After speaking to thousands of fractional owners over the years, we’ve learned that the displeasure of most buyers usually stems from a lack of disclosure. While their inability to book desired dates or refinance timeshare loans can be aggravating, most owners are upset over rising annual fees. Maintenance fees and unexpected assessments typically cost them a pretty penny every year. Some can never afford these expenses and others simply stop paying for them over time.
In the past, timeshare companies have been able to keep concerns regarding special assessments under wraps. But in recent years, a number of stories with vague insight have surfaced. One of them involved Bluegreen Vacations’ swift notice of foreclosure to hundreds of their owners in Louisa County, Virginia. The property, boasting 1,000+ wilderness acres for members to explore, was looking to move on from current owners that hadn’t remained current with their assessment fees.
Listed as a club resort near Gordonsville, Shenandoah Crossing provides unique lodging that appeals to the nomadic culture. From cabins to recreational vehicle pads to luxury canvas tents called yurts, the resort has it all. Bluegreen Vacations more than likely wants to rid themselves of the current stubborn pool of fractional owners and replace them with travelers that’ll pay them for future assessments. But who’s to say they won’t continue to run into the same problem?
How Shenandoah Crossing Plans to Rebound.
After submitting default amounts ranging from $2700-$20k and a $650 foreclosure cost for every stakeholder, the resort knew it was going to have to put a lot of work into reselling the shares. Andrew Little, an investment banker in Richmond, noted that the foreclosure notice was very difficult to decipher. He went as far as saying it looked “like a deal to stay away from as a real estate investor.” Bluegreen never really provided much insight on their decision.
Richmond attorney, John McPhaul, knew the subsidiary of Bluegreen Corporation would eventually push hard to sell the timeshare units in bulk. It’s common in the industry to see large groups of people invited to a pressure filled timeshare presentations. Even if Shenandoah Crossing wasn’t able to rapidly collect past due fees, the ownership rights of Bluegreen Vacations allowed them to press on aggressively. At the time, the Corporation had shares at over sixty resorts in over forty vacation destinations, providing lodging to nearly 200K owners.
Even Unaffected Timeshare Owners Were Bothered.
Some of the owners are upset that Bluegreen Vacations is letting people foreclose on the property when they haven’t paid their dues. They’re so unhappy with the purchase that they’d be willing to incur a huge financial penalty just to get out of the timeshare. Owner, Bill Myers was interviewed by The Richmond Times and said, “I would just as soon get out from under ours – it’s a burden – and they [the resort] ought to let us out first.”
He went on to explain his reasoning. “Those who haven’t been responsible and not paid their bills are about to get a huge advantage and there is something fundamentally wrong about it. Foreclose on mine first. Take mine. You can have it.” This goes to show just how frustrated, yet clueless, a lot of buyers are about the perpetual contract they agreed to.
Resale Flops But Profits Rise for Bluegreen.
During the foreclosure auction, Bluegreen Vacations didn’t receive a single bid. No one seemed to want to touch the property. It’s safe to say nobody really won in this situation. Either way, we’re pretty sure Shenandoah Crossing is still profiting handsomely. They’re now collecting on higher assessments from less informed buyers.
Listen, if you’re considering the purchase of a timeshare, make sure you’re fully aware of all it entails. Whether you enjoy it or not, the travel industry will always find a way to make money. Most of the time, it’s at your expense. Taking the time to qualify the timeshare information prevents you from eventually being forced to look for a way out of a contract you really can’t afford.