Timeshare Forums at TimeshareForums.com

[Spence]

Torres Mazatlan Alert
posted by VACATION INTERNATIONALE on their site
and forwarded by a member

We wish to inform you that a company owned by Diamond Resorts (formerly known as Sunterra Resorts) has constructed a fence at Torres Mazatlan that closes off part of the land used by owners there. The fence was built in violation of Mexican law and VI's agreements with Sunterra and Diamond, and therefore we have placed the matter in the hands of our lawyers to solve.

FAQs

What has happened at Torres Mazatlan?Diamond Resorts International, the company formerly knows as Sunterra, has built a fence around the parcel of land at Torres Mazatlan north of the pools and Building D.

When did it happen?
The fence was constructed beginning early on the morning of July 4th, without any advance notice or warning to VI.

Why did Diamond Resorts do this?
Diamond Resorts has refused to provide any information regarding how they intend to use the land if it is not returned to VI.

Why couldn’t VI stop it from happening?
Diamond Resorts came on the land with no prior consultation, notice or warning. Their construction workers were accompanied with armed guards. They made explicit, written threats of violence against VI staff and owners if anyone interfered with them. They chose a time and day for this invasion which was a US holiday weekend and when VI would be unable to seek immediate legal redress to stop them. VI did call the Mazatlan police and Diamond Resorts’ personnel agreed to stop all work until the following Monday when Mazatlan judicial authorities could rule on who had rights to the land. Diamond Resorts broke these promises during the nighttime when the police would not protect VI’s land.

What is the history behind the land ownership?
When Bob Burns and Bob Ringgenberg sold Vacation Internationale, Ltd. to Sunterra in 1997, they sold development rights to that land as a separate asset from the resort that contains the condominium towers, the pools and the commercial/administrative buildings. Whether this was a legal transaction has been questioned ever since then because the resort was controlled by the VI Trust not by Vacation Internationale, Ltd. Sunterra (now Diamond Resorts) now claims development rights to this land based on the 1997 sale from Bob Ringgenberg and Bob Burns. However, when VIOA bought the VI program and assets back from Sunterra in 2004, a series of agreements were reached that assured VI the use rights for this land for the indefinite future, subject to a joint planning process that Diamond Resorts has now refused to follow. Since 2004, VI has paid all bills for the land and has receipts for all such payments, which is consistent with the use rights agreements in place.
Accordingly, VI's lawyers tell us that the construction of the fence is both illegal under Mexican law and a violation of the 2004 agreements with VI. We have every reason to agree with the lawyer's advice and we are following the course of action they recommend to have the fence removed.

What amenities are still available to Owners?
Although the volleyball court, running track and putting greens are no longer available, Torres Mazatlan personnel jumped into action to ensure all vacationers would have everything necessary to enjoy their vacation. Guests are able to play beach volleyball and soccer, the tennis courts are still available and new BBQ’s have been installed at several locations. Two large tents with tables and chairs are next to the new BBQ's and additional lounge chairs have been placed around the pool and on the beach. All other facilities of the resort are still open.

What are the next steps at the resort?
The VI Board has authorized an intensive use study of the resort to plan additional improvements and new amenities so that VI owners will still have great vacations at Torres Mazatlan. This plan will be developed with owner input and will be ready for implementation before the Winter season of 2008-09.

What are the next steps legally?
An arbitration demand has been filed and served against Diamond Resorts for violations of the 2004 purchase and sales agreement between VI and Sunterra (now Diamond Resorts). In addition, VI's Mexican legal team has been directed to proceed with necessary legal filings to protect VI's rights to the land under Mexico law.

Is the beach in front of the fenced off land open to VI use?
Yes, that is land owned by the Federal Government and anyone can use it. We have VI guests playing soccer and volleyball there right now.

Is the "Diamond parcel" landlocked or do they have legal access to the highway?
It does have access to the highway, but the entrance to the buildable part of the land has to pass between the tennis courts and the bodega (warehouse) – that's a narrow space and one that might be hard to make attractive if they think they’re going to do something attractive there.