Special Assessment Meeting

[78Southwind Junior Member Find all posts View Profile Close 78Southwind]

I just purchased a resale timeshare at ridicules low price (almost free) and I am happy with the purchase. However, I just received a Special Meeting notice that we need to meet to vote to authorize the Board to levy a one-time Special Assessment of $375.94 per interval of which shall be utilized to purchase approximately 200 unsold timeshare intervals from the developer. It is expected that the timeshare intervals to be purchased by the association will be held by the association in order to create more bonus time availability to existing members (we currently get 7 bonus days per quarter if available). It would be great if this purchase creates more bonus time but I doubt it will. The purchase will probably just keep the bonus time that we have now available. The problem that I see is that the developer is charging a price that is probably higher than they could get in this market, although the price is about 1/3 of the original price when timeshare started selling five years ago. So what is your take on this Special Assessment …guys/gals?

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

Developer closeout prices when developers closed their sales operations on the OBX were much lower than that, so it seems like a bad bargain from the HOA's standpoint. I doubt that the developer could find any other buyer in today's market for a bulk sale of the weeks, and if he doesn't sell them, then he is liable to the HOA for m/f's. The HOA should have been in a position to get a much better deal than that. It is very much a buyers market for inventory like this.

I would also ask if the developer is current on m/f's for 2009. When Concerned Owners group took down developer managment at the First Flight resorts on the OBX, the developer was behind on m/f's and part of the settlements was that he deeded all of the weeks he still held over to the HOA's, and in the case of Ocean Villas II, which bargained for the best deal, paid them a six figure sum as well.

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

I wonder who is currently sitting on the board?

This information would really influence my decision... If the board members still have any relationship to the developer, that would raise a big warning flag to me, and could explain the perceived overmarket offer.

If the board members are all strictly owner reps- then perhaps they simply want the developer out of the project as soon as possible. In this case, I'd really recommend you find out the motivation behind it and decide if you agree or disagree with their thinking..

Finally- another question to be raised is if this sale would actually remove the developer presence. It's not uncommon for a developer to lose control of a resort, but have a legal right to maintain a presence and onsite sales office for upgrades and offsite sales..

Carolinian is ABSOLUTELY correct in the current state of the market for most bulk sales.. There are a few developers and HOA's simply giving away inventory in bulk to reduce m. fee responsibility.... Just like in individual resales- free inventory tends to have a pretty drastic effect on this niche market as well.