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Friday’s Letter from America

Welcome to another Letter from America, today Irene Parker has a look at the Coalition to Reform Timeshare and the petition which needs your signatures. This has been a recurring theme on our pages, the timeshare industry needs to change how it works, it is in dire need of reform, yet it seems they are not listening to the hundreds of complaints which are hitting not just forums like Inside Timeshare but many other forums, websites and FB groups that you will find on the internet. Inside Timeshare has received hundreds of emails asking for help, yet that is only the tip of the proverbial iceberg.

The industry needs to change if it is to survive, it has created the problems yet it does not even acknowledge them or admits that there is a problem. It is responsible for the myriad of scam exit and resale companies that exist, all because it fails to police how its own sales force operates. The time for change is here, it is in your own interest to be part of this and sign this petition.

Timeshare Wars Continued

Has Diamond Resorts Offered a Compromise through Transitions?

A Petition and a Coalition to Reform Timeshare

By Irene Parker

June 14, 2019

A Coalition to Reform Timeshare (CRT) was launched to advocate for the rights of more than 9 million timeshare owners in the U.S. CRT is made up of individuals and organizations dedicated to reforming the timeshare industry.

Timeshare developers feel the industry is just fine and doesn’t need reforming. Where do you start when two sides are so opposed? How do you narrow the gap?

Our volunteer Supporters at Timeshare Accountability Group™ (TAG) feel both ends of the timeshare sale need some reform. The Change.org petition already received over 800 signatures.  Sign our petition today to show lawmakers and the Timeshare Industry at large that there is a need for change.

https://www.change.org/p/state-legislators-in-arizona-florida-and-nevada-demand-reform-of-the-timeshare-industry-s-unfair-and-deceptive-practices

After signing the petition, a prompt appears asking for a donation. I questioned how donations are spent. One of our Supporters received this answer from Change.org:

Similar to boosted posts on Facebook or sponsored tweets on Twitter, promoted petitions let you pay to show any petition (including your own) to other potential supporters on Change.org or our distribution which supports our platform as well.

Has Diamond Resorts provided a bridge between members and exit providers?

I’ve heard timeshare exit service providers say, “If the developers would just take back the timeshare, there would be no need for timeshare lawyers or exit service providers!”

Well, Diamond Resorts is taking back timeshares at a record pace. One member reported that she had to wait on hold for five hours at year end. I can’t speak for the entire universe of Diamond Resorts members, but I can speak for the Diamond members on our over 3,000 member-sponsored Facebook page.  I can’t recall one post from a member who applied for Transitions and was not accepted. Many members who successfully exited their timeshare via Transitions remain on our Facebook to advise others.

https://www.facebook.com/groups/DiamondResortsOwnersAdvocacy/

I posted asking members to share their Transitions experience. Six members responded, all positive. Veteran family Cathy McDyer posted, “We applied & were accepted when the fee was only $250. We had points & a deeded week.” One member reminded me that points or weeks purchased on the secondary market are not eligible.  

Diamond Resorts launched their Transitions voluntary surrender program late 2017. Members with no outstanding loan and current on maintenance fees can deed back their timeshare by clicking “Transitions” on their member dashboard.

Inside Timeshare has received complaints from Diamond members who say they paid an exit company to get out of a fully paid Diamond timeshare. Not only did they pay more money than the $1,000 Diamond now charges, the process will likely take longer and some exit companies require the member continue to pay maintenance fees while they try to get you out. To make matters worse, the member is no longer eligible for Transitions if they contract with an exit provider.   

I contacted the Newton Group to ask if they would consider directing their fully paid Diamond member callers to our Facebook. The first representative hung up quickly when I asked. I called back and spoke with JoAnn, who also hung up on me as soon as I asked the question.

In 2018 Wyndham filed a lawsuit listing the Newton Group as one of the defendants. DC Capital Law is also listed as a defendant. DC Capital has filed a lawsuit against the timeshare developer ARC Americano.

https://dockets.justia.com/docket/florida/flsdce/9:2018cv81251/535273\https://insidetimeshare.com/tag/americano-beach-resort/

If Diamond is accepting their timeshare points and weeks back (at least according to our Facebook members), why are some exit providers charging $3,000 or more to get a member out of a fully paid Diamond timeshare rendering them ineligible for the program?

I’ve asked exit providers to test my proposition by referring a few callers to our Facebook page. They would not need to convince the member. It could be a suggestion after, “Have you reached out to the company?” If the member would be denied, it would strengthen the argument as to why timeshare exit service providers are needed. Can you imagine the good will that would ensue if this were to happen?  It would be one baby step to solve this nightmare without dueling lawsuits.

Signing our Change.org petition will also support the establishment of a Timeshare Bill of Rights. My comments are highlighted in red.

1) The right to a 24-hour cooling-off period prior to signing a timeshare contract to allow for the review of all sales and contract information including, but not limited to, other governing documents, public offering statements and covenants that run with the land.

Timeshare buyers also need time to recover after sales sessions that last more than six hours. There have been many reports of driver’s licenses and credit cards confiscated to prevent leaving a presentation, along with other creative techniques. I would add that the buyer could waive this offer if they wished.

In debates over timeshare bills proposed this year, the timeshare lobbyists for ARDA in Arizona strongly objected to allowing timeshare buyers 24 hours to review their decision to sign a perpetual timeshare contract, despite lobbying for a 24-hour cooling-off period in Florida and Nevada when it comes to signing a timeshare exit contract.

There is no other industry that would disintegrate if the buyer were allowed 24 hours to think about signing a contract. It’s because timeshare contracts are perpetual, accompanied by rising maintenance fees, and has no secondary market. Complaints about deceptive sales abound.

2) The right to receive complete disclosure of the true market value of the timeshare, prior to the timeshare being purchased.  

Some timeshare companies do disclose this, but the buyer doesn’t read the contract. The consumer does need to do their part by reading the contract.

A major concern is the lack of a secondary market. If the primary housing market placed restrictions on the ability to sell homes, think of the effect this would have on the housing market. Some timeshare companies list in their annual reports that a viable secondary market is a risk to investors. One private equity firm even described the lack of a secondary market as a reason to buy the stock!

In summary, customers experience a reasonable value proposition tempered by the lack of a secondary market. The secondary market has undoubtedly had its growth stunted because the absence of the market creates an opportunity for the imeshare companies.

Scott Miller, Founder of Greenhaven Road Capital, Latticework

3) The right to be free of any high-pressure sales techniques and verbal misrepresentations intended to circumvent the assessment period. For example, “Today Only” offers or the requirement of any form of advance payment to attend a timeshare presentation. Developers would be prohibited from collecting and withholding a credit card, driver’s license or other items before or during the timeshare presentation.

The verbal representation clause appears in many other contracts but widely reported to be abused and overused by unscrupulous timeshare sales agents.  Three against two tag-teams are skilled at holding attendees hostage. Is the gift worth this?

4) The right to record the entire sales presentation or to require the developer to record the entire sales presentation, including the closing of the sale, and to retain the recording for a period of 24 months with no waiver.

My biggest beef is timeshare companies that record the closing session, and then hold that recording against the member, but do not allow the member to record the sales session. Some states, like Nevada and Arizona, allow recording, but the consumer on vacation mode never thinks to do so. After all, they were told they were just required to hear about a new resort.

5) The right to full transparency during the sales presentation without any waiver of verbal representations during the closing of the sale. This right also prevents owners from being required to attend “update meetings” or similar meetings if a sales presentation is conducted during this meeting.

6) The right to full disclosure of the resort owners’ association financials, as well as disclosure of any and all HOA fees, including indirect resort costs imposed on owners which may increase maintenance fees and special assessments. This right also includes yearly owner roster notifications that disclose the number of weeks or points under developer control with the HOA, not excluding resale and rentals the HOA has control over.

7) The right to have the rescission period for a contract extended to one week after a person returns from their vacation to allow appropriate family and/or legal counsel review. The rescission date would be clearly noted in the contract based on input from the consumer on when they return home.

Unfortunately, even this extension doesn’t help when timeshare sales agents are skilled in dodging the rescission period as evidenced by Tuesday’s Inside Timeshare article in which the buyer was told to wait a few months until they had made a couple of months of loan payments before applying for an exit program. Many are told of maintenance fee relief programs that do not exist. They don’t discover they were lied to until they attempt to pay their maintenance fee invoice in December.  

https://insidetimeshare.com/the-tuesday-slot-34/

8) The right to be free of sales calls from the timeshare developer before or after the sale and the right to be free of attempts by the timeshare developer to have a consumer re-activate a previously rescinded sales contract.

I think this provision is a stretch. Most companies, especially cell phone companies, have customer retention departments.

9) The right to full disclosure of the entire cost of timeshare ownership, including available interest rates, before a consumer signs a contract. This would include projected increases in maintenance fees based on the average maintenance fee increase for the past five years for an individual property.

I think the buyer has the total cost including interest as stated on the purchase agreement.

10) The right to have sales agents and timeshare companies subscribe to an industry code of ethics.

There is an industry code of ethics, but it is ignored, based on hundreds of complaints sent to ARDA ROC which they ignored. The board of ARDA consists of timeshare executives, so the complaining member is complaining to the chief wolf guarding the chicken coop. If the industry doesn’t respond to over 200 timeshare members reporting unfair and deceptive practices, what good is a code of ethics?

11) The right as a timeshare owner or vacation club member to have priority booking of reservations over the general public.

A good idea, but I think it would be hard to prove a member does not have priority.

12) The right to unilaterally terminate an unencumbered, non-deeded timeshare interest with written notice to the developer upon making the current “use year” maintenance fee payment.

To join the Coalition or share your story, go to ReformTimeshare.org. Inside Timeshare also welcomes member submissions. Speak up and speak out. Right now the only enforcement seems to be via the media and the media seems reluctant to take on the mega-money associated with the front end of the timeshare sale, so join our efforts to reach sympathetic lawmakers and members of the media not afraid of big money.    

Other member sponsored advocacy groups:

We seek to provide timeshare members a way to proactively address membership concerns; to advocate for timeshare reform; to obtain greater disclosure from the company; to advocate for a viable secondary market; and to educate prospective buyers.

https://www.facebook.com/timeshareadvocategroup/

https://tug2.com/Home.aspx

https://everythingabouttimeshares.com/consider-exchange-options/

Bluegreen Facebook

https://www.facebook.com/groups/180578055325962/

Wyndham Facebook

New: https://www.facebook.com/groups/376743609795740/  

Sapphire Starpoint New: https://www.facebook.com/login/?next=https%3A%2F%2Fwww.facebook.com%2Fgroups%2F292083584642570%2F%3Fref%3Dshare

Diamond Resort Facebook

https://www.facebook.com/groups/DiamondResortsOwnersAdvocacy/

Gold Key Facebook

https://www.facebook.com/groups/1639958046252175/

Thank you Irene, let us hope that this petition really does take off, the industry is in need of reform, either they do or the lawmakers have to step in and do it for them just like in Spain.

So that is all for this week in the murky world of timeshare, join us again on Monday with Part Four of our exclusive on the truth behind Silverpoint.

Friday’s Letter from America

Welcome to another Letter from America, This week Irene Parker writes about Americano Beach Resort and the lawsuit that has been filed regarding Foreclosure Proceedings, but first a quick warning to our European readers.

Another warning is being issued to those clients of Eze Group, a new firm has just emerged contacting consumers stating they have been appointed by the court to manage the return of money paid to Eze Group.

This company name is Egerton Advisory Limited, Company Number 10286171 and the registered address:

Eighth Floor 6 New Street Square, New Fetter Lane, London, United Kingdom, EC4A 3AQ

With an alternative location address registered as:

Q3 The Square Randalls Way, Leatherhead, Surrey, KT22 7TW

The directors are named as:

Victoria Noland Carter Egerton and William Luke Le Beward Egerton, both registered the New Street Square address.

The company was incorporated on 19 July 2016, but the filing history shows very little information or filing of any accounts.

As we have stated before, the courts do not appoint private companies or third parties to manage any payouts. No money has been awarded by Birmingham Crown Court to consumers of Eze Group, the O’Reilly‘s are now subject to investigation under The Proceeds of Crime Act, which will take some time to complete.

Along with Money Advice Limited, Claims Assistance Bureau Limited, Egerton Advisory Limited are fraudulent companies, if you are contacted by them or any other company with a similar story then let Inside Timeshare know and file a report to Action Fraud.

https://www.actionfraud.police.uk/

Now for this weeks Letter from America.

A Class Action Lawsuit was Filed against ARC Daytona Americano Beach Resort Contesting Real Property Foreclosure Proceedings are being Illegally Applied to Foreclose on Personal Property  

By Irene Parker

March 29, 2019

DC Capital Law, LLP filed a class action lawsuit on November 6, 2018, against ARC Americano, LLC and Americano Beach Lodge Resort Condominium Association on behalf of plaintiffs Gerald J Sohasky and Norma J. Sohasky in the Florida Circuit Court of the Seventh Judicial Circuit Volusia Civil Division.

According to the lawsuit, plaintiffs Gerald and Norma Sohasky allege illegal practices that violate the Florida Consumer Collection Practices Act and the Florida Vacation Plan and Timeshare Act by threatening foreclosure on a piece of personal property and threatening to charge up to 40% of amounts owed in collections, where the original contract or law does not authorize charging such collection fee. The ARC lawsuit contends “Floating Week” debt is consumer debt, incurred primarily for personal, household or family use.

Having read or listened to complaints from 746 timeshare members and owners, I am astonished by the level of stress caused by what is supposed to be a stress reducing product.  

Comment sent to Inside Timeshare

My parents bought into the Americano in the 90’s. Fast forward to 2017 – my 70 something year old mother, now a widow, had to pay for a service we hadn’t used in ages.

They (Americano) HOUNDED MY MOM about switching to the freedom 365 plan. She was a 13 year widow on a very fixed income and somehow we were pushed into signing for a new plan that would offer us huge hotel discounts and she would be able to stop paying after 5 years.

My mom is going broke!  Sara

My husband and I purchased an Ozark timeshare in 1985. A St. Louis native, we enjoyed years of vacations, but after moving to Florida we no longer desired to vacation in the Ozarks. I contacted the resort and talked to the manager I had gotten to know over the years. “Yeah, we had a board meeting and decided we can’t expect loyal owners who faithfully paid maintenance fees for thirty years, now older, to be held hostage,” she said. A few days later I received a one page form to be notarized, sent it back and that was that. We paid $8,000 for the timeshare in 1985. I had no regrets getting nothing in return as we had used the timeshare for many years. Like Sara’s mom, and many in my age bracket, we are losing hips, knees, eyesight and spouses. The thought of going to the Ozarks alone, should something happen to my spouse, is depressing.

Americano is demanding owners, many who have owned at Americano for decades, spend an additional $5,000 to $6,000 to join a Freedom 365 Travel Club in order to be released from their deeded weeks. Making this mandatory for seniors seems unfair. Granted, the resort is in need of funds as Americano is the only Daytona resort still not opened after suffering hurricane damage, but other developers now have voluntary surrender programs for members in good standing. There may be a fee, but the fee is less than $1,000. Don’t forget that we were all told we were buying real estate so no problem selling the timeshare should we need to dispose of it. In a statement made by ARC’s law firm, they assert they will work with owners to find appropriate alternatives but typically for seniors, a Travel Club is the last thing needed. I’m looking at long term care plans.

The issues related to property damage are complicated. When Americano owners contact me, I explain that if they bought a primary residence condo, and the condo is rendered uninhabitable, the assessment fees don’t stop. It would be difficult to sell an uninhabitable condo. I understand ARC’s argument from this perspective.

Due to pending litigation, ARC’s response is from their attorneys. I have found others at Americano willing to listen and weigh in consideration; the harm timeshare exit in general is causing especially seniors. Let’s hope continued dialog will result in some form of relief for angry and frustrated owners.

Below is the response we received from ARC’s attorneys. Contrary to the attorney’s response, this article will not be disseminated to some of the Americano owners. Some Americano owners do read and share our articles. We sent a draft of today’s article to ARC to give ARC an opportunity to correct any inaccuracies, which they corrected. Inside Timeshare is published from Spain. Following ARC comments, are arguments presented by the plaintiffs’ attorney taken from the lawsuit complaint. A legal expert weighs in. Plaintiffs’ attorneys did not respond.

Response from ARC’s attorneys submitted by ARC President Scott MacGregor:

This information is given to correct inaccuracies to be contained in a publication that will be disseminated to some of the owners.  Americano is a Legacy resort that was severely damaged due to the recent back to back hurricanes, 2016 Hurricane Matthew and 2017 Hurricane Irma. There was one Special Assessment for $4,348,109, not $15 million, which will correct the incorrect reference in the article. The Association continues to seek insurance from its carriers, but had to pursue litigation to address the claims. The Developer is seeking financing and other options for the remaining restoration of the Resort estimated to be $15 million plus. However, it is imperative that all owners pay the maintenance fees, taxes and assessments as required under the Declaration and Florida law. It is fundamentally unfair to the paying owners for other owners not to pay to operate and restore the resort.

The Association is faced with vigorously defending any lawsuit against the Association, which litigation will only increase fees and costs to all owners, as required under Florida law, at the Resort. While our trial legal counsel has stated that no comment should be made at this time concerning any lawsuits, the Americano Beach Lodge Resort is a real property timeshare under Florida law and actions taken are authorized and required under the Declaration and Florida law.

The Developer and Association continue to try to work with each owner to find appropriate alternatives as discussed before. Owners are encouraged to seek ownership and payment options through the Association and Developer.  Lawsuits against the Association will not only increase maintenance fees and assessments for all of the owners due to legal and professional fee expenses, but also may leave those owners with potentially expensive legal bills in addition to their ongoing obligations to the Association. We believe it is much better to work together to resolve the issues that everyone is facing rather than unnecessarily expend owner and Association funds and resources that are needed to restore the Resort, for court expenses.

More from Sara:

They used scare tactics to convince my mom that I would be responsible for the timeshare in the event of her passing, and my children would be responsible after I passed. I have learned this is not true.

The Freedom 365 plan supposedly offered us huge hotel discounts and would allow my mom to stop paying after five years.  We attempted to use the Freedom 365 plan. The first two times we used it we did get a good discount on hotel rooms, but after that the deep discount was no longer available. We got a good rate the first time at $93 for a Hyatt room, but when we later tried to book the same week of the year the price was $100 more, about $170 plus tax. I called and asked why it was so much more. They stated they could price match if we got a better price on another website. What good is that? You don’t have to pay any kind of upfront money, financed by a loan, to book a hotel room using an online service. We were promised the best deals. We were promised so much and at what cost? My mom is going broke! The amount financed was $6,000.

Following are allegations made in the lawsuit

Is a “Floating Week” timeshare real estate or personal property?

If the timeshare is defined as personal property, the lawsuit claims foreclosure rights do not legally exist and are in violation of the Florida Timeshare Act.

I’ve had many discussions about timeshare foreclosure questioning whether a timeshare really is real property. I found the requirements governing real vs personal property foreclosure in Texas helpful:

Comparison of Texas Foreclosure Procedures for Real property and Personal Property

Real property and personal property foreclosures are dramatically different. Real property foreclosures are conducted on the first Tuesday of each month between the hours of 10:00 a.m. and 4:00 p.m. at the courthouse door in the county in which the real property is located, with a notice posted at the courthouse door, personal notice to the debtor, and filing of the notice with the county clerk, all 21 days before the foreclosure sale. These requirements are defined by § 52.001 of the Property Code and are unique to Texas law. Personal property foreclosures are conducted under § 9.504 of the Texas Business and Commerce Code, which generally requires a commercially reasonable sale. The requirements of Article Nine of the Texas Business and Commerce Code are followed, with some minor variations, by all states except Louisiana.

According to the ARC lawsuit, plaintiffs purchased only the ability to make a reservation rather than ownership in real property. In the “Floating (or flex use) periods and The Timeshare Plan article of the Declaration, the Declaration makes it very clear that the Warranty deed of an “owner” who switched  to Floating time to become a member of a “Right to Use” program renders the deed worthless and provides none of the requisite rights associated with real property.

I asked an expert, as argued in the lawsuit, if switching from a “Fixed Week” to “Floating Week” would render the “Fixed Week” deed worthless.

Purchasers still own that deeded week and it can be found in land records. The purchaser simply surrendered their right to occupy that week and the use rights that went with it in exchange for a floating week use right. Their interest, however, is tethered to an actual real property ownership (even if they cannot legally possess it). If they sold their interest, they would be selling the deeded week they bought which would include the surrender and exchange agreement for a floating week. By the same token, if they are foreclosed upon for non-payment, it would be the deeded week that would be foreclosed and the agreements tied to it (i.e., the floating week right) would be rendered null and void.

As an analogy, let’s say you join a car-sharing group where everyone in the group can use whatever car is available using a reservation system. In order to get into the group, however, you are required to purchase a car to add to the fleet. You don’t buy the car outright; you finance it through the group such that your monthly dues are part car payment and part fees. Even though you hold title to one car in the fleet, you have no more right to use that car than anyone else in the group. If you fall behind in your monthly dues, you will lose your car-sharing membership (i.e., the use rights you bargained for), and the car that you added to the fleet (i.e., the tangible property you hold title to but surrendered possessory interest in) will be repossessed by the group.

Note from Inside Timeshare: Spanish Timeshare Law prohibits Floating Weeks and Points as there is no tangible product and they lack any substance.

My unnamed source is not saying the lawsuit is without merit, in that they feel the underlying real property is illusory, but they feel it may be a tough argument to win.  

Related articles:

Timeshare Foreclosure Explained to Lenders     

What happens if I stop paying my maintenance fees? Timeshare attorney Mike Finn answers the question in this article:

Proprietors behind Americano are ARC American Resort Collection

www.arcresorts.com/about-arc/

Self-help groups we feel are not industry influenced.

https://www.facebook.com/groups/DiamondResortsOwnersAdvocacy/

https://tug2.com/Home.aspx

https://everythingabouttimeshares.com/consider-exchange-options/

https://www.facebook.com/groups/180578055325962/

https://www.facebook.com/groups/465692163568779/

https://www.facebook.com/groups/1639958046252175/

We seek to provide timeshare members a way to proactively address membership concerns; to advocate for timeshare reform; to obtain greater disclosure from the company; to advocate for a viable secondary market; and to educate prospective buyers.

Thank you Irene, next week in the Tuesday Slot we welcome Mike Kosor with his response to the Wyndham Sr VP Jason Gamel and his testimony to the Florida HB 435 workshop.

Join us again next week and have a great weekend.