What if a resort is destroyed?

[aussiegirl Junior Member Find all posts View Profile Close aussiegirl]

I saw a discussion on another board about the implications for owners if a resort is destroyed by a hurricane, earthquake, fire, etc. It makes sense that there would be a difference depending on whether you own a specific week at a non-chain resort or a UDI in a points-based system.
Does anyone know how Bluegreen would handle such a problem for its members whose underlying resort is shut down?
Ann

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

Does anyone know how Bluegreen would handle such a problem for its members whose underlying resort is shut down? Ann

From what I understand, in an all points resort, Bluegreen could use the insurance to rebuild (there could be a Special Assessment associated with it if there wasn't enough insurance) or could choose not to rebuild and split the insurance among the members whose points were assigned there. Those members, of course, would then lose their points.

I am guessing that we, owners, own the building and furnishings, and BG owns the land. So if the land had become extremely valuable, the points owners would not see a windfall but BG would.

In a resort where BG points owners own only part of the inventory, then the HOA would make the decision.

Charles

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

That's a very good question. I don't know the exact answer, I'd have to go back and read the Public disclosure document to find out for sure.

My guess is that here is what would likely happen.

1) Insurance would cover rebuilding the resort. Bluegreen would need to determine if it would just fix the damages to the current structures and if the current structures had to be demolished, then there would be an issue with owners who have underlying deeds at that resort.

2) To the extent possible, Bluegreen would probably still grant owners at that resort their points for the year depending on whether or not the remaining supply could handle the normal demand.

3) If they rebuilt and there is not sufficient units, my guess is that owners of points deeded at that resort would lose a year of use. But, there could be a lot of developer inventory at new resorts that they could put into the system to keep it balanced. The insurance would cover the replacement inventory.

In essence, I can see lots of scenarios where Bluegreen can keep all owners vacationing while the new resort is being built since they already have a pipeline of other resorts underway and are being sold. It would have to be a HUGE loss of inventory before they would have to resort to taking away points for a year.

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

Don't assume the insurance proceeds would be sufficient to rebuild the property. Just ask owners of timeshares in Grand Cayman after Hurricane Ivan came through. In all likelihood, there would be a special assessment.