability to use those points at other Wyndham resorts or for RCI exchanges. Points are points. As previously mentioned fixed week owners were out for the duration, perhaps a reason to consider a point system