Letter from our HOA

[rapmarks Moderator Find all posts View Profile Close rapmarks]

We just received a letter from our HOA warning about "Transfer" company scams. It warns of scams where an owner transfers their interest to a transfer or rescue company or affiliated closing company who in turn deeds the timeshare interest to a shell entity which does not pay timeshare assessments. Our association now requires owners to seek prior review and approval before engaging in a transaction to convey the timeshare interest. If the owner is involved in a fraudulent transfer, the owner will remain responsible for their continuing maintenance fee.

[fishingguy Member Find all posts View Profile Close fishingguy]

Just curious, what property is this?

I guess I don't see what purpose their review/approval serves. Since they say that without transfer of ownership, the original owner is still responsible for assessments.

One has to wonder what recourse they have if the owner does not get review/approval before selling their property.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

It is good that they are warning people. Their attempt to control transfer may likely not have any legal force behind it. Unless there is something in the Declaration of Covenants that authorizes them to do it, then it cannot be enforced. Things like that cannot be done by management rules, HOA rules, HOA bylaws, etc.

At least in North Carolina, most of the deeds I see recorded by the closing companies these slugs use are not valid to pass title in the first place, so the resort would not have to have such a rule. They could just tell the owner that there is no valid deed out of their name.

[rapmarks Moderator Find all posts View Profile Close rapmarks]

they are quoting the revised statues of Missouri section 428.024 regarding fraudulent conveyances and liens. the fear for me is that I find a buyer who I think is legit and he stops paying the maintenance fees, I am back in ownership!

the purpose of this review approval is to not allow an owner to pay a fee to a scam company to take the timeshare off your hands and then the company goes through some steps to put it into a "shell" title and doesn't pay the maintenance fees. Our small association cannot expect the other owners to make up the difference in loss of fees.

[timeos2 Senior Member Find all posts View Profile Close timeos2]

We just received a letter from our HOA warning about "Transfer" company scams. It warns of scams where an owner transfers their interest to a transfer or rescue company or affiliated closing company who in turn deeds the timeshare interest to a shell entity which does not pay timeshare assessments. Our association now requires owners to seek prior review and approval before engaging in a transaction to convey the timeshare interest. If the owner is involved in a fraudulent transfer, the owner will remain responsible for their continuing maintenance fee.

While I can understand and appreciate what they are trying to do - great that they are looking to protect their owners! - unfortunately they have no right to require a "review and approval" before a legal transfer is recognized. The fact that down the road that transfer may turn out to be troublesome or even end up in a "lose lose" situation for the owner and the HOA doesn't change the fact that each owner has a right to do as they please with their deeded ownership. No harm in trying to educate the owner/seller as to what can happen but the actual ability to "require" approvals is non-existent.

Nonetheless while it may not be enforceable having the process in place may save an unsuspecting seller so let it stand. Again I applaud the proactive approach being taken.

[fishingguy Member Find all posts View Profile Close fishingguy]

I also applaud the HOA for trying to look out for the interests of its members.

However, I don't see where the original owner who initially transferred the property is the "target" of 428.024 (or the HOA) -- unless he knowingly and fraudently did so in the first place. More importantly, all of 428.024.1 seems to be aimed at the first party that he transferred the property to; "a title or rescue company or affiliated closing company who then transfers to a shell entity".

428.024.2 specifically addresses the later case: where the transfer to the shell company was hidden or undisclosed; the tranfer to the shell entity was still controlled by the title or rescue company or affiliated closing company; the shell entity obsconded; they did the transfer to the shell just before the fees came due; the shell declared bankruptcy just before the fees came due, etc.

Lastly, I don't see where the original owner is responsible for anything (again if the transfer was not done fraudently) after the transfer is done and deeded. (Even in most cases involving PCC's, donations, etc. the original owner goes into the transaction thinking everything is on the up-and-up.)

So in most cases, transfers between individual parties don't seem to be the focus. Especially with a properly deeded and recorded transfer of the title since the previous owner is no longer the debtor -- the new owner becomes the debtor. [An aside: it seems in some ways that the HOA may be making things worse from the context of 428.024, by superimposing themselves in the process and being made aware of all transfers.]

...just my take, and it looks like this HOA will be very busy in the future....

Again, can you share what property is this for in MO?

[rapmarks Moderator Find all posts View Profile Close rapmarks]

Lakewood Resort, Osage Beach, Missouri

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

What we really need is for HOA's to press their state AG's to use stautes like this to either sue civilly or prosecute criminally the PCC's which are conspiring to commit fraud. The PCC's need to be run out of business. Perhaps federal RICO remedies would be appropriate.