Continuing with the story of Los Claveles, Inside Timeshare has been asked by Roger Barrow to publish the following letter.
It is published as there are always two sides to every debate, without this balance nothing will be solved. All owners must have access to both arguments, you may not agree with this letter, but there are many owners who do not know what is going on. From the many comments and emails we have received there does appear to be some personal grudges being vented.
Inside Timeshare asks that you put these aside and try to work together, you all believe that you have a lovely resort, many of you have owned for years. Going through the internet we have found many negative comments about other timeshares, but not about Los Claveles or in fact any of the other resorts such as Las Casitas, where Roger is President of the Committee of Owners.
We leave it to you the readers to decide.
Los Claveles Committee – Owners Fight Back
In 2015, Ivan Pengelly of WimPen, who were the appointed administrators for Los Claveles along with several other resorts in the Canary Islands, sold his shares to OnaGrup, who he judged were the best company to help improve the rental income for blocked and unsold villas in the resorts. All the resorts were suffering from an aging population of owners and an increasing number of debtors. This sale to OnaGrup was subject to a confidentiality agreement.
Once the sale was complete, Ivan Pengelly announced the sale to the resort owners. While there were a few ‘bumps in the road’ and much anxiety by owners in most of the resorts, calm and measured negotiation with OnaGrup resulted in amicable and mutually agreeable arrangements for the continued management of the resorts. With the exception of Los Claveles that is.
A Los Claveles committee meeting, on the casting vote of the Chairman, decided to terminate WimPen’s contract. A subsequent General Meeting voted 329 to 236 to retain Wimpen, however this result was overturned by proxy votes, including the chairman’s discretionary proxies. The final voting was 863 for termination with 823 against.
“We believe this decision was premature and we want to challenge the Claveles committee and way they have handled this dispute”, said Roger Barrow, chair of the newly formed opposition working group. “It has led to the most acrimonious of disputes, with owner set against owner. The dispute has now launched into an expensive arbitration and legal battle, when the committee could have followed the simple and straightforward process to appoint a new administrator, a process set out in the constitution.”
“It was a knee-jerk reaction which we believe owners will regret,” said Mr Barrow.
So, what is the situation now? While everyone awaits the full outcome of the arbitration and legal appeals, Wimpen, now without a contract, have continued as Acting Administrators, successfully managing the resort. They look after the finances, maintenance, cleaning, resort improvements and employ the staff. Owners still must pay their maintenance to WimPen to gain access to their villas.
“The club committee are also demanding payment with threats that owners are acting illegally and risk losing their membership if they don’t”, said Marilyn Fry, the group’s secretary. “This leaves owners bewildered, confused and very anxious. Some have paid twice to Wimpen and the Club, a few have successfully obtained a refund from the club. But for owners, this is a very unsettling situation”.
“There is also an unsatisfactory level of secrecy in the club”, continued Mrs Fry, “With owners who criticise or oppose the committee’s actions banned from the owner’s website and social media, which is heavily censored”.
So, what is the solution? The opposition working group are setting out to challenge the owners’ committee and believe that by giving WimPen a new contract, owners can regain control and should then allow Wimpen time to show what they can do before following the correct process to either continue with WimPen or appoint a new administrator.
“We all want the same thing in the end,” said Mr Barrow. “A happy and efficient resort that operates as successfully as all the other resorts in WimPen’s portfolio.”
The opening paragraph clearly explains the problem that all timeshare resorts have, owners who are now elderly, many unable to travel, owners who can no longer afford the maintenance fees and a new generation that do not believe in the concept of timeshare.
With this diminishing population of owners the only way these resorts can survive is by increasing the maintenance fees of the remaining owners, or by renting out the unsold and returned weeks.
Inside Timeshare has given you a platform to begin a discussion and resolve this issue, it is your resort, you are among the lucky owners of timeshare, you do have a say in how your resort is run. For those who own in the points system, which the Spanish Supreme Court has deemed illegal, they do not have these rights. They are members of a vacation club, with only a right to use and this is subject to availability.
Inside Timeshare will continue to publish news as it comes in, we also hope to publish the news that you have all come together and resolved the issue. We wish you all the best.
First some recent news fro the Supreme Court in Madrid which came in this morning, this is the 73rd ruling by Spain’s Highest Court.
Another Silverpoint contract has been declared null and void with the British clients set to receive over £37,000 plus legal fees and interest.
No details are yet available, but as with other cases the main infringement is likely to be a contract over 50 years. The one important factor is that these contract contravene the Spanish Timeshare law 42/98.
Now for Irene’s article.
The Marriott Vacation Club Racketeering Lawsuit – an Update
Timeshare Wars – Members vs Developers and ARDA Part II
November 28, 2017
By Irene Parker
Part I – The Manhattan Club and the possible dismantling of the Consumer Financial Protection Bureau
In the Marriott racketeering lawsuit, attorneys for the plaintiffs, Anthony and Beth Lennen, challenged Marriott’s points based system. Once again ARDA’s lobbyists are at the forefront.
“This was bigger than a lawsuit,”Hunter says. A negative ruling “could have a consequence of being devastating, conceivably, to the industry.” Florida Trend
I can imagine slave traders and slave owners making the same argument ARDA lobbyist Gary Hunter makes in opposition to the challenge to the points based timeshare product.The legal structure of the points based timeshare product is complex. It seems the points based programs are not products that should be associated with real estate. It would be as if a country club charged me closing costs for joining their right to use program. Bluegreen seems to employ a similar model. As usual, I asked timeshare attorney Mike Finn of the Finn Law Group if he agrees with me.
“Several developers are using a similar trust based hybrid product like Marriott’s. I think Bluegreen may have initiated it originally, but don’t hold me to that. Yes, the products are very similar. I felt Bluegreen was intentionally hurting their defaulted owners with their credit reporting as ‘foreclosures’, when I knew this was incorrect for the same reason as the allegations in the Marriott lawsuit, namely that the interest the ‘owner’ ends up with is personalty, not real estate. You cannot accurately call a personalty repossession a ‘foreclosure’ as there’s no legal procedure to ‘foreclose’ on personalty, according to UCC codes. My efforts to get Bluegreen to change were ignored; hence our litigation which resulted in at least 11,000 individuals getting foreclosures redacted from their credit reports. However, in our preparation, at the last minute, we researched the Florida timeshare act and realized Florida had anticipated our move! The statute was modified to define the Bluegreen timeshare plan as “real estate”. It was like legislating a duck into a goose,” Mike explained
Is timeshare deemed real estate when it comes to charging buyers fees associated with actual real estate, but not real estate in matters having any control over the property? Is this a case of having your cake and eating it too?
I asked timeshare member and economics professor Michael Nuwer to review the amended Marriott lawsuit complaint filed October 25, 2017 by the plaintiffs’ law firm, Newman Ferrara LLP. The complaint suggests suspicious legislative maneuvering intended to circumvent the lawsuit. The amended complaint addresses the Marriott-forced law changes in 2013 and 2017. The recent (2017) amendment to the Florida Timeshare Act purports to exclude pre-existing weekly owners as “interest holders” and pre-existing Condo Declarations as “encumbrances” with regard to sales of multisite timeshare plans that use pre-existing timeshare estates. According to the complaint,
“It allows massive profit-making – including administrative fees, closing costs, recording fees, transfer taxes, maintenance, assessments, and title insurance premiums.” Amended Marriott complaint 6:16-cv-00855-CEM-TBS
“As far as I know, none of the trust fund based timeshare systems “convey real property interest,” said Michael. “Ownership is a “beneficial interest” in the trust fund, although a recent ruling in Canada found the Diamond Resort Embarc members don’t even have that.”
“If Florida law requires a real property conveyance, then I think there could be a problem,” Michael added.
Michael Kosor, a Wyndham owner and timeshare advocate, circulated a similar argument at the last two Nevada legislative sessions, proposing greater disclosure, but again ARDA’s lawyers fought against the members. The legislation proposed would have allowed better disclosure as to the lack of or limited secondary market and the fact that timeshare today has nothing to do with real estate. Timeshare agents typically inform buyers during their presentations that they are real estate agents, further enhancing a false security that the buyer is protected by real estate rules and regulations. Even the name reflects the change. Fixed week timeshare buyers were “owners”. Points based buyers are “members.”
I have been researching timeshare since attending an astonishingly deceptive sales presentation July 2015. Like peeling an onion, I discovered at timeshare’s core, the points based system provides a recipe for deceit. As the Lennen complaint describes, point programs began in 2008 when timeshare developers did not know what to do with aging, foreclosed or repurchased inventory.
Inside Timeshare has received 216 US timeshare complaints from our readers, the majority concerning points. Not one of the 216 members understood, at the time of purchase, the difficulty selling their timeshare. Of the 216 complaints, 201 allege deceit and bait and switch on the front end of the sale. Of the 216 complaints, only two came from a Marriott member. It saddens me to see Marriott singled out when the entire industry may be guilty of selling a product that is more smoke and mirrors than reality.
According to the suit, Marriott (NYSE: VAC) timeshare customers pay fees associated with owning real estate — such as closing costs and recording fees — but don’t actually own any real estate. Despite not actually being real estate owners, the lawsuit says, buyers are still paying closing costs, recording fees, title policy premiums and real estate taxes.
Marriott has argued, in its motion to dismiss the case, that “plaintiffs have misread the statutes that they assert have been violated” and “the allegations are without merit and the MVC Plan fully complies with applicable law.”
Except it seemingly did not fully comply with applicable law, so ARDA lobbyists and industry executives forged ahead to initiate legislative changes that would change the definition of “beneficial interest” so that Marriott would comply.
The following excerpts are from a November 23, 2017 Florida Trend article. The full article is linked below. In bold is my emphasis.
“Engineering the Law” Politico
However, Marriott began fighting the suit on another front. The company turned to the Florida Legislature, acting through the American Resort Development Association, the trade group that represents the timeshare industry. At the time, ARDA’s chairman was Steve Weisz, Marriott Vacations’ president and CEO.
In both provisions, the lobbyist, Gary Hunter, of Hopping, Green & Sams in Tallahassee, included extra sentences saying the changes were meant as “a clarification of existing law” — an effort to ensure Marriott could use them as a retroactive defense in the Lennen lawsuit.
ARDA sent more than talking points and issue briefs. A few days after Hunter sent in the additions to the bill, the organization gave $25,000 to the Republican Party of Florida and another $25,000 to a committee controlled by Senate Republican leaders. In April — on the same day that both the House and Senate scheduled the legislation for floor votes — ARDA gave another $10,000 to the state Republican Party. (ARDA, which represents a heavily regulated industry and works on legislation every year, is a reliable source of money for the state GOP, which controls all levers of state government. The organization gives more than $100,000 to the party and its affiliates every year.)
The legislation passed both chambers in late April, and Gov. Rick Scott signed it into law a month later. After the legislation passed, ARDA gave another $50,000 to the fund controlled by Republican Senate leaders.
Two weeks to the day after the bill became law, Marriott went back in court in Orlando, alerting Judge Mendoza to the new Florida law whose provisions “go to the very heart” of the case. “These clarifications of existing law … decimate much of the complaint,” Marriott’s attorneys wrote.
A spokesman for Marriott declined to comment on either the lawsuit or the legislation. But Hunter, the lobbyist for the American Resort Development Association who worked the bill, says the goal of the legislation isn’t just to help Marriott defend itself. It is, he says, meant to protect the entire timeshare industry from similar attacks in the future, should a judge, who is unlikely to be familiar with the history and intricacies of timeshare law, interpret state statutes in a way that no one in the industry ever intended.
Florida Republican Representative Mike La Rosa, Oceola County was one of the lawmakers behind the amendment along with Republican Senator Travis Hutson, St. Johns County. Representative La Rosa is a member of ALEC. Senator Nan Orrock of Georgia has described ALEC as a “corporate bill mill.”
After the legislative amendment was made, Mr. Brinkmann at the Orlando Sentinel once again picked up the thread:
A third-party observer, Ben Wilcox of the nonprofit government watchdog group Integrity Florida, said the timeshare law changes are suspect.
“It has the appearance of unethical influence, the appearance anyway,” Wilcox said. “The question would be, does it represent misuse of office or conflict of interest? Is it meant only to benefit those corporations and change the rules of the game?”
It’s not unusual for Florida to spearhead legislation that ultimately gets rolled out nationwide. Like the 2017 Florida amendment, in 2015 Florida passed a bill that alarmed advocacy groups. Advocacy groups felt the 2015 bill made it more difficult to be released from timeshare contracts. This new amended 2017 bill is also expected to be rolled out nationwide. ARDA lobbyist Gary Hunter is instructing Senator Hutson to remove language from the proposed 2017 Amendment that provided that the law applied only to Florida properties. He called the language “non-substantive” clearly intending to broaden the reach of the amendment to cover properties from single-site timeshare plans outside of Florida (which make up the bulk of MVC Trust properties).
Timeshare, in my opinion, is virtually an unregulated industry. There is no federal enforcement, and some Attorneys Generalmay be influenced by lobby dollars. Florida is a timeshare Mecca with billions of tourist dollars flowing into the state. As mentioned in Part I, the Florida Timeshare Division only acted on 110 out of 2,360 timeshare complaints from April 2012 to April 2014.
Thank you Irene and all who helped with this article, especially Mike Finn of Finn Law Group for his legal views, this will certainly be of interest not just to those across the Great Lake, but also those owners in Europe.
If you have any questions or comments on this article or any other timeshare matter, please contact Inside Timeshare and we will do our best to help.
Welcome to this week’s Friday’s Letter from America, Irene this week looks at Black Friday, with a few books she recommends. Irene was wondering if we in Europe also have Black Friday, the answer is yes we do, it looks like the retail trade has followed in the footsteps of America. In the UK traditionally Boxing Day was the start of the winter sales, but as pre Christmas shopping was starting to decline as people waited for the sales rather than spend before Christmas, retailers began following the US trend.
Now for a quick roundup of the week in Europe, we begin with the news which came in late last Friday 17 November. The Supreme Court ruled against Silverpoint in tenerife once again.
The UK client will receive back over £67,000 plus legal fees and legal interest. The contract was also declared null & void. Then on Monday 20 November they issued another sentence against the same company. In this case the client was awarded over £25,000 plus legal fees and interest. The contract was over 50 years in duration and was declared null and void.
Then on Tuesday 21 November another Supreme Court ruling, again involving Silverpoint, with yet another Uk client awarded over £78,000 plus £3,000 double the deposit paid with legal fees and interest.
On Wednesday 22 November, the High Court in Las palmas Gran Canaria declared an Anfi contract null and void with the return of over 18,000€ plus legal interest.
Also on the same day in Tenerife, Eze Group was ordered to repay over £52,000 plus legal fees and interest. We also published the news that Dominic O’Reilly and his daughter Stephanie O’Reilly had pleaded guilty at Birmingham Magistrates court to “aggressive” sales practices and “coercion”. The have been referred to the Crown Court for sentencing in the new year, these are criminal proceedings which the magistrates are limited in sentencing power.
Thursday 23 November in Tenerife, the High Court Number 3, declared yet another Silverpoint contract null and void, with the UK client awarded over £38,000 plus legal interest.
This morning the news came in of yet another High Court ruling from Tenerife, Yes you guessed it, Silverpoint again. The clients in this case will now receive over £40,000 plus legal fees and interest.
So a rather expensive week for Silverpoint and some good news for clients of Eze Group. So now on with our Friday letter from Irene Parker.
A Cyber Monday Shopping Suggestion to Avoid Black Friday
For Timeshare Members and Advocates
By Irene Parker
November 24, 2017 Black Friday in America
The Friday immediately following our American Thanksgiving holiday is called Black Friday. People really do sleep outside shopping malls ready to cash in on deals designed to launch the holiday shopping season. Consider instead shopping at home on Cyber Monday with this holiday suggestion perfect for your favorite politician or timeshare advocate. This will allow you to avoid the rush and possibly prevent broken bones and trampled toes.
The trilogy of books I suggest are helpful for family and friends who work in or are involved in politics, timeshare, customer service, advocacy or law enforcement. We have a high turnover of timeshare advocates due to non-disclosure clauses, but those who have signed such agreements can still steer timeshare members in trouble to Inside Timeshare or to a self-help timeshare group.
Here are three advocate orientated book selections
#1 Hug Your Haters by Jay Baer
Author Jay Baer was the keynote speaker at this year’s Interval International’s Shared Ownership Conference attended by developers and private equity firms. Mr. Baer’s principle theme is: Haters are not your problem…..Ignoring them is.
His message is meant for customer service providers, but anyone can benefit from learning about how Social Media is changing the face of customer service. Take timeshare. Non-disclosure agreements, obstacles placed in the way of members designed to keep them from contacting other members, private arbitration rulings – all keep timeshare members silenced and isolated. That’s changing in the face of Social Media. A non-disclosure agreement doesn’t mean the signer can’t suggest someone read Inside Timeshare. There are thousands of timeshare members now comparing notes and Inside Timeshare has helped to tabulate and analyze patterns of concerns emerging from member submitted complaints.
Mr. Ford’s book is inspirational for politicians or advocates. When Mr. Ford’s father, Harold Ford, Sr., endured a ten year political scandal and lawsuit over alleged Mud Island Bridge misappropriations in Memphis, young Harold Ford, Jr. describes the success he achieved through grassroots efforts. By reaching out to the media, he learned how to educate and shape the public’s perception of his father. He reached out to broadcast and print media to expose improper jury selection. Mr. Ford, Sr. served 11 congressional terms. He was found not guilty.
In his own campaign, unknown and broke, unable to find speaking engagements, Mr. Ford, Jr., at age 25, was initially pleased to learn his co-campaign chair had arranged for him to speak at 32 graduation ceremonies, only to find out they were kindergarten graduation ceremonies! Still, he dug in with gusto and continued to build momentum throughout his campaign. Mr. Ford’s critics dubbed him “The Kindergarten Candidate”, which Mr. Ford turned into his moniker, and was propelled into congressional office by the votes of grandmas, grandpas, moms and dads who listened to him at kindergarten graduations. According to Mr. Ford, “The campaign was turning because of efforts that I never thought would yield this kind of momentum. The kindergarten speeches were catalysts….Often, the moment it seems least likely that something positive will emerge – it does.”
Any advocate or activist will appreciate the not-so-civil disobedience eight anti-war protestors undertook to break into the Media, Pennsylvania FBI office in 1971. Two were professors, led by Haverford College physics professor Bill Davidon. Without their extraordinary effort and courage, Herbert Hoover’s dirty tricks and illegal surveillance may have never been discovered. Catching them plagued Hoover for the rest of his life. More remarkable, they were never caught.
Thanksgiving in America is also a time for giving thanks and showing gratitude, so Charles Thomas and I both wish to thank our readers for reading and responding to our efforts to improve an industry desperately in need of repair. We especially appreciate our growing list of contributors, attorneys supporting our efforts we have chosen to support through their honesty integrity and experience. We would be remiss not to thank sales agents and developers trying to do the right thing by repairing broken customer relationships so that members can use and enjoy what they can afford. Charles, our advocates, contributors and I do this work and volunteerism so we can save vacations, not destroy them by tearing apart the industry. Let’s hope 2018 will be the year of working together. We can hope.
So that is it, another week over, some very happy ex-timeshare owners and two directors facing possible jail terms in the new year. Somehow I don’t think they are going to have a very Happy Christmas.
Don’t forget, before you deal with any company do your due diligence and check them out first, if you need any help in this, please do contact Inside Timeshare and we will point you in the right direction.