nasoj1
TUG Member
What would be the cautionary tale about ownership? Is there anything that could be done to avoid ownership in resort that has a lot of defaults.
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.
sptung - Your posts indicates that "Many timeshare resorts have disallowed any transfers to LLCs altogether."
Can you name some of these timeshare resorts? While this will solve only a portion of our resort's delinquency problem, it is a start.
Also if anyone else can name specific resorts where such a provision was adopted but was not in the by-laws, this would be greatly appeciated.
By the way, my husband is going to suggest to the rest of the HOA that they institute a policy where voluntary deed-backs will be allowed for those owners who are up to date in the payment of all their fees. He is planning to suggest that these owners will need to pay the maintenance fees in advance for the upcoming year as well as the transfer cost in order to lessen the burden on the rest of the owners. I think that the prepayment of the maintenance fee as well as the transfer cost is likely to be less than the owner would have to pay to the LLC as an "upfront" fee.
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?"
I'm an HOA board member (and former president) of a timeshare in Whistler, Canada. The market for an individual week (1/51st) or fractional (1/8th, 1/10th, 1/4) title is virtually non-existent. But we found a robust market for selling an entire unit to one individual. Owners in five of our fractional units agreed to sell and each of the five sold for between $650,000 and $750,000 Canadian (and one just resold for $900,000). Each sale cleared a delinquent share in that unit, gave each owner in the unit a good return on their money (some rebought a share in one of our remaining units), and we've recouped over $110,000 Canadian for about $50,000 in legal fees.
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!
I agree that buying a full year share will be attractive to many people. The problem is that maintenance fees will be the weekly fee multiplied by 52 weeks. Ski area timeshares (you mentioned Whistler) tend to require above average maintenance fees. It seems to me that nobody would be willing to pay something like $50,000 a year in maintenance fees just to own a whole unit.
What I don't understand is the lack of knowledge of property rights. unless it is in the original documents how can they not accept the transfer?are there individuals that own two weeks or more?.. if you think they might have a legitimate reason than its possible an LLC might have the same legitimate reason
I understand how the management company will be able to just not recognize that a sale has happened and refuse to recognize it and continue to send the bills to the previous owner, But they are still a previous owner. You might as well send the bill to me as to the previous owner It seems to me that you will have about as much chance of collecting
It seems to me that you have 2 problems 1) its too expensive to foreclose when someone falls behind, and 2) even if te hoa did accept deed backs or did go through the foreclosure process they dont know what to do with them
So attempt to prevent the transfer to an LLC.. it doesnt seem to me you gain anything, You still have a non performing interval and if you want to keep the place open the remaining owners are going to have to pay higher fees
The base problem is that some of your weeks are worthless. If we assume the number is 50% than the other 50% of the owners are going to have to accept a 100% increase in their mf
and if they arent willing to do that then the owners of the best weeks are going to default too
To answer the the question posed in the title of the original post: How does a Home Owners Association Stop Sales to LLCs? The answer is to add value to the blue weeks so that your blue week owners have something of value to sell
Cant do that and the red week owners arent willing to pick up the slack... Its time to explore options to close the place down... Have you considered bankruptcy?
What I don't understand is the lack of knowledge of property rights. unless it is in the original documents how can they not accept the transfer?
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What I don't understand is the lack of knowledge of property rights. unless it is in the original documents how can they not accept the transfer?
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I am not sure that is the case. A whole ownership doesn't cost as much to maintain. It would be the responsibility of the owner to pay to refurbish their own condo. There would also be no weekly maid service. Those are probably the two highest expense items in a timeshare budget. So the MF on a while ownership would have to be a lot less than just 52 X the weekly MF.