How does a Home Owners Association Stop Sales to LLCs?

[Fayeoctober]

Currently our timeshare has more than 100 weeks owned by Limited Liability Companies who are more than a year delinquent in terms of paying maintenance fees and the assessment. More than half of them owe between $5K to $7K for an individual week and some owe about $50,000 for all the weeks they have. It seems like there should be a way to prevent sales to these organizations but in doing so, are are we limiting the legal rights of owners to sell their timeshare to whoever is willing to buy it. I personally can think of no reason other than a "Viking Ship" issue for a LLC to buy a timeshare. What I would like to know from someone who has done it is: HOW TO PREVENT THE SALE OF A TIMESHARE TO AN LLC? Please provide some detail on this and indicate the state in which it was done. Thank you in advance.

 

[davidvel]

Currently our timeshare has more than 100 weeks owned by Limited Liability Companies who are more than a year delinquent in terms of paying maintenance fees and the assessment. Some of them owe more than $7,000 for an individual week and some owe about $50,000 for all the weeks they have. It seems like there should be a way to prevent sales to these organizations but in doing so, are are we limiting the legal rights of owners to sell their timeshare to whoever is willing to buy it. I personally can think of no reason other than a "Viking Ship" issue for a LLC to buy a timeshare. What I would like to know from someone who has done it is: HOW TO PREVENT THE SALE OF A TIMESHARE TO AN LLC? Please provide some detail on this and indicate the state in which it was done. Thank you in advance.

Sounds like big number. I'd contact a reputable attorney local to your timeshare and at least have them evaluate this scheme for potential recovery from the middle-men or original owners, especially if the owners owes fees before transfer.

 

[Fayeoctober]

Thank you for the advice, but isn't there a Statute of Limitations issue in terms of the prior owners? Also in order for the sale to the LLC to have gone through, wouldn't all prior debts to the HOA have to have been dealt with? I am looking for a way to keep this from happening in the future - for instance could we pass some kind of by-law to stop multiple sales to the same LLC in the same year from happening? I don't think trying to reconstruct the past is going to be helpful but again thank you.

 

[Saintsfanfl]

It is quite simple. HOA's and/or management companies are refusing to transfer to an entity that is not "legitimate". They are screening the transfers and requiring copies of DL and SS#'s. If they take an LLC they may review to see that it is a real and operating LLC and not just a dummy shell or viking ship. Usually this screening process scares away all the LLC's.

Does this limit the rights of the owners or is it even illegal to some degree? The answer is likely yes and yes but they are doing it anyway.

The problem with these actions is it doesn't really solve the real problem. The reason so many are in shell LLC's is because the timeshare were completely worthless and the owners felt there was no other way to get out. The management or HOA needs to solve the real problem or someday the timeshare is going to fold.

 

[Saintsfanfl]

Thank you for the advice, but isn't there a Statute of Limitations issue in terms of the prior owners? Also in order for the sale to the LLC to have gone through, wouldn't all prior debts to the HOA have to have been dealt with? I am looking for a way to keep this from happening in the future - I don't think trying to reconstruct the past is going to be helpful but again thank you.

Anyone can record a deed that transfer's ownership. Nobody at the county is ever going to check anything at all. It is not their responsibility. They are just the public recorder. The resort management is the one that should be checking before they process the internal transfer based on the deed. It sounds like things were done with no care or checks and balances. They should have been reviewing what is due and then refusing to process the transfer. But again this isn't going to make the bad debt problem go away. It may delay things because some of those owners may keep paying the bill but the majority of them would probably default.

This resort needs to foreclose against the LLC's and then get aggressive with resales. They need to start taking deedbacks to prevent people from being motivated to turn to viking ships or defaults.

Fixing it will take time and money but not doing anything is just going to make it worse and worse.

 

[theo]

Currently our timeshare has more than 100 weeks owned by Limited Liability Companies who are more than a year delinquent in terms of paying maintenance fees and the assessment. More than half of them owe between $5K to $7K for an individual week and some owe about $50,000 for all the weeks they have. It seems like there should be a way to prevent sales to these organizations but in doing so, are are we limiting the legal rights of owners to sell their timeshare to whoever is willing to buy it. I personally can think of no reason other than a "Viking Ship" issue for a LLC to buy a timeshare. What I would like to know from someone who has done it is: HOW TO PREVENT THE SALE OF A TIMESHARE TO AN LLC? Please provide some detail on this and indicate the state in which it was done. Thank you in advance.

Disclaimer: The following is my personal opinion, neither offered nor intended as any form of legal advice nor offered or intended as any form of substitute for seeking competent, appropriately licensed legal counsel in the specific state(s) at issue for your timeshare(s) of concern.

That being said, there are (...or so I am told ) legitimate LLC's that own timeshares that are not just slippery Viking Ships of ill intent by their very design.
The objective then, it seems to me, is not necessarily to "prevent" LLC ownership, but to instead require verifiable identification of corporate "officers", thereby maybe being able to hold personally accountable specific, real, living, verifiable individuals associated with the LLC who, without providing verifiable personal identification, might otherwise just hide behind the "corporate veil". No real, live, verifiable people in the LLC? Then no HOA acceptance or acknowledgement of transfer of ownership.

Is this easier said than done? You betcha....
Whether the state of concern to you allows for simple, quick, non-judicial foreclosure proceedings is also a relevant factor for HOA recovery and resale of weeks.
I don't know the size of your facility, but if it's a small "independent", 100+ weeks in bogus LLC names would seem to suggest a HOA basically asleep at the wheel.

 

[ronparise]

Disclaimer:
The following is personal opinion, neither offered nor intended as any form of legal advice nor offered or intended as any form of substitute for seeking competent, appropriately licensed legal counsel in the specific state(s) at issue for your timeshare(s) of concern.

That being clearly stated, there are (...or so I am told ) legitimate LLC's that own timeshares that are not just Viking Ships of ill intent by their very design.
The objective then, it seems to me, is not necessarily to outright "prevent" LLC ownership, but instead to require and identify (from pertinent corporation papers) in advance (and then maybe be able to hold personally accountable) specific, real, live, verifiable individuals associated with the LLC, who might otherwise successfully remain hidden behind the "corporate veil". No real, live, verifiable people in the LLC? Then no HOA acceptance or acknowledgement of transfer of ownership.

Is this easier said than done? You betcha....

Ive highlighted what I think the key words are in Theos post .

The problem I think is that the transfer process is usually find a buyer, make your deal, prepare a new deed, and record it. Then submit the new deed to the HOA so they can update their records>> By the time the hoa knows there has been an ownership change its too late to stop it

There are condos in SW Florida that require the the same steps but in different order. The first step is to submit yourself to the HOA for approval, some even require a personal interview

But this isnt something they just came up with, its written into the condo docs, that were filed with the county land records when the condo was created.

I think its too late for most timeshares to even try to inject themselves into the transfer process

The answer Ive been suggesting for a long time goes to the question... Is it better for a timeshare deed to be packed into a Viking Ship, set on fire, and sent out to sea? or safely kept in a safe in the offices of the HOA, until it can be sold?

I think the HOAs need to present themselves as the buyer of last resort

 

[rickandcindy23]

The president of our small HOA has directed our management company to never accept a deed transfer from an owner to an LLC. We had a few that got by with it a few years ago (maybe 8 years ago?), but never again. Our president personally calls the owner who is trying to sell/give away the week. He asks about the process they went through to find a taker. When the owner pays thousands of dollars, he tells them they were swindled, and they maintain their obligation to the week.

It's illegal to deed a week to an entity you know will not pay the fees. At least it's that way in Colorado.

A guy named Michael Dunahay, you can look him up, owner an LLC called Vacation Solutions, and he took in thousands of timeshares. He went bankrupt because management companies went after his money. You see, an LLC in Colorado has your SS# attached to it.

Long story short, Michael Dunahay owned the most unusual and famous house in the state, The Sleeper House, also known to me as the spaceship house, which is high on a hill in Evergreen. He lost his house because he stole peoples' money with his Viking Ship LLC.

 

[Ty1on]

Thank you for the advice, but isn't there a Statute of Limitations issue in terms of the prior owners? Also in order for the sale to the LLC to have gone through, wouldn't all prior debts to the HOA have to have been dealt with? I am looking for a way to keep this from happening in the future - for instance could we pass some kind of by-law to stop multiple sales to the same LLC in the same year from happening? I don't think trying to reconstruct the past is going to be helpful but again thank you.

Firstly, the contracts aren't generally delinquent when they are transferred to the LLC. Once transferred to LLC, all payments stop and delinquency starts mounting.

It has been mentioned that anyone can transfer a deed to anyone, but it is up to the HOA whether to accept them into membership. Ostensibly, the HOA could leave the original owner on the hook if it does not approve a transfer. I don't know the legal specifics of enforcing maintenance fees against someone who no longer owns the property. But in the end, whether it sails off on a Viking Ship or an owner says they're done and stops paying, the result is the same.....Bad Debt expense starts mounting, and paying owners are on the hook to pay that deficiency, except in some cases where I understand developers contract to cover mf delinquent over 365 days in exchange for the right to use that property as rental.

 

[Fayeoctober]

I want to thank everyone who has replied thus far. I want to provide a little more information. While there are more than 100 delinquent LLC weeks, only about 10 of them are in the prime rental season. Units on which maintenance fees are not paid, including those owned by LLCs, have been rented in the past.

Our resort consists of about 130 units and while I guess we would be considered independent, in that we aren't owned by a larger company, we do have a management company (who manages a number of timeshares in different states) who has been with us for about five years. The management company takes care of day-to-day operations and the HOA is in an oversight role. The HOA may be exploring looking at another organization to manage our resort - maybe the current company is too large to give us the service we need.

My husband was elected to the HOA in October 2014 and he replaced the President of the HOA who had been in that position since the beginning. He didn't replace her as President just as a member of the HOA, but she was very upset when she wasn't reelected. There are a number of issues involving her company (she was one of the original developers) that have contributed to our resort being in a less than good financial position.

The first time my Husband learned how many owners were in significant arrears was at the HOA meeting a few months ago. Based on the reaction of other members of the HOA, this may be the first time they learned of it as well.

I don't know if the prior President kept this information from the rest of the HOA or the management company was negligent in telling the HOA. But of more than 1,000 weeks in arrears for at least $2,000, only about 10% are in the peak summer months. The amount of maintenance fees, assessments, and interest are well in excess of our annual budget.

My Husband and the current President of the HOA want to do what is within the law, but at the same time, work to preserve the existence of our resort. We are aware that some vacation clubs may be looking to get their hands on our property and also want to prevent that.

Sorry for all the detail and thank you so much for taking the time to read this and for any advice you can offer.

 

[TUGBrian]

this is a great thread, I hope many HOA/BOD members will read and chime in on this...for far too long most have just kept their heads in the sand without providing a viable solution!

 

[Ty1on]

I want to thank everyone who has replied thus far. I want to provide a little more information. While there are more than 100 delinquent LLC weeks, only about 10 of them are in the prime rental season. Units on which maintenance fees are not paid, including those owned by LLCs, have been rented in the past.

Our resort consists of about 130 units and while I guess we would be considered independent, in that we aren't owned by a larger company, we do have a management company (who manages a number of timeshares in different states) who has been with us for about five years. The management company takes care of day-to-day operations and the HOA is in an oversight role. The HOA may be exploring looking at another organization to manage our resort - maybe the current company is too large to give us the service we need.

My husband was elected to the HOA in October 2014 and he replaced the President of the HOA who had been in that position since the beginning. He didn't replace her as President just as a member of the HOA, but she was very upset when she wasn't reelected. There are a number of issues involving her company (she was one of the original developers) that have contributed to our resort being in a less than good financial position.

The first time my Husband learned how many owners were in significant arrears was at the HOA meeting a few months ago. Based on the reaction of other members of the HOA, this may be the first time they learned of it as well.

I don't know if the prior President kept this information from the rest of the HOA or the management company was negligent in telling the HOA. But of more than 1,000 weeks in arrears for at least $2,000, only about 10% are in the peak summer months. The amount of maintenance fees, assessments, and interest are well in excess of our annual budget.

My Husband and the current President of the HOA want to do what is within the law, but at the same time, work to preserve the existence of our resort. We are aware that some vacation clubs may be looking to get their hands on our property and also want to prevent that.

Sorry for all the detail and thank you so much for taking the time to read this and for any advice you can offer.

In truth, that total delinquency, though astounding, is just a fuzzy number at this point. I say that because paying members have been covering the bad debt through the years through higher maintenance fees and other assessments.

I know you guys understand that maintenance fees are calculated by budgeting all operating costs and management fees to SPM. They budget a certain amount of bad debt expense and if delinquencies go higher than expected during the year, the HOA runs a financial deficit that year and if they are responsible, they budget additional needs the following year to make up the deficit. All prior years delinquencies that make up that huge arrears amount is represented on the Balance Sheet as Allowance for Doubtful Accounts, which is a contra-asset to the operating receivables. This Allowance is accumulated as the sum of all bad debt expenses through time, and is only reduced if a contract is foreclosed and its delinquency written off, or someone comes out of a coma and decides to pay off their delinquency.

So here's the dilemma. If the HOA forecloses on an account, they have to go through significant legal expense--let's say $2K per contract for sake of argument. Once foreclosed, it becomes an association-owned contract, which doesn't add to the revenue in the budget. So unless the HOA can sell the contracts or even find takers for them once foreclosed, it is in the same boat it was just letting the contracts fester in perpetual delinquency.

I presume it's a mature resort with no active sales staff, so the ugly truth is that unless the HOA can find a big system who wants to put that dot on the map and will be willing to pay foreclosure costs to pick up the contracts and add to their inventory, the HOA is probably just as well off leaving the contracts languish in delinquency and get what it can in rental revenue.

To Brian's point, if the HOAs would take back deeds, your delinquency problem wouldn't be as severe, but again, your association owned inventory would become a problem.

 

[TUGBrian]

there is no reason the HOA cant resort to listing ads in the resale market just like they expect their owners who want out to do so!

We extend offers to all HOAs and offer assistance in workign with them to get their unused inventory listed for sale and for rent on TUG.

marketing to your existing owners, as well as the current resale market does NOT require an active sales staff IMO. The goal is to replace a delinquent interval with a paying owner....there should be little to no fees involved for these to a buyer as the resort is in many cases not really in a position to demand much of anything and would be best served by making it as easy as possible for someone to take over an unused deed!

 

[Fayeoctober]

Brian, we appreciate your offer. But the sad reality is as Ty10n stated:

"So here's the dilemma. If the HOA forecloses on an account, they have to go through significant legal expense--let's say $2K per contract for sake of argument. Once foreclosed, it becomes an association-owned contract, which doesn't add to the revenue in the budget. So unless the HOA can sell the contracts or even find takers for them once foreclosed, it is in the same boat it was just letting the contracts fester in perpetual delinquency."

While we have been advised the cost of foreclosing might be $1,500 per unit week, about 90% of the weeks in significant arrears aren't worth $1,500 and we currently don't have the funds for the other 10% in our budget. I realize we need to get a handle on this and I appreciate all suggestions on how we can continue to be independent. Thank you.

 

[dioxide45]

The problem is that it is slow downward spiral. As more accounts become delinquent, the bad debt expense goes up, increasing the fees and increasing the number of people willing to walk to avoid the fees. So then the bad debt and fees go up more. The problem is that for too long prime week owners were looking to low season owners to subsidies their MFs. It isn't sustainable in the long run and the reason many resorts have moved to points based products.

It isn't going to be easy and it will probably take a special assessment to bring the weeks back on board and get them out to either current owners willing to take them on or give them away to people willing to pay for them. A special assessment may also be needed to bring the property up to a standard where people want to stay there, even in shoulder and low season. Though that will put strain on those owners that are still paying and many will walk once an SA comes a long. In some cases, it may be best just to fold the whole thing and sell. Or let the big boys take over. Remaining independent isn't easy.

 

[TUGBrian]

sure it may cost $1500 to recover, but thats what...2 or so years worth of maintenance fees?

its certainly easy to ignore such an expense, but as mentioned above...its only delaying a much larger one.

 

[Fayeoctober]

The $1,500 is closer to 2 1/4 years of maintenance fees. The HOA raised the fees about $25 and some owners were extremely upset. We had a significant assessment about two years ago, the final payment for which is due in a few weeks. People do want to stay at our resort from May through maybe October, but its the rest of the year that can be a problem. And unfortunately the by-laws state that all the maintenance fees regardless of time-period or size have to be the same. I don't think that is a governmental thing but rather the way the by-laws were written.

I am starting to think there isn't a way out of this, but hoping there is. And maybe the whole timeshare model for a resort that is basically seasonal has become obsolete.

 

[LannyPC]

People do want to stay at our resort from May through maybe October, but its the rest of the year that can be a problem.

I know this issue has been discussed many times here on TUG. One suggestion raised that fits your resort's situation is to shut down the resort during the mud/blue/dog weeks. That will reduce the operating expenditures and make the weeks that are running more valuable.

Of course, OTOH, there are at least two rebuttals to this solution:

1) Are you going to get all of the owners at the resort, including the ones who own dog weeks, to vote and agree to this? It's a lot easier said than done.

2) You will have a tough time recruiting and retaining quality employees at the resort if it is shut down (IOW, they are laid off) for half the year.

I know it's a tough dilemma but all options should really be looked into considering your resort's situation.

 

[Ty1on]

One place the HOA can start is by contacting delinquent owners and offering amnesty on the arrears if they voluntarily deed back their property. This would allow the HOA to bring it back to Association Owned at the cost of recording the deed and whatever SPM charges as an admin fee to do it. The deed could then be offered up on TUG, etc., at little expense. You have to come to terms that no matter what the resolution, the delinquent fees are sunk money.

The 600 pound gorilla is that an HOA that is TOO accommodating with deedbacks can turn the slow spiral dioxide described into a fast spiral as more owners opt out. I think this is largely why they won't do it. I think the solution requires some thinking outside the box, and ceasing building up debt the HOA will never collect anyway is a good way to start. Again, it isn't going to help the HOA in the short run as it doesn't put more cash in the coffer, but it would only be at the expense of what it costs to process a voluntary deedback. The LLC owned deeds and the deeds belonging to deceased that weren't inherited you save for last because of the legal expense. Also focus on the mud weeks, because you are already recovering some or all of the lost fees through rental of the good ones.

Maybe come up with a par inventory the Association is willing to carry, like maybe 30-50 deeds, and take more deedbacks as you find takers for the ones you already held and the inventory decreases below that par.

Or put some lipstick on the property and wink at DRI, and make a deal with the devil.

Are discounted bonus weeks offered to owners during slow season?

 

[theo]

Some thoughts...

The $1,500 is closer to 2 1/4 years of maintenance fees. The HOA raised the fees about $25 and some owners were extremely upset. We had a significant assessment about two years ago, the final payment for which is due in a few weeks. People do want to stay at our resort from May through maybe October, but its the rest of the year that can be a problem. And unfortunately the by-laws state that all the maintenance fees regardless of time-period or size have to be the same. I don't think that is a governmental thing but rather the way the by-laws were written.

I am starting to think there isn't a way out of this, but hoping there is. And maybe the whole timeshare model for a resort that is basically seasonal has become obsolete.

Maybe, maybe not...

I do not own at any resorts which are in RCI Points and I am neither a member nor a fan of RCI, so the following is offered objectively and with no personal agenda.

Once foreclosure results in recovery of deed back to the HOA, even "dog" weeks can be "reinvented" to acquire some value if placed into RCI Points before next resale. It's a relatively minor one-time expense for a RCI-affiliated resort to adopt the RCI Points program. The goal is obviously to acquire new fee-paying owners for "doggy" weeks --- even if the reinvented "dog weeks" (...but now also with some RCI Points) owners never plan to subsequently set foot on the property themselves at all, but instead just plan to use their new RCI Points elsewhere. I don't claim to know the statistical success rate of this particular strategy --- and I'm sure that the Points / maintenance fees ratio is a very important factor in its' success. I'm merely observing "aloud" that the RCI Points option exists and that I have personally watched it become adopted as a HOA strategy by at least one timeshare property where we owned (...but, for completely unrelated reasons, sold off) a prime Snowbird week.

I am not recommending or endorsing this RCI Points adoption strategy, but merely offering food for thought and discussion, while acknowledging that the delinquent weeks must still first be recovered by the HOA, hopefully utilizing the more timely (and less expensive) non-judicial foreclosure process, if a non-judicial foreclosure process is even available in the OP's resort state. I cannot knowledgeably name all of the states in which non-judicial foreclosure is an available option.

I do not (...never did, never will) subscribe to the theory that it is any (volunteer, unpaid) HOA's responsibility to accept deeds back from owners who freely and voluntarily bought "in", but later conveniently decide that they now want "out" of the legal and contractual responsibilities of the ownership which they voluntarily acquired in the first place. That personal belief aside however, the above described RCI Points adoption is indeed one proactive way in which a HOA can help to impart at least some value to foreclosed weeks which otherwise have little or no attraction or current resale or market value --- at least at RCI-affiliated resorts.

 

[rickandcindy23]

In truth, that total delinquency, though astounding, is just a fuzzy number at this point. I say that because paying members have been covering the bad debt through the years through higher maintenance fees and other assessments.

I know you guys understand that maintenance fees are calculated by budgeting all operating costs and management fees to SPM. They budget a certain amount of bad debt expense and if delinquencies go higher than expected during the year, the HOA runs a financial deficit that year and if they are responsible, they budget additional needs the following year to make up the deficit. All prior years delinquencies that make up that huge arrears amount is represented on the Balance Sheet as Allowance for Doubtful Accounts, which is a contra-asset to the operating receivables. This Allowance is accumulated as the sum of all bad debt expenses through time, and is only reduced if a contract is foreclosed and its delinquency written off, or someone comes out of a coma and decides to pay off their delinquency.

So here's the dilemma. If the HOA forecloses on an account, they have to go through significant legal expense--let's say $2K per contract for sake of argument. Once foreclosed, it becomes an association-owned contract, which doesn't add to the revenue in the budget. So unless the HOA can sell the contracts or even find takers for them once foreclosed, it is in the same boat it was just letting the contracts fester in perpetual delinquency.

I presume it's a mature resort with no active sales staff, so the ugly truth is that unless the HOA can find a big system who wants to put that dot on the map and will be willing to pay foreclosure costs to pick up the contracts and add to their inventory, the HOA is probably just as well off leaving the contracts languish in delinquency and get what it can in rental revenue.

To Brian's point, if the HOAs would take back deeds, your delinquency problem wouldn't be as severe, but again, your association owned inventory would become a problem.

This is a great post with a lot of thought going into it. I agree with everything you said, Ty1on. This describes legacy resorts and what they face to a "T."

 

[Maple_Leaf]

Our resort consists of about 130 units and while I guess we would be considered independent, in that we aren't owned by a larger company, we do have a management company (who manages a number of timeshares in different states) who has been with us for about five years. The management company takes care of day-to-day operations and the HOA is in an oversight role. The HOA may be exploring looking at another organization to manage our resort - maybe the current company is too large to give us the service we need.

Have you approached SPM about this? I know they use Palmetto Marketing as a dealer for weeks at other SPM managed resorts. It's hard to find weeks outside of Palmetto for these resorts, Palmetto appears to be the dominant market maker and prices are higher.

 

[j1ceasar]

Solution to arrears

It seams to me that a well run resort will have reasonable fee's and that will be enough to keep arrears down .

As an example ESJ towers fee's run us $ 650 for TWO WEEKS . This is an Island resort on the beach. Yes its reasonable for two reasons .
1) large multiple units ( thousands of owners ) built many years ago .
2) well run and well kept up.

All this makes it a desireable place to stay. (Units are $ 5 -20,000 per week )

La Quinta Aruba is much smaller and the maintainence is double that , but its well kept and ownership is around 99% giving them good payments .
( units are cheap to buy . )
Fee's are 1/2 of what a hotel runs so its a great deal ...

As a suggestion to all TS companies . Why not simply get payment monthy or quarterly ? NJ state allows quarterly tax payments and it makes life easy for many owners ...

Lastly - If your Resort couldn't make it as a hotel originally , there was something wrong to convert and think a TS would make it.

 

[PeakRunner]

Time-limited ownership

Could the HOA offer ownership of turned-in deed-backs to new owners for a defined and limited time period, say 3 years? There might be additional buyers if they knew there was an exit plan freeing them from eternal obligation for MFs.

 

[Fayeoctober]

Peakrunner - your idea is very interesting.

j1ceasar - our timeshare was never built as a hotel. I think two buildings were built originally as condos - one stayed that way and the other became a timeshare. The buildings that followed were all built as timeshares.

Our management company has arranged for a company called MVP to do resales for existing owners and when we get foreclosed units or voluntarily deeded back units into our possession, MVP will be tasked to sell them. They will try to sell the less desirable weeks as "points." Unfortunately the commission that I think we have agreed to paying MVP will probably eat up all the sale proceeds but we will then have more dues paying members.

However, the major problem is the weeks that aren't turned in - in other words weeks that are only obtainable through a foreclosure. A while ago I tried to research North Carolina law and it appeared foreclosures could be done through a non-judicial process. However, it seems like this non-judiicial process may cost as much as a judicial process - in other words the $1,500 per unit. I would like to see us start with weeks 24 to possibly 38 where the cost of the foreclosure may be worth at least the value of the week.

I want to thank Rick and Cindy for their advice about telling the management company not to allow any transfers to LLCs. I am not sure I can get the Board to agree to this but I think a proposal not to allow the same LLC to purchase more than one unit in a calendar year might make it through. I can't think of any valid reason that a legitimate LLC would buy two units? I have found a number of instances where the same LLC owes the same amount of money for two different weeks - so that means they purchased more than one timeshare in the same year.

With regard to the issue I just mentioned, do you think we have any recourse against our management company for allowing two sales to the same LLC - in other words should they have known that these transactions were likely "shams?"