Start the Week: Marriott Complies with Court Order

Welcome to the start of another week with Inside Timeshare, today we take a look at a case from the Court of First Instance of Marbella which, unlike many other cases we have been following, has been completed in record time. We have to ask the question why has this case only taken 10 months to go through the courts with the sentence issued and payment made to the court.

This case involved German clients who purchased two contracts with Marriott at Son Antem, with deposits taken within the statutory cooling-off period, along with a floating weeks system and contracts with a duration of more than 50 years.

The Court of First Instance Number 8 of Marbella declared both contracts null and void plus awarded the clients 49,084€ for the purchase. The court also in accordance with the Supreme Court rulings on the taking of illegal deposits ordered a further 32,124€ which is double the amount taken in illegal deposits.

In total the court has awarded 81,208€ plus the clients have also been awarded legal interest and the return of their legal fees.

In just two months of the judgement, Marriott has already voluntarily deposited the full amount with the court, making this one of the speediest cases we have seen for a long time. When we take into account the time to translate the documents, prepare the case, submit it to the court then the 8 months for the case to be heard once filed, we have a case that has probably taken just around 12 months from start to finish.

So why has this case with Marriott been so quick?

One part of the answer can be found in our articles published 2018 and again in March 2021, in these articles, we reported that Marriott, which is a public company, has to make a full report to shareholders and the Securities Exchange Commission. In these reports (which can be found on the links to the previous articles), Marriott admitted they are losing in the courts and especially the Spanish Courts.

Marriott also announced that it had set aside litigation expenses of $16.3 million in respect of cases in the US and Spain. We have so far not seen anything like this from any other timeshare company, let alone admitting they are losing.

This aside, there are also the tactics that are being employed by other timeshare resorts of causing delays with late filings at court, constant appeals, and arguments over minor points of the case. The main culprits using these methods are our old friends at Anfi and we have to say that even Club la Costa has used similar methods in the past.

What we have seen with these delaying tactics are the courts becoming very frustrated with the timeshare resorts, in many cases the High Court has increased the payment awarded, adding the legal fees where they had not been granted by the lower courts. These can be considered to be punishment by the courts and they are well within their rights to do so.

It should also be considered how much it must cost in legal fees to their own lawyers, to constantly appeal, counterappeal, and file representations as to why the case should not be heard.

Obviously, Marriott, having to report their finances to shareholders and the Securities Exchange Commission, having to justify any expenditure, and reduction in profits to shareholders is a major factor in what Marriott appears to be playing ball. All we can say is this is good news for Marriott members with cases at court.

This case was brought on behalf of the clients by Canarian Legal Alliance, with the Lawyers Aroa Farray and Christine Ihmann with Claims Consultant Evi Richter assisting the client.

Links to past articles

https://insidetimeshare.com/marriott-admit-losing-in-spanish-courts/

https://insidetimeshare.com/the-tuesday-slot-marriott-and-the-spanish-courts/

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Friday’s Letter from America: Exit Industry on Trial.

Welcome to this week’s edition of Letter from America, today our regular contributor Irene Parker and the story on the legal battle between Westgate Resorts and Timeshare Exit Team. The number of “exit” companies coming into existence has rattled the industry, not just in the US but also in Europe, all as a result of the industry making it very hard or almost impossible to terminate a contract and membership. So is the industry to blame for creating a problem in the first place?

Westgate Resorts v Timeshare Exit Team – Settled

Case 6:18-cv-01088-GAP-DCI

http://flowjournal.org/wp-content/uploads/2013/10/Image-1-The-Queen-of-Versailles.png

The Queen of Versailles Mansion built by Westgate’s Founder

By Irene Parker

July 16, 2021

The jury trial of Westgate Resorts v Timeshare Exit Team (TET), filed July 9, 2018, was scheduled to begin Tuesday, July 13, 2021. I had intended to attend the trial, but the parties settled. Settlement terms are confidential and neither side will comment on the outcome. 

The crux of the argument was whether TET and their agents instructed or influenced owners to stop making payments. Also at issue was whether TET violated the Florida Deceptive and Unfair Trade Practices Act. Westgate sought to recover the balances on the unpaid mortgage and maintenance and tax fees caused by TET’s alleged interference. 

TET contended that as agents of their customers, they were privileged to interfere with Westgate contracts. According to the standard federal jury instructions, if a jury finds that a third party gave honest advice and that it was in a timeshare owner’s best interest to breach a timeshare contract, then the third party cannot be held liable for tortiously interfering with the timeshare contract.

Timeshare Wars

Given the volume of lawsuits that have been filed against exit providers, including attorneys and law firms, what seems to really be on trial is the legitimacy of the exit industry. Should disgruntled or desperate members be allowed to have professionals help them try to extract them from a timeshare? 

Making the wrong decision to buy a timeshare can be devastating. Westgate’s corporate representative in court documents stated that Westgate’s current default rate is approximately 30%. A timeshare contract typically exists in perpetuity, with little to no secondary market. Unaffordability is exacerbated by an interest rate typically financed at the highest rate allowed, 17.99%. 

The resale market for timeshare properties is almost nonexistent. An example provided in court documents showed the median purchase price of a timeshare in Osceola County in 2016 was $22,990. The average resale price, two years later, was approximately $10. 

What Happens When a Westgate Owner Defaults?

According to Joint Pre-Trial Statements – not much happens. 

Out of 621 original owners, Westgate only brought foreclosure proceedings against 244 accounts. Of the 86 remaining owners, only four testified they were foreclosed. With respect to the 86 owners Westgate decided to foreclose upon, none testified that their credit was damaged as a result of nonjudicial foreclosure, or were aware of any such impact. Westgate had not sought deficiency judgments as a matter of policy and is not entitled to under Florida law and the law of almost every state. 

Westgate could change its policy to pursue judicial foreclosure and seek deficiency judgments. This would allow them to place liens on real property or garnish wages, etc. 

Nonjudicial foreclosure is quicker and costs less than judicial foreclosure. Non-deeded points, rapidly replacing deeded timeshares, are not eligible for judicial foreclosure. The buyer is a “member” with no beneficial interest in real property. However, that member could be sued for the balance due on a promissory note.  

ARDA-ROC encourages judicial foreclosure according to letterhead minutes of the April 10, 2019 ARDA-ROC meeting at ARDA’s World annual conference. ROC stands for Resort Owners Coalition, the Owners’ advocacy arm of the timeshare industry lobby. Kenneth McKelvey is Chairman of ARDA-ROC.

“The best thing we can do with exit (is) judicial foreclosure, ruin the credit and enforce the contract,” McKelvey said. 

This is in contrast to how Mr. McKelvey testified at a Florida legislative workshop March 12, 2019: 

“Most of the developers I know and certainly most of the timeshare managers I know, and I managed timeshare properties for thirty years… every single resort had a dissolution policy, every single one (one). There was a way to get out. You had to come to your management company, and based on what the board of directors instructed us to do in the terms if they had to pay a fee or if they had to be current, whatever those situations were, we did not have a one that did not have a dissolution policy and a hardship policy….” 

Reports from Westgate owners 

Out of 18 Westgate owners who contacted me or another volunteer as this lawsuit worked its way to trial, only five were able to exit their timeshare. Several had no outstanding loan. I advised one couple, both diagnosed with cancer, to contact Westgate’s Legacy Department via ARDA’s Responsible Exit website. They reported back that the Legacy representative transferred them to a supervisor who informed them, “We don’t take timeshares back and that’s not our website.” I told them about this lawsuit. They reached out to one of the attorneys involved after we discovered a Resort Trades article that listed Westgate as a founder of ARDA’s Responsible Exit program. This couple was ultimately able to relinquish their timeshare. 

Another owner, aged 90, and his wife, are currently in default because Westgate contested their paying the broker who found a buyer his $800 commission.  

The Queen of Versailles and Property Man     

My intended retirement to move to Florida and return to my first occupational love, teaching piano lessons, was disrupted in July of 2015 when I turned on the television at a resort in Orlando and saw the Queen of Versailles mansion pictured above. The show was Property Man on FOX, hosted by the late Las Vegas attorney Bob Massi, who sadly died of cancer in 2019.  The Queen of Versailles is a documentary about Westgate owners, David and Jackie Siegel’s palatial 90,000 square foot home. The documentary took Best Director at Sundance one year

I had just endured a pathetic sales presentation experience. I wrote to Mr. Massi about my experience. Remarkably, a FOX producer responded asking if I would be willing to be interviewed. The producer said the show had not intended to be about timeshare, but they were flooded with timeshare complaints. Not wanting to appear on national television unprepared, I began what has turned into a seven year effort to alert potential timeshare buyers as to the pitfalls that can occur when not enough due diligence goes into the decision to buy a timeshare. 

Timeshare resale brokers I’ve spoken with, who charge no money upfront to list a timeshare, refuse Westgate listings due to obstacles they say are placed in their way. Resorts that do not allow a secondary market breed generations who want nothing to do with timeshare after hearing parents and grandparents bemoan their difficulty relinquishing a burdensome timeshare.  

TIMESHARE TALKS is an interactive YouTube forum launched to promote a secondary market and educate the consumer as to the need to comparison shop by calling a legitimate timeshare resale broker before buying a timeshare. John Kushman is a broker with Timeshare Specialists.  John was also interviewed by Bob Massi in a segment that aired prior to mine. John’s website lists nearly 150 timeshare resale scams, with an impressive amount of timeshare crime intelligence gathering. Organized crime rings instruct unsuspecting timeshare owners to wire money to Mexico, the Dominican Republic or Hong Kong. 

https://tarda.org/f/timeshare-specialists%E2%80%99-timeshare-exit-scam-hotline

The exit industry for primary residences is called realtors, and in cars, used car dealers. Stifling the secondary market and silencing the known exit-providing players via thousands of billable hours gives rise to boiler rooms with common-sounding names. TET produced 1,071,751 customer documents concerning an initial 2,069 Westgate accounts. 

Should anyone buy a timeshare if it can lead to financial ruin?

If developers begin to attach personal assets and garnish wages, how can it be prudent to ever buy a timeshare? If an adverse life event happens over the life of a 17.99% loan, or maybe the owner just doesn’t want it anymore, lives could be financially ruined. Clearly, the goal needs to be consumer awareness if the industry moves in this direction.      

Bankruptcy may be of no salvation. According to one attorney, since timeshares have virtually no resale value, it could be deemed an “abandoned asset” so not liquidated. After seven years of bankruptcy protection, the unfortunate timeshare owner learns that they have NOT been foreclosed and receives a bill for seven years of maintenance fees and the loan balance, with late fees. This actually happened to one timeshare owner in California.      

If a timeshare default is the only credit report black mark, and the lender is informed as to why the member defaulted, especially if experiencing unfair and deceptive practices, the lender may be sympathetic. This too has happened. 

The bottom line – If aggressive collection tactics ensue, don’t buy a timeshare unless you pay cash, but know that if a cash buyer later learns they were duped, a refund is more difficult to negotiate than a loan cancellation. Instead of media spin about there being no problems in this industry, issues should be addressed and a secondary market is necessary for the health of the industry and the consumer. 

Related articles:      

The Dashiell’s article

http://insidetimeshare.com/the-tuesday-slot-7/

Thank you Irene for this week’s article, as usual, you have covered and explained the main points for our many readers, one thing is very clear from this article, it is the timeshare owner who once again is stuck in the middle!

That is all for this week, have a great weekend and join us again next week. 

Start the Week

Welcome to the start of another week with Inside Timeshare. First, for those who have been following the Euro finals, yesterday was a little disappointing for our English readers, but it has to be said, the lads and the manager made us proud. It is just a shame that the abusers have already taken to social media and attacked some young and talented players who gave their all. Now back to what we are here for, timeshare latest.

Since Inside Timeshare has been offline, the woes for Anfi have not gone away, in fact, they have just been getting worse, but it is of their own doing!

At every turn, Anfi still thinks the law is wrong and appeals every decision made by the courts against them, from the moment a case is filed with the court they will delay responses and disagree with all decisions made by the courts.

Yet as we have seen, not one case which is filed with the courts has a contract that is not in breach of the timeshare laws first enacted in January 1999. These contracts range from “perpetuity” which is never-ending, to points and fixed week systems, not to forget the illegal taking of payments within the statutory cooling off period!

These are just the basics, once the contracts are explored with the expert eye of the lawyers, they begin to find other infractions which come under other laws designed to protect the consumer.

But the courts are now well aware of the tactics Anfi is using, unfortunately, they have to allow these appeals, it is the legal right of Anfi to do so, even though the judges can see the reasons behind the appeals, their hands are tied and the legal process must go on.

What we have seen recently though, is a growing tendency of the appeal courts to process these appeals in a much quicker time, with every appeal being dismissed and the original judgments confirmed.

Then there is the matter of Anfi complying with the sentences issued against them, the delays in paying into the courts the funds to be returned to the consumer using some very dubious methods.

These dubious methods are now under investigation by the Provincial Prosecutors Office of Gran Canaria. This investigation has been running for quite some time now and is looking at possible criminal charges involving the suspicious movement of funds.

One of the reasons which triggered this investigation is the fact that by moving these funds it appears that Anfi could be seen as attempting to ignore a court order. This point is noted as being a criminal act in Spain.

This is only the tip of the proverbial iceberg, we have an investigation into the dealings of Anfi with the various agencies including the Mayor of Mogan, over the debacle which is known as the Anfi Tauro Beach Project. There are also other investigations into members of the Cazorla Group board who are also involved with Anfi, it is certainly a very big can of worms.

The worst part of all this is the fact the Anfi resort is loved by many, so what is turning members to the courts?

The answer is very simple, it is now they are finding that what they were sold in the first place is not what they were promised. It is the attitude towards the members when they have a problem, it is the lies and falsehoods passed out by management on various subjects, the most recent being the replacement of contracts.

The signing of these new contracts is being portrayed as a legal obligation by the members, what Anfi is not telling you is their main reason for the change. They know full well their existing contracts are illegal, and by “enticing” members to change they are saving their own skin, after all, once the new contract is signed, the member loses all legal rights to sue Anfi.

Rather than come clean with their members and admit they are losing in the courts accepting the original judgements, (or even settle out of court), the management seems to rather pay their lawyers and accumulate more charges with the appeals. We just wonder where they are getting the money to pay for all this, could it be your maintenance fees?

It is not just Anfi who are losing in the courts, but it is Anfi who keeps coming up with appeal after appeal, no doubt we will be bringing you more results from the High Court of Las Palmas in the very near future.