Timeshare "Sunset" or Self-Destruct clause - 2020! Every timeshare owner should read!

[CO skier]

My opinion is that the vast majority of timeshare owners would get a windfall if they they took advantage of the one time opportunity to terminate the timeshare and sell the property to a developer.

This would work only where the governing documents give the HOA power-of-attorney to act for all owners whenever the timeshare is terminated. This is not a given.

If the HOA does not have this POA, how does one persuade all the other 1000+ owners to sell (and sign the closing documents) at the same time? How much does it cost to title search to determine all the true owners and legally serve the process? What if the true owners are deceased?

Just "sell the timeshare land and buildings and cash the check" is not as simple as it sounds.

 

[RLG]

This would work only where the governing documents give the HOA power-of-attorney to act for all owners whenever the timeshare is terminated. This is not a given.

If the HOA does not have this POA, how does one persuade all the other 1000+ owners to sell (and sign the closing documents) at the same time? How much does it cost to title search to determine all the true owners and legally serve the process? What if the true owners are deceased?

Just "sell the timeshare land and buildings and cash the check" is not as simple as it sounds.

The documents for SVR call for the board to prepare and present a plan for a "partition". I wouldn't be surprised if this a standard provision in the sunset-date boilerplate.

In any case, the directors of the organization should be preparing a plan for maximizing the value to the owners once the timeshare ends. I believe the most reasonable way to do this is to sell it in whole with the proceeds distributed to owners.

As discussed in the linked thread, there is already a well established method of dealing with disposing of a property with multiple owners in common, i.e. a "partition". In a case with thousands of owners, and the issues you identified, I don't think it would be too difficult to show that a sale of the entire property was the only reasonable way to partition.

Once the property was sold, owners who couldn't be located would have their share of the proceeds escrowed. If they were never claimed, they would be escheated to the state.

 

[TUGBrian]

I dont argue one bit on your theory of how it "should" happen...

unfortunately anyone with any sort of experience within this industry cannot ignore the high % of situations where what should happen, simply doesnt. and the owners are always the ones who end up with the short end of the stick in those transactions.

Either way, getting in front of this is certainly a better answer than "sitting back and assuming" no matter what situation you are in!

 

[CO skier]

In any case, the directors of the organization should be preparing a plan for maximizing the value to the owners once the timeshare ends.

Everyone would probably agree with this. The problem is that at too many resorts, this is not being done, and in the not-too-distant future, Surprise!

 

[TUGBrian]

absolutely, and this is the whole point of this thread!

It is great that there are resorts that are well aware of this and are taking steps, but we all know there are a good number of them that are not.

 

[tugnut]

Several months ago (July 2014) I started a thread seeking details about the sale of Skiers Edge TS in Breckenridge CO.
http://tugbbs.com/forums/showthread.php?t=214488&highlight=skiers+edge

Not much interest. Again in January 2015 again asked for info and advised that it had sold not once but twice and asked if anyone had details. It was like talking to a post. For a group that purports to have a pulse on the industry there is precious little to be learned here. Now here is a case of people wringing their hankies about some sunset clause they have no clue about and lament the possibility that a TS may disappear and end the bottom feeding.

My brother still has not heard from them and the FB page is gone. He doesn't expect a lot but escape is a plus.

 

[TUGBrian]

Ignoring the super-charming context of the bulk of your post....In reading that old thread, it certainly sounds like a "worst case" scenario for the owners for exactly the topic being discussed here.

perhaps you can enlighten us with all you have learned about the situation in the past 10 months?

 

[theo]

Why the sour grapes?

<snip> For a group that purports to have a pulse on the industry there is precious little to be learned here. Now here is a case of people wringing their hankies about some sunset clause they have no clue about and lament the possibility that a TS may disappear and end the bottom feeding.

An interesting and entertaining (...even if patently absurd and woefully uninformed) statement and conclusion.

I don't suppose you considered the possibility that a isolated situation at one particular facility in one particular state, about which you bemoan not having received an avalanche of brilliant feedback, might involve a financially troubled facility about which no one here actually has any situation-specific knowledge of substance?
There may very well be "precious little to be learned here" --- about your particular individual, isolated, facility-specific situation of interest (...to you).

Not respectfully, I submit that absence of knowledge about your unique, isolated item of inquiry does not actually make us a collection of clueless ignoramuses here.

So Tex, I haven't seen any of the "hankie wringing" or "lamenting" in this thread to which you refer on this (entirely different topic) of "sunset" clauses, but if you are genuinely troubled by what you seem to believe is our collective ignorance here on TUG, you can always choose and opt to just "git along, little doggie", no?

 

[Lemonjuice]

A little clarification

There is a bit too much ado about this. One thing that noone mentions is that in termination, the underlying real estate (building or condos) would be sold in lue of partition and funds distributed to owners. So why is this termination clause so alarming?

 

[Lemonjuice]

This is called sale in lieu of partition. Everyone does not have to agree.

This would work only where the governing documents give the HOA power-of-attorney to act for all owners whenever the timeshare is terminated. This is not a given.

If the HOA does not have this POA, how does one persuade all the other 1000+ owners to sell (and sign the closing documents) at the same time? How much does it cost to title search to determine all the true owners and legally serve the process? What if the true owners are deceased?

Just "sell the timeshare land and buildings and cash the check" is not as simple as it sounds.

 

[theo]

There is a bit too much ado about this. One thing that noone mentions is that in termination, the underlying real estate (building or condos) would be sold in lue of partition and funds distributed to owners. So why is this termination clause so alarming?

I respectfully but strongly disagree about "too much ado", but that's just a difference of viewpoint; we can certainly just agree to reasonably disagree on that point.

In my view, what is truly most "alarming" is that some Boards clearly have no knowledge --- today, right now, even as we "speak" --- about the existence or impact of the "sunset" language already lurking in black and white within their officially recorded governing documents --- and scheduled to "kick in" in +/- 5 years. Ignorance of the issue will obviously, inevitably lead to a lack of timely action, which still actually constitutes a "decision" anyhow, even if just passively "inherited" by default.

The issue of substance (in my view, anyhow) is that this determination of a facility's future should really be considered and intelligently assessed for informed majority vote and proactive measures by the current ownership of record --- not by merely "inheriting" a legal default due to a lack of awareness (i.e., ignorance) and inaction. Clearly, some tired resorts maybe shouldn't continue on as timeshares beyond their sunset clause date anyhow, in which case the property closure / sale / "cash out" scenario that you reference may be entirely appropriate. In other instances however, renewal and continuation as interval ownership and use for some extended (and precisely defined) time period may very well be both more appropriate and the ownership majority wish --- but this latter option can only be considered and exercised proactively, in advance, by an an informed ownership overtly acting and voting to do so.

I have no selling point or other agenda here on this issue; I'm merely noting that ignorance is not bliss in this particular matter and that inaction is, in and of itself, a (perhaps unintended) legal decision --- even if only passively and by default.

 

[FLDVCFamily]

Yikes...we own Foxrun and our Wyndham contracts are deeded at Kingsgate! I really hope that this amounts to nothing with both as they are both great traders for us and I'd be sad to lose them from our portfolio.

 

[planzfortomorrow]

I've got an EOY in Florida. It's a nice enough TS, but to be honest, I'd be happy either way--if it stays as is, or if it's no longer a TS & I just walk away. It's now a festiva resort, and apparently, they've been buying quite a few timeshares in the area (not all Florida, but according to their website a total of 28 different timeshares). I wonder if they've looked at the sunset clause & are willing to gamble that a quorum will not be reached & the TS are sitting on decent pieces of real estate....

I don't know what the official sunset date of my TS is--it's not listed in the 'deed' for my sliver of the pie, and off-hand I don't know where you'd go to get the overall TS statement for the property.

 

[jlwquilter]

I'm not going to pretend I follow all of this but...

If my deed specifically states 'to have and to hold, the same in fee simple forever' and no where in the deed is any reference whatsoever to a
termination of status or opertion as a timeshare... am I correct in thinking that this particular resort DOES NOT have a sunset clause?

This wording is on the deeds of my Orlando based timeshares, my SW FL Gulf timeshare and my SC timeshare.

 

[dioxide45]

You also need to check the CC&Rs. Even with the sunset clause, you own the property forever. It just converts to join tenancy at sunset. Meaning, you really have no specific usage. All 52 owners could live in the unit at the same time.

 

[jlwquilter]

Ok thanks. I never got the CC&Rs so I guess I have to contact the repays for them. That'll be fun.

 

[Talent312]

I'm not going to pretend I follow all of this but... If my deed specifically states...

I'd hazard to bet that your deed also has a clause that says something like: "Subject to the the Timeshare-Condominium Declarations and Covenants recorded in ..." They set forth the terms and conditions under which the TS operates.

If the TS operation goes poof as specified, you may show up to find no one at the gate, the lobby locked, and the elevators and AC turned off. But you'll still own what's in your deed.
.

 

[dioxide45]

Ok thanks. I never got the CC&Rs so I guess I have to contact the repays for them. That'll be fun.

Your deed should reference the CC&R documents, along with the book and page that they are recorded. With that you should be able to look them up online. I know you can at least with the Orlando property if it is Orange County.

 

[jlwquilter]

That's helpful info, thanks. I don't think they are in Orange County but the other counties may have it accessible too. It's better to try that before taking on the resorts!

 

[WinniWoman]

I'd hazard to bet that your deed also has a clause that says something like: "Subject to the the Timeshare-Condominium Declarations and Covenants recorded in ..." They set forth the terms and conditions under which the TS operates.

If the TS operation goes poof as specified, you may show up to find no one at the gate, the lobby locked, and the elevators and AC turned off. But you'll still own what's in your deed.
.

So, isn't that when you stop paying the maintenance fees and possibly hire an atty if necessary to protect your credit

 

[Greg G]

Vacation Break Resort at Start Island, Kissimmee FL , has a termination clause as follows (scanned in and OCR converted). I'm not sure I fully follow the wording. So what happens if a quorum is not present (I assume this means by total votes taken in person or by proxy at the meeting)?

Greg

XIX.
TERMINATION
A. If the Unit Owners and holders of all liens and Mortgages affecting any of the Condominium Parcels execute and duly record an instrument terminating the Condominium Property, as set forth hereinafter, or if "major damage" occurs as defined in the insurance clauses herein above, said property shall be deemed to be subject to termination and thereafter owned in common by the Unit Owners. The undivided interest in the property owned in common by each Unit Owner shall then become the percentage of the undivided interest previously owned by such Owner ill the Common Elements upon termination of the condominium.
B. Not less than thirty (30) days nor more than sixty (60) days prior to December
31 of the year 2035, the Board of Directors shall call a meeting of all Owners of Unit Weeks in Units committed to Vacation Ownership, for the purpose of determining whether or not to continue the Vacation Ownership plan. At such meeting, a vote shall be taken to decide the disposition of the Units committed to Vacation Ownership. A quorum at such meeting shall be a majority of the total outstanding votes of all Owners of Unit Weeks in Units committed to Vacation Ownership. Said Ownership present at such meeting, in person or by proxy, may vote, by a vote of not less than fifty-one (51 %) percent, to continue or discontinue Vacation Ownership and/or this condominium. In the event Vacation Ownership or this condominium is continued, the restrictive covenants set forth herein will be adopted as covenants running with the land for a period often (10) years. The Board of Directors shall, not less than thirty (30) days nor more than sixty (60) days prior to the actual expiration of said ten (10) year period, call a meeting of all Owners of Unit Weeks in Units committed to Vacation Ownership. A quorum at such meeting shall be a majority of the total outstanding votes of all Owners of Unit Weeks in Units committed to Vacation Ownership. The Owners may vote to continue the Vacation Ownership-in this condominium for an additional ten (10) year period. This process shall be repeated at the end of each successive ten (10) year period.
In the event the Owners vote to continue their Unit Weeks as provided above, each Owner shall have the exclusive right to occupy his Unit, and as among Owners to use and enjoy the Common Elements of the condominium, and the rights and easements appurtenant to his Unit during his Unit Weeks and to maintain and repair the Units during maintenance weeks. Unless otherwise through the Flexible Use Plan, no Owner shall occupy his Unit or exercise any other rights of ownership in respect to his Unit other than the rights herein provided to him during any other Unit Weeks unless expressly so authorized by the Owner entitled to occupy the Unit during such Unit Weeks or during any service period, if applicable, when acting through the Association.
No Owner or other person or entity acquiring any right, title or interest in a Unit shall seek or obtain through any legal procedures, judicial partition of the Unit or sale of the Unit in lieu of partition at any date prior to the expiration of each successive ten (10) year period, if any, voted by the Owners as set forth above. If, however, any Unit Weeks shall be owned by two or more persons as tenants in common or as joint tenants, nothing herein contained shall prohibit a judicial sale of the Unit Weeks in lieu of partition as between such co-tenants or joint tenants.

 

[pedro47]

Does this mean the timeshare company would have to resell everything? Or that it would be converted to residential units? What happens to the buildings? Wouldn't this be a good way for owners to know they will eventually be free of the burden of their maintenance fees? I am not understanding....

Question's who will own all the resort buildings, automobiles, golf carts, and amenities ? What about t/s owners that have paid off their t/s and have a deed for their fixed week/time ?

 

[Greg G]

Ahh, did find another statement in the document.

"3. Term of Plan

The Vacation Ownership shall be perpetual unless voted to be discontinued by a majority vote of the owners as set forth in the Declaration of Condominium at Article XIX."

So based on XIX in my previous post I read the document to say the timeshare is only terminated if a majority of owners vote and out of those that voted at least 51% voted to discontinue it?

Greg

 

[Talent312]

"I read the document to say the timeshare is only terminated if a majority of owners vote and out of those that voted at least 51% voted to discontinue it." -- I concur.

 

[dioxide45]

"I read the document to say the timeshare is only terminated if a majority of owners vote and out of those that voted at least 51% voted to discontinue it." -- I concur.

The problem arises if they can not meet a quorum. What happens then?