$5,893.32 special assessment for Diamond's Point at Poipu

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

As someone who practiced law for a many years, an excuse of ''time and expense involved'' absolutely reeks. If they had a bankrupt or otherwise insolvent defendant or statute of limitation problems or something like that, I could see them foregoing a lawsuit, but certainly not for ''time and expense involved''. As to expense, if this was a viable cause of action, it is likely that they could find a law firm to take it on a contingent fee basis, which means they get paid a percentage of the eventual recovery. As to time, there is no reason they could not pursue a two track approach, with a SA now to get the repairs done, and a lawsuit to try to recover against the builder, proceeds of which could be used to reimburse at least part of the SA when they recovered them.

Something just does not smell right about this situation, and owners there need to get to the bottom of it.

There is another type of lawsuit they should also keep in mind, and that is a corporate derivative action. The HOA is a non-profit corporation, and in this type of case members of the corporation bring suit on behalf of the corporation against directors and managers for misfeasance, malfeasance, or nonfeasance in office. Failing to pursue a viable cause of action on behalf of the corporation for $65 million would certainly fit. HOA's buy directors liability policies to cover their directors for such things. Even small timeshares have such policies with seven figure limits, so with a timeshare as large as this one, quite likely there is enough coverage in directors liability insurance for the whole amount involved.

The important thing, however, is to have someone do their homework. They need to use the provisions in corporate law allowing them to inspect and copy most corporate records. They need to get the details on exactly what is going on and then take those to a Hawaii attorney to evaluate. Doing the research legwork yourself can save a bundle in legal fees for the lawyer doing the same research.

What is so tough to understand - things wear out, somethings don't last as long as expected & yes materials outright fail. Nothing is guaranteed forever. Sometimes there is no one else to pay except those that derive the value from the item.

It wouldn't be a lawsuit instead of $65 million in repair's - it would be $65 million PLUS the high cost of a likely failure of a lawsuit. The Board is doing what they have to. Act to protect the resort for the owners they represent. Sure its a blow but thats life. Assume you have to pay what you owe by your agreed ownership you've enjoyed & hopefully will continue to enjoy. Its time to stop looking for someone else to blame or to have them pay. Get over it.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

For those thinking of bailing out, this post on another site might be interesting:

Diamond resorts allowing any member to leave if they want to, - Timesharetalk

In a post on that thread:

As I see it, if people can resign at a time of their own choosing then this would be a great step forward as a true exit strategy would have been created.

I did not realize I was posting there.

Here's the rest (the best statement relating to the biggest inherent problem in the industry I have ever read):

People wish to get out of timeshare for a variety of reasons, all are based around personal circumstances however and those circumstances do not all arrive at the same time for everybody so a mass exodus would not occur.
There are two major reasons why timeshare is in the doldrums at this moment in time. Reason one is the current financial world climate and reason two is the awareness of new prospects, via the internet, of the downside of the product. The major downside has always been twofold - The ever escalating annual fees which are generally above the level of inflation and the absence of an exit strategy if members circumstances change and they become unable to sustain payment of those fees.
An exit strategy would give new prospects the knowledge that they and their families are not tied into the product for another forty or so years. Recruitment of new members to replace those leaving then becomes far easier. Mis-selling disappears and with it the adverse publicity surrounding the product. This creates a win win win for the company, existing members and new members.
In conclusion if what you report is correct then this is not just a great step forward for DRI but also for the industry in general as other developers will surely follow the DRI lead.

Assuming that there is nothing problematic with an interval (such as we are discussing in this thread), if the industry will not take back an ownership for free, with the owner forfeiting all that they have spent on it, the industry is as much as admitting that they are selling something that has no value, and that they are holding owners captive as a source of revenue.

NJMHO, it seems.

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

As someone who practiced law for a many years, an excuse of ''time and expense involved'' absolutely reeks. If they had a bankrupt or otherwise insolvent defendant or statute of limitation problems or something like that, I could see them foregoing a lawsuit, but certainly not for ''time and expense involved''. As to expense, if this was a viable cause of action, it is likely that they could find a law firm to take it on a contingent fee basis, which means they get paid a percentage of the eventual recovery. As to time, there is no reason they could not pursue a two track approach, with a SA now to get the repairs done, and a lawsuit to try to recover against the builder, proceeds of which could be used to reimburse at least part of the SA when they recovered them.

Something just does not smell right about this situation, and owners there need to get to the bottom of it.

The Board has never said they weren't pursuing action against the builder because of the time and expense involved. They have said they are not going after the builder because the problem wasn't discovered during the period when relief could be obtained. As with 48 of the 50 states, Hawaii'i has a statute of repose applicable to improvements to real property.

Haw. Rev. Stat. § 657-8 : Hawaii Statutes - Section 657-8: Limitation of action for damages based on construction to improve real property.

(a) No action to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of any deficiency or neglect in the planning, design, construction, supervision and administering of construction, and observation of construction relating to an improvement to real property shall be commenced more than two years after the cause of action has accrued, but in any event not more than ten years after the date of completion of the improvement.

Given that, if they were pursuing litigation against the builder I would be questioning if they were spending money wisely.

But an area that I have not seen the Board address is the possibility of products liability action against the manufacturer of the siding materials.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Yes a matter of public record but the only info available is name. I assume if we were willing to pay $10-$20 for every file, we may get that info. Doesn't seem like a strong possibility. Anyone local?

I see what you mean. Too bad.



No. of Pages Unavailable
Fee Fee:

Computed at $1.00 per page for documents in the system.
Flat fee will be charged for documents not in the system.
$10.00
Recording Date Recording Date:

Date instrument recorded. YYYY-MM-DD
2000-02-09
Description ASSIGNMENT OF TIMESHARE
Grantor Grantor:

Party transferring interest.
SUNTERRA PAC INC ETAL
SUNTERRA PAC INC TR ETAL

Grantee Grantee:

Party acquiring interest.
BRIGGS MARY R

TMK TMK:

Tax Map Key. Parcel identification, if known.
Used for real property assessments purposes.

Notes Notes:

Brief comments on affected interests.
ATS CM 447 PER 01/02 APT 76 CM 447 PER 01/02

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

I was quoting the excuse given by one of the members in this thread. If the board had a stronger argument, then that is what they should have used and not ''time and expense''. One key on a statute of limitiations is when the action accrues, and that usually is when you discover or should have discovered you had an action. Hawaii's statute would seem to cap even hidden defects, however, at ten years.

The Board has never said they weren't pursuing action against the builder because of the time and expense involved. They have said they are not going after the builder because the problem wasn't discovered during the period when relief could be obtained. As with 48 of the 50 states, Hawaii'i has a statute of repose applicable to improvements to real property.

Haw. Rev. Stat. § 657-8 : Hawaii Statutes - Section 657-8: Limitation of action for damages based on construction to improve real property.
Given that, if they were pursuing litigation against the builder I would be questioning if they were spending money wisely.

But an area that I have not seen the Board address is the possibility of products liability action against the manufacturer of the siding materials.

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

I was quoting the excuse given by one of the members in this thread. If the board had a stronger argument, then that is what they should have used and not ''time and expense''. One key on a statute of limitiations is when the action accrues, and that usually is when you discover or should have discovered you had an action. Hawaii's statute would seem to cap even hidden defects, however, at ten years.

The board never did day "time and expense" for not pursuing the builder. They said recovery was precluded.

The purpose of statutes of repose is explicitly to extinguish claims for hidden defects in building construction after a set period of years. They exist in almost every state in the Union - a couple of New England states are the only exceptions (Maine and Vermont?). Hawaii gives an owner ten years to find defects in the building; that actually puts Hawaii among the states most favorable to owners. North Carolina, for example, is six years.

****

[Added note] I checked a survey of states with statutes of repose for construction. As of 2006 there were four states without some form of statute of repose: Maine, New York, South Dakota, and Vermont.

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

Again, Steve, in my first post on the subject of litigation, I noted that there was the possibility of solid reasons not to litigate and specifically mentioned the possibliity of statute of limitation problems or insolvency of defendants. The ''time and expense'' argument came from another poster who owned there, and if you say he/she was incorrect and the board never said that, then I will accept your version of it, even though neither of you has provided any links to anything from the board to show which version is correct.

But, if other posters are correct and these problems were hidden by the board from members for a period of time, it is certainly enough of a red flag that members should go through the records with a fine tooth comb to make sure the board was not remiss in their duties. And the fact that it is a developer controlled board rather than a member controlled board just makes it that much more suspect.

You yourself mentioned the potential product liability claim, which the Hawaii statute you quoted exempts from the limitations imposed.

The board never did day "time and expense" for not pursuing the builder. They said recovery was precluded.

The purpose of statutes of repose is explicitly to extinguish claims for hidden defects in building construction after a set period of years. They exist in almost every state in the Union - a couple of New England states are the only exceptions (Maine and Vermont?). Hawaii gives an owner ten years to find defects in the building; that actually puts Hawaii among the states most favorable to owners. North Carolina, for example, is six years.

****

[Added note] I checked a survey of states with statutes of repose for construction. As of 2006 there were four states without some form of statute of repose: Maine, New York, South Dakota, and Vermont.

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

I have learned a lot in the past couple days!

I bought on a whim when PP was EVR and have regretted it - especially now. Thanks to all of the folks who have been writing about this event and how DRI and the board have prepared us for this mess. Like many - I am worried that this won't be the end of the SA. If a sizable part of the ownership can't/won't pay - then what? But what is this property worth and what will it be worth after spending $65 million of our dollars - and what are our chances of ever recovering our original SA - I have resolved my original investment is lost.
Would it be feasible to bulldoze the property and sell it to someone else? I always vote for non- DRI board members and plan to attend the meeting next week - cute they only gave us two weeks notice.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

I guess what a lot of folks miss in stuff like this, and probably what I missed more than 20 years ago, is where they/we/I agreed to do whatever some board decided we have to do, right or wrong.

I guess they/we/I missed where we agreed to do whatever we are ordered to do, rather than just walk away from it.

Paradise Lost . . .

But sometimes God comes down and wanders around, invisible, to see what men are doing.

When he saw the tower they were trying to build, he cast a spell on them so that when they spoke to each other it seemed they were all speaking different languages and nobody could understand anybody.

There was loud babbling all over. All the builders were confused and angry and stormed off the job, leaving the building unfinished. The angels in Heaven were laughing.

John Milton

[island77 Junior Member Find all posts View Profile Close island77]

Can't bail even if assessment paid

For those thinking of bailing out, this post on another site might be interesting:

Diamond resorts allowing any member to leave if they want to, - Timesharetalk

I called DRI today and they said I can't walk away EVEN IF I pay the $6K in full TODAY. They said they do not do "deed backs". I have to privately sell - and who would be crazy enough to buy? Maybe I should pay someone big bucks to take my unit off my hands after I pay the assessment??

[island77 Junior Member Find all posts View Profile Close island77]

The board never did day "time and expense" for not pursuing the builder. They said recovery was precluded.

The purpose of statutes of repose is explicitly to extinguish claims for hidden defects in building construction after a set period of years. They exist in almost every state in the Union - a couple of New England states are the only exceptions (Maine and Vermont?). Hawaii gives an owner ten years to find defects in the building; that actually puts Hawaii among the states most favorable to owners. North Carolina, for example, is six years.

****

[Added note] I checked a survey of states with statutes of repose for construction. As of 2006 there were four states without some form of statute of repose: Maine, New York, South Dakota, and Vermont.

Sorry - I posted the original thing - I was quoting the "time and expense" from the documents I was sent - when I went back and looked it said that was the decision relating to not pursuing litigation against the insurance company (not the builder).

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

Winning HOA elections is all about proxies. The developer is going to be working to get all the proxies they can. What is needed is a concerned owners group to counter that and also solicit proxies for a rival team. That has happened at several resorts I have owned at, and the developer was removed from control.

In short, what is needed is organization. You need to set up a Concerned Owners organiation and get to work fighting for member control of your HOA.

And, yes, it is a very dirty trick to only give you two weeks notice of this mess. I would never want a developer which uses such slimy tactics in control of a resort.

I bought on a whim when PP was EVR and have regretted it - especially now. Thanks to all of the folks who have been writing about this event and how DRI and the board have prepared us for this mess. Like many - I am worried that this won't be the end of the SA. If a sizable part of the ownership can't/won't pay - then what? But what is this property worth and what will it be worth after spending $65 million of our dollars - and what are our chances of ever recovering our original SA - I have resolved my original investment is lost.
Would it be feasible to bulldoze the property and sell it to someone else? I always vote for non- DRI board members and plan to attend the meeting next week - cute they only gave us two weeks notice.

[island77 Junior Member Find all posts View Profile Close island77]

Calling Dateline

Maybe we could get Dateline or 20-20 to do a special on Diamond Resorts International??

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

Maybe we could get Dateline or 20-20 to do a special on Diamond Resorts International??

From the post on the European site I linked to, that seems to be what is encouraging DRI to think about doing right in some of these situations. As President Reagan said, ''sometimes if you cannot make them see the light, at least you can make them feel the heat''.

Since a UK TV outlet seems to also be working on DRI, maybe a contact with them about Point at Poipu might help. They may work that into their story, and that might help encourage US media outlets to also pay attention. The hiding of this issue from members would seem to be a major issue, as would DRI's dictatorial control of the HOA board and illegal refusal to provide members with membership lists so that they might have a meaningful opportunity to challenge developer control.

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

Getting organized

We own a week every other year at poipu. We agree that we need to work together. We plan on writing RICO. Agree we need media. I am going to request all maintenance records from resort. Never considered risk of. Developer owned board. Obvious conflict of interest. When dRI purchSed this resort, they had to do due dilengence and an inspection right? Where are those reports? Why won't insurance company cover? Did the maintenance staff truly do their job? Who is the insurance company?