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Thread: Legal question for anyone

  1. #21
    Industry Representative ConsumerProtectionLawyer's Avatar
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    Quote Originally Posted by ronparise View Post
    John I think you are confusing the business model of the developer with the business model of the hoa. The hoa is not a business in the sense that most of us understand...The hoa is a non profit association. it is the owners of the resort. and it is the owners that have the most at stake, It just makes common sense to me that the owners have the most to lose when intervals are non performing, and the most to gain when their association has a plan to deal with these problems.
    Quote Originally Posted by ronparise View Post
    John I think you are confusing the business model of the developer with the business model of the hoa. The hoa is not a business in the sense that most of us understand...The hoa is a non profit association. it is the owners of the resort. and it is the owners that have the most at stake, It just makes common sense to me that the owners have the most to lose when intervals are non performing, and the most to gain when their association has a plan to deal with these problems.
    Developers and HOAs
    You are right Ron, they are different, but I am jaded when most of the HOAs we encounter are just the developer's attorneys and cronies that make up the Board of Directors and the functioning roles of the HOA. The individual owner (1/52 of hundreds/thousands of units) really has no power in this structure. Occasionally we find a small resort with a real [genuine owner operated] HOA, but this is the exception. For most of the Consumer Lawyers I know, the Resort and HOA are all the same, meaning the resorts are running the show and NOT letting people out [while also squeezing higher fees even while the underlying resorts generate huge capital from new sales, points, etc.].

    Non-Profits
    What happens to all the money? [thousands of units x 52 weeks x the MF per interval = TONS of cash. It seems more like the maintenance budget for the White House. Non-profit? Legal entity formations mean that certain protocols must be followed, but it doesn't mean that the owners get a check when there is an overage... so who gets it? Qui Bono? (Who profits?) Follow the money.

    Stimulating convo, but I just got busted for "not" vacationing -- gotta go -- talk to you all in a week,
    John

  2. #22
    Please excuse me, I'm a Dick. Not a moron just a Dick
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    Quote Originally Posted by tonyg View Post
    I had reported earlier this month that the city of Ellsworth, Maine had foreclosed on 137 weeks of a timeshare. One can go down to the town hall and buy one (or more) of these weeks for under $ 1,000 each. Most of these were formerly owned by the developer who has been in financial problems for years. Unfortunately, someone bought the week I was most interested in or I would have gladly plunked down the $ 566.27 to buy it. This is one of those cases where the HOA did not foreclose, pushing the city to foreclose instead. The HOA did not want to have around 80 weeks to pay tax on if they had foreclosed. The timeshare in this case has a deedback policy in force.
    What did the City foreclose on?
    RCI Member Since 24-Aug-1989/150-plus Exchanges***THE TIMESHARE GRIM REAPER~~~Exchanging/Searching/SW Florida/MO/AR/IA/Consumer Advocacy/Estate Planning/Sports/Boating/Fishing/Golf/Lake-living/Retirement****Sometimes ya just gotta be a dick

  3. #23
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    Quote Originally Posted by ConsumerProtectionLawyer View Post
    Developers and HOAs
    You are right Ron, they are different, but I am jaded when most of the HOAs we encounter are just the developer's attorneys and cronies that make up the Board of Directors and the functioning roles of the HOA. The individual owner (1/52 of hundreds/thousands of units) really has no power in this structure. Occasionally we find a small resort with a real [genuine owner operated] HOA, but this is the exception. For most of the Consumer Lawyers I know, the Resort and HOA are all the same, meaning the resorts are running the show and NOT letting people out [while also squeezing higher fees even while the underlying resorts generate huge capital from new sales, points, etc.].

    Non-Profits
    What happens to all the money? [thousands of units x 52 weeks x the MF per interval = TONS of cash. It seems more like the maintenance budget for the White House. Non-profit? Legal entity formations mean that certain protocols must be followed, but it doesn't mean that the owners get a check when there is an overage... so who gets it? Qui Bono? (Who profits?) Follow the money.

    Stimulating convo, but I just got busted for "not" vacationing -- gotta go -- talk to you all in a week,
    John
    I'm glad to see You're still around.

    At the two resorts I have been talking about, where we are stuck with 3 weeks at each one, pissing away $3000 a year that could better be used elsewhere, after responsibly and loyally funding TS resorts for 25 years, there has been no developer involved in the operation of the resort for many years.

    At one of them, our three weeks are from a foreclosure (1992) and two Quiet Title weeks that the Association did/owned (1999/2000). The three weeks at Fine Kettle of Fish are all PCC weeks, with no developer and the mini-system gone kaput.

    At the resort where we started timesharing, Wastegate-ish, yes, in fact, it was under the control of the developer.
    RCI Member Since 24-Aug-1989/150-plus Exchanges***THE TIMESHARE GRIM REAPER~~~Exchanging/Searching/SW Florida/MO/AR/IA/Consumer Advocacy/Estate Planning/Sports/Boating/Fishing/Golf/Lake-living/Retirement****Sometimes ya just gotta be a dick

  4. #24
    Quote Originally Posted by ConsumerProtectionLawyer View Post
    Actually, if they send it to a 3rd party collection company [assign the debt] they get paid upfront (for example, 75 cents on the dollar), and the collectors can go legal if they don't get paid.
    Good point. So, then it still becomes a financial question on how far a collection company is willing to go in pursuing a debt. The collection group is not going to lose money. If the costs are high enough, they would have to stop the process.

    Also, once you stop paying the fees, how long is the HOA (or the collection companies) allowed to continue to rack up the fees to pursue a judgement? Couldn't they just wait for 10 years, and for the unpaid fees to climb high enough, and then pursue the judgement when it would be more worth their while?

  5. #25
    Goomba & Super Moderator tonyg's Avatar
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    I looked at the bad debts of one timeshare this morning, it was 22% of the total expenses for the resort in 2013.

  6. #26
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    Quote Originally Posted by tonyg View Post
    I looked at the bad debts of one timeshare this morning, it was 22% of the total expenses for the resort in 2013.
    So, isn't that a very strong indication that something needs to be done, something other than what is already being done?

    If not, the resort will run itself into the ground chasing bad debt. That's what I meant recently when I said the people this is most important to, the people who should be most concerned, are those who want to keep their timeshares. Those who want out will be gone one way or the other.

    And some pretend there is no problem.

    Last edited by JLB; 06-29-2014 at 08:36 PM.
    RCI Member Since 24-Aug-1989/150-plus Exchanges***THE TIMESHARE GRIM REAPER~~~Exchanging/Searching/SW Florida/MO/AR/IA/Consumer Advocacy/Estate Planning/Sports/Boating/Fishing/Golf/Lake-living/Retirement****Sometimes ya just gotta be a dick

  7. #27
    Quote Originally Posted by JLB View Post
    And some pretend there is no problem.

    If the resorts can claim up to 75% of the non-payments (as mentioned above) when they sell their bad debt to collections, then perhaps there is not a significant problem. I don't know, 75% seems like kind of a high estimate. Also, it would be interesting to find out how expensive it actually is for a resort to pursue these matters in court.

    Nothing will be done until the resorts are forced to take action. They'll be forced when the bad debt is high enough and they are losing significant money. I guess we're not there yet.

  8. #28
    I am betting if you personally know a director in the HOA then you also might get special treatment re

    Quote Originally Posted by ace2000 View Post
    Hmmm, I'm still unsure. Does anyone know a Timeshare attorney we could ask?

  9. #29
    Quote Originally Posted by ace2000 View Post
    If the resorts can claim up to 75% of the non-payments (as mentioned above) when they sell their bad debt to collections, then perhaps there is not a significant problem. I don't know, 75% seems like kind of a high estimate. Also, it would be interesting to find out how expensive it actually is for a resort to pursue these matters in court.

    Nothing will be done until the resorts are forced to take action. They'll be forced when the bad debt is high enough and they are losing significant money. I guess we're not there yet.
    collections doesnt work when you are trying to collect from someone that cant or just wont pay...I gotta tell you collections efforts dont work with an old fart like me... I own my house and I wont be buying any more new cars, I dont need good credit, so threats to damage my credit dont work...

    I want to know the hoas plans to deal with folks like me when we decide we dont want the timeshare any more, As you say they will have to do something but waiting until bad debt is high enough may be too late. Defaults force the hoa to raise the mf and the higher the mf goes, the more likely defaults will increase ...the danger is that the hoa goes backrupt

  10. #30
    Goomba & Super Moderator tonyg's Avatar
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    I hear Shawnee got up to 92% non-performing before they decided to close up shop recently.

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