All Spinnaker Resorts - New Transfer Policy

Timeshare Professionals, Inc has just received from an owner a copy of the "Timeshare Transfer Policy For All Spinnaker Resorts effective 01/03/2011. Besides the $125 transfer fee, someone must PREPAY $1,500 for an annual use or $750 for a biennial/even/odd/triennial use, as prepaid Maintenance fees to be paid to the OWNERS ASSOCIATION.

If the title is transferred into a Corp or LLC, a complete disclosure is required: articles of incorporation, a State letter that the LLC or Corp is in good standing, a most recent filed Federal tax return and all officers of the LLC/CORP must include their contact info to be reviewed prior to the completion of the transfer can occur. These are just the highlights of the new policy.

The HOA Board states it is for the protection of the owners. I can see why they are finally reacting to the "Post Card" companys effect due to the loss of M&T fees. Especially the smaller, sold out resorts. The Association is trying to protect itself.

On the other hand I believe this may have the same effect that a "TAX" would have on a consumer good. This TAX could effectively add 50-100% to the cost to buy most lower end comparable timeshare units. Even if the prepayment is going towards the future M&T fees. It is the "cash out to buy" that counts. So in the short term, why by at this resort when I can buy something else and exchange into it!

I am concerned that this policy may only cause further hardship on the resorts owners looking to get out. Further eroding the value in an already depressed market. The seller may end up paying the bulk of the "advance fees" now required by the HOA.

It will be interesting to see how potential buyers react to this policy and it will be more interesting to see how many other resort follow this policy.

What affect to you think this will have on the resort resales?

Has anyone sold something at this resort since the policy change?

$1500 deposit or advance maint fee collection

No, but there was one on ebay and it showed the $1500 advance deposit/ advance maintenance fee money being paid or whatever they labeled it. Yeah I think that stinks and it does hurt people selling their weeks. I thought it was a cool place to add to my weeks but that was a turn off.

Now 1 in 4 system wide

Southwind also recently changed their "Importand information" under RCI exchanges. In the past they had a mini regional block prohibiting owners from Reba manages HH properties from trading in. The now are enforcing a 1 in 4 system rule so that if you trade into any HH Southwind resort through RCI you can not trade into any others for 4 years.

There was a report on this a couple of months ago from a Tugger selling an EOY. I think they agreed to split the fee.

I've also seen a few on sale on ebay. For the non prime weeks the sellers are usually covering the transfer fee/MF. For the prime weeks some are asking for the fees, some don't mention the fees and some are including the transfer ($700/$1500) fees. I was slightly tempted with a fixed summer week where no MF would be due until 2013 but decided against because I didn't want to have to prepay the fee when it came time for me to sell.

JayKozlowski said:

Timeshare Professionals, Inc has just received from an owner a copy of the "Timeshare Transfer Policy For All Spinnaker Resorts effective 01/03/2011. Besides the $125 transfer fee, someone must PREPAY $1,500 for an annual use or $750 for a biennial/even/odd/triennial use, as prepaid Maintenance fees to be paid to the OWNERS ASSOCIATION....

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In effect, its the up-front fee that a seller might foolishly pay a PCC company, only now its collected by the HOA. Even if the seller manages to find a buyer themselves, they'd likely have to pay the fee to make it work. Now nice!

But its clearly designed to: (a) weed out transfers made for purpose of abandonment, or (2) keep the PCC's from holding onto a mega number of non-performing units and thereby, draining the HOA's budget.

A smart move to protect the the HOA, if not entirely fair for individual owners.

I got "lucky" and sold a biennial summer week at Waterside; just went to closing

The buyer indicated his brother-in-law wanted to buy my annual summer week (before finding out about this prepayment). The brother-in-law said that he was still interested in the week and would call me over the weekend. I didn't hear from him. I was hoping to hear back and possibly negotiate with him on these prepaid fees if I needed to do that in order to make the sale.

That's a lot of moola to come up with in addition to the current maintenance fee being reimbursed, the resort transfer fee of $125, and the closing costs.

I think this will make it much harder to resell weeks. It's already hard enough to resell most timeshares. It will be harder (or much more expensive) to give these timeshares away. If I can sell this Waterside week, I won't be buying any more Southwind-managed resorts.

I've seen this 1 in 4 for Southwind Managed resorts for some time on RCI

tschwa2 said:

Southwind also recently changed their "Importand information" under RCI exchanges. In the past they had a mini regional block prohibiting owners from Reba manages HH properties from trading in. The now are enforcing a 1 in 4 system rule so that if you trade into any HH Southwind resort through RCI you can not trade into any others for 4 years.

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I know it's been a few years because I had stayed at Waterside a number of years back and wanted to return to the resort. It had only been about 3 years since my previous exchange in. I ended up getting a week there through Sky Auction and was able to bypass the 1 in 4.

I experienced something new "for me" the other night that hasn't happend in the past. I saw a resort that I knew had a 1 in 4, which I exchanged into year before last. I attempted to put it on hold, but was denied. A screen popped up saying I had exchanged into the resort within the last four years.

I actually think this is a good thing.

Even if you buy from the developer, you pay your MF up front -and these would normally be paid by the BUYER. If seller is that hard up to get out, their problem.

I would like to see MGV follow suit given the writeoff for bad debt on its books...

This is for the collective good of the owners that are still in and in good standing.

JayKozlowski said:

Timeshare Professionals, Inc has just received from an owner a copy of the "Timeshare Transfer Policy For All Spinnaker Resorts effective 01/03/2011. Besides the $125 transfer fee, someone must PREPAY $1,500 for an annual use or $750 for a biennial/even/odd/triennial use, as prepaid Maintenance fees to be paid to the OWNERS ASSOCIATION.

If the title is transferred into a Corp or LLC, a complete disclosure is required: articles of incorporation, a State letter that the LLC or Corp is in good standing, a most recent filed Federal tax return and all officers of the LLC/CORP must include their contact info to be reviewed prior to the completion of the transfer can occur. These are just the highlights of the new policy.

The HOA Board states it is for the protection of the owners. I can see why they are finally reacting to the "Post Card" companys effect due to the loss of M&T fees. Especially the smaller, sold out resorts. The Association is trying to protect itself.

On the other hand I believe this may have the same effect that a "TAX" would have on a consumer good. This TAX could effectively add 50-100% to the cost to buy most lower end comparable timeshare units. Even if the prepayment is going towards the future M&T fees. It is the "cash out to buy" that counts. So in the short term, why by at this resort when I can buy something else and exchange into it!

I am concerned that this policy may only cause further hardship on the resorts owners looking to get out. Further eroding the value in an already depressed market. The seller may end up paying the bulk of the "advance fees" now required by the HOA.

It will be interesting to see how potential buyers react to this policy and it will be more interesting to see how many other resort follow this policy.

What affect to you think this will have on the resort resales?

Has anyone sold something at this resort since the policy change?

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I tend to agree... I'm an educator and I'm not one of the highest paid in the industry either. I probably wouldn't have bought a timeshare week if I had to prepay maintenace fees for the next year. It's nice being able to budget for it so that you don't have to pay out such a huge chunk at closing.

Egret1986 said:

The buyer indicated his brother-in-law wanted to buy my annual summer week (before finding out about this prepayment). The brother-in-law said that he was still interested in the week and would call me over the weekend. I didn't hear from him. I was hoping to hear back and possibly negotiate with him on these prepaid fees if I needed to do that in order to make the sale.

That's a lot of moola to come up with in addition to the current maintenance fee being reimbursed, the resort transfer fee of $125, and the closing costs.

I think this will make it much harder to resell weeks. It's already hard enough to resell most timeshares. It will be harder (or much more expensive) to give these timeshares away. If I can sell this Waterside week, I won't be buying any more Southwind-managed resorts.

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I was the one who discovered this when I was giving my unit away for just closing costs. After the letters and finally the 1/2 of the EOY fee, the buyer never responded and I still have the unit (I was just asking for closing costs.) - After that I decided to divest the other timeshares I owned and move those weeks to Interval International as they will get Marriotts rather inexpensively versus RCI Points or give them to my kids once they get of age.

On the fee - Your Brother In Law would NOT have to come up with the Prepaid Maintenance Fees. Look in your current newsletter from Spinnaker...last line of the Timeshare Transfer Policy does say...

"The EXCEPTIONS to the above policy are as follows: (a) Inter-family transfers; (b) Transfers from individuals to their trusts for estate planning purposes; and (c) Original transfer from developer to first owner."

Peggy

Not my brother-in-law...the other buyer's brother-in law

got4boys said:

I was the one who discovered this when I was giving my unit away for just closing costs. After the letters and finally the 1/2 of the EOY fee, the buyer never responded and I still have the unit (I was just asking for closing costs.) - After that I decided to divest the other timeshares I owned and move those weeks to Interval International as they will get Marriotts rather inexpensively versus RCI Points or give them to my kids once they get of age.

On the fee - Your Brother In Law would NOT have to come up with the Prepaid Maintenance Fees. Look in your current newsletter from Spinnaker...last line of the Timeshare Transfer Policy does say...

"The EXCEPTIONS to the above policy are as follows: (a) Inter-family transfers; (b) Transfers from individuals to their trusts for estate planning purposes; and (c) Original transfer from developer to first owner."

Peggy

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Fortunately, these were prime summer weeks and the brother-in-law of the buyer of the biennial timeshare ended up purchasing the annual use timeshare. Another great thing was that neither of these buyers tried to negotiate the purchase prices or ask for closing costs to be paid. I really feel fortunate. Too bad your potential buyer didn't come through for you.

Now you bail and claim tortuous interference with a contract when they come after you.

You've got to like this one!

got4boys said:

"The EXCEPTIONS to the above policy are as follows: (a) Inter-family transfers; (b) Transfers from individuals to their trusts for estate planning purposes; and (c) Original transfer from developer to first owner."

Peggy

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Guess the developer doesn't actually care enough to ensure that the people they sell to have the financial ability to prepay maintenance fees.. Kind of the same mentality where developers and ARDA fought to ensure that developers don't have to actually check a buyers credit rating at the time of the initial sale.

Unfortunately, for them it's not about the viability of the product as much as it is the quick cash from selling that timeshare loan to a commercial bank.

If they really cared, they would work to develop an actual resale market for their owners or create their own exit program by accepting deedbacks. This simple step would put a dead stop to every postcard company transaction with their owners.

We've already seen this same type of thinking fail in Europe, where transfer fees are ridiculously high and transfer processes have became a nightmare to get through for buyers or sellers.. Unfortunately, this is exactly the type of disgusting strategy that was "recommended" by an "expert" at the last ARDA convention. His concept was to make the estoppels and transfer process extremely difficult.

All this leads to is more owner defaults, and an increase in buyer activity for the vacation club products with very low annual fees and where the buyer pays for the reservations they actually use within their clubs.

The true problem has not changed..

Currently- there are no effective exit strategies for an aging owner base who no longer use the timeshare properties. Holding them hostage to ensure the "financial health" of the timeshare association will only last for a few more years at best.. In this day and age, personal credit ratings are not nearly as important as they were in the past- and as current owners pass away- kids are getting much wiser in declining this part of their "inheritance"..

While I am most certainly not a fan of any postcard company- I pray that consumers are savvy enough that we don't allow developer propaganda to push the blame for this entire debacle onto the shoulders of David MacMillan. Most timeshare developers have been using underhanded tactics to deter resales for years without any regard to the long term health or viability of the product- and certainly without any true regard for the individual owners.

First, I must say I'm happy I bought my 2 EOY summer weeks in 2010. Second, I think this is a great policy and can only help owners in good standing who plan to remain owners.

If you go to sell one of these units, I can foresee having some trouble, but for a prime summer week, it really shouldn't make too much of a difference. It's the weeks that needed to be given away in the past that will have even more trouble giving them away.

Prepaying MF is nothing like paying a tax. It is going toward your future use. While I said I'm happy I didn't have to, it wouldn't have changed my decision to buy. I may have attempted to use it as a bargaining tool.

How about picking up the tab for the MFs not paid by owners can't sell and bail out?

If this is a deeded week, I suspect that they may not have legal authority to do what they did. But that is not surprising. Many of the transfer fees that management companies have made up also are not legally authorized. If I am confronted with one of those, I would demand to see the authority for it in the declaration of covenants (a mere resolution by HOA BOD is not sufficient by itself if they have no authority in the covenents).

If they lack legal authority, you might find an attorney willing to burn them a new one under state consumer protection laws, which typically allow recovery of treble damages plus attorney fees. With solid cases of this type and a solvent defendant, it is sometimes possible to find younger attorneys who will take them for no fee upfront, just the lilkihood of collecting from the defendant through the court.

It is too bad that in another situation, the SC Real Estate Commission proved itself weak as water in standing up for consumers. This is exactly the type of situation that Blackwell Brogden, the longtime legal guru of the NC Real Estate Commission would have come down on like a ton of bricks. Brogden used his power well for consumers. He even refused to allow RCI Points, then called GPN, to operate in NC without making some significant pro-consuenmr changes in the way it operated and was campaigning with other state Real Estate Commissions to adopt the same policy, forcing RCI to wave a white flag and make the changes systemwide that Brogden demanded.

e.bram said:

How about picking up the tab for the MFs not paid by owners can't sell and bail out?

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This is already happening along with PCCs owning units that they aren't paying for. They are merely trying to prevent 1 of the 2.

Carolinian said:

Many of the transfer fees that management companies have made up also are not legally authorized.

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This is not an transfer fee, it is required upfront maintenance fees. IMO, it protects them and owners that are in good standing and hardly worthy of a lawsuit.

If you read my post, the transfer fee is a seperate but similar issue; something management companies too often conjure up out of thin air without any legal basis. The real issue on both is whether there is any legal basis in the condo documents for them to assert either requirement. They cannot just suddenly decide that they want to do it, and then proceed to do so. A resolution of the HOA BOD, standing alone, is not authority, unless it is based on a power given to it in the condo docs (declaration of covenants, NOT corporate charter of HOA or HOA by-laws).

What they are trying to do is a restraint on alienation of real property, something that is highly disfavored in the law. They are also putting themselves in a very murky position to foreclose. I suspect that a court would say that who the owner of a week is would be the person with a duly recorded deed executed in compliance with state law for that week.

It never surprises me what some management companies will try to do. I am aware of one which is now writing in its contracts that it will prepare all deeds from the HOA to buyers at a set cost. None of their employees are licensed to practice law and the state has a criminal statute prohibiting unauthorized practice of law. These contracts could make the HOA an accessory to that criminal activity. Another management company put in its contract that it would get a healthy cut of insurance proceeds for ''supervision'' and got sued over that because it violated state insurance laws, and had to settle out of court for an undisclosed, but I am told, substantial sum.

stevedmatt said:

This is not an transfer fee, it is required upfront maintenance fees. IMO, it protects them and owners that are in good standing and hardly worthy of a lawsuit.

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