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Old November 27, 2007, 11:24 AM   #1
Kurt Brown
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Deeding Back Timeshares

FYI, this article of mine was published in the last issue of Timesharing Today and is reproduced here with their permission -

Kurt


DEEDING BACK OF TIMESHARES

One big issue destroying the value of timeshare ownership is the refusal of many resorts to take back timeshares when there is no balance owing, or only the upcoming maintenance fees owing.

Resorts contributing to Scam Operations

Almost anyone advertising a timeshare for sale is approached by various scam operators, offering to help sell the timeshare in exchange for the owner giving $300-700 or more. The scam operator promising to sell the timeshare. Typically, the owner never hears again from the scam operator. There is at least one organization that invites owners to come to a local hotel ballroom and give the operator more than $2000 to get rid of the timeshare.

The resorts originally sold the intervals to the owners yet now many refuse to take them back even when the loans are paid off. Many purchasers have “buyers remorse” after the hard sell, and want to give them back. The resort operators and sales teams naturally don’t want to cancel a hard-earned sale. However, when events happen in a purchaser’s life; events that were unforeseen at the time of the purchase, there should be a reasonable way to give the timeshare back. Such events would be like serious illness, long-term loss of job, or death. People experiencing such life-changing events are easy prey for the scam artists.

Worthless Intervals

By refusing to help the timeshare resale process, many resorts are contributing to the effect of timeshares becoming essentially worthless. The resorts are in the best position to resell or rent out unused or returned timeshares as the resorts are the centerpoint for the vacationer.

Timeshare owners know that maintenance fees are always going to increase. Yet, in many cases, why would one want to pay ever increasing amounts for a worthless timeshare. At many resorts, there is not enough money set aside for insurance and repairs and updates, leading many resorts to assess frequent special assessments - often without consulting owners or asking for owner vote/approval. Again, if the underlying interval has no value, why should the owner pay the increased maintenance fees and the ever-present special assessments, when the resorts themselves are telling the owners that the intervals have no value and are not worth taking back.

Lifetime Guaranteed Job Security

Many resorts give owners two unconscionable choices - pay maintenance fees and special assessments even if you are not using and cannot use the interval, or face foreclosure. Resort personnel have lifetime jobs. Since owners cannot sell their intervals, if they want to keep their credit, the owners must continue paying even when it causes even more financial problems to add to already desperate situations.

Facility Obsolescence

Like any other piece of real estate, the buildings are never going to get newer. If the resort does not have funds set aside for updates, upgrades and repairs, then the owners should have the option to close the operation, sell the facilities, with the owners getting a share of the resulting proceeds.

What Resorts Can/Should Do

Timeshare resorts do not operate in a vacuum. Offseason exists for hotels, restaurants, shops, businesses, and residents in general. Like other brick-and-mortar operations, timeshare resorts have to deal with offseasonal usage.

Resorts can shut down, reduce staff to minimal levels for those owners who wish to stay at that time, actively market unsold and unused intervals both for rental and for sale. Some locations, including the resorts, can create offseason events to attract tourists - like Galveston’s Mardi Gras. The resorts can enter the corporate apartment business. Conventions and company getaways can be sought. Bonus time programs can be actively marketed to current owners. Resorts can align with hospitals to provide housing for family members of patients. There are more “suite hotels” being built as a strong indication that a furnished unit with full kitchen is attractive for individuals and families on an extended stay in an area. Real estate agents can provide contacts with people moving to the area and looking for temporary furnished housing. Resorts can band together with others in other locations to market together unused inventory with owners paying for the “exchange” privilege. These are only a few of the possibilities for an active, engaged resort management team to increase rentals and usage at the resort.

Resorts should without hesitation take back unwanted intervals - especially those fully paid for. If the resorts create a market for such intervals, the intervals can be resold or rented for some amount of money. If it is “impossible” for the resort to rent/resell such intervals, then there is a strong case for shutting down the resort as an uneconomic entity.

Exchange companies

Resorts and individual owners can unaffiliate with certain exchange companies that thwart the lifeblood of the timeshare industry, by stopping the deposit of weeks into such systems. It is apparent to any timeshare owner that for various reasons, the exchange process has become a less and less desirable alternative to staying at one’s resort. Exchange and guest fees continue to rise, increasing the costs above the ever-increasing maintenance fee/special assessment model. RCI is involved in many conflicts of interest that work against timeshare owners. RCI now manages and operates resorts. Weeks owners who refuse to pay thousands more to purchase RCI Points are at a disadvantage in the exchange process. RCI markets to special interest groups including civil servants. Now, non-timeshare owners can get many of the benefits of the exchange process. RCI even has a “Fam2Friends” program. If one pays to send a friend to a resort, that friend or family member is subject to RCI marketing efforts. Again, there is no need to be a timeshare owner to participate in such programs. RCI has therefore helped destroy any underlying value for timeshares. Non-owners can stay for less than paying maintenance fees + special assessments + exchange fees + guest fees.

In Summary

The resorts can operate in a way to alleviate the huge load of unwanted timeshares by creating a market for their own intervals, and by more actively renting and utilizing excess inventory.


Kurt J. Brown
kjbrown@sprintmail.com

Last edited by Dave M; November 30, 2007 at 08:12 PM. Reason: Edited to restore complete article after Timesharing Today granted permission to post it here.
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Old November 27, 2007, 11:29 AM   #2
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Great job! Many wonderful points made and put very well...
thanks for sharing!!
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Old November 27, 2007, 12:16 PM   #3
johnmfaeth
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Hi Kurt,

Great article in general. One issue you do not cover however is the difficulties which HOA-controlled timeshares face when the developer has already packed up and left. Especially in the category of owners who "just want out" or whose life circumstances preclude their ability to continue paying.

The issues include:

1) Lack of expertise or time for the BOD to take on this resale task

2) Licensing requirements and associated legal/staffing espenses to resell units as a BOD

3) Substantial marketing expense of traditional timeshare sales having to be paid by the owner community

These exist even in 52-week high demand locations like the Caribbean.

For these reasons, as an owner, I prefer active collection efforts against non-paying owners.

At the 2-3 year point, when collection efforts are unfruitful, and credit history of the deadbeat owner is fully shot (only ammo in the HOA's gun), then offer a "Deed in Lieu of Forclosure". The reason is to avoid the additional 2 year foreclosure action and accompanying expense. Why, to save the paying owners another two years of paying the fees for the deadbeat unit as well as the foreclosure fees. Foreclosed units get offered for sale by the County Sheriff and garner almost no money. If no bids, it defaults to the HOA anyway.

Then offer HOA owned units to the paying owners who supplemented them for years by being paying owners. Anything netted is a plus, main issue is getting them back to MF paying status.

I don't accept the logic that the other owners, who pay their MF's, should have to shoulder the burden of another's unit.

Yes, the purchase of that unit may have been a mistake, but that is life and capitalism. Once the developer is gone, the HOA is WE, not THEM. Why should fellow owners get your burden which resulted from another's purchase decision. That is certainly not fair to them.

Concurrently, I do believe that owner-controlled HOA's should do everything to empower the transfers and creation of a functioning resale environment to prevent delinquencies in the first place. This however, is not a simple task.

As to the problem of developer's keeping their heads firmly buried in the sand when it comes to resales. I see no other approach that a capitalistic corporation can take while engaged in selling real estate at 3-4 times it's cost of creation (industry average as per the ARDA - the TS industry's trade group). Only consumer education can eventually drive down retail pricing and thus enable a stable resale market to be acknowledged by developers.

Keep in mind this is not like used cars, a resale timeshare is the exact same unit as a new one. The dog and pony show developer incentives are mostly garbage designed to obfuscate reality and confuse/instill fear into buyers considering the resale market. Only when this paradigm is changed can the situation significantly improve IMHO.

John
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Old November 27, 2007, 02:50 PM   #4
Kurt Brown
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Quote:
Originally Posted by johnmfaeth View Post
Hi Kurt,

Great article in general. One issue you do not cover however is the difficulties which HOA-controlled timeshares face when the developer has already packed up and left. Especially in the category of owners who "just want out" or whose life circumstances preclude their ability to continue paying.

The issues include:

1) Lack of expertise or time for the BOD to take on this resale task

2) Licensing requirements and associated legal/staffing espenses to resell units as a BOD

3) Substantial marketing expense of traditional timeshare sales having to be paid by the owner community

John
John,

I just don't buy this argument - which is not new!

First, like any organization, tasks can be "farmed out" to outside organizations, when the management/board does not consider itself to be expert in a task.

Second, it is (and was) totally foreseeable that as owners get older and as life situations change, that intervals will have to be sold by someone. In my view, that becomes the responsibility of the resort/board to create a market for such intervals. The resort/board is in the best position to do so. A board running a multi-million dollar operation cannot simply say to the owners - the developers have run away, we have no idea how to run and maintain the resort, poor us. Most resorts are under the auspices of a management company, anyway - hired by the board; paid by the owners.

If there is no other option, wind up the corporation, like any other business that no longer can be managed due to changing circumstances and changing economic factors.

Again, leaving the owners who encounter life-changing situations with two unconscionable choices - to pay even when they cannot afford or use the intervals, or face foreclosure, is not satisfactory. And, the board and other owners are gladly accepting this blood money.

Can you truly enjoy your vacation knowing that you are significantly contributing to the suffering of others?

Kurt
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Old November 27, 2007, 03:08 PM   #5
JMAESD84
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Quote:
Originally Posted by johnmfaeth View Post
Hi Kurt,

Great article in general. One issue you do not cover however is the difficulties which HOA-controlled timeshares face when the developer has already packed up and left. Especially in the category of owners who "just want out" or whose life circumstances preclude their ability to continue paying.

The issues include:

1) Lack of expertise or time for the BOD to take on this resale task

2) Licensing requirements and associated legal/staffing espenses to resell units as a BOD

3) Substantial marketing expense of traditional timeshare sales having to be paid by the owner community

These exist even in 52-week high demand locations like the Caribbean.

For these reasons, as an owner, I prefer active collection efforts against non-paying owners.

At the 2-3 year point, when collection efforts are unfruitful, and credit history of the deadbeat owner is fully shot (only ammo in the HOA's gun), then offer a "Deed in Lieu of Forclosure". The reason is to avoid the additional 2 year foreclosure action and accompanying expense. Why, to save the paying owners another two years of paying the fees for the deadbeat unit as well as the foreclosure fees. Foreclosed units get offered for sale by the County Sheriff and garner almost no money. If no bids, it defaults to the HOA anyway.

Then offer HOA owned units to the paying owners who supplemented them for years by being paying owners. Anything netted is a plus, main issue is getting them back to MF paying status.

I don't accept the logic that the other owners, who pay their MF's, should have to shoulder the burden of another's unit.

Yes, the purchase of that unit may have been a mistake, but that is life and capitalism. Once the developer is gone, the HOA is WE, not THEM. Why should fellow owners get your burden which resulted from another's purchase decision. That is certainly not fair to them.

Concurrently, I do believe that owner-controlled HOA's should do everything to empower the transfers and creation of a functioning resale environment to prevent delinquencies in the first place. This however, is not a simple task.

As to the problem of developer's keeping their heads firmly buried in the sand when it comes to resales. I see no other approach that a capitalistic corporation can take while engaged in selling real estate at 3-4 times it's cost of creation (industry average as per the ARDA - the TS industry's trade group). Only consumer education can eventually drive down retail pricing and thus enable a stable resale market to be acknowledged by developers.

Keep in mind this is not like used cars, a resale timeshare is the exact same unit as a new one. The dog and pony show developer incentives are mostly garbage designed to obfuscate reality and confuse/instill fear into buyers considering the resale market. Only when this paradigm is changed can the situation significantly improve IMHO.

John
I appreciate John's opinion and in fact agree with him on most of what he posts on this message board, however, this is a hot button issue that we have discussed at length in other threads and I couldn't disagree more.

This is a major issue facing many HOA's and one that I feel they have an obligation to step up and address in a proactive way. Bullying owners "who just want out" with threats of damaged credit and foreclosure is just plain wrong.

My position:

ANY FULLY PAID UP OWNER WHO WISHES TO DEEDBACK SHOULD BE ABLE TO.
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Old November 27, 2007, 03:08 PM   #6
johnmfaeth
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Hi Kurt,

No I can not enjoy any such situation, that's why I cringe when I see a timeshare salesman leading around some innocent young couple with the fake smile on his face.

I am blessed to be part of the 530+ owner Wyndham Bluebeards Beach Club Yahoo discussion group. It is owners-only and tightly managed to eliminate spam. We have about 25% of the owners enrolled and actively seek more. I personally host 4+ informal owners meetups per year at the pool area with the Wyndham Island Manager present to answer questions and get feedback for attending owners. They are a great success. Last one was two weeks ago. We have great owner reps on the board (not yet sold enough for control) but they work well with Wyndham. I am not on the board but have the self-proclaimed title as "big mouth" at the resort. I do a certain amount of volunteer work for the BOD when I can help.

This discussion group is a great forum for information exchange and provides a free mechanism for owners to sell and rent unneeded units.

We also have a MF fee collection process similar to what I posted and have a miniscule delinquency rate, far lower than the industry average. We cannot afford to carry deadbeats but we do what I suggested for resale encouragement.

Our Yahoo group is like a mini-TUG with postings informing owners of Pay Me To List It and Postcard Company ripoffs. We also have discussions of how to sell through TUG and the major internet sites like redweek.com.

Our units rarely show up on EBay and fetch good money when they do, from other owners snatching them up.

If only my other TS were so well managed...

If any Wyndham Bluebeards Beach Club owner wants out, the Yahoo Group is a great way to do it. Email me and I'll list it for you. Better yet, let's get you signed up directly in the group as an owner so you can do it yourself.

But we do not need to burden the HOA with that task. Direct owner communications gets it done.

Last edited by johnmfaeth; November 27, 2007 at 03:11 PM.
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Old November 27, 2007, 03:50 PM   #7
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Having participated on numerous HOA boards of various types over the past 35 years, and having considered this type of issue on numerous occasions, I agree with John. It might well make sense to try to find a third party to refer owners to if they want to sell, but for the HOA (that's all of us as owners) to readily take back every timeshare that individual owners no longer want would seem to be a foolhardy policy.

When taking back a timeshare, the first thing that happens is that no one is responsible for the MFs on that timeshare until a new owner is found. For some timeshares that can't even be sold on eBay for $1, that could be forever. That means our MFs go up because someone isn't paying their share on that timeshare.

Also, the costs associated with facilitating such sales by the HOA could be horrendous. How does the HOA pay for the advertising, personnel and closing costs on timeshares that won't sell for more than a few bucks without adding significantly to the net costs of the HOA - meaning even more increased MFs for the rest of us.

The developer sells us a product. Then the developer or a third party will maintain the property at a cost - our MFs. Isn't that a lot like many businesses? A car manufacturer sells us a car. Then, at a cost, the car manufacturer or a third party (at our option) will maintain it for us. We don't even think of suggesting that the manufacturer come get it and haul it away if it breaks down or otherwise has no value to us. What's so different about a timeshare that suggests the developer or HOA should take it back?

I'll concede that there are some high-end timeshares, especially those with year-round high seasons, where the HOA would make a nice profit by accepting unwanted timeshares. But there are very few of those resorts.

As a further example, suppose I own a timeshare at a Florida resort that is partially destroyed by a hurricane. The insurance limitations result in a special assessment of $5,000 per timeshare, more than the average resale value of any of the off-season timeshares at that resort. So, because the resort has adopted the policy that some of you espouse, about half of the owners (most of the off-season owners) deed their timeshares to the HOA. That leaves all of the remaining owners with double the proposed special assessment and double the normal annual MFs! Then the deed-backs accelerate until the BOD finally votes to stop accepting deed-backs. Since I was away on an extended deserted island trip, it turns out that Iím the only owner left when I find out about the mess. And my MFs to make the budget balance, before considering the SA, are up to $2,340,000 for my single week (52 weeks X 100 units X $340 normal MF). I donít think I can pay!

Bottom line? Except in a few situations, such as where all timeshares at a resort have decent resale values, an HOA has to rely on the legal obligation to pay MFs for financial stability. If that were changed to a voluntary obligation, because an owner could deed a timeshare back, there would be financial chaos at many timeshare resorts.

Lastly, each owner made a purchase with certain obligations (e.g., MFs and SAs) detailed in the legal documents that each new owner is supposed to read during the purchase recision period. I donít know of very many businesses that if I donít like what I purchased, I have the right to give it back years later for credit (e.g., no further MF obligation). Why should the developer or a timeshare HOA be different from any other business?

I think itís great that a few resorts believe they can assist owners. But I definitely believe itís not the resortís obligation to do so.
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Old November 27, 2007, 04:03 PM   #8
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Dave M I commend you on a post well written.

Based on my 5 minute look it appears that the original author had a small side business in taking over timeshares for people who no longer want the ownership IF HE WANTS TO. In other words if my father wanted to give him week 40 at Bluebeards castle with mfees of nearly $1000 and perpetual threat of special assessment as a smart businessman he would probably deny that week. If however someone wanted to give him a week 7 in Aruba with low maintenance fees and a balanced budget he would probably do that in a heartbeat.


I own at two resorts that are well run and with respectable maintenance fees. I commend my boards for operating within their budget and for building a reserve to avoid the special assessments.

In my mind the worst thing that a resort can do is create artificially low mfees that will result in the HOA relying on ongoing special assessments which will create a nightmare scenario.

With regards to contracting out with sales and marketing companies it is not as if there are 100's of companies wanting to market older resorts in extremely seasonal locations that require a special assessment.

I hope that someone will write timeshare today with an opposing point of view.
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Old November 27, 2007, 04:36 PM   #9
Bill4728
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I believe that there are two different questions which should be clarified in this thread.

What to do if someone wants to give back to the HOA a TS if:
1. The resort is still in sales
2. The resort is no longer in sales.

1. It seems like a no brainer: if the resort is still in sales, the developer should be willing to take back all units and also take responsiblity for the MFs. ( since they all ready are doing that for all the other units which they have for sale.)
2. If the resort is no longer in sales. I don't believe that the HOA should just take back the units. But, I do believe that the HOA should help owners in giving the units away with the offers going first to any other current owner. One way to do that may be to have a page on the resort's website ( all TS should have one in this day and age) where owners can post for sale ads.

What do you think?
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Old November 27, 2007, 04:59 PM   #10
johnmfaeth
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I agree fully with #1, but our opinions are somewhat meaningless unless one is a major investor in a developer organization.

As to #2, I support any activity by a BOD to enable the owners. After all, an owner-controlled BOD is a cooperative. But cautions need to be taken to avoid accidental violation of any state brokerage laws. Some states may require registrations of the BOD as a developer. Particularly NC and SC in the opinions offered here by some (Carolinian, for one, seems to have expertise there). After all, the BOD is not an individual seller acting as principal which I believe is always exempt from such things.

Nonetheless, I agree fully in principal. My line is drawn where the impact starts to financially affect other owners. With cost containment a major priority in the face of large insurance, energy, and labor cost increases, I see few paying owners supporting expeditures to assist those who do not pay.

Where does one draw the line with hardship cases? That's a really tough question, especially in the light of how to stop that line from creeping forward.

And as a paying owner, does one want the limited time resources of a volunteer BOD tied up with this topic when EVERY resort could always use more BOD time to address needs, concerns, and just plain old communications with the paying owners?
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Old November 27, 2007, 05:09 PM   #11
Kurt Brown
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Not exactly

Quote:
Originally Posted by cancun dish View Post
Dave M I commend you on a post well written.

Based on my 5 minute look it appears that the original author had a small side business in taking over timeshares for people who no longer want the ownership IF HE WANTS TO. In other words if my father wanted to give him week 40 at Bluebeards castle with mfees of nearly $1000 and perpetual threat of special assessment as a smart businessman he would probably deny that week. If however someone wanted to give him a week 7 in Aruba with low maintenance fees and a balanced budget he would probably do that in a heartbeat.


I own at two resorts that are well run and with respectable maintenance fees. I commend my boards for operating within their budget and for building a reserve to avoid the special assessments.

In my mind the worst thing that a resort can do is create artificially low mfees that will result in the HOA relying on ongoing special assessments which will create a nightmare scenario.

With regards to contracting out with sales and marketing companies it is not as if there are 100's of companies wanting to market older resorts in extremely seasonal locations that require a special assessment.

I hope that someone will write timeshare today with an opposing point of view.
Not exactly the situation with my website that you describe. What you describe is the situation a number of years ago. Now, it operates pretty much as a public service. I get e-mail requests EVERY day from people who are in serious financial straits and cannot manage the additional costs of their timeshare. I am happy for all the TUGgers who do not have financial problems, and for whom timesharing is still completely a fun and sideline interest. And, I hope you individually never get into such problems. And, I am glad that your own resorts are well run. Many are not.

As an attorney, I can usually tell the difference between people who can pay and simply don't want to fulfil their obligations, versus those who are in a serious financial and health problem status. I spend quite a bit of time suggesting to the latter group various options, including low-cost sales. Even those do not always work, as we know that many timeshares have no value whatsoever, and cannot even be given away. I try to help them avoid the various scams. Many have already fallen victim to them. In my article, I suggest that by not being pro-active, that the resorts are contributing to the livelihood of the scam operators.

So, you are welcome to write an opposing point of view.

The truth is that there are a lot of people in this country and in this world that are really hurting. Getting them (and their estates after they die) to pay no matter what, or foreclosing on them, may suit your own individual conscience and way of looking at the world. "You signed a contract. If you can't pay, tough!". But, I strongly disagree.

There has to be a better way.

In response to Dave's example, the used car can be junked. You don't have to give it back to the seller. You can always get rid of it. Once it is paid for, you can get it hauled away, often for free. Not so with a timeshare.

As to the argument, that if someone gives their timeshare back, it makes everything more expensive for the other owners. If the timeshare is worth something, then Dave or Cancun Dish or other owners at that resort should gladly take it off the hands of the BOD and make a small fortune reselling it. If the timeshare cannot be sold by the experts - the people running the resort and the knowledgeable owners, then I go back to the other option. Like any other business that cannot be run economically, sell the resort off as a piece of real estate and distribute the proceeds to the paying members.

And, when we all bought years ago, we had to be aware of timeshare sales people telling untruths. Then, we had to deal with the difficulty and additional costs of getting reasonable exchanges through the exchange companies.

I don't ever recall a TUG conversation to the effect that should you ever buy a timeshare, in many cases you will not be able to sell it, ever, and it will be an eternal possession for which you will pay ever-increasing maintenance fees, regular and very large special assessments, and higher and higher exchange and guest fees. Forever.

Kurt

Last edited by Kurt Brown; November 27, 2007 at 05:20 PM. Reason: add a point
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Old November 27, 2007, 05:20 PM   #12
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HOA-BOD's Obligation Is To The Paid-Up Owners.

It is imperative that the timeshare HOA-BOD go after all delinquent accounts so that annual fees donít have to cover shortfalls caused by other peopleís unpaid bills.

If in some particular case(s) it works out that it's to the overall advantage of the paid-up owners collectively (as represented by their elected independent HOA-BOD) to take back a deed, then so be it. But the HOA-BOD has to keep their eye on the ball, focusing on what works out in the paid-up owners' best interest, not solving problems for upside-down owners or buyer-regret owners or we've-changed-our-minds owners or we-don't-use-it-any-more owners.

Part of the obligation of timeshare ownership is taking care of handing it off responsibly to another owner when the time comes, as it eventually will for those of us who have not yet located The Fountain Of Youth.

So it goes.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.
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Old November 27, 2007, 05:43 PM   #13
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Well said, Alan!

Quote:
Originally Posted by Kurt Brown View Post
If the timeshare is worth something, then Dave or Cancun Dish or other owners at that resort should gladly take it off the hands of the BOD and make a small fortune reselling it. If the timeshare cannot be sold by the experts - the people running the resort and the knowledgeable owners, then I go back to the other option. Like any other business that cannot be run economically, sell the resort off as a piece of real estate and distribute the proceeds to the paying members.
That's not reality and that's twisting what I said, Kurt.

Most timeshare resorts are managed by their BODs in a fiscally sound and responsible manner. Many of those same resorts have some very-low-off-season (e.g., mud-season) weeks that people bought but don't use or want and probably can't sell or give away. We have all seen posts of such desperate owners here on TUG. The existence of such weeks doesn’t suggest in any way that the resort itself isn’t stable financially.

So why is it the BOD's obligation to take back the (let's say) 10% of timeshares that have little or no resale value merely to bail out some owners who no longer want their timeshares - at the expense of the remaining timeshare owners? Such an approach would make the term "legal obligation" to pay MFs a farce.

Back to my car example, which you dismissed, with a twist: Just as I am legally committed to pay MFs on my timeshare as long as I am the owner, I am likewise committed to pay my car loan to (let's assume) GMAC on the GM car I buy. Extending your theory, I should be able to get out of that "legal obligation" by merely giving my car back to GM when the car, which may well be worth less than the loan payoff balance, no longer serves my purposes. I don't think so.

Again, why should a BOD that manages the resort's operations efficiently take back the dog-weeks that can't be easily sold? Why should the remaining owners shoulder that increased MF and selling expense?
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Old November 27, 2007, 05:46 PM   #14
JMAESD84
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I find it very interesting that we all are quick to offer guidance and advise to someone to BUY RESALE, saving thousands of dollars versus buying from the developer.

Quick to offer guidance and advise someone to AVOID UP FRONT FEE resale scammers and big dollar postcard companies.

Yet when it comes to addressing a serious fundemental flaw in the ongoing operations of many TS's, that some units are not worth owning(which is really why we don't accept deedbacks), we stick our heads in the sand and have no good advise to offer.

Why because it may cost us a bit more in MF's?

Why, because it may mean that a resort that we like needs to be shut down because it's no longer economically viable?

When the only solution mentioned is to enforce the contract and force people to keep paying until they find someone else to take on there unenviable postion without the assistance of the TS operator is simply wrong.

That's an FU pay me policy - sounds like what the mob would say when extorting money from you.

If I should ever need to sell and can't because the timeshare becomes worthless...and am told no deedback from my TS.....the deed will be transferred legally to someone who will not be hurt by any action taken to enforce the contract by the TS and it will be the TS that ends up suffering and regrets not taking the deedback. This is what I recommend to other who finds themselves in this poistion.

As John said in his HOA protective policy .....at the end of the day when the sheriff has his sale with no buyers showing up, it's the HOA that gets the deedback.

So I say we can do this the easy way or the hard way.....consider your answer carefully.
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Old November 27, 2007, 05:53 PM   #15
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Some examples -

Just TODAY'S messages from people needing to get out from under their timeshares. And, I get similar ones EVERY DAY!! These are real people, and represent a significant number of timeshare owners. It may not be a problem for most TUGgers, but it is for many of your co-owners - those who share this world with you.

"Please take my timeshare. I found your name on a website and am hoping you are interested in a timeshare in _____________. ... My husband is on dialysis and is no longer interested in traveling. All I want is to get rid of it! Can you please help?"

===========================

Another -

"I have been recently widowed and unable to use our timeshare at ______________. This is becoming a financial burden for me and I need to get out from under it. ... Please let me know if this is something you'd be interested in."

============================

Another -

"We are responding to the potential of your taking over our timeshare payments etc.(no money to us). Below is the information on our unit. Due to my wife's breast cancer treatments in the past two years we can no longer afford such a luxury. I hope you can help. Thanks in advance for your assistance."

=============================

Others are not in as serious a situation, but still have a need to get rid of a timeshare. They respect their obligation and want to maintain their credit. That does not mean that their needs should be completely ignored -

"I found the timeshare dump in a google search. I have a fixed week at
________________________. It is completely paid for and maintenance fees are _____________ per year. I am not able to use it any more and want to get away from the maintenance fees. Would you be interested in taking this week?"
==============================


Again, these are just samples from one day's e-mails. I am only one person with a passive site. I never approach anyone wanting to sell. They contact me.

Do we as TUGgers have ANY idea how many people out there need to get rid of their timeshares? Can't we help them by being a voice for them in trying to get our resorts to be more responsive to this real problem?

Kurt
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Old November 27, 2007, 06:09 PM   #16
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I am on a board for a small timeshare resort, and I think we should always take deedbacks. Some board members disagree.

I cannot believe the expense of hiring a lawyer to get the weeks back (or the money) from people who don't care to own anymore. Why force people to own something they don't want? I say, let them give it back. Any resort can rent off-season weeks that no one wants, plus the Baby Boomers are retiring now and continuing the trend over the next fifteen years. There will be more need of off-season weeks, so I think the problem will take care of itself, mostly.

Are you all seeing good weeks on eBay by the various big resellers? I see a lot of good stuff. Some people will give back the good stuff! We have zero ski weeks at Twin Rivers in inventory, but we have lots of summer and lots of spring/ fall weeks. Our resort should take back everything and rent out the off-season weeks in a very active rental program.

I asked Timesharing Today (in an article I wrote) to donate ad space for resorts to give away weeks they have in inventory. That issue was in July/ August. TUG is doing it, Timeshare Forums has free ads, yet Timesharing Today chose not to even answer my CRAZY SUGGESTION article in their magazine. I am not impressed with them. Plus, they allowed Timeshare Relief to slam me for absolutely no reason.
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Old November 27, 2007, 06:13 PM   #17
johnmfaeth
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Hi James,

I must say that you are taking me out of context. The HOA needs to wield a big stick, while taking reasonable steps to assist owners. That is the fiduciary responsibility of the BOD.

Many around here know the efforts I make on behalf of the little guy. But the other owners deserve no less.

Please keep my statements in context.

Hi Kurt,

I again offer my assistance to any owner of the Wyndham Bluebeards Beach Club. The world's 6,000 or so other resorts will require other volunteers. But my offer stands. I am not unsympathetic and would hate to have your voicemailbox.

But the paying owners are the little guy here too. And their money does not grow on trees either. Fair is fair, these are the issues which result from capitalism. Thus is life.

There is no magic "they" to bail out those in trouble, "they" is "we" and most of "we" seem to draw the line on sympathy when we feel further personal financial pain.

John

Last edited by johnmfaeth; November 27, 2007 at 06:16 PM.
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Old November 27, 2007, 11:52 PM   #18
JMAESD84
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Quote:
Originally Posted by johnmfaeth View Post
For these reasons, as an owner, I prefer active collection efforts against non-paying owners.

At the 2-3 year point, when collection efforts are unfruitful, and credit history of the deadbeat owner is fully shot (only ammo in the HOA's gun), then offer a "Deed in Lieu of Forclosure". The reason is to avoid the additional 2 year foreclosure action and accompanying expense. Why, to save the paying owners another two years of paying the fees for the deadbeat unit as well as the foreclosure fees. Foreclosed units get offered for sale by the County Sheriff and garner almost no money. If no bids, it defaults to the HOA anyway.

Then offer HOA owned units to the paying owners who supplemented them for years by being paying owners. Anything netted is a plus, main issue is getting them back to MF paying status.

I don't accept the logic that the other owners, who pay their MF's, should have to shoulder the burden of another's unit.

John
John,

I didn't mean to take anything you've said out of context. We agree on far more than we disagree about. Clearly from the thoughts contained above you recommend a "you must continue to pay stance" or face "active collection...until the credit history of the deadbeat is shot" instead of a more proactive approach that I recommend in accepting deedbacks as a routine solution.

Remember that these owners are not deadbeats but they want OUT. I know that you are not completely unsympathetic to their situation and at least at the one resort you are active with you offer constructive counselling. Your approach however, is to do harm to the credit history of owners in good standing who are fully paid up if they are left with no alternative other than to stop paying when they would gladly deedback the property to the TS.

A TS could have a deedback policy that requires a fee for this service, to offset some of the administration costs for obtaining clean title to the deed.

Absent the deeback policy an owner is well served to legally transfer the deed to someone who because of their situation is immune to this harmfull active collection approach and with whom you'll only be harming the TS by applying this strategy. Leaving the TS with not only the lost revenues but the additional legal cost of collection, foreclosure and perhaps clouded titles to reclaimed property after years of effort.

This response is also capitalism. The TS wouldn't spend $5000 in legal fees to try to collect a $500 bad debt from someone who's unlikely to pay even when you've got the judgement and that's the decision the TS would be left with.

Last edited by JMAESD84; November 27, 2007 at 11:58 PM.
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Old November 27, 2007, 11:57 PM   #19
JMAESD84
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Quote:
Originally Posted by rickandcindy23 View Post
I am on a board for a small timeshare resort, and I think we should always take deedbacks. Some board members disagree.

I cannot believe the expense of hiring a lawyer to get the weeks back (or the money) from people who don't care to own anymore. Why force people to own something they don't want? I say, let them give it back. Any resort can rent off-season weeks that no one wants, plus the Baby Boomers are retiring now and continuing the trend over the next fifteen years. There will be more need of off-season weeks, so I think the problem will take care of itself, mostly.

Are you all seeing good weeks on eBay by the various big resellers? I see a lot of good stuff. Some people will give back the good stuff! We have zero ski weeks at Twin Rivers in inventory, but we have lots of summer and lots of spring/ fall weeks. Our resort should take back everything and rent out the off-season weeks in a very active rental program.

I asked Timesharing Today (in an article I wrote) to donate ad space for resorts to give away weeks they have in inventory. That issue was in July/ August. TUG is doing it, Timeshare Forums has free ads, yet Timesharing Today chose not to even answer my CRAZY SUGGESTION article in their magazine. I am not impressed with them. Plus, they allowed Timeshare Relief to slam me for absolutely no reason.
Cindy,

I think you are serving the best interests of the TS by recommending deedbacks to the BOD. You're correct that the TS will receive both good and bad weeks via thia approach and can be creative with what to do with this inventory.
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Old November 28, 2007, 08:40 AM   #20
cancun dish
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Quote:
Originally Posted by Kurt Brown View Post
John,

I just don't buy this argument - which is not new!

First, like any organization, tasks can be "farmed out" to outside organizations, when the management/board does not consider itself to be expert in a task.

Second, it is (and was) totally foreseeable that as owners get older and as life situations change, that intervals will have to be sold by someone. In my view, that becomes the responsibility of the resort/board to create a market for such intervals. The resort/board is in the best position to do so. A board running a multi-million dollar operation cannot simply say to the owners - the developers have run away, we have no idea how to run and maintain the resort, poor us. Most resorts are under the auspices of a management company, anyway - hired by the board; paid by the owners.

If there is no other option, wind up the corporation, like any other business that no longer can be managed due to changing circumstances and changing economic factors.

Again, leaving the owners who encounter life-changing situations with two unconscionable choices - to pay even when they cannot afford or use the intervals, or face foreclosure, is not satisfactory. And, the board and other owners are gladly accepting this blood money.

Can you truly enjoy your vacation knowing that you are significantly contributing to the suffering of others?

Kurt

Kurt,

I don't think that in your case you have had such a life change that you can not afford the timeshare. I believe that in your case you have simply decided the product no longer works for you. I view this as your responsibility to sell this week. Have you ever visited this resort? If so many owners do enjoy time at the resort and might be happy to take a week from you for free.
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Old November 28, 2007, 09:27 AM   #21
bogey21
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Let's see if I understand this. I own a Week at XYZ Resort in ABC, Florida. I'm happy with my ownership, use it every year and pay my MFs on time. For whatever reason all the rest of the owners have personal issues and deed their Weeks back to the HOA. The Weeks are currently bding offered on Ebay for between $1 and $100 with few takers.

In short, I now own the only week paying MFs and the HOA owns all the rest which are essentially unsalable. There is no income for the Resort other than my MF since the HOA has let everyone elso off the hook. Next year I get billed $1.5 million for my Week to cover expenses.

Thanks Kurt!!

GEORGE
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Old November 28, 2007, 09:28 AM   #22
johnmfaeth
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Hi James,

We do agree on most of this. IMHO, the issue is well summed up by a Ben Franklin quote "If all men were Angels, we would need no government".

That is the basis for my desire for the HOA to protect the interests of paying owners, while promoting constructive means to help those truly in need. In that way, their fiduciary role of protecting those who pay and are in it for the long term are met without inducing unnecessary "pain" for non-payers.

But not all deadbeats want to do the right thing. When offered to turn in a unit before the foreclosure portion happens, at no cost or expense to be "done with it", only 1/2 of those given the offer accept it. A foreclosure is far more damaging to a credit report than a simple unpaid debt. They refuse a "free ticket out", much to the financial detriment of the HOA.

But the HOA must pay that price to maintain its credibility with others. Who would pay the IRS is folks realized it was voluntary and without consequence not to pay?

The reasons are often lack of concern for their credit, in those cases I can only assume it's already shot from many deadbeat situations. And they desire to hurt the HOA financially, because they are still mad about paying an excessive amount to a developer when they bought it. They want pain for someone who is not involved and inflict it intentionally on their fellow owners instead.

Other times, it's a timeshare owned with an ex and they want to hurt the other party. We have had postings on TUG for the willing party in recent times, whose hands are tied by their vindictive former partner.

So, I think the system I support does the best it can, pre and after initial collection efforts.

The hardship cases discussed by Kurt do get early relief in most instances, a simple email to a BOD member has resolved many that I've heard of personally, so will a posting on the Yahoo group or EBay.

But don't assume the deadbeats are all "good guys", it aint the case by any stretch.

I'll finish this post, as enough has been said by me on this topic, with another Franklin quote "this is a topic upon which honest men can disagree".

John
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Old November 28, 2007, 09:42 AM   #23
bogey21
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Here is where I agree with you. All resorts not still in development should have internal sales operations and act as the middle-man to help those who don't want to keep their Week. In the last 2 years I have sold Weeks in resorts where I own(ed) this way: Berkshire Beach Club, Deerfield Beach, FL and Peppertree by the Sea, Myrtle Beach, SC (two Weeks at each). Three others where I own also have active internal sales operations: Pinecliff Village, Ruidoso, NM; Emerald Seas, Deerfield Beach, FL; and Chateau LeGrand, Biloxi, MS.

This is the way it should be done. Owners wanting to sell, set the price and pay the MFs until the Week is sold. The HOA only inventories Weeks that it has acquired via forclosure.

GEORGE

Last edited by bogey21; November 28, 2007 at 09:45 AM.
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Old November 28, 2007, 10:19 AM   #24
rickandcindy23
 
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George, you are certainly correct, the burden of the abandoned timeshare does fall upon the owners. BUT, there are lots of owners that will take weeks, and the associated maintenance fees, if resorts will just give the weeks to current owners.

Orlando is the number one vacation destination with a lot of pink weeks that are easy to get on trade. My goal for the off-season weeks is to market the ability to trade into Orlando in those slow times. As soon as our resort is done with its exclusive contract with II, I will make sure every newsletter has alternative exchange companies listed, along with their costs.

That is my plan. I hope the management company actually listens to the board and allows us to add information to the newsletter. This is always a problem. The management company "forgets" to add whatever we have discussed to the newsletter.
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Old November 28, 2007, 10:34 AM   #25
Bill4728
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ANYONE TRYING TO GET RID OF THEIR TIMESHARE

Tug has setup a place in their BBS classifieds ads for people to advertise TS for sale under $25. Link here

This may be a great place to just get rid of your TS and give other TUG members a chance to grab a real bargain.

Please note this is the "beta BBS classified ads", not the regular TUG classified ads
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