40 Year Florida Timeshare Expires in 3 Years - Then What?

[bbakernbay]

Thank you, I am getting my Documents out this afternoon and will report on what I find.

 

[vacationtime1]

The Manager said it wouldn’t be 4 @ $350 but some much lesser amount for weeks 2, 3 & 4 but he wasn’t specific. We intend on using our 4 weeks in 2018 until we see how this settles out particularly if they are successful attracting long term rentals which brings several negative factors to the rest of us.

Also the proposed rental per month is about half of the equivalent of our MFees which rankles me and likely others but that is what the market is. Better to get $1,500 income from 16 rental units than have no income.

This makes me very suspicious of the Manager's motivation.

Shouldn't the Manager (i.e. the HOA) treat all weeks equally -- i.e. charge the same amount for each? If the Manager is negotiating a group rate, it seems that the "buyer" of the four units is someone other than the HOA.

 

[bbakernbay]

I certainly think it is the HOA taking the Units back but he advised that his management firm does the transfer process and he indicated that if multiple weeks by one owner is being deeded back at the same time, there are some savings to be achieved, the specific amounts I still need to determine but I doubt I will do anything this year as MFees are known and we intend on using our 4 weeks.

It does concern me that there is a one person Board which is the Manager.

He did say any Owner who wants to sit on the Board is welcome to do so.

 

[bizaro86]

I certainly think it is the HOA taking the Units back but he advised that his management firm does the transfer process and he indicated that if multiple weeks by one owner is being deeded back at the same time, there are some savings to be achieved, the specific amounts I still need to determine but I doubt I will do anything this year as MFees are known and we intend on using our 4 weeks.

It does concern me that there is a one person Board which is the Manager.

He did say any Owner who wants to sit on the Board is welcome to do so.

I would volunteer for the board and see what happens after that. It would be some work, but then you'd know what was happening.

Also, if they find a bunch of excuses to turn you down, that would be good info about the managers motivations.

 

[bbakernbay]

I just checked my files and the Deedback fee for one unit is $295 not $350 as I mistakenly posted.

His firm has developed some form of expedited process that has been approved by the State of Florida that enables HOA’s to get this process done quicker and cheaper. I forget the exact term he used to describe this process.

I am in the process of reading the lengthy document that we received on purchase. I do see the words that we become tenants-in-Common until the first Saturday in the year 2021.

Since there is zero possibility of getting a quorum of Owners before that date it would seem that is all we can do now except if bankruptcy is declared.

I would consider volunteering for the Board but he really scared me when he advised that the other Board Members, who were non-owners and his business associates, all resigned when the Board received threatening letters from some owners after being advised of the true financial situation. In addition, I live 1,500 miles away so that makes it difficult to properly participate.

 

[theo]

His firm has developed some form of expedited process that has been approved by the State of Florida that enables HOA’s to get this process done quicker and cheaper. I forget the exact term he used to describe this process.

This reference was almost certainly to non-judicial foreclosure, adopted in some states to expedite and facilitate the process. That procedure is not an "invention" by any firm; it is instead a legislatively approved, expedited legal process of relatively recent vintage, now in practice in numerous states (...yes, including Florida).

Foreclosures aside however, I'd still frankly be curious (and dubious) in your situation regarding exactly who apparently wants "deedback" weeks --- and why. It would be very interesting to see the "grantee" name(s), assuming that "grantor"-signed quit claim deeds are an integral part of that voluntary "deedback for a fee" option and process.

Those now-departed Board members, reportedly themselves both non-owners and business associates of the current one man Board / manager, all reportedly resigning in the aftermath of some financial status disclosures, frankly gives me even more pause. I also really have to wonder how an independent (i.e., non-"chain") timeshare property ever somehow had a Board comprised of non-owners in the first place. I cannot even begin to fathom how that could have occurred.

Btw, as a (maybe or maybe not irrelevant) aside, an interesting case study regarding an independent timeshare property "managed" by just a single person is the recent saga of Harbor Hill, located in Provincetown, MA, discussed at some length in these TUG forums during the past year or two. After not paying property taxes or Federal taxes (and / or assorted other bills) for quite some time, the place ultimately closed down. The property was purchased (for $8 miliion, well above its' actual market value, IMnsHO) by the town of Provincetown, to be used for middle income housing. Former (unsupervised) Harbor Hill "sole manager" Donna L. Zoppi was (...finally) recently indicted. It remains to be seen what became of missing money there, reportedly somewhere in the ballpark of $2 million dollars.

 

[Talent312]

My post presumed that no action was taken to formally extend the timeshare.
Of course, if they did that, then there would be no tenants in common...
just member-owners of an apparently failing timeshare.
.

 

[bbakernbay]

I Googled “Non-judicial disclosure Florida” and several articles appeared including this one:

Non-judicial Foreclosures
April 1, 2015 Sharon Scott, RRP


Many of us remember when various states began adopting legislation to allow for the non-judicial foreclosure of timeshare realty. We all celebrated at the time, but later it became apparent that while HOAs could now regain inventory in cases where the owners were not paying their annual maintenance fees, they still needed to pay expensive fees to a lawyer to go through the paperwork. Large developers could perhaps handle the process more easily if they were in active sales and needed the inventory. However, the ‘little guy’ was out of luck.

Kevin Mattoni
We recently caught up with Kevin Mattoni, VP of Cunningham Property Management, who says they have created a solution. Along with Sharon Cunningham and Richard Cunningham, Mattoni operates a multi-site management company, Cunningham Property Management, based in Florida. “As most of our resorts are more than twenty years old, many of them were facing a possible crisis,” he says. “In many cases, aging owners were not paying their annual maintenance fees, a situation that was only exacerbated by the recent recession. Associations needed to get delinquent weeks back so they could resell them to fees-paying owners who would once again use and enjoy their vacation ownership property.”

This situation is what originally prompted the group to create Cunningham Asset Recovery Services LLC (CARS) by retaining an attorney who would provide a lower price when processing a larger number of cases. “We realized that we could gain even greater efficiencies if we were to broaden our scope to open an entity that would provide foreclosure services to other management companies, HOAs and developers. Presently, CARS is available to any condominium, owner association, developer or lender desiring non-judicial foreclosure services at extremely low costs.”

Since they officially launched CARS last year, Mattoni reports they have grown significantly. “We are now serving over 20 associations spread throughout Florida, and are in discussions with resorts in Nevada and South Carolina,” he says. “Plus, we are exploring expanding into Massachusetts, Colorado, Rhode Island, Maine and Vermont. We manage every step of the process from recording the lien and completing mandatory title searches to the final trustee sale and recording the trustee’s deed. Our services are available for every size resort, from small self-managed properties all the way to larger projects under developer-control. CARS’ step-by-step process assures clients of clear title qualifying for title insurance, including clearing title clouds relating to bankruptcy, divorce, death or owners who cannot be located.”

Mattoni and the Cunninghams have been in the property management business for over 30 years. As a matter of fact, Sharon Cunningham was appointed to Florida’s Regulatory Council of Community Association Managers by Governor Rick Scott. This was approved by the Florida State Senate after a full vetting of Sharon and the company.

“We are excited by the opportunities we have for further growth,” remarks Kevin. “We are currently working on our website,
www.timesharenonjudicialforeclosure.com, and have a number of meetings scheduled during the ARDA World convention.”

 

[Maple_Leaf]

I recently had the opportunity to take a winter beach week in South Florida off of someone's hands, with first use in 2019. A quick check of the governing condo docs revealed that the timeshare arrangement expires in 2022, unless a meeting of a majority of interval owners 1-2 months prior extends the timeshare for 10 years with a majority vote. After almost 40 years of deaths, divorces and bankruptcies granulating the ownership, good luck with finding an interested designated voting member for a majority of those intervals to establish quorum.

 

[bbakernbay]

I completely agree, there is no way they will ever get the Owners, if they can even find them, to vote to extend.

That raises the obvious question, Who gets to decide?

Does the HOA vote for those Owners in delinquency or do they need a “foreclosure” first?

Did you buy yours in anticipation of getting a return based on timeshare being sold off.

That is what I am trying to decide if that is worth holding on for another 3 years.

Hopefully we can get some advice from someone who has actually gone through this process.

Thanks for posting.

 

[Maple_Leaf]

I completely agree, there is no way they will ever get the Owners, if they can even find them, to vote to extend.

That raises the obvious question, Who gets to decide?

Does the HOA vote for those Owners in delinquency or do they need a “foreclosure” first?

Did you buy yours in anticipation of getting a return based on timeshare being sold off.

That is what I am trying to decide if that is worth holding on for another 3 years.

Hopefully we can get some advice from someone who has actually gone through this process.

Thanks for posting.

I didn't take it. My situation was a bit different than yours. You were already in, considering getting out. I was out, considering getting in. I thought the risk of a negative outcome was too great.

 

[bbakernbay]

I completely understand, that is one reason I started this thread so as to alert prospective purchasers that timeshares could very likely have an end date and beware of what the future may bring. BTW, I now live in Kitchener, previously 40 years in North Bay.

 

[Maple_Leaf]

I found this pitch video from Timesharing Today about a small resort in North Carolina converting from a timesharing regime to whole ownership condos. I don't know anything about Lemonjuice Capital but they appear to present a roadmap for legacy resorts to move from a timeshare model to whole ownership condos with the prospect of realising some value for owners. It will be interesting to see what happens with the owners of the resort in the video.

 

[pwrshift]

I bought Marriott Manor Club many years ago and will have to dig out my papers as I think I remember that resort has some sort of arrangement that expires at some future date ... probably with Ford's Colony Golf Course .. it may only be the part where owners cease to get free golf rounds.

Brian

 

[garyk01]

Our timeshare in the Orlando - Kissimmee Florida Area now has 3 years left on its 40 year life.

Unfortunately the financial situation of the timeshare has deteriorated with the maintenance fees jumping significantly due to 50% of the owners not paying their Maintenance Fees.

The new management group is proposing to convert about 40% of the Units into long term residential rental units in order to create some additional income.

The Manager advises that in 3 years, when the 40 year term expires, then every owner will become a “Tenant-in Common” and the timeshare could continue on.

Financially, I don’t know whether we can survive 3 years as the big MF increase will likely accelerate the Owners abandoning ship.

I own 4 weeks and we use all 4 weeks there every year.

The Manager has indicated that existing Owners can relinquish ownership now or in the future by paying a $350 transfer fee.

The timeshare can’t possibly get sufficient Proxies to even hold an AGM, let alone make a decision to sell the entire complex, at least until the 40 years have expired.

Question 1, if we hang on until the end of 40 years and it is agreed to sell off the entire complex, then who gets to share in the proceeds. At the present time there is no bank loans or liens.

I estimate each unit would have a $100,000 vale as a rental property, therefore in theory the maximum payout to each owner would be $2,000 per week owned.

By year 40 there could only be 25% of the Owners in good standing, does that mean they get to share in the total proceeds based upon their proportion of weeks owned in good standing.

Hopefully, fellow Tuggers will chime in with their experiences or opinions. Apparently there are many Florida timeshares approaching Sunset.

 

[Panina]

I found this pitch video from Timesharing Today about a small resort in North Carolina converting from a timesharing regime to whole ownership condos. I don't know anything about Lemonjuice Capital but they appear to present a roadmap for legacy resorts to move from a timeshare model to whole ownership condos with the prospect of realising some value for owners. It will be interesting to see what happens with the owners of the resort in the video.

Interesting. The board and majority of owners allowed a takeover from Lemonjuice. I hope all the owners who voted no accept this and move on as the risk of not is really unknown.

 

[garyk01]

I actually had this happen to myself at a florida timeshare . I also had this and the manager said let us sell off the resort to a developer and you will get a share of the proceeds. Well I paid about $2000 to buy into the resort . I did the math and based on what they said I should get my money back. Hover by the time I paid all the courier fees, notary fees, the management costs, legal fees, transfer fees, etc. I ended up with a cheque for $132 .97 . That did not ever cover my costs to sell the place. I lost about $1000.00 . Best option deed it back now for the small fee and wash your hands of it. AS the big wigs will get all the gravy and you get basically nothing anyways.

 

[theo]

Every resort situation is different in regard to its' current infrastructure condition, owner base, financial health --- not to mention the resort management's competence, agenda(s) and honesty.

We own intervals at two separate older, independent, non "chain" timeshares in coastal SW FL. In both instances, governing docs reflected a "sunset" date 40 years after (early 1980's) construction, making 2022 the "sunset" year.

In both instances, the BOD / HOA was proactive, seeking (more than a year ago now) a majority vote to "extend" another 10 years beyond the CC&R sunset date. Wisely, they provided almost a full year for owners to vote, in order to acquire enough votes to constitute the majority required by the governing docs. In both cases, they got the votes and the right to amend the CC&R's --- and did exactly that.

My intended point is that overt action needs to be proactively undertaken long (i.e., several years) in advance of the CC&R-identified sunset date. Otherwise, a last minute (and likely unsuccessful) "Chinese fire drill" is almost guaranteed. I strongly suspect that a fair number of early 1980's-built timeshare resorts in Florida with 40 year CC&R "sunset" clauses have BOD's / HOA's with their heads currently in the sand (...or perhaps elsewhere), passively and inevitably headed straight toward that completely avoidable last minute "Chinese fire drill".

 

[Panina]

Every resort situation (i.e., infrastructure condition, owner composition and financial health) is different.

We own intervals at two separate older, independent, non "chain" timeshares in coastal SW FL. In both instances, governing docs reflected a "sunset" date 40 years after (early 1980's) construction, making 2022 the "sunset" year.

In both instances, the BOD / HOA was proactive, seeking (more than a year ago now) a majority vote to "extend" another 10 years beyond the CC&R sunset date. Wisely, they provided almost a full year for owners to vote, in order to acquire enough votes to constitute the majority required by the governing docs. In both cases, they got the votes and the right to amend the CC&R's --- and did exactly that.

My intended point is that overt action needs to be proactively undertaken long (i.e., several years) in advance of the CC&R-identified sunset date. Otherwise, a last minute (and likely unsuccessful) "Chinese fire drill" is almost guaranteed. I suspect that a fair number of early 1980's-built timeshare resorts have BOD's with their heads in the sand (...or perhaps elsewhere), passively but inexorably headed toward that completely avoidable last minute "Chinese fire drill".

Well run resorts that have proactive board members do what is required to extend . I own a few with the clause and the association did what needed to be done.

 

[bbakernbay]

One further question on Sunset situation.

If the majority of Owners vote to extend the timeshare for 10 years, or whatever term, does that obligate every Owner to continue paying their Maintenance Fees after the Sunset Date, even though they voted not to extend.

 

[theo]

One further question on Sunset situation.

If the majority of Owners vote to extend the timeshare for 10 years, or whatever term, does that obligate every Owner to continue paying their Maintenance Fees after the Sunset Date, even though they voted not to extend.

Yes. If a sufficient voting majority is obtained to amend the "Termination" section language in the underlying CC&R's, all owners are then collectively bound by that decision and the (newly amended) governing docs.

Frankly, the biggest obstacle is often getting a sufficient percentage of total votes at all, as often (but not always) clearly specified within the underlying governing resort docs. If, for example, the docs require 80% of owners to vote in order to constitute a required minimum total, that high hurdle is not easily jumped.

HOA-owned weeks should have no voting status at all (which is precisely why I previously questioned exactly who the new "grantee(s)" might be in the strange "one-man-band" deedback processing situation you had referenced previously.

 

[bbakernbay]

Theo, thank you very much for your prompt and thorough reply which I very much appreciated. Given that HOA owned weeks have no voting status and that Owners in default should have no vote (is that a correct assumption?) then there might not be many of the 2040 week owners eligible to vote.

I am wondering whether the 80% (or whatever % is stipulated) is calculated based upon the total 2040 Owners or just those remaining in good standing.

I contacted our Manager/President/Sole Director a few days ago asking whether we would hear anything about what is likely to happen before the MFees are due on February 28th and he said there are some legal issues the lawyers are trying to sort out. I have asked that paying Owners be given some perks in order to encourage them to remain and pay the substantially increased MFees for 2018. He indicated that he would try to do that.

As far as who the new Grantee is that is unknown, I can only presume the Manager/President but who knows.

Can an Owner demand an accounting of the number of Owners that are currently in good standing, we were told that it is around 50% but I expect that to plummet this year. If I am not present at the upcoming AGM, can I rightfully pose questions by email or letter?

 

[theo]

...Owners in default should have no vote (is that a correct assumption?) then there might not be many of the 2040 week owners eligible to vote.

Strangely enough, owners of record (whether or not current on maintenance fees) may indeed vote.
Whether or not current on maintenance fees, they are lawful owners of record until foreclosure (or "deedback") occurs.
Their votes count, unlike HOA-owned weeks, which have no vote *if* appropriately deeded back to the resort HOA (not to some other entity or individual(s) instead; a possibility which might be a concern / issue in the situation discussed here).

I contacted our Manager/President/Sole Director a few days ago asking whether we would hear anything about what is likely to happen before the MFees are due on February 28th and he said there are some legal issues the lawyers are trying to sort out. <snip>

As far as who the new Grantee is that is unknown, I can only presume the Manager/President but who knows.

Have you pointedly asked this "deedback grantee identity" question directly of the manager / President / deedback handler?
Deeds are a matter of retrievable public record and someone is (hopefully) officially recording all those "deedbacks".
It should only be the resort HOA (not any individual(s) or company) named as grantee in any and all such "deedbacks".
Exactly whose interests this "Lone Ranger" manager / President / deed handler truly represents is entirely unclear to me.

The "some legal issues" answer you received seems a bit vague and fuzzy, coming from the one person who knows (or should know --- and share) exactly what those "issues" might be, with payment deadline date less than three weeks away. Seems a bit disingenuous, but perhaps that fuzzy response was a face-saving alternative to admitting "I have no idea".
By the way, where are the funds coming from to pay "the lawyers" mentioned by the manager / President / deed handler?
Who exactly does legal counsel actually represent there? Who retained said counsel in the first place --- and why?

Can an Owner demand an accounting of the number of Owners that are currently in good standing, we were told that it is around 50% but I expect that to plummet this year. If I am not present at the upcoming AGM, can I rightfully pose questions by email or letter?

Many independent (i.e., non-"chain") resort HOA's voluntarily report their current delinquency rate, often routinely identifying same in periodic resort newsletters, openly comparing the current delinquency rate to that of prior year(s).
There is no good reason that you as an owner should not be readily provided with that information, regardless of the means by which you choose to request it and regardless of whether or not you are physically present on site when doing so.
Open identification of individual delinquent owners by name would not be appropriate or necessary however.

That "one man band" manager / President / "deedback handler" arrangement truly gives me pause; it has a faint but foul aroma, IMnsHO. Maybe I'm being overly suspicious, but I certainly get no warm and fuzzy feeling from that very strange "arrangement" and / or the uninformative answers coming from the "Lone Ranger" poohbah on site. That situation smells. The potential for impropriety seems almost boundless, starting with (currently unknown) grantee name(s) on "deedbacks".

 

[bbakernbay]

We received an offer from our resort today by which any Owner who is current with their 2018 can return their deed to the HOA and become an owner in 2019 of a 2 bedroom unit about 15 miles away near Disney for a cost of $395 to look after the paperwork. Apparently a better resort with lower maintenance fees that is looking to increase their roster of Owners who will pay their MFees.

It looks like the writing is on the wall that our resort will be finding another use in the next few years or maybe sooner.

I doubt whether we will take this option based upon our age and the fact cheaper rentals are available.

I am still awaiting to hear what they may offer to existing owners who choose to stay and pay the substantially increased MFees.

 

[tschwa2]

I found this pitch video from Timesharing Today about a small resort in North Carolina converting from a timesharing regime to whole ownership condos. I don't know anything about Lemonjuice Capital but they appear to present a roadmap for legacy resorts to move from a timeshare model to whole ownership condos with the prospect of realising some value for owners. It will be interesting to see what happens with the owners of the resort in the video.

I have some experience with Lemonjuice biz. They advertise on the timeshares wanted section of TUG or at least have in the past for prime Ocean City MD weeks and pay decently for them.

My guess is the resort they took over had owners clamoring to get out. It doesn't look bad but I imagine even high season owners would have had difficulty renting out their unit to cover their MF's and off season weeks could probably be had for less than half of MF's through RCI's last calls and other similar resorts in the area probably go for half the MF's during off season so if any owners still wanted to enjoy the area they could with no commitment and half the cost paid only when they wanted to stay.

I don't think it would work in a TS with more than 30-40 units and ideally less. Digging up the deeded owners for non productive weeks would be a killer.