Tanked: resorts that have closed their doors.
You are probably correct, way less than 1%
Now, define "need to close their doors".
Two resorts on the OBX have tanked in recent years and not for any reason mentioned in this thread. The problem was that they had the same management company and when both were severely damaged in a hurricane, that management company used a contract provision to skim huge amounts from the insurance proceeds which left them financially gasping for air. In one case, the original developer and in the other a secondary developer then moved in for the kill. Both were rebuilt and reopended for business, but with shoestring finances due to the the skimming by the management company, which was fired at both resorts. The developers had membeship lists and started buying up weeks to take over, and both started with ownership of a block of weeks.
In the case of Sea Ranch II, the HOA had won every round in some ongoing litigation, but the actions of the management company impacted weeks and some commercial space they owned so they sued both the HOA and the management company in a new lawsuit, pointing out that the contract provision used by the management company for the skimming was illegal in North Carolina. The management company settled out of court for an undisclosed sum with the developer. The HOA could have won the lawsuit probably, but was in tight finances from being skimmed itself and the added burden of the litigation costs led it to run out of operating funds. Along the way, the HOA board had put the developers motion to close the resort, sell it, and distribute the funds to a vote and the members voted it down, but facing that financial situation, they finally had to go along with that, as the resort would likely have remained closed until the whole thing worked its way through the appellate courts.
In the case of Bodie Island Beach Club, part of the problem was that it was a mixed use resort and the whole owners, who were a majority of the BOD wanted to crash the timeshare part of it, which was 3/4 of the resort and make it whole ownership and they went along with a secondary developer to do just that. They started with the 1/4 representing the whole owners and a further block owned by the secondary developer, and that developer used a members list provided by his predecessor to mail out letters trying to buy weeks to get control. Thanks to the skimming, the resort ran out of operating funds and closed at the end of summer. The management company was fired, but before anything could be done to reopen, the secondary developer filed a lawsuit asking that the court require the HOA to allow him to vote his weeks in the upcoming annual meeting even though he had not paid m/f's on them. The whole owner majority on the HOA board did not answer the lawsuit and let the developer win on that issue by default, but the developer's lawyer went further and asked the court to also order something that had not even been asked for in the lawsuit and that was a vote on whether to rebuild the resort AFTER the rebuilding had already happened under the provisioins governing resorts substantially destroyed, which has a much lower majority needed to pass and the judge granted that as well. It took some weeks after that for word to travel that their BOD majority had sold them out, so the timeshare members organized and fought the developer in court. The judge who had entered the order had rotated out of the district and the legal problem was that no other judge would touch changing his order, or even allow the individual timeshare members to join the lawsuit as parties. I have read the transcript of the hearing on the original default motion, and it is clear to me that the main thing the judge relied on in that order was the fact that the resort had closed due to lack of funds. Legally that did not justify what he did, but it is clear it was why he did it. Despite well organized timeshare members fighting to keep their resort and contributing to the legal expense fund, the various legal efforts failed, and the developer bought enough weeks to vote to close and sell the resort. While there were probably enough legal errors to have won on appeal, the problem became the inability to post the appeal bond necessary to stop the sale. The members simply did not have the funds to do that, as it was several million dollars,
At both resorts, large numbers of members fought vigorously to save them, and it was not just summer owners who pitched in. A crooked management company and grasping developers were the problem, coupled by a Benedict Arnold HOA BOD at Bodie Island Beach Club.
