Question re Equity

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

Take a deep breath.. Look everything over twice!

I also saw your question on lawyers.com.

First and foremost, the regulars here have seen this question over and over again. While nobody likes how timeshares are sold, you'll find that most in this venue love being timeshare owners. We know the product for what it is- a means to vacation. We see both the good and the bad, and we do our best to share our experiences with others to help them make the most of what they own. You've gotten great advice, but it appears you still hope to proceed with a lawsuit.

Speak with an attorney you trust, and just remember to proceed cautiously.. Timeshare related scams are plentiful, and there are a number of "firms" who advertise they are willing to "advocate" for consumers, but too often these are simply another type of upfront fee scam. Always take the time to research the company or individual before you share your personal information..

You may also want to take a deep breath and consider what you could be facing. Most likely, the developer has a signed document from your father, which is carefully crafted to ensure the sale was legally compliant. Your difficulty will be in proving that some type of fraud or deception occurred during the presentation. Documentation is the key, and it is almost always stacked on the side of the developer.

The other thing you will want to consider, is the chance that even if you locate a firm willing to accept your case on consignment- the developer may also file a counter suit against you. Whether this action would have merit or not, it is possible you could incur costs to defend yourself. Always ask your legal counsel to try and provide you with an estimate of fees if this was to occur.

The developer has deep pockets, and may simply try to use delay tactics to continuously push back the case, so you should be prepared for what could possibly turn into a long battle.

You might also want to consider trying to file a complaint with the attorney general in the applicable state. If you have any proof of foul play, this may be a way to take action without bringing the fight to the developer all on your own.

Sorry for your situation and I hope you are able to resolve this issue. Good luck..

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

To add to other comments -

Where (physically) did your father sign the contract? Was it while he was at Velas Vallarta? If so, the contract is likely enforced under Mexican law, not US law. If he signed it in Mexico, unless for some (unlikely) reason the contract documents state that the contract is enforceable in the US, the contract is almost surely a Mexican contract, not a US contract. I've not bought any timeshares in Mexico, but I would suspect there is a Spanish language version of the sales documents. That version would be the official version, and any interpretations of the document will be based on the Spanish language version, not the English version. IOW - if there is a difference in language or interpretation between English and Spanish versions, it's likely that the Spanish version will govern.

Mexico has a fundamentally different legal system than the US - it has it's roots in the Napoleonic Code rather than the British civil codes that form the backbone of US contract law.

Hence my comments above that if you are seeking legal advice, you need to be in contact with an abogado, not a US attorney.

+++++

That all being said, it's also likely that that payments on the contracts have been assigned to a related US entity so that payment can be enforced in the US.

[Frustrated Owner Junior Member Find all posts View Profile Close Frustrated Owner]

Hello everyone.
I really appreciate all your comments. I want y'all to know that I find this discussion helpful. It is interesting to read such a wide variety of perspectives.

To answer some of your questions:
- Contract was signed at Velas Vallarta
- The company has a "head office" in Hollywood, California that deals with all the financial matters, so is a bit unclear as to whether California or Mexican Law applies.
- someone like myself gets onto these forums because they are seeking advice and the experience of others. For example... it would be nice to hear from someone else who has researched these issues with VV, and, for example, knows which laws apply.
- I have asked a number of times if there is any lawyer that knows if there is any legal precedence (Mexican or Californian), that would apply. Again... only asking for what others have learned.
- The issue remains: If one has cancelled contract 3 (and 1 & 2 were confirmed cancelled) then the fact remains that dad-in-law still has equity in the form of a deed or share purchase. One can "sell it". What it is worth on the open market? I don't know. If it is zero, that's fine. I just want to know. That is what I was hoping to hear from y'all.
- Regarding Allikai's comments: Wow! Your comments are a little harsh.
This whole time share thing cannot be compared to a divorce or even a foreclosure. I agree that this is something my father-in-law got himself into but someone has had to help him figure this out, ask questions and advocate on his behalf.
- I am not "upset" nor excited nor interested in getting him involved in any legal battle. However, the more I learn about it the more I realize that not only are the Time Share Sellers sharks, but there is a whole re-sale industry built around "helping" (sarcasm) those, like my dad-in-law, get out of it... whether it be people who buy up the time shares for pennies on the investment or people who help others negotiate getting out of the contract... people who know how to work the system and get something of value out of it. This other sub-industry would not exist if these time share scams weren't so prevalent.
- Regarding the contracts - We rescinded Contract 3 only after it was confirmed that Contract 2 no longer existed. That is contract law 101.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

Ok..

So you don't like timeshare developers...
You also don't like people involved in resales...
At least it appears that you like your own father!

Your basic question seems to be about if the ownership has any value.. I guess I'm one of those scumbags in resales that you can't stand, but I'll still be happy to try and give you a straight answer on this one..

No........

For your father's ownership, there is no monetary value.........

The only value to a timeshare ownership lies solely in its usage.. If it is not being used, then it is simply a bill he pays each year for the privilege of not taking a vacation.

The secondary market in Mexico at this time is in tatters for all but a few very respected resorts. With the media frenzy over drug violence, with the echo's of the flu, with the economic conditions- there are many many owners who would be willing to give away their ownership if someone else will simply agree to pay the annual dues.

Your father is in that same boat- and the waves are getting pretty rough..

Since he doesn't seem to be involved in this at all- step up to the plate and be the good son.. Call the resort (the number will be located on his maintenance fee bill) and ask them what you will need to do to transfer the timeshare into your name. Then do it!

Once it is yours, make a choice to:

1) Learn how to use it, and then use it..
2) Try to give it away..
3) Simply let it default and take any consequences that may result..

That's is pretty much it.. Good luck...

And Happy Holidays!

[Frustrated Owner Junior Member Find all posts View Profile Close Frustrated Owner]

Boy... this forum can sure get personal quick!
Yikes.
People on either side of the fence are sure passionate and sensitive about where they stand. My comments were observational and should not be taken as condemnation of everyone in the aftermarket.

What started off as a great concept has changed with the times. There are way more sharks that are hurting honest (uniformed and uneducated in the ways of timeshare), hardworking people, especially seniors. I just spoke to a Lawyer and he said sharks love young couples as they are also an easy target.

While I might not like (some) Developers I do applaud those who have figured out how to make it work for themselves. Smart. I never said scum bag - you did.

A better example than a foreclosure or a divorce might be those that steal cars and then take them apart. There is an aftermarket for parts. In this time share situation, there is an aftermarket for the time shares because of the action of all those sharks. It wouldn't exist if those that sell time shares didn't "steal" legally from those wanting a piece of vacationing high life.

So... enjoy all your vacation weeks. Clearly you've worked hard for them.

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

Here's the problem, FO. (And I apologize if I get the details wrong, because I haven't read everything as closely as I should.) As I understand it, your father owns a timeshare, for which there are ongoing costs. You want someone to tell you that there is value in what your father owns ("equity"), and how you can recover that value while disposing of the timeshare. Alternatively, you want someone to tell you how you can recover some of the spent money due to less-than-honest representations during the sale.

No one will tell you those things. At least, no one who is honest. And that's because (a) there simply is no residual value and (b) the chances of recovery from the developer are essentially zero. From my reading so far, you aren't willing (or able) to hear this. But, you need to, because it is the truth.

There is no residual value because there are a lot of people in your father's situation---many of whom own things with slightly better market value---and not enough people who are interested in becoming timeshare owners via resale. There is essentially no chance of recovery from the developer because they've been doing this for a long time, and know how to craft the sales agreement that your father signed to make it fairly well bulletproof.

Did they take advantage of your father? Yep, you bet. But, it takes two to tango, and he was wearing his dancing shoes. People are talked into making bad decisions all the time, and generally the law allows them to do so and suffer the consequences, provided they are competent and enter into the transaction willingly. If he sells it for a pittance (or worse, pays someone to take it off his hands) does that person profit from his misfortune/mistakes? Yep, also true. Them's the breaks. None of us particularly like this---I think it is fair to say that we'd all rather that timeshare buyers were well-informed at the time of purchase. But, the reality is what it is.

After that, the question remains: what to do about it? There aren't many pretty options, unfortunately. You can try to sell it for whatever you can get for it. If you are patient, you may eventually find someone who will give you more than a token amount, but that requires finding someone who (a) knows they want to buy a timeshare on the secondary market (or can be convinced of the same), but (b) doesn't know enough to look for a better bargain. Such people exist, but it's safe to assume they are rare. You can leave it in your father's name, and allow it to go into default, with whatever consequences flow from that. That might not be a bad option, provided he doesn't need to protect his credit score (and many seniors don't). You could transfer it into your name and try to get some use out of it yourself. But, if you would allow it to go into default, it is worth asking who is better off taking the hit, you or your father. In most families, it is probably the parent, not the child. You could also pursue the unlikely course of recovery, if you wish, but that's probably going to cost you at least significant time, and probably a non-trivial bit of cash, pursuing an outcome that is, frankly, unlikely. I could be wrong, and there could be something in your father's situation that will lead to a recovery, but that doesn't happen very often.

We all wish we had better news for you. Really, we do. You're not the first person to find yourself in this situation, and it stinks. There's no two ways about it. But, the fact that it stinks doesn't mean you can easily get out from under it. And that's what we are trying to tell you.

[aliikai2 Super Moderator Find all posts View Profile Close aliikai2]

Sometimes in order to get the Donkey to listen

You must hit him in the head with a stick.

Hello everyone.

- Contract was signed at Velas Vallarta

- The issue remains: If one has cancelled contract 3 (and 1 & 2 were confirmed cancelled) then the fact remains that dad-in-law still has equity in the form of a deed or share purchase. One can "sell it". What it is worth on the open market? I don't know. If it is zero, that's fine. I just want to know.

This is this is the area that I can't figure, if the use of the timeshare is what was sold, and your FIL has canceled the use contracts, having no further use or obligation, how can this have any value? This was a right to use timeshare, and he no longer has that right, so like a post office box, if you aren't paying the rent, you can't use it, it doesn't belong to you so it has no value, right?

That is what I was hoping to hear from y'all. [/B]

- Regarding Allikai's comments: Wow! Your comments are a little harsh.
T101.

Life is sometimes harsh, cruel, but I prefer it to the alternatives.

fwiw,
Greg

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

One more note: if your father has no ongoing obligation in terms of costs, fees, or back amounts owed, then I think you can treat this as water under the bridge. The damage has been done, but at least there is no more. If there are no usage rights, there is nothing to sell. I suppose you could try to sell "the deed" (or equivalent), but who would give you anything for it, and why? And, my prior comment about recovering from the developer still stands. It could happen, and I could also get hit by a meteor in the next ten minutes, but neither is likely.

[Frustrated Owner Junior Member Find all posts View Profile Close Frustrated Owner]

Thanks again.
When first reading the reply from bnoble I was concerned when Bnoble used FO. I thought, at first, you might be telling me to, you know, FO.

I think my reply buddies have most of the right facts now.
- the obligation to pay has been cancelled
- I was wondering what "the equity" means and if there is any value in it.

I hear y'all in telling me you believe the equity" equals zero.
My father is happy to walk away. To be out of the obligation to pay more than $1015.00 per year for 19 years, with no ceiling on how high the payments might go, is a blessing. I am very happy for him and have no interest in taking it over. It might be different if it was somewhere other than Velas Vallarta.

In talking with others there is a remaining question that revolves around a Deed.

Some Time Share Sellers provide you with a Deed. The Purchaser gives "consideration" and then pays for that deed in full (either by payments or lump sum) and whatever rights are extended by the seller. The Purchaser is buying 1/52 portion of that unit plus they have "priviledge" (sarcasm) of paying for "X" number of weeks as part of their maintenance. In my father's case, that deed was worth alot of money (that he paid). From the Sellers point of view, they expect no one to challenge them and to walk away.

It would be fascinating to review all the contracts for 2 bedroom units in a particular year to see the variation in price paid by purchasers. This is where the scam is and it is too bad no one is stepping up to regulate this. Freedom of Information probably doesn't apply in Mexico and I am not sure an FOI request in the US or Canada would help.

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

There is no law that says people have to pay the same price for things. In particular, the price he paid doesn't mean that's what it was "worth" in a fully-informed, transparent marketplace. At that moment in time, that's what it was "worth" to him, but that has nothing to do with what anyone else would pay for the same thing. Next time you are on an airplane, in a hotel, etc. ask the person next to you how much they paid. I bet you'll be surprised at how different the prices can be.

Also, FOI only applies to public entities, not private businesses. The recorded deeds should be matters of public record, though accessing them might cost something. So, you could compile the prices yourself if you chose to.

[aliikai2 Super Moderator Find all posts View Profile Close aliikai2]

In Mexico

An American can't own any property within 50 miles of the coast.

Now for real property there are holding companies that allow a legal way to own.

Timeshares in Mexico are memberships or right to use ownerships, there are
no deeds like with most US based weeks.

So your FIL didn't buy any property , so no deed, nothing left.

He is very lucky to have gotten out of this as the value of a Velas Vallarta is a negative number.

Glad it all worked out that that everybody is satisfied.

Greg

Thanks again.
When first reading the reply from bnoble I was concerned when Bnoble used FO. I thought, at first, you might be telling me to, you know, FO.

I think my reply buddies have most of the right facts now.
- the obligation to pay has been cancelled
- I was wondering what "the equity" means and if there is any value in it.

I hear y'all in telling me you believe the equity" equals zero.
My father is happy to walk away. To be out of the obligation to pay more than $1015.00 per year for 19 years, with no ceiling on how high the payments might go, is a blessing. I am very happy for him and have no interest in taking it over. It might be different if it was somewhere other than Velas Vallarta.

In talking with others there is a remaining question that revolves around a Deed.

Some Time Share Sellers provide you with a Deed. The Purchaser gives "consideration" and then pays for that deed in full (either by payments or lump sum) and whatever rights are extended by the seller. The Purchaser is buying 1/52 portion of that unit plus they have "priviledge" (sarcasm) of paying for "X" number of weeks as part of their maintenance. In my father's case, that deed was worth alot of money (that he paid). From the Sellers point of view, they expect no one to challenge them and to walk away.

It would be fascinating to review all the contracts for 2 bedroom units in a particular year to see the variation in price paid by purchasers. This is where the scam is and it is too bad no one is stepping up to regulate this. Freedom of Information probably doesn't apply in Mexico and I am not sure an FOI request in the US or Canada would help.

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

FYI, many of us on these forums did in fact buy from a developer FIRST, got educated after the fact, and if we loved TS'ing, purchased more but by resale.