ARDA, RCI oppose timeshare homeowner democracy legislation

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

The recent massive Point at Poipu special assessment and the fallout from it has exposed contradictions in Hawaii's laws regarding timeshare management's responsibility to provide HOA board candidates or other concerned timeshare owners with membership lists with addresses to allow them to run a proper campaign for a board seat, and not have information controlled only by management. Legislation has been introduced to clear this up that management is required to produce such lists, so that HOA board elections can be run in a proper democratic manner and all candidates can address their issues to the members.

Needless to say, the usual suspects among the special interests which have a vested interest in continuing developer / management dictatorship on HOA boards is resisting. It is no surprise that Timesharing Today magazine reports that developers and management companies have testified against this legislation. It is also probably not surprising that ARDA, which is a mouthpiece for developers also testified against.

The surprising thing in the report, thought was why a timeshare exchange company would also be up testifying against homeowner democracy, because that is exactly that one exchange company did. That exchange company was RCI. Why does RCI feel threatened by homeowner democracy in HOA boards? Are they afraid that more representative HOA boards will mean more dual affiliation with II or outright jumping ship to II, or democratic HOA boards promoting their competitors in the independent exchange companies? Obviously no other exchange company feels threatened by homeowner democracy because no other one was in bed with the developers on this issue.

[Ridewithme38 Senior Member Find all posts View Profile Close Ridewithme38]

If the membership, or at the very least, the owners claiming to by running for HOA Board are able to get access to all the owners names...They can VERY easily set up an internal 'owner 2 owner exchange' system...This could eventually put a big strain on companies like RCI

Think about it, if you had the choice of paying $89 for membership to RCI Plus $189 for an Exchange vs. calling another owner or going on a forum for an 'owner 2 owner exchange' for free...Which would you do?

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

If the membership, or at the very least, the owners claiming to by running for HOA Board are able to get access to all the owners names...They can VERY easily set up an internal 'owner 2 owner exchange' system...This could eventually put a big strain on companies like RCI

Think about it, if you had the choice of paying $89 for membership to RCI Plus $189 for an Exchange vs. calling another owner or going on a forum for an 'owner 2 owner exchange' for free...Which would you do?

. . . EXCEPT that in most states where the non-profit corporation laws provide for members obtaining the organization's membership list, they also expressly limit the purpose it can be legally used for, and commercial purposes are usually forbidden. The lists can only be used for communicating with other members on issues of governance, management, and related issues as to the organization and there are penalties for misuse of the lists. Most of these laws were written before the rise of the internet and do not require turning over email addresses. I think that would be a positive amendment in every state.

It serves Worldmark right that after they stonewalled on California's clear law that required turning over the lists and fought it all the way through the courts, the California Supreme Court actually expanded the statutory requirement to also require Worldmark to turn over the email addresses as well. With as large a membership as Worldmark has, that made challenging developer control a whole lot cheaper. If Worldmark had just obeyed the law, all they would have had to turn over would have been the postal addresses. It serves them right for being total pricks in thumbing their nose at the law.

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

This is why I refuse to pay ARDA-ROC fees. In my opinion, they only represent consumer interests when it doesn't impact their developers' interests. If owners could communicate with each other, it would make it easier for them to organize and protect their interests.

I was on the board of a Hawaii timeshare a few years ago. The management company refused to provide the board members with a membership list, claiming a fiduciary duty not to provide it. The covenants required over 50% of all owners to remove the manager. If the proposed Hawaii law was in effect, it would have made things a lot easier for us. As of this year, our resort is free of developer/manager control.

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

A clear case of management self-interest!

I was on the board of a Hawaii timeshare a few years ago. The management company refused to provide the board members with a membership list, claiming a fiduciary duty not to provide it. The covenants required over 50% of all owners to remove the manager. If the proposed Hawaii law was in effect, it would have made things a lot easier for us. As of this year, our resort is free of developer/manager control.

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

Is this just for HI for for all of US?

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

Is this just for HI for for all of US?

It was a bill in the Hawaii legislature, so it would only impact Hawaii owners. However, it is a start.

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

This is no surprise, The Developer has always been RCI's customer

We the dues paying members aren't important to RCI, that is why some resorts get Gold Crown while still under developer control. This law is a great start for consumers, and of course that is why both ARDA and RCI are opposed.

Greg

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

Is this just for HI for for all of US?

This bill is just for Hawaii. All laws in these areas are state laws. Most states, however, already have this provision, which is generally found under the non-profit corportation laws since HOA's are non-profit corporations. Hawaii is just catching up to the overwhelming majority of states. The California Supreme Court in a case involving Worldmark just expanded the scope of their statute by requiring timeshare management to also turn over email addresses as well. Most state laws were written before the advent of email, and so only cover postal addresses.

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

I don't think LA has that provision. Someone I know tried to get an owners list in NOLA and the developer controlled management company blocked it.

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

I don't think LA has that provision. Someone I know tried to get an owners list in NOLA and the developer controlled management company blocked it.

Management companies sometimes block things without having any right to do so (they sometimes try to do that with deposits to independent exchange companies, too). Worldmark refused to provide the list, too, even though they were thumbing their nose at California law to do so, forcing the timeshare members to fight all the way to the California Supreme Court to get it. Most of them, however, will not go that far. If you go in to ask for it, the best way is to look up the law and cite them the specific statute. Sometimes there is a time frame that the list has to be asked for, like in North Carolina when it is within a certain period before the annual meeting. If you ask for it at other times of the year, they can legally say ''no''.

I recall one Concerned Owner group in North Carolina that asked the management company for the list at the appropriate time and were denied. One member of the group was an NC lawyer, so instead of screwing around with management any more, he wrote a letter to the HOA's lawyer, cited the statute, demanded the list, and said that if it was not forthcoming, he was prepared to go to court to get it, naming the management company as a defendant, seek legal fees for his time from the management company under consumer protection laws, and seek injunctive relief to restrain holding the annual meeting until the law was complied with. The HOA lawyer called him immediately to discuss how he wanted to arrange picking up the list.

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

My understanding is that in LA, consumer protection law is not very robust and that the property law / deeds, etc. have their roots in the French rules and more difficult.

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

My understanding is that in LA, consumer protection law is not very robust and that the property law / deeds, etc. have their roots in the French rules and more difficult.

Louisiana does indeed base much of its law on French law of the Code Napolean rather than English Common Law like the other 49 states.

I am not sure about their Consumer Protection law, which is often the best place to get relief from those who want to goose step on your rights. However, in most states, the place where the right to the membership list exists is in the Non Profit Corporation laws. HOA's are non profit corportations and are bound by those provisions. Non Profit corporation laws nearly always provide for members being able to get a copy of the list to be able to promote candidates or issues at meetings of the non-profit corporation.

Some states have a pro-active timeshare regulator who will get involved when management fails to follow such laws. North Carolina did for many years while Blackwell Brogden held the timeshare portfolio at the NC Real Estate Commission. Brogden did not mind going to war on behalf of consumers against major developers or even RCI. His successor is more low key but I have not heard of her refusing to take up a significant consumer complaint brought before her.

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

The HOA is somewhat developer or management company controlled.
All communication with the directors are requested to be send via the resort.

Actually the management company have a for profit company name (resort name, Inc) fairly similar to the HOA non-profit organization name and several members of the management company/developer are on the HOA and only the volunteer HOA president is on the official director list of the non-profit so it raises a lot of concerns, especially since payments are requested to be made to the management company name when i and others thought it was made to the resort but I did not know the difference until I started researching it recently.
Especially in view that they have only ever submitted a expense budget to the owners but never submitted a full budget like I get from my hyatt and other ownership where you see the incomes from MF, previous year MF, rental, upgrade fee, etc. plus somewhat detailed expense budget for a full P&L including planned major repairs.

The lack of clarity concerns me and a director that had some objections to some of the happening ended up resigning so it raises the concern even more. Lots of potential conflict of interest exist since payments are funneled via the management company first without clear accounting and the management company developer are renting a lot of units without clear accounting aside from a vague statement of 25-35% commission for owner rental and the resort have only 75% active weeks by the look of things (last MF was divided by about 75% of all available weeks) and as far as I know non of the owners I know have received a budget for 2012 in the fall of 2011 as it is normal done.

If the management company recover deliquent payment or rent out weeks are that not owned or in dispute, it is not sure where that income goes. Someone had a special event week which he tend to prepay and when a new developer took over the management company, they claimed he was in arrears and did not respond to communication send to the resort with backup documentation that the prepayment was made and he was denied the use of his week and the management company likely rented it for a profit but no account trail of where that income has gone.

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

does anyone know Lexisnexis? I found an article that is interesting but need either subscription or one time purchase of $15. Not sure if an article in 1984 is still relevant.

https://litigation-essentials.lexisn...26e26c1f4d28be