Tag Archives: timeshare

We Know Them by Name: Katrina, Sandy, Matthew, Harvey and now Irma

By Shep Altshuler, publisher TimeSharing Today

By now, every American has been touched, in some way, by the effects of hurricanes. They imperil lives, property, and businesses. Death and destruction threaten as we watch the most severe storms form, grow, and roll across the national landscape. We also know the international devastation caused in parts of the world that are less capable of responding as we do here in the U.S.

We know them by name — but these monster storms are not our family members or friends. They enter our lives as unwanted invaders, foes wreaking havoc and terror on a scale beyond most terror attacks.

Unlike terror attacks, hurricanes are predictable. We can see them coming from hundreds of miles away. They’re reported and tracked on the news and by multiple weather-reporting services. As the winds blow, and the waters rise, we see the toll of injuries and deaths rise in the aftermath.

In the world of vacation ownership, TimeSharing Today, its readers, and industry providers are among those who are impacted. We may live far away from the eye of the storm, but our resort could be dead center when the hurricane hits.

Our thoughts and prayers go out to all victims of extreme natural disasters.

 

 

 

 

NOTICE TO: OLYMPIC VILLAGE INN OWNERS

The Board of Directors’ Election at OVI will be held prior to the October 7, 2017 Annual Meeting of Members.  OVI owners should receive their ballots in September 2017.  The current Board of Directors continues to withhold the List of Candidates from the individuals who have requested that they be included on the ballot.  We must win this election and force the incumbents out of office.

There are four candidates who form a coalition team dedicated to reversing the trend set by the current Board to deliver OVI to Wyndham Resort Development Corp.  These four candidates are Sandra Farrow, Greg Rankin, Julie Feldman and Robert Bone.  In order to accomplish the needed change on the Board of Directors there will need to be a change in the majority and these four candidates supply the necessary change.  All four offer unique expertise in their own professional background – Real Estate Management; Timeshare Sales/Management and Resort Development; Legal Expertise; Corporate HR and Operations.  This team of candidates built a website SAVEOVI.ORG and they would like you to see what is happening from their perspective.  Robert Bone is available for any questions or comments at Law Office of Robert M. Bone, 707-525-8999 or via email at robertbone@att.net.

Welk Resorts files racketeering lawsuit

By Kristina Payne

Welk Resorts recently filed a federal racketeering lawsuit against Reid Hein & Associates, operating as Timeshare Exit Team (TSET); and two law firms.

The suit was filed July 25. 2017, in the U.S. District Court for the Southern District of California.

Welk Resorts alleges that TSET representations are false, and that TSET purposely leads customers to break contracts with their timeshare resorts and destroy their credit. Welk Resorts says that the negotiation process is a one-page demand letter that claims to represent the owners. Welk Resorts also alleges that the fee, $5,000 or more, was spilt between the two law firms.

Timeshare Exit Team offers to help customers get out of their timeshare obligations forever. Its website claims to negotiate with timeshare resorts on the customer’s’ behalf, with a guarantee to either relieve them of the timeshare or return their money, with no effect on their credit scores. The website makes no mention of the price of this service, or how TSET negotiates with the timeshare resorts. TSET says it is endorsed by multiple radio stations and TV personality Steve Harvey, and is accredited by the Better Business Bureau. In a news release on July 27, Timeshare Exit Team called the lawsuit “meritless” and said it “intends to vigorously defend itself in court.”

Welk Resorts, started in 1964, is a family-vacation resort brand. Welk executives pride themselves on their family values and want to protect their owners from fraud. In a news release, Welk Resorts claims that TSET broke multiple California laws, including the California Vacation Ownership and Time-Share Act and the California False Advertising Law.

Kristina Payne is the social media coordinator for TimeSharing Today.

 

Marty Kandel

Understanding your right to cancel. Timing is everything!

By Marty Kandel for TimeSharing Today

Rescission or cancellation of a timeshare contract is a statutory right in almost every state, but the state where you purchase your timeshare interest is generally the law that applies. The amount of time you must cancel or rescind your contract varies from 3 to 15 days, and averages 7 days for purposes of this brief article.

The right to cancel is, in some ways, a legislative way of protecting timeshare buyers from themselves, (as well as the developer).  The provision is a tacit acknowledgment that consumers have endured a moderate to high pressure, one on one sales presentation, for a significant period.  The statutory cancellation right also recognizes that there is a great deal of information to absorb during a sales presentation, that the verbal assurances of the salesperson does not always”match” the language in the purchase agreement and public offering statement (POS), and that the consumer does not have an opportunity to review any agreement in a meaningful way until after the agreement is signed, the deposit money is paid over, and the new purchasers have left the sales office.

Often, timeshares are purchased while on vacation, when potential purchasers are relaxed, carefree, and in some cases, unprepared for the 90-minute presentation in exchange for show tickets or a tasty meal. If the timeshare is purchased at the front end of a vacation, the rescission clock is running and may run out by the time the new owner gets home.  At that point, you can no longer cancel!

Remember, a new purchaser has a legal right to cancel their contract within the statutory time. This right cannot be waived and a consumer need only follow the directions as to how to cancel found in the purchase agreement. Consumers are usually entitled to 100% of any money paid, but you may have to return the POS and owner’s kit or risk paying a fee for them. Generally, a cancellation should be short, to the point, and need not state a specific reason for wanting to cancel. Buyer’s remorse is not uncommon.

If being mailed, it is wise to send your letter and sales kit by certified or registered mail and be postmarked prior to the last day of the rescission period.  If a purchaser is hand-delivering the cancellation notice back and materials back in the sales center, get a signed receipt and try to steer away from long discussions with your salesperson, whose job it is to talk you back into the deal.  Generally, if your instinct is to cancel, follow through.  You can always go back at any other time and in most cases, get at least as good a deal as you received in the first place.

Finally, it is common that solicitors from one timeshare company will prey upon new owners of another. The second company will help you cancel your timeshare if only you purchase the better product from the second company.  Well, let the games begin!

Marty Kandel is a Principal and General Counsel of Timeshare Advisory and Resolutions Services, LLC. He can be contacted at: martykandel@tarserv.com

Send comments about this article to: staff@tstoday.com Subject: Rescission

 

Jeff Weir

Disclosure bill benefitting timeshare buyers survives first hearing — but with some scars

By Jeff Weir, for TimeSharing Today

CARSON CITY, NV — A new bill that would require developers to provide additional disclosures for timeshare buyers passed its first legislative hurdle in the Nevada Senate March 2.

But not without some injuries.

As amended by the Judiciary Committee, Senate Bill 195, authored by Sen. Becky Harris (R-Las Vegas), would add the following consumer disclosures to the Public Offering Statement documents that are handed over to buyers at the time of sale.

“A timeshare is for personal use and is not an investment for a profit or tax advantage.  The purchase of a timeshare should be based upon its value as a vacation experience or for spending leisure time, and not for purposes of acquiring an appreciating investment or with an expectation that the timeshare may be resold.

“Resale of your timeshare may be subject to restrictions, including .. the developer’s first right of refusal and the developer’s continuing sale of timeshare inventory.  Any future purchaser may not receive  ancillary benefits which were not part of the timeshare plan that the developer may have offered at the time of purchase.

“You should check your contract and the governing documents for any such restrictions and also check whether your purchase contract, note or any other obligation will be fully due and payable upon sale of your timeshare.  Real estate agents may not be interested in listing your timeshare.”

In a separate section, the bill also requires that timeshare managers disclose all details of their compensation annually to members of the association.

While reasonable at face value, these consumer disclosures are timid compared to the proposals of the original bill, which was designed to inform buyers that their timeshares might have little, or no, value on the resale market.  In the original bill, Harris wanted buyers to sign a one-page document acknowledging, in effect, that their brand new $20,000 timeshare might prove worthless on the secondary market.  A second contentious proposal sought to advise customers that their timeshare purchase was a “perpetual contract” that would obligate buyers, and their heirs, to pay maintenance fees forever.  A third would have required developers to disclose the existence of any “give-back, deed-back, repurchase” or “other ownership divestiture programs.”

These three proposals, along with the one-page disclosure document, were exorcised from the bill over a 10-day span during which Harris communicated with interested parties, including owner advocates and representatives of the American Resort Development Association (ARDA), the lobbying arm of the US timeshare industry.

The end result of those discussions was a scaled-back bill — not what Harris really wanted, but what she could get.  That’s how legislation, frequently referred to as sausage by insiders, gets made across the country.  Harris is an attorney by trade.  She does not own any timeshares.  Nor has she ever attended a timeshare presentation.  Her knowledge of what happens at a sales presentation is limited to what she learned from her legal clients.

“I had clients who thought they had bought something that was an asset.  But it was not,” Harris said in an interview.  “I think more consumer protections are needed in the timeshare industry.  My premise is, I wanted a one-page sign-off sheet where buyers realize that they are not buying real estate property, and that they may not be able to sell.  It was a laundry list of items (buyers) had to sign.  Having all that information in one place protects consumers.”

SB 195 is similar to a bill that Harris authored last year.  It won passage in the Senate but died in the Assembly without a hearing, the victim of unknown assassins.

“I could not understand the pushback,” Harris said.  “Timeshare documents are 40 to 80 pages long.  There’s no way a regular consumer can take time to read them.  I just want it to be clear about what people are purchasing, and not, and what the resale value could be.”

This year, for tactical reasons, Harris tucked the timeshare disclosure provisions into an omnibus HOA bill that would reform and update the laws that govern condominium associations. She recognized that the HOA proposals would draw attention from many legislators — and, perhaps, provide air cover for her modest timeshare consumer protection proposals.

The language of the original bill included the following stark statements: “Be aware that the future value of a timeshare interest is very uncertain. Do not count on appreciation..The timeshare developer may have limited your resale rights.  Any future purchaser who buys your timeshare from you will have severely limited opportunities to reserve occupancy in the timeshare plan.”

None of those statements survived the amendment process.  They disappeared along with the “perpetual contract” statements (which, in fairness, would scare potential retail buyers and queer sales).

In light of the amendments that Harris acceded to last week, her original proposal appeared to have no chance of passage in a state that is dominated by the political and fundraising support of the casino-gambling-hospitality-tourist-and-recreation industries.  None of those powerful entities represent timeshare owners, who are spread across 50 states and Canada and, as a result, have little political clout to enact consumer friendly timeshare legislation.

One of the original advocates of the bill, Michael Kosor of Las Vegas, was rankled but not surprised by the legislative deliberations on SB 195.  Kosor, an owner at Wyndham Grand Desert in Las Vegas, is an outspoken individual who, by virtue of his lifetime experience, has developed black-and-white opinions about the timeshare universe. Kosor is frustrated with Nevada regulators, and absolutely dismayed by Harris’ willingness to compromise on her legislation.  He’s also running for a seat on his HOA board.

“I got involved in all of this because of the resale issue.  When I moved to Las Vegas and wanted to get rid of my timeshare, I found out it was an impossible feat,” Kosor said.

“This bill would not fix the overall secondary market issues, but it would make the absurdity of the resale situation available to everybody.”

The American Resort Development Association (ARDA), the industry’s lobbying arm in Washington, D.C., is actively following but NOT sponsoring the bill.  According to Harris’ statements at the March 2 Senate Judiciary Committee hearing, ARDA is now “supportive” of the amended bill.

“Our Nevada State Committee is tracking, monitoring and working the bill to ensure that the timeshare portion is accurate and does not have an unintended effect on the industry (including consumers),” said Peter Roth, ARDA’s vice president of communications and industry relations.  In an email, Roth added, “It is important that timeshare legislation and regulation be balanced and work for the consumer and the platform as both benefit from growth and protection of the industry.”

Harris’ bill arrives on the heels of a new consumer disclosure policy announced by Diamond Resorts in response to an investigation by the Arizona Attorney General into allegations of deceptive sales practices by Diamond sales personnel.  Diamond’s new program, which includes a host of new sales protocols, a voluntary relinquishment program and ethical promises to treat consumers fairly, was announced Jan. 23, 30 days after Diamond agreed to settle the Arizona case by paying $150,000 to the state for legal costs and $650,000 for restitution to buyers.

Both developments — the Nevada legislation and the Arizona litigation — suggest that the industry, overall, is gradually (maybe grudgingly) moving to a posture that endorses more consumer-friendly practices when sales agents try to persuade consumers to buy timeshares.

TimeSharing Today will keep you posted on all future machinations of SB 195.  The bill must gain passage from the state Senate and Assembly before being signed into law (or vetoed) by the governor.

Here is a link to all of the online information about SB 195.

https://www.leg.state.nv.us/App/NELIS/REL/79th2017/Bill/5061/Text

To comment, reply to staff@tstoday.com Subject: Nevada Bill

Big transitions ahead in 2017 – By Jeff Weir, for Timesharing Today

timeshare

Consolidation.  Growth.  Unsolicited calls from travel clubs.  Increasing maintenance fees.  Turbulence in the resale market as older owners drop out.  Plus, big changes in Washington, D.C. (and elsewhere) that could impact the entire timeshare travel universe.

With all apologies to the cliché about death and taxes, there are a half-dozen trends, at least, that are guaranteed to impact timeshare owners in 2017.  Based upon our interviews with industry leaders, board members and regular timeshare owners, here is a glimpse of 2017 — in advance.

Money talks

Maintenance fees, a subject every owner likes to complain about around the hot tub, will increase on average 2-5% in 2017, with most of the increases due by the end of January.  At many legacy resorts, the increases may go much higher as HOA boards try to offset the double-downside of increasing delinquencies with an urgent need to renovate older units and onsite amenities.  Legacy resorts that DON’T or WON’T increase maintenance fees may be headed for a rougher landing, in several years, when they try to mix the value of timeshare vacations with an ugly business reality — bankruptcies and shutdowns.  Conversely, HOAs that are not staying competitive in the timeshare market, may become takeover targets for well-funded companies, public and private, that are eager to pick up inventory — even at dilapidated resorts — to feed their trust inventory.  This enables the buying companies to continue selling timeshares at high retail prices — $25,000 or more for a week of usage, according to our most recent survey — even if the inventory they are stockpiling in their trusts, for pennies on the original dollar, may be resorts that have minimal value.  In the trust inventory world, where individual intervals are tied to points instead of specific real estate, every interval looks like a penthouse in Hawaii, and that’s how developers sell it.

Consolidation continues, along with modest growth

The timeshare developer industry appeared to enjoy modest growth in 2016 following a 9 percent increase in sales in 2015, according to annual studies conducted by the American Resort Development Association.  That makes seven straight years of growth since the financial crisis of 2008.  That progress is expected to continue in 2017, incrementally, unless an economic crisis or an international political event, such as a war, changes everything, depresses the travel industry and makes people stay home.

ARDA’s 2016 economic report also provided the following snapshot of an industry in transition.  The average sales price for a timeshare interval in 2015 was $22,240, with 54 percent of all sales going to existing owners (many for upgrades).  Timeshare occupancy rose 2 percent to a robust 80 percent, compared to 60 percent in the hotel industry.  The timeshare universe included 1,547 resorts where 70 percent of all units offered two bedrooms, or more.

These milestones suggest a healthy industry going forward even as some older resorts approach potential shutdowns or buyouts.  A major restructuring is also taking place as healthy companies — the big brand names — expand their inventories, purchase other clubs and consolidate their influence over the market.   Consolidation brought about big changes in 2016 — and more changes are ahead.  Equity giant Apollo Global Management LLC bought Diamond Resorts for $2.2 billion and, recently, announced the Dec. 31 departure of CEO David Palmer.  ILG (formerly Interval Leisure Group) added the Hyatt, Westin and Sheraton vacation clubs to its stable of holdings while Hilton Grand Vacations and Marriott Vacation Club spun-off from their parent companies to offer timeshares on their own.  The Marriott hotel chain, which bought the hotels formerly owned by Starwood, announced a grand total of 30 brands in its hospitality chain.

ARDA President and CEO Howard Nusbaum contends that consolidation is a predictable and heathy indicator for an industry that has proven its value (over 40 years) and still attracts new investors and consumers.  “This is a natural iteration of a healthy business,” Nusbaum said.  “We have well-capitalized players who are going to look for more synergies through acquisitions.  Frankly, I would be nervous if we weren’t consolidating.”

Marketing challenges for millennials

At the same time, the major timeshare brands are struggling to find a winning formula that will bring millennials into timeshare presentations.  So far, the youngest generation of monied travelers (the oldest millennial is 36) prefers spontaneous, short-term, AirBnB-like vacations, not weeklong stays at the same resort.  And they appear extremely leery of, if not hostile to, lifelong purchase contracts.

“Every focus group we’ve done shows that lifestyle trumps generation” Nusbaum said.  “We are seeing younger purchasers over the past 36 months, where the average age is 42.”  Bottom line, Nusbaum is confident that more and more younger buyers will embrace timeshares when they discover the myriad options that come along with ownership — including spontaneous timeshare escapes to New York, Washington and other urban areas.

For now, though, capturing the elusive millennial is a work in progress that will continue to unfold in 2017.

Secondary market will continue to struggle

The secondary timeshare market — with resale inventory outstripping demand — is expected to continue struggling in the new year despite efforts by some companies to devise “exit programs” that will enable longtime owners to get rid of their timeshares without being scammed by third-party companies that, for the moment, aggressively pursue elderly owners.  Wyndham’s Ovation program is the leader in this field, so far, because it offers owners a safe, secure and no-cost way to divest themselves of their timeshares.  The demand for more Ovation-like programs will build as more and more original timeshare owners age-out of their timeshare travel.

The emergence of travel and vacation clubs, which are not regulated and susceptible to abuse, will also impact owners seeking exit strategies.  Many travel clubs are stockpiling inventory to create their own business franchises, while simultaneously selling exclusive vacation packages.  They solicit owners directly but also work with legacy resorts. Legitimate travel clubs tend to have working arrangements to recycle inventory with developers and legacy resorts.  The “ill-intended players,” as Nusbaum described them, are hit-and-run specialists that prey on longtime owners.

“Everybody is rooting for the secondary market to be healthy,” Nusbaum said. “Developers realize that recycling inventory is important.  The quality resellers and realtors need to work together to create more opportunity. I believe it will continue to get better.”

President Trump also promises to change things

Donald Trump’s election as president is the final wild card for timeshare developers and owners in 2017.  During his campaign, the Republican Party adopted a platform that included a promise to dismantle a below-radar federal agency — the Consumer Financial Protection Bureau, which is currently investigating numerous industries and at least one timeshare company, Westgate Resorts.  Created by Congress in the aftermath of the subprime mortgage crisis of 2008, the CFPB investigates complaints about financial credit and loan programs that may defraud consumers.  It is singularly responsible for exposing the Wells Fargo Bank sales scandal that triggered the ouster of the bank’s president and led to a congressional investigation.

While not focused on the timeshare industry as a whole, the CFPB is looking at Westgate’s practice of financing owners’ timeshare purchases, a program which is common within the industry.  Using its subpoena powers, the agency has been investigating Westgate’s overall business practices, including sales representations, since the fall of 2015.  Business groups say the CFPB is too aggressive and should be reigned-in by an independent commission.  Consumer groups say it is doing a great job. Trump’s chief of staff, responding to Republican calls to regulate the regulators at CFPB, said recently that the next president would unveil his regulatory reforms as soon as he finishes picking a Cabinet.

At TimeSharing Today, your opinion really does count. What are your views about the state of the industry.  To comment, please email staff@tstoday.com.  Subject: Industry

Trolling for Votes and Control

Several developers have adopted deed back programs whereby owners at selected resorts are able to turn back their deeds, sometimes at a cost to the owner. Those developers are also aggressively acquiring defaulted timeshares that are being sold at auction or that can be found online at distress sale prices. The economic motives for this are clear. It is more cost-effective to convert existing timeshare properties to a developer’s points/vacation club than it is to build new projects.

Another developer strategy is to acquire enough voting rights to displace the bona fide owner-board members with developer-controlled board members. Board control empowers the developer to manage maintenance fees, special assessments and management costs.  They then end up with revenues gained through management fees and inventory to feed their vacation clubs.

The prime targets for these activities are legacy resorts and legacy owners. Other targets are the board members who have served to protect the interests of those legacy owners. We have seen developers in court battles with boards of directors and recently, TimeSharing Today has learned that two board presidents at different developer-controlled resorts have been ousted by the new “puppet” boards of the developers. Those board members do not have access to the owners lists to inform them about what is taking place.

Developers argue that the legacy resorts they target need higher maintenance fees to ensure adequate reserves for needed upgrade the resorts to bring them up to the standards of their vacation clubs; new owners get the quality amenities and services that are consistent throughout their properties. This argument, in certain situations, can be valid.

The questions for legacy owners are they:

  1. Informed about what is going?
  2. Getting hit with surprise special assessments and maintenance fees?
  3. Being coerced to convert to a Points/Vacation Club during sales presentations?

To comment, send an email to: staff@tstoday.com Subject: Developer Control

Aging timeshare owners and industry dynamics – A TimeSharing Today commentary

Are you among those timeshare owners who have enjoyed many wonderful years of vacations ownership, but have now reached the point where it’s time to move on? Many owners are no longer able to travel or are living off fixed retirement income and cannot afford the expense of ownership. Some TimeSharing Today members have reported that their kids have taken over their timeshares; others have said that their kids don’t want anything to do with owning a timeshare. Some owners have said that they were successful at turning over their deeds to their resort; others advised that their resort won’t take back units. Some have said that they have successfully sold their timeshares through various sources; others have said that they can’t give theirs away for free. There are owners who have decided to suffer the consequences and not pay their ongoing obligations; others have said that they continue to pay the maintenance fees but do not use their timeshares. Some say that their resort has an onsite resale program; others say their resort doesn’t do anything about resales.

TimeSharing Today has long reported that a lack of a viable exit strategy for aging timeshare owners has created a feeding ground for scams and fraudulent transfers. Howard Nusbaum, CEO and President of the American Resort  Development Association (ARDA), said in a interview on TimeSharing Today Radio (listen to it at www.tstodayjoin.com TST Broadcasting), that he is committed to helping find an “elegant” path for owners to get out of their long term obligations. Nusbaum said that a growing number of major brand  developers are implementing various forms of deedback programs. Those reclaimed timeshares can be converted to the resorts’ points programs, and those programs are having increased appeal to new and younger buyers. Nusbaum refers to a “cultural shift” away from resort specific ownership to flexible destination vacation choices that are available through vacation club memberships. He points out that younger buyers (millenials) are gravitating towards vacation club programs and when they reach a point at which they have families, timesharing still offers they greatest value compared to other choices such as hotels that have invested in expanding a variety of suite brands.

Email your comments to: staff@tstoday.com  Subject: Industry dynamics