A Few Words About Filing Regulatory Complaints

I wish this was either made up or an exception. The truth is this happens much too often. Unfortunately, these consumers turn to online groups who convince them that they should file regulatory complaints or just walk away. Filing regulatory complaints to whom?  For what?  Just because you made multiple poor financial choices is no basis for a complaint. Walk away?  So now after making multiple poor financial choices, you’re going to take legal advice from someone other than an attorney?  

“After four presentations, my husband and I have gone from Sampler, to Standard, to Gold, and then to something they called an upgrade from "ownership," to "membership."  We now have 19000 points,  two mortgages totaling over $45000, and annual maintenance fees of nearly $4000.  And we have already paid over $20000 in down payments and monthly mortgage payments in just 15 months.  We will never take vacations worth the amount of money this is costing us. Is there any way out?”

Before I get screamed at online, I should note that there was no mention of anything being misrepresented by the salesperson in the original post.  So, please save your breath and don’t make anymore accusations of me blaming the customer rather than the salesperson. 

There are a lot of serious matters facing the timeshare industry. There are a lot of serious issues that regulatory agencies should be looking at. Don’t waste valuable time by filing complaints when the only valid complaint is that you made a series of poor decisions. 

Meet Lemonjuice Capital & Solutions

I was happy to meet with some great companies while attending Timeshare Together, the annual ARDA conference. Over the next few weeks, I’m going to introduce you, the timeshare owner, to some companies that you may not be aware of. Some of the big complaints that I hear on a regular basis from timeshare owners is that there’s nothing new, that their options are limited and that they feel trapped. Not necessarily true.  Today, I’m introducing you to Lemonjuice Capital & Solutions. I think they have a compelling story and I’m looking forward to working with them on a number of initiatives moving forward.  

Can you tell my readers a little bit about the history of the company?  Why was it created?

The Lemonjuice Capital & Solutions’ story began in 2016. We knew the time had come to provide innovative pathways to help timeshare owners, associations, and boards to unlock the value of their resort properties.  We began doing so through our Reimagine Resorts^TM process by finding viable and real solutions to solve complex financial and legal title issues and those created by exit companies.  Since the company was originally founded, we have expanded our services to include resort management, rentals, sales, technology and software solutions, and we are continually expanding our resources and capacity in new and innovative ways. 

 

So, you seem to offer multi-tiered solutions for aging resorts. 

When we Reimagine Resorts^TM, we take into account what owners want.  In some cases, it means that we help the association and the Board right-size the resort to a financially sound and operationally sustainable resort.  Lemonjuice wants to restore resorts to financial good health when at all practicable.  We restructure the legal ownership of resorts when that option seems most appropriate and, in all instances,  we re-engage owners who want to continue vacationing by making sure that they have a product that they like and a relationship with one of the exchange companies.

 

Are aging resorts your number one focus or have you worked with resorts that are being mismanaged as well? Or perhaps we should use the term “under managed.”

We do work with resorts that prefer a new management company.  For years, resorts enjoyed the relationship with their management company.  As the timeshare evolved, and things became more challenging, many management companies were without the expertise and know-how to explore creative ways to Reimagine the situation.  Lemonjuice brings a fresh new perspective to the industry.  One of our core guiding principles is that owners deserve to be treated fairly, and that promises made yesteryear should be kept.  This means great service and great vacations must still be the number one priority while the myriad of issues are being attacked.  If an owner lifestyle has changed, and they are ready to vacation in other ways or not vacation at all, we provide solutions to help them get to where they need to be.  These solutions make the desirability of predatory exit companies obsolete.     

 

Lemonjuice is unique to our industry.  We Reimagine Resorts^TM by helping the Board determine the highest and best use for their property and what is best for all resort owners and stakeholders.  Then we execute the Board’s decisions.  In some cases, right sizing a resort involves a reduction of timeshare units in order to place the resort in a more secure financial footing.  The remaining units will be sufficient to accommodate the needs of vacationing owners.  In some cases, our management team’s expertise can dramatically improve resort quality and operational efficiencies to limit more drastic changes to the resort’s overall legal structure.   And, in some cases we restructure a resort because the owners determine it is the best path to take.   In all cases, Lemonjuice takes a consultative and organic approach and leaves the Board in control.  No other company does what Lemonjuice does, nor do they have the capacity or know-how.  Are there some that will claim they can restructure a resort?  Yes, but unfortunately, the methods used are contrary to the best interests of resort ownership.  Competitors force out owners through extraordinarily high special assessments, leaving owners (many who are on fixed incomes) with little choice other than to give up their deed in return for nothing – no vacation, no money. 

Let’s talk for a minute about Sunset Clauses. Can you give us a basic definition and why they’re so vitally important, yet almost never understood by the average owner?

Sunset provisions are typically included in the governing documents of most legacy timeshare resorts developed through the 1990’s. A sunset date is defined as the planned termination of the timeshare, or shared ownership, regime of a resort property. Many developers included the provision as a precaution if the project failed or if resort ownership wanted out entirely. It created an opportunity for owners to assess their vacationing needs and the fiscal health of their association and develop a plan of action to make their new vision and resource needs become a reality. 

Without clear legal guidance or a practical arrangement, the sunset event can confuse owners and create chaos. In most states, once a timeshare property’s regime sunsets, owners become tenants in common because the timeshare use plan is terminated. Legally, owners can then coordinate among themselves to use their week(s). However, mastering this task is virtually impossible without professional guidance, and continuing to operate under an expired use plan can put the board, the owners, and resort’s staff in legal jeopardy and financial ruin.  

Can you give us a little background on the principals of the company?  From what I can see, you have a team with both long and varied experiences within the timeshare industry. 

The company was founded by our CEO, Alexander Krakovsky.  He recognized the deficiencies in the aging timeshare model and how it impacted the owners, the associations, boards, and the surrounding communities.  Prior to starting Lemonjuice Capital & Solutions, Alex and his partners worked in the energy sector building powerplants worldwide.  Once this company went public, he set off to find a new endeavor working with contract and capital partners with which he had long-time business relationships.  It was through Alex’s vision that he was able to attract a sizable capital partner, which skyrocketed  Lemonjuice from a concept to reality.  To learn about Alex and the rest of the Lemonjuice team, you can find him and all of our backgrounds on LinkedIn. 

 

Can individual owners who are having issues with their current management company and/or HOA contact you?  

We welcome contact with owners; however, we are compelled to work through the Boards, Resort Managers, or Management Companies in order to make any progress.  Those entities control the resort and are the ones with which we can develop a comprehensive strategy that is then memorialized in the form of a written agreement.   The Board is accountable to resort owners and its decisions must align with its fiduciary duties in providing the best solutions and outcomes for the financial stability of a resort and its vacationing owners.   

 

Are there any types of timeshare that you can’t work with?  

There could be some properties that Lemonjuice’s involvement would not make economic sense.  Certainly, we are open to talking to any Board, Developer, or Management Company to evaluate how we can help. 

 

What do you see as the biggest challenge facing the timeshare industry as a whole in the next five years? 

The lack of planning for the future of legacy resorts is now being fully exposed around the country.  Over 50 percent of legacy timeshare properties are 40 years old or older.  In many cases, properties were converted from existing hotels and have outlived their commercial life making it impossible for them to keep up with much-needed maintenance and capital improvements.  Old buildings often require millions of dollars of improvements and resorts do not have the financial wherewithal to respond to these rapidly deteriorating conditions.  When you combine aging structures to the availability of newer vacationing models and the changing lifestyles of owners, many of whom are advanced in age, it is difficult to see how some legacy resorts can remain competitive and thrive.  Yes, some organizations will continue to push their agendas, but we believe that it is time for a new voice in the industry to be heard.  It is one that can effectively Reimagine Resorts^TM to give Boards, owners and associations what they richly deserve and desperately need. 

Prizes…We Like The Prizes

Reading a lengthy thread on a FB page dedicated to bitching about the ills, perceived or real, of a certain timeshare developer. The original post and many comments that followed were all about how the salesperson had kept them past the allotted: hours, how the manager had “made” them sign paperwork and how the purchaser didn’t get access to their points until 2022.  

One person posted this comment:  “Why do you continue to go to these sales presentations?”  A valid question I ask consumers every single day. The original poster wrote this: “Because I like the prizes.” and completed her comment with a smiley emoji. 

While it’s bad enough that this happens millions of times per year in this country, what followed that comment floored me; and I’m not easily floored in timeshare matters. 

At last count, there were 27 comments, including from the original poster about these prizes and how much they enjoyed trying to get more prizes out of the person booking the sales pitch. 

I say I’m floored for a number of reasons:

> These aren’t prizes, they’re bribes 

> These bribes are baked into the marketing and sales costs of every single timeshare product the developer is selling…as is the commission that the booker gets for getting you to the sales pitch

> If the standard bribe is $150 or two rounds of golf, but you think you’re being a good negotiator by getting them to increase it to $300 or two rounds of golf and two dinners, you’re delusional in not understanding how this works

> These bribes rarely if ever, turn out to be worth the time and mental anguish far too many people complain about 

I’ve said for more than 20 years that the marketing and sales paradigm has to change. I’ve also said that unless/until the consumer changes their behavior, nothing will change. There’s absolutely no incentive for the developers to change what they’re doing when they’re making the money they are making. 

So why doesn’t the consumer change?  Because they’re too busy clamoring for illusionary prizes. 

Bonus Edition! The More Questions-The Murkier Things Get

I’ve sufficiently thawed out from attending ARDA’s Spring Conference, Timeshare Together, to sort out my notes and thoughts; many of which will be featuring in upcoming posts. 

Today I’m going to talk about Bonus Points. I have many questions as you’ll see. 

I’m not breaking any conference secrets by saying that many, and from the Sales and Marketing session I attended, perhaps most developers offer up bonus points as an incentive for the consumer to buy that day. Let’s say you’re looking at a purchase of 100,000 points annually for $25,000.   As an incentive to sign on the dotted line right then and there, the sales manager will offer to “throw in” 100,000 one time bonus points which may bring you up to VIP, Gold, Platinum, Super Secret or whatever “upper” level they have. 

The idea behind this is quite simple; the consumer thinks they’re getting a deal by getting “free” points and the developer gets a chance to sell them more points once the bonus points are gone and the hapless consumer is no longer at the Super Secret level. 

First, as we all know, there’s no such thing as free so get that out of your head immediately. 

Second, and where the basis for this post began are these questions:  Where do these mysterious bonus points come from?  What are they?  Who, if anyone is paying maintenance fees on them?

The more questions asked, the muddier the issue becomes. 

Let’s simplify things. Let’s say that the developer has registered the site and the total number of points available is 10,000. That’s it. They can’t sell more than 10,000 points. So now they’ve been selling for 5 years. Half of their inventory has been sold. They now have 5,000 points to sell. Mr and Mrs Smith come in on a mini-vac and are given the opportunity to purchase 100 points for $20,000. They balk. The closer comes in and offers then 100 one time bonus points on top of the annual 100 points if they buy now. 

So does this mean that the site now has only 4,800 points to sell this year, but thot 100 bonus points will be back in the inventory pool next year?  Is it the same inventory pool?  If not, what pool is this coming from?  

Making things even muddier, if the Smiths are responsible for paying $1,000 annual maintenance on their annual 100 points, who is paying the $1,000 maintenance on the 100 bonus points this year?  If no one is paying those fees, are they being pro-rated among all the owners?  Or, if I suspect, no fees are being paid on the bonus points, because they’re illusionary, why should anyone be charged maintenance fees on something that is illusionary?

You see, the more questions asked, the more questions arise and the muddier things become. 

If anyone can answer these questions and un-muddy these murky waters….please do.