First Lawsuit filed against Viking Ship LLCs / PCCs

[DeniseM]

This is starting to just sound like a power struggle...Some want the owners to have power over how they get rid of what they own....others want the BOD of the HOA to have that power....

When you cast a very wide net on this...it comes down to trust and faith in your resorts BOD of your HOA....Most people have lost faith in these 'officials'....So i'm wondering...do we REALLY need a representative BOD or can timeshares work as true democracies?

I don't think you know what a "true democracy" is: A true democracy means that on every single decision, there would be a vote taken with all the owners. I can't imagine anything that could be much WORSE! They would probably have to vote every day!

As things stand, resorts can't even get a quorum for BOD elections once a year - how would you possibly get a meaningful number of owners to vote on every single decision!

 

[Ridewithme38]

I don't think you know what a "true democracy" is: A true democracy means that on every single decision, there would be a vote taken with all the owners. I can't imagine anything that could be much WORSE! They would probably have to vote every day!

As things stand, resorts can't even get a quorum for BOD elections once a year - how would you possibly get a meaningful number of owners to vote on every single decision!

Are you telling me that the BOD votes every day? Of course not, they vote on a budget and the management company and a few other small things,renovations, etc. i'd be surprised if they meet more then 4-5 times a year...You're telling me, sending out voting slips along with the 'quarterly report' would be THAT big of a deal? You wouldn't need a quorom, with a true democracy majority rules, if only 3 members return the voting slips(obviously more then that will reply) and 2 vote yes and 1 votes no, it passes

Why would a true democracy have to vote on more things than what we have now? Either way, i posed it as a question, not a statement....I was originally going to post it as a 'Reducto ad absurdum', but i couldn't find the term online, so instead rephrased it as 'casting a wide net'...I realize getting rid of all BOD controlled HOA's would be impossible....

 

[TUGBrian]

you also assume that all BOD's are just regular owners at the resort that will always vote for things that are "for the best" for all other owners at the resort.

definitely not the case.

 

[BocaBum99]

You are trying to reinvent what already exists. They do have a plan to deal with unpaid owners. Collection -if it fails foreclosure. Remember too when the point of foreclosure occurs they can still offer to accept a deed back thus avoiding the cost to them and the negative credit report to the former owner. And that may make perfect sense to do if things reach that point. The deeds are then "back" like it or not and it meets the terms every owner agreed to when they bought. They do NOT have to say, on the owners terms / time frame, "we'll take it back from you if want". That was never agreed to by anyone.

and this approach leads to PCCs. If you are going to maintain your absurb position against deed backs, you deserve all the PCCs that come your way. There will be another scheme. I am already getting wind of it. The only difference is that the HOAs are going to be targeted as the villain. When organizations don't do the right thing, the market will come up with a solution that will force them to do it ultimately.

 

[dougp26364]

You are trying to reinvent what already exists. They do have a plan to deal with unpaid owners. Collection -if it fails foreclosure. Remember too when the point of foreclosure occurs they can still offer to accept a deed back thus avoiding the cost to them and the negative credit report to the former owner. And that may make perfect sense to do if things reach that point. The deeds are then "back" like it or not and it meets the terms every owner agreed to when they bought. They do NOT have to say, on the owners terms / time frame, "we'll take it back from you if want". That was never agreed to by anyone.

Judging from the delinquent account line item expense on my MF's, collection and foreclosure aren't working out so well. If they were, then we wouldn't be reading about this lawsuit against some of these PCC's and I wouldn't get multiple phone calls advising me that this is the best way to get rid of my timeshare.

Why not look at it this way with a more open mind.

1. There will always be unhappy owners willing to abandon their weeks.

2. Collection and foreclosure are not cost effective or efficient remedies to the problem.

3. PCC's offer a way out for upwards of $3,000 cash for each deed.

4. When an owner takes this route, the HOA still has the problem of foreclosure. Collections go out the window as the trust is bullet proof.

5. Why not have the HOA cut out the middle man and accept deed backs with a payment similar to the PCC's? The result is the same EXCEPT for one MAJOR difference. The HOA actually collects some money on the account!

To continue the same old remedy which is not very efficient is foolish. Collect the money, get the deed back with very little cost vs collections/foreclosure and move on.

 

[timeos2]

Judging from the delinquent account line item expense on my MF's, collection and foreclosure aren't working out so well. If they were, then we wouldn't be reading about this lawsuit against some of these PCC's and I wouldn't get multiple phone calls advising me that this is the best way to get rid of my timeshare.

Why not look at it this way with a more open mind.

1. There will always be unhappy owners willing to abandon their weeks.

2. Collection and foreclosure are not cost effective or efficient remedies to the problem.

3. PCC's offer a way out for upwards of $3,000 cash for each deed.

4. When an owner takes this route, the HOA still has the problem of foreclosure. Collections go out the window as the trust is bullet proof.

5. Why not have the HOA cut out the middle man and accept deed backs with a payment similar to the PCC's? The result is the same EXCEPT for one MAJOR difference. The HOA actually collects some money on the account!

To continue the same old remedy which is not very efficient is foolish. Collect the money, get the deed back with very little cost vs collections/foreclosure and move on.

If the worst happens and the $3000 runs out but there is still no new owner found what then? It is a delinquent account just as if it were in the hands of an owner or PPC or Viking ship that won't pay. Where does the money come from for that ownerships dues for the year?

 

[K2Quick]

If the worst happens and the $3000 runs out but there is still no new owner found what then? It is a delinquent account just as if it were in the hands of an owner or PPC or Viking ship that won't pay. Where does the money come from for that ownerships dues for the year?

It comes from other dues paying members which stands a decent chance of being a fair outcome since the guy dumping his timeshare isn't using his timeshare interest, there is no demand for his timeshare interest, and that guy has been subsidizing the usage of those who actually have been visiting the timeshare.

 

[TUGBrian]

If the worst happens and the $3000 runs out but there is still no new owner found what then? It is a delinquent account just as if it were in the hands of an owner or PPC or Viking ship that won't pay. Where does the money come from for that ownerships dues for the year?

where does the money come from when the HOA takes the unit back via foreclosure?

 

[csxjohn]

....

5. Why not have the HOA cut out the middle man and accept deed backs with a payment similar to the PCC's? The result is the same EXCEPT for one MAJOR difference. The HOA actually collects some money on the account!

To continue the same old remedy which is not very efficient is foolish. Collect the money, get the deed back with very little cost vs collections/foreclosure and move on.

If the worst happens and the $3000 runs out but there is still no new owner found what then? It is a delinquent account just as if it were in the hands of an owner or PPC or Viking ship that won't pay. Where does the money come from for that ownerships dues for the year?

This solution makes sense and John, I feel you're being stubborn here. It seems to me it would be better for the HOA to get the $3000 and have a chance to unload the week and at the worst be in the same position 3 years down the road as if the owner paid the PCC.

As pointed out, the difference is that the HOA has an extra $3000 and some time to make an effort to transfer the title as opposed to having to try to spend money to foreclose against the PCC and Viking Ships.

And more importantly, if there are so many owners that want out, collect the fees, then make a decision on staying in the business of a TS or sell out. The deeds would be in the hands of the HOA so action could be taken in the best interest of the remaining owners.

This is a way to get the votes needed to take the actions that need to be taken one way or another.

 

[Bwolf]

One of the timeshares I own takes deed backs with 3 years MF paid. I'd offer that as a solution rather than the $3,000 being suggested in this thread.

 

[BocaBum99]

If the worst happens and the $3000 runs out but there is still no new owner found what then? It is a delinquent account just as if it were in the hands of an owner or PPC or Viking ship that won't pay. Where does the money come from for that ownerships dues for the year?

Are you serious?

If a new owner can't be found by the HOA who has all the advantages of the owner list and guest manifest, then the unit should be locked out and the usage rented.

If the inventory gets to be so big that it is losing money, then a special assessment should be charged to the remaining owners to cover the budget. This is likely to be cheaper than the foreclosure budget per interval. This special assessment is the clue being sent to the rest of the owners that their timeshare resort is at risk of bankruptcy and they need to instruct their BOA to take swift corrective action by a creating a better resale and rental program or proposing a sale of the property or reducing maintenance fees to ensure that intervals have a positive value to the market.

In the absence of such feedback, owners will keep their heads in the sand about the problem. The HOAs have kept their head in the sand for too long. They must act now. The 30% or so of maintenance fee paying owners who want out of their timeshare deserve a solution offered by their HOA board. If they don't offer it, expect more PCCs to enter the market to fill the vacuum created by the inaction of HOAs

 

[dougp26364]

If the worst happens and the $3000 runs out but there is still no new owner found what then? It is a delinquent account just as if it were in the hands of an owner or PPC or Viking ship that won't pay. Where does the money come from for that ownerships dues for the year?

OK, which would you rather have, $3,000 and the deed or $0 and the deed?
One way or another, the resort is going to end up with the deed.

If I'm looking at getting deeds back, either through a deedback program or foreclosure, I'd rather take the deed and the money vs just taking the deed PLUS paying foreclosure costs. Seems like a no-brainer to me.

Keep in mind that once an owner defaults, the chances of collections seem pretty slim. So, what's your resorts percentage of collections for dead beat owners? I'm betting it's nowhere close to $3,000/deed.

Once a week is foreclosed upon, I'm betting the resort holds the deed with no chance to collect from the previous owner anyway. Is it really worth $3,000 to ding someone's credit? I know if I'm ever in a situation where I need to walk away from a timeshare week, I really don't think it will matter what the HOA might or might not put on my credit record.

 

[dougp26364]

One of the timeshares I own takes deed backs with 3 years MF paid. I'd offer that as a solution rather than the $3,000 being suggested in this thread.

I only picked $3,000 because that's seems to be the going rate for these Viking Ship PCC's.

3 years MF's would be more than $3,000 at most of the resorts we own. Out of 8 deeds owned, only 3 are less than $1,000 in MF's. One week runs us $1,600/year. I'd be better off going to the PCC who would take that week for $3,000 than pay 3 years MF's.

Each resort HOA would have to arrive at a solution that works for them. DRI, when they do take a deedback, requires the MF's be current and next years MF's be paid but, they don't always take deed's back. They appear to decide on a case by case basis. I suppose you really have to make a believer out of them that you're going to default and they're not going to get any money at all.

 

[BocaBum99]

Here is what everyone is missing about John's argument.

Think of the owner population in 3 buckets.

1) Owners who are paying maintenance fees and want to keep using their timeshares

2) Owners who are paying their maintenance fees and no long want to keep using their timeshare.

3) Owners who are NOT paying their maintenance fees and are likely to default.

When John cites numbers like 80-85% of owners who are paying their maintenance fees, he does not further break it down into how many of those are willing to pay to get out of their ownership and feel like their are being held hostage to their timeshare. My guess is that about 30% of the maintenance fee paying owners want out of their timeshares and don't have a way out. John claims to be representing the 80-85%, but he is only representing 70% of those which makes it more like 55-60% of owners.

John is thumbing his nose at these owners by saying, we will let you out if you default. We are willing to ruin your credit rather than take your unit back.

The owners who are going to default anyway, John doesn't care about because those are going into foreclosure anyway. He will have that cost no matter what.

What John is advocating are laws that make it even more difficult for those maintenance fee paying owners to get out so that they can subsidize the rest of the owners. This IS what John really wants. He just won't admit it.

 

[K2Quick]

My guess is that about 30% of the maintenance fee paying owners want out of their timeshares and don't have a way out.

I think that figure is going to vary depending on the quality of the resort and whether it's a hyper-seasonal resort. For example, I would think very few owners without mortgages at the Marriott Ko Olina are desperate to unload their units for free. However, I would think that almost every owner of a fixed-April/May/October/November-week at an off-brand timeshare in Avon, Colorado would rather be free of their interest if they could do so easily.

 

[BocaBum99]

I think that figure is going to vary depending on the quality of the resort and whether it's a hyper-seasonal resort. For example, I would think very few owners without mortgages at the Marriott Ko Olina are desperate to unload their units for free. However, I would think that almost every owner of a fixed-April/May/October/November-week at an off-brand timeshare in Avon, Colorado would rather be free of their interest if they could do so easily.

I am sure you right that it depends on the resort. My guess is based on the rough owner occupancy levels that I see at the larger systems. There are tons of owners who just don't use their ownerships anymore and keep paying their maintenance fees. They subsidize everyone.

 

[dougp26364]

The assumption that most people are honorable and will keep paying a MF's, even when they have no use for the timeshare, is probably misguided by one's own value and belief system. My personal experience is that belief systems vary greatly between people.

It seems to me that resorts are having issues with defaults. When I have a couple of resorts where the bad debt write off is in the $800,000 range, then there's a problem.

I still say collecting some money upfront, getting the deed back at little to no cost and developing a resale program whereby the resort markets those deeds to current owners happy with the resort and/or exchangers currently staying at the resort is the better way to go. I've always appreciated the effort that The Ridge in Lake Tahoe makes in this regards. To be honest, every time we've exchanged into that resort I've contemplated contacting their resale department.

Unfortunately that's probably not going to happen at resorts where there are still active sales on property. Since there are many resorts who are now in groups such as Bluegreen, Wyndham, Marriott, DRI, Hyatt, HGVC, Disney, Shell, Festiva, Westgate et...to accept or not to accept deedbacks will be up to the developer more so than the HOA.

It seems to me the trend has been more or less consolidation under individual management flags and internal exchange systems vs independant resorts. So all this arugement for/against an HOA having some sort of deedback program may be a moot point.

 

[BocaBum99]

The assumption that most people are honorable and will keep paying a MF's, even when they have no use for the timeshare, is probably misguided by one's own value and belief system. My personal experience is that belief systems vary greatly between people.

It seems to me that resorts are having issues with defaults. When I have a couple of resorts where the bad debt write off is in the $800,000 range, then there's a problem.

I still say collecting some money upfront, getting the deed back at little to no cost and developing a resale program whereby the resort markets those deeds to current owners happy with the resort and/or exchangers currently staying at the resort is the better way to go. I've always appreciated the effort that The Ridge in Lake Tahoe makes in this regards. To be honest, every time we've exchanged into that resort I've contemplated contacting their resale department.

Unfortunately that's probably not going to happen at resorts where there are still active sales on property. Since there are many resorts who are now in groups such as Bluegreen, Wyndham, Marriott, DRI, Hyatt, HGVC, Disney, Shell, Festiva, Westgate et...to accept or not to accept deedbacks will be up to the developer more so than the HOA.

It seems to me the trend has been more or less consolidation under individual management flags and internal exchange systems vs independant resorts. So all this arugement for/against an HOA having some sort of deedback program may be a moot point.

This is why I am in favor of statutes that require HOAs to have deedback programs and that those statutes cover ALL HOAs including resorts that are still in sales.

 

[TUGBrian]

sadly something forcing "all" resorts to do something wont ever get passed...again...it does no good to argue the extremes on either side....as noone will feel they are reasonable on the other side.

 

[BocaBum99]

sadly something forcing "all" resorts to do something wont ever get passed...again...it does no good to argue the extremes on either side....as noone will feel they are reasonable on the other side.

I don't agree. We are not arguing that all resorts should have the same deed back program. They can design it any way they want based on the needs of the resort. By having some type of deedback program, it ensures that there is a home for any and all timeshares at a price that does not require a Viking Ship.

The same is true of the new Florida law regarding transfer companies. It requires that any upfront fee put placed into escrow. That is for ALL transfers. Not most.

 

[Ridewithme38]

sadly something forcing "all" resorts to do something wont ever get passed...again...it does no good to argue the extremes on either side....as noone will feel they are reasonable on the other side.

So, what do you think we can get passed? Easier bankrupcy laws for Timeshares? Limited time frames before required votes for disolusion, with majority vs. supermajority for new developments? Maybe new ethics laws for timeshare sales companies?

There's got to be something done and it kinda has to be done fairly soon before the whole industry implodes on itself

 

[TUGBrian]

until a major developer (one that currently has resorts being unloaded for nothing or given away) steps up....I doubt youll see any traction on it at all.

 

[Ridewithme38]

until a major developer (one that currently has resorts being unloaded for nothing or given away) steps up....I doubt youll see any traction on it at all.

Maybe this is something thats needs to be started on the grass roots level...We have lawyers, economists, professors, all members of TUG, this maybe something that can start with just a properly written form letter on TUG that we can all send to the BOD's of our HOA's demanding that they take action,demanding change....giving suggestions on what methods we recommend they take

Think about it, with just under 64,000 members of TUG, that's a large group to be sending letters out to EVERY BOD...we would need to start a new thread to figure out exactly what the letter needs to say, but it can be done....I've done more with less when i was involved with an E-cigarette Consumer advocacy group...we emailed, called, faxed and sent out letters almost monthly as soon as any e-cig legislation came up and were successful in blocking a lot of it

What did your generation used to say "Power to the People"?

 

[BocaBum99]

until a major developer (one that currently has resorts being unloaded for nothing or given away) steps up....I doubt youll see any traction on it at all.

Most of the developers have had a huge upswing in their business since 2008 when the financial crisis froze up credit to the point that their existences were threatened.

Now, they have an unbelievable model for profit generation based on free inventory.

Bluegreen has started buying back properties. So has Wyndham, Diamond, Westgate and others. If there were enough political pressure, it might be possible to get something done.

 

[AwayWeGo]

Put The Onus On The Timeshare Companies, Not On The Independent Resorts.

I am in favor of statutes that require HOAs to have deedback programs and that those statutes cover ALL HOAs including resorts that are still in sales.

How about covering only the HOAs of timeshare resorts that are still in sales ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​