Sheraton Kauai Timeshare Presentation

Old Apr 22nd, 2008, 04:16 AM
  #21  
 
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pegontheroad, interesting story. There is a nice smallish timeshare complex just a block from me in Naples, Florida. It's about 25 years old. Over the years they raised the annual fees more and more, until some were paying almost as much annually as they paid to buy their week some 25 years ago. But two years ago, they decided to totally redo the entire complex -- I'm talking completely gutting the units, new roofs and even a change in the exterior features. They sent everyone an assessment that was WAY above what they original paid for their "lifetime" of ownership. The majority of people walked away feeling enough was enough. The work was completed. The developers got back all those apartments for free, and resold them all at huge prices. Timeshares are fantastic, wonderful, and financially spectacular things -- for the DEVELOPERS -- not for the buyers.
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Old Apr 22nd, 2008, 09:12 AM
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But two years ago, they decided to totally redo the entire complex -- I'm talking completely gutting the units, new roofs and even a change in the exterior features. They sent everyone an assessment that was WAY above what they original paid for their "lifetime" of ownership.

After 25 years, "They" is no longer the developers, it's the homeowner's association. Either the board (voted for by the homeowners) or the homeowners themselves, voted for the repairs and assessments.

Second, if you've owned a house or a condominium for 25 years, you have to put in at least much for restoration -- it's no better or worse for a timeshare.
 
Old Apr 22nd, 2008, 10:02 AM
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Those are the kinds of stories the salespeople leave out of the TS presentations.

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Old Apr 22nd, 2008, 10:05 AM
  #24  
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Those are the kinds of stories the salespeople leave out of the TS presentations

Just wondering, if you're buying a new house, do you expect the salesperson to tell you you might need a new roof in 25 years?
 
Old Apr 22nd, 2008, 10:18 AM
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Of course not. But buying a house is a totally different type of transaction. Most people don't understand what they're buying when they purchase a timeshare. And the less real info the salesperson gives you, the better off s/he is. Of course you should always understand what you buy. But timeshare sales is such a high-pressure tactic that it works completely differently. How many people go into a ts presentation knowing they'll never buy yet walk out having signed a contract. When you buy a home, it's not a decision that you make on the spot in the space of two hours.
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Old Apr 22nd, 2008, 10:20 AM
  #26  
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I'm a big believer in Caveat Emptor.
 
Old Apr 22nd, 2008, 11:39 AM
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dmlove, if you're involved in timeshares, surely you know that at some timeshare resorts (particularly smaller ones) that also operate as if they were a hotel (open rentals to others) the developers keep at least half of the total weeks for themselves. So the "homeowner's association" is always controlled by the developer's -- the ones also taking a percentage if you put your unit into the rental pool, and taking their cut of profits from the maintenance dues and other assessments. So when someone who paid $5000 for a one week stay "for life" is faced with the option of walking away after 25 years or having to put up a $25,000 assessment to keep it, what would you think most of them do?

And do the math. The developers who are charging the $25,000 per week per unit for the upgrading are bringing in a total of $1,300,000 per unit. Trust me -- the complete remodeling of the units didn't cost more than about 10% of that amount.
That's hardly like doing "normal upkeep" on your own home or a place you own.
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Old Apr 22nd, 2008, 01:03 PM
  #28  
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To Beachkomer:

My husband got this as a referral from someone he works with; this guy was allowed to refer two people to Starwood for the deal. I don't know if you could get it from Starwood directly.
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Old Apr 22nd, 2008, 01:20 PM
  #29  
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By law (in California),

1) Special assessments, such as the $25,000 per week referred to above for refurbishment require the vote of a majority of the owners EXCLUDING the developer, who gets no vote.

2) The amount collected cannot exceed the amount reasonably necessary for the subject repairs or refurbishment.

3) To the extent the developer continues to own interests, they are subject to the same assessments as everyone else.

NP, your math simply doesn't work (although I'm sure it did in the years that timeshares were given there bad rap, before laws were enacted to prevent exactly the scenario you posit).
 
Old Apr 22nd, 2008, 01:49 PM
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I know nothing about California laws, I only know what DID happen here in Florida with this place in the past 2 years.

First loophole: Question of semantics, really. The "developer"-- a corporation -- doesn't own ANY units and has no voting rights, so you're right. But the several individuals who just happen to make up that corporation DO own over half of the units privately, and because they "personally own them" they DO have voting rights -- so that rule flies out the window. I happen to know one of them personally (I think there are about 12 total in the corporation).

I see nothing wrong with my math, unless you're saying they couldn't charge that much. Excuse me, but they DID. I will backtrack somewhat however, in saying that the $25,000 for a week's ownership was for the "in season" weeks, off season week owners were assessed a little less than that, so yes, my total was off. But trust me -- they collected one heck of a lot more money than it cost! Of course, since the architectural work just happened to be done by one of the partners who is a leading architect in town, and the general construction done by another, etc., what they charged would be difficult to be argued as "reasonable".

Meanwhile, do the math on original sales of the units. These units would have sold as regular condos for a little less than $100,000 in the early 80's when they were built. But the weeks sold for "an average" of $5000 a week. My math says that's about $250,000 for each unit. Is it any wonder so many were going in here in Florida at that time, but the laws drastically changed since then?

I'm happy for people who own a timeshare and it works for them, and many owners may feel it is all worth it to them -- fine -- but no one can say it is a great financial investment (buying on the "new" market) except for the developers. If those units HAD sold as individual condos for $100,000 in the early 80's and someone still owned one today, he'd get well over a million for it, closer to $1.5 million. That's what waterfront real estate has done here. But try to sell your week for 10 to 15 times what you paid for it. Are you kidding me? Many people tried to sell their weeks for what they paid years before and rarely had luck (with the original partners individually buying back those units cheaply). That's what I mean by it NOT being a great financial investment.
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Old Apr 22nd, 2008, 02:14 PM
  #31  
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NP, if they DID charge more than the cost of the repairs, the owners probably have a lawsuit if they choose to pursue it (again, assuming Florida's laws are similar to California's). And if the individual shareholders who own the developer corporation own half the weeks, then they're also paying half the cost. Seriously, what you're talking about here is simply fraud.

Also, I never said (and wouldn't, because I agree, it isn't) that it's a good financial investment, in the sense that I don't expect any "return" on my capital. But I do think its a good expenditure of money for what I get in comparison to paying for an upscale condo for 14 days every year (2 weeks of use per year, plus a large number of Marriott points that I have used in hotels all over the world).
 
Old Apr 22nd, 2008, 02:28 PM
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"Seriously, what you're talking about here is simply fraud."

Hello. Welcome to Florida.

By the way, those 12 or so "partners" really own almost all of the weeks by now. They operate the place via the corporation pretty much as a hotel. So many owners walked away from them over the years and the few remaining ones with this most recent assessment, that the original "developers" are almost in total ownership at this time. And they seem to be making NO attempt to resell weeks. I think they are happy with the status quo -- operating it like a hotel (and taking some timeshare trades) and sharing in the profits.

As I said it is a small complex. I'm guessing 48 or so units total. And I certainly don't mean to suggest this is how MOST timeshares work -- just how this one works.
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Old Apr 22nd, 2008, 02:36 PM
  #33  
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Hello. Welcome to Florida.

I guess I know where I'm NOT buying a timeshare LOL!
 
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