Kaanapali vote to offer 33 units as float

[ocjohn]

John, did your better half read this paragraph?

Yes he read it before I posted it and said it was correct (regarding don't let quorum happen). John

 

[dahntahn]

I sent the following e-mail to Lisa Trosset and will report on the response if and when I receive it:

I have four questions and do not feel that I have adequate information to vote. I also feel that this is true for the other owners.


My first question is as follows:


Your e-mail states the following:


“The usage rights you have for your fixed week, floating unit type will not be effected by this change.”


Based on this statement, as a fixed week owner I can continue to use the fixed weeks in the same floor band as I currently do if this passes. Is that correct? My confusion is that it appears that the following language is being removed from the current rules:


“In the event that the Resort Agreement is terminated (letters bolded by me) in accordance with its terms, the owner of each Timeshare Interest shall nevertheless retain the exclusive right to reserve and use a Fixed Week in a Resort Unit of the same Resort Unit Type in which the Timeshare Interest is owned."


What does this mean and if it means that we are less protected in the case of a sale then we currently are, how can you say that our usage rights are not changed?


My second question has to do with maintenance fees. It would seem to me that floating week users have less of a sense of ownership then fixed users and as a result, maintenance costs and fees would increase under the proposal. Do you have data that would either support or refute this?


My third question is how units are assigned today and how they would be assisgned when some of the weeks are floating and some are fixed. Please describe that to me.


My fourth and final question is specifically which units are included in the 33 that are being proposed for floating.


I look forward to your answer. I believe that this information is relevant to all owners and that you should provide this information and other relevant Q&A to all owners prior to the vote so that we can make good informed decisions. I believe that a failure to do this could invalidate the outcome of the vote.

I hate to sound like the grammar police, but in the line # 5 above the spelling of the word "effected" makes the meaning of the sentence as it stands to be your rights will NOT be carried out. You want the spelling to be "Affected" which would mean that your rights will be protected. Just say'in.

 

[Sapper]

I wouldn't even be surprised if the developer and HRC are already working in concert behind the scenes and have a buyer lined up once this thing passes.

Yeah... Besides owning a Hyatt unit in Key West, I don't have a bone in what appears to be becoming a legal problem for the Hawaii owners. However, I'm going to put my two cents in anyway.

I have been in the board room when high level discussions and planning are being done, both when building a company up and when the company is being pulled apart. First, the strategy for what we are seeing was probably planned months ago. Second, with out seeing the meeting minutes and notes (assuming they didn't kick the secretary out of the meeting when this stuff was discussed) we are all just playing speculation checkers while they are playing high level chess. We are not even on the same game board with the developer, management company, and who ever is financially backing this. The only way to be on the same game board is to band together, hire some damn good lawyers, and fight to have a place at the table. Otherwise, the owners are just pawns on their chess board.

 

[WalnutBaron]

And the problem is that the vote takes place exactly three weeks from today. Not much time, unless--as was suggested here--we move for a temporary injunction to stop the vote before it happens to give time for clarification.

 

[Kal]

Let's see what Lisa Trosset has in her reply. My guess is there will be double talk and "everything will be alright". If she was protecting the interest of the homeowners, she would clearly address each issue and develop an approach to full transparency. A reasonable person would propose the vote be postponed until the homeowners have an opportunity to review a full and complete disclosure.

Okay Lisa, you're on the count down clock!

As an alternative course of action here's what I recommend:

- Send a copy of the list of Lisa's questions to Andrew Carter, Director of Association Compliance
- Tell him he needs to step in and assure there is full and complete disclosure to the homeowners
- Ask for a delay in the vote

I'm not a Maui owner but I am concerned this game plan if successful will expand to other Hyatt properties. Maybe it's a situation where they don't have confidence in the Pure Points fiasco, and are desperate to get Maui in the PPP bucket as bait. There would be a huge incentive for ILG to sell the Hyatt System but all the legacy deeded weeks doesn't make it very attractive to a new buyer. Then again, ILG could do a behind the curtain shell game and sell Hyatt to itself, thereby triggering the Maui meltdown to points.

 

[WalnutBaron]

Great advice, Kal, as always. I was thinking about sending out a "call to action" among Hyatt owners, since I agree with you that the machinations being foisted on HKB owners are only the first step in master plan by ILG that could potentially affect all HRC owners.

The problem is threefold: 1) most owners will say 'this is an issue affecting Ka'anapali owners only, and it's their problem to solve' so why should I be concerned? 2) the number of Hyatt owners that even realize there is such an ominous developing threat is literally a fraction of 1%; 3) there is so little time to organize effective opposition before the vote 20 days from now.

What would the call to action entail?

1. Hire a highly capable attorney familiar with timeshares, how they work, and the laws in the big states where most timeshares reside--Hawaii, Florida, Nevada. Have the attorney review the documents HKB sent to its owners a couple of weeks ago, particularly the clause that would remove fixed weeks usage in the event of an ownership change.
2. Request a temporary injunction to halt the vote on August 1 to allow time for complete disclosure and full consideration by HKB owners before the vote is held.
3. Seek to have ILG/Hyatt conduct a webinar/call-in meeting with owners to provide direct answers to the questions posed by gdonner as well as others so that this proposed action is fully disclosed and fully understood.

The issue, of course, is who pays the attorney? My own feeling is that HKB owners are going to need to take the lead on this and can certainly ask the rest of us to contribute for the good of the cause. I, for one, would be willing to help but this is not my fight right now and I think HKB owners will need to be the ones in front on this looming situation.

 

[ocjohn]

Lisa Trosset is the president of the owners association. She is also an employee of the developer. I've noticed the same thing when we bought a new house for a developer, it's common. But as president, she has a fiduciary duty to all owners in the association. Davis Sterling dot com has a nice summary on that I just found.

I would think the easiest thing to do now would be to ask that the association hire an independent attorney to prepare a a clear "pros and cons" assessment of the proposed amendment, and to delay the vote until that can be distributed to all owners.

 

[dagger1]

"Included in the proposal is a deletion of a line item where in the event of a sale of the resort, fixed week owners are no longer guaranteed their fixed week"

Kal, obviously as a recent purchaser of 3 fixed weeks at HWOR and a fractional ownership at HMSS, your point above intrigued me. How exactly would the sale of a Hyatt resort effect a Hyatt week at this resort deeded and recorded in the county that the resort is located... What overrides the deed? Is there already a clause in Hyatt's rules/regulations that describes this right (of Hyatt) and something I agreed to when I signed the sales documents? Or is this a new rule they are trying to implement in Hawaii and perhaps in all the resorts eventually?

 

[Kal]

That's a very good point. The deeds are real property and it would seem a change in the by-laws to confiscate a deed would not go well. Hopefully Maui is an outlier where a significant amount of the resort is not yet sold and is held by a number of developers. It's bad enough when a developer sits on the BOD, but when an officer of the corporation is the president of the BOD, in addition to the developer seats, that is not good for the homeowners.

From the perspective of a HRC member, it has always been very difficult to exchange into Maui, but when Hyatt takes 30% of the property out of the exchange pool it harms the HRC. I know, those units have not yet been sold but the expectation for HRC is that they would eventually be sold and become candidates for exchange. Therefore this proposed action AND the PPP removal of units definitely harms the HRC (legacy) owners.

For members in the east, Hawaii is maybe too many time zones away. For me hanging out on the left coast, Hawaii is a relatively short hop over the lake.

 

[WalnutBaron]

Dagger, I've read the Proposed Amendment document. There is a fascinating strikethrough, located near the bottom of Page 6 of the proposed amendment. Referring to Fixed Week ownership, this sentence--which is in the current ownership by-laws--is proposed to be struck as part of the amendment: "In the event that the Resort Agreement is terminated in accordance with its terms, the Owner of each Timeshare Interest shall nevertheless retain the exclusive right to reserve and use a Fixed Week in a resort unit of the same resort unit type in which the Timeshare Interest is owned."

Thus, the proposed change would affect Hyatt Ka'anapali Beach owners only. However, if ILG is successful with this highly questionable maneuver at Ka'anapali, you can bet they will begin trying the exact same thing at other Hyatt properties.

 

[dagger1]

Dagger, I've read the Proposed Amendment document. There is a fascinating strikethrough, located near the bottom of Page 6 of the proposed amendment. Referring to Fixed Week ownership, this sentence--which is in the current ownership by-laws--is proposed to be struck as part of the amendment: "In the event that the Resort Agreement is terminated in accordance with its terms, the Owner of each Timeshare Interest shall nevertheless retain the exclusive right to reserve and use a Fixed Week in a resort unit of the same resort unit type in which the Timeshare Interest is owned."

Thus, the proposed change would affect Hyatt Ka'anapali Beach owners only. However, if ILG is successful with this highly questionable maneuver at Ka'anapali, you can bet they will begin trying the exact same thing at other Hyatt properties.

I agree completely, WalnutBaron, otherwise why strike it from the Amendment. But I wonder how they propose to "override" a lawfully executed and filed deed? Can a super majority vote override deeds owned by the minority? Is there another rule that is in the original sales agreement and Hyatt rules/regulations that gives a super majority this power, a rule that I agreed to when I signed these documents? Interesting....!

 

[ocjohn]

Lawyer husband says if the deed says unit x, week 6, that's what we own. But what we can occupy and how is governed by CC&Rs, which is being amended (if there is a quorum).

 

[lizap]

Great advice, Kal, as always. I was thinking about sending out a "call to action" among Hyatt owners, since I agree with you that the machinations being foisted on HKB owners are only the first step in master plan by ILG that could potentially affect all HRC owners.

The problem is threefold: 1) most owners will say 'this is an issue affecting Ka'anapali owners only, and it's their problem to solve' so why should I be concerned? 2) the number of Hyatt owners that even realize there is such an ominous developing threat is literally a fraction of 1%; 3) there is so little time to organize effective opposition before the vote 20 days from now.

What would the call to action entail?

1. Hire a highly capable attorney familiar with timeshares, how they work, and the laws in the big states where most timeshares reside--Hawaii, Florida, Nevada. Have the attorney review the documents HKB sent to its owners a couple of weeks ago, particularly the clause that would remove fixed weeks usage in the event of an ownership change.
2. Request a temporary injunction to halt the vote on August 1 to allow time for complete disclosure and full consideration by HKB owners before the vote is held.
3. Seek to have ILG/Hyatt conduct a webinar/call-in meeting with owners to provide direct answers to the questions posed by gdonner as well as others so that this proposed action is fully disclosed and fully understood.

The issue, of course, is who pays the attorney? My own feeling is that HKB owners are going to need to take the lead on this and can certainly ask the rest of us to contribute for the good of the cause. I, for one, would be willing to help but this is not my fight right now and I think HKB owners will need to be the ones in front on this looming situation.

I agree. Since this will affect HKB owners (at least initially), they need to take the lead on this. Having said that, we are willing to make a contribution toward legal expenses. I know there are other active TUG members that are posting, but just not on the Hyatt forum right now for some reason. How do we get the word out to them?

 

[taffy19]

This clause was not there when we bought originally from the Hyatt in Maui but what happened after ILG purchased the HRC, I am not so sure if the purchase documents were changed. You all need to check your documents carefully when you buy re-sale too, IMO.

PS. My other comments will follow later when I am home as I cannot see the icons on my phone so accidentally must have posted it.

 

[dagger1]

Lawyer husband says if the deed says unit x, week 6, that's what we own. But what we can occupy and how is governed by CC&Rs, which is being amended (if there is a quorum).

Not being a lawyer, I need a little clarification. So just because I own unit xxxxL every week 23 at a Hyatt resort, that doesn't mean I get to occupy that unit on week 23? An HOA and or the CCR's can "take" this week from me, even though I am current on all MF's/dues/taxes? This makes no sense to me, but as I said, I'm not a lawyer...
It would seem that if this kind of "seizure" is actually implemented that will be the end of Hyatt timeshares...

 

[ocjohn]

I'm not a lawyer either dagger (but have access to one if I don't abuse the privilege (-: ) - but our deed says we "own unit 5608 (for example) week 7". But they can actually put us in any 2 bedroom unit from floors 5-8, per the CC&Rs. Perhaps this is just a Ka'anapali thing I don't know. Also if I don't book during the HRPP, I'm not guaranteed getting anything in Ka'anapali even though I "own" it. That's cool with us we knew that going in.

 

[dagger1]

I'm not a lawyer either dagger (but have access to one if I don't abuse the privilege (-: ) - but our deed says we "own unit 5608 (for example) week 7". But they can actually put us in any 2 bedroom unit from floors 5-8, per the CC&Rs. Perhaps this is just a Ka'anapali thing I don't know. Also if I don't book during the HRPP, I'm not guaranteed getting anything in Ka'anapali even though I "own" it. That's cool with us we knew that going in.

Thanks ocjohn, it's probably the same at all Hyatt resorts... But the new change might mean that even during HRPP we can be dispossessed of our week. I find this incredible...

 

[WalnutBaron]

While possible, I will tell you that it would not happen without a massive legal fight. Whether ILG is prepared to have that fight or not is still to be seen. Right now, of course, the issue resides squarely with owners of HKB. But all of us Hyatt owners need to be on alert--and I think this discussion thread certainly has achieved that.

 

[bdh]

I'm not a lawyer either dagger (but have access to one if I don't abuse the privilege (-: ) - but our deed says we "own unit 5608 (for example) week 7". But they can actually put us in any 2 bedroom unit from floors 5-8, per the CC&Rs. Perhaps this is just a Ka'anapali thing I don't know. Also if I don't book during the HRPP, I'm not guaranteed getting anything in Ka'anapali even though I "own" it. That's cool with us we knew that going in.

The "putting you in any 2 bd unit on floors 5-8" is an HKB thing - the HKB units are not/were not sold as specific deeded week/units, however each HKB owner is guaranteed a unit in the "floor band" purchased. In lieu of specific units, the 2 bd units are purchased by "floor band". ie: floors 1-4, floors 5-8 and floors 9-12. At all other HRC properties, the deed lists a specific week and a specific unit - if reserved in HRPP, the owner is guaranteed the specific week and specific unit listed on the deed. HBK is the same as all other HRC properties relative to HRPP - if not reserved during HRPP, the owner is not guaranteed anything.

Thanks ocjohn, it's probably the same at all Hyatt resorts... But the new change might mean that even during HRPP we can be dispossessed of our week. I find this incredible...

As far as the current scenario unfolding at HBK occurring at other HRC properties:

As long as the HOA board and owners at the mature/sold out HRC properties are semi-awake, the board could terminate the Hyatt management contract for changing of sheets and cleaning of toilets. The positive side is that Hyatt would be out and the owners retain the property - the negative for owners that don't use there deeded week would be the ability to exchange to other HRC properties via an HRC internal exchange.

At properties actively being sold with new buildings/units under construction (HWO & HCP), expect the existing sold out buildings/units to be the same scenario as the older/mature HRC properties to terminate the Hyatt management contract. Not an issue at the new buildings/units as the PPP purchaser doesn't own anything to began with.

Hacienda Del Mar owners would probably welcome the chance to escape from their weeks. haha

 

[ocjohn]

Hey Ka'anapali owners, look at the amendment, amended section 3.2 (d) on page 7. This may protect our fixed week(s) even if the development is sold? Opinions? So there may not be a plot here?

 

[alexadeparis]

Not being a lawyer, I need a little clarification. So just because I own unit xxxxL every week 23 at a Hyatt resort, that doesn't mean I get to occupy that unit on week 23? An HOA and or the CCR's can "take" this week from me, even though I am current on all MF's/dues/taxes? This makes no sense to me, but as I said, I'm not a lawyer...
It would seem that if this kind of "seizure" is actually implemented that will be the end of Hyatt timeshares...

Ok, I am an attorney, but I will step in only to explain this. It's not unique to Hyatt, it is common with all timeshares. Let's say that there are 10 units. With 52 weeks, that makes 520 unit-weeks, lets say ranging numerically for reference/inventory purposes from 01/01 (unit one, week one) to 10/52 (unit 10/week 52). So in order to sell "the building" they must account for all 520 units, with no duplicates. So each of the 520 deeds will have a different ID number within the range. (Leave aside the question of biennials for the example, but there could be more than 520 deeds if there were biennials). Each deed provides that singular unit-week SUBJECT TO the CC&Rs which control the HOA. This is right there on the deed. In the case of floating time, it will say something along the lines of "This is a Platinum Interest" or "365,000/987,000,000 points" or something that would alert you there is an underlying scheme you are under.

In the CC&Rs, (which stands for Covenants, Conditions and Restrictions), are the actual rules, which by virtue of purchasing, you are agreeing to abide by. Most commonly this would be in a condo setting, and you have to abide by the condo rules, such as: no pets, no BBQ grills, only certain window decorations at Halloween, whatever. In the timeshare context, this is the entirety of the rules of the "Club" (which operates like a master association) as well as whatever the particular resort is offering: floating season, points, fixed unit, (or in this particular case a certain band of floors), reservation windows, points allocated for the unit-week, etc. Here, the CC&RS currently call for the use of what specific week you purchased, but NOT the unit week, so you ALREADY do not have the deeded week use. (Contrast this to say Key West where their CC&RS DO call for that specific unit/week on the deed to be used.)

It sounds like HRC is asking to be freed from having to provide the fixed week via a change to the CC&RS, in case they decide to sell the company, to make it more attractive. I don't own there so I haven't seen the documents. If they are perhaps going to offer the floating concept later, this may be why they are asking. No comment on that since I haven't looked at it.

 

[ocjohn]

amended section 3.2 or 3.5 (d)... again... looks like fixed week owners would be protected in a sale?

 

[dagger1]

The "putting you in any 2 bd unit on floors 5-8" is an HKB thing - the HKB units are not/were not sold as specific deeded week/units, however each HKB owner is guaranteed a unit in the "floor band" purchased. In lieu of specific units, the 2 bd units are purchased by "floor band". ie: floors 1-4, floors 5-8 and floors 9-12. At all other HRC properties, the deed lists a specific week and a specific unit - if reserved in HRPP, the owner is guaranteed the specific week and specific unit listed on the deed. HBK is the same as all other HRC properties relative to HRPP - if not reserved during HRPP, the owner is not guaranteed anything.



As far as the current scenario unfolding at HBK occurring at other HRC properties:

As long as the HOA board and owners at the mature/sold out HRC properties are semi-awake, the board could terminate the Hyatt management contract for changing of sheets and cleaning of toilets. The positive side is that Hyatt would be out and the owners retain the property - the negative for owners that don't use there deeded week would be the ability to exchange to other HRC properties via an HRC internal exchange.

At properties actively being sold with new buildings/units under construction (HWO & HCP), expect the existing sold out buildings/units to be the same scenario as the older/mature HRC properties to terminate the Hyatt management contract. Not an issue at the new buildings/units as the PPP purchaser doesn't own anything to began with.

Hacienda Del Mar owners would probably welcome the chance to escape from their weeks. haha

I quickly read through

Ok, I am an attorney, but I will step in only to explain this. It's not unique to Hyatt, it is common with all timeshares. Let's say that there are 10 units. With 52 weeks, that makes 520 unit-weeks, lets say ranging numerically for reference/inventory purposes from 01/01 (unit one, week one) to 10/52 (unit 10/week 52). So in order to sell "the building" they must account for all 520 units, with no duplicates. So each of the 520 deeds will have a different ID number within the range. (Leave aside the question of biennials for the example, but there could be more than 520 deeds if there were biennials). Each deed provides that singular unit-week SUBJECT TO the CC&Rs which control the HOA. This is right there on the deed. In the case of floating time, it will say something along the lines of "This is a Platinum Interest" or "365,000/987,000,000 points" or something that would alert you there is an underlying scheme you are under.

In the CC&Rs, (which stands for Covenants, Conditions and Restrictions), are the actual rules, which by virtue of purchasing, you are agreeing to abide by. Most commonly this would be in a condo setting, and you have to abide by the condo rules, such as: no pets, no BBQ grills, only certain window decorations at Halloween, whatever. In the timeshare context, this is the entirety of the rules of the "Club" (which operates like a master association) as well as whatever the particular resort is offering: floating season, points, fixed unit, (or in this particular case a certain band of floors), reservation windows, points allocated for the unit-week, etc. Here, the CC&RS currently call for the use of what specific week you purchased, but NOT the unit week, so you ALREADY do not have the deeded week use. (Contrast this to say Key West where their CC&RS DO call for that specific unit/week on the deed to be used.)

It sounds like HRC is asking to be freed from having to provide the fixed week via a change to the CC&RS, in case they decide to sell the company, to make it more attractive. I don't own there so I haven't seen the documents. If they are perhaps going to offer the floating concept later, this may be why they are asking. No comment on that since I haven't looked at it.

Thank you for a great explanation! So, as a follow up, if both your fixed week AND unit are specified in the recorded deed, can a change in the CC&R's at a later date make null and void what is on the recorded deed? Thanks!

 

[alexadeparis]

Thank you for a great explanation! So, as a follow up, if both your fixed week AND unit are specified in the recorded deed, can a change in the CC&R's at a later date make null and void what is on the recorded deed? Thanks!

Theoretically, if enough people voted to change the CC&R's to make it completely floating, yes. But the threshold of yes votes is usually very high, usually well above 50%; like 75% or 90%.

 

[dagger1]

Theoretically, if enough people voted to change the CC&R's to make it completely floating, yes. But the threshold of yes votes is usually very high, usually well above 50%; like 75% or 90%.

Thanks!! Kind of like eminent domain by the HOA...