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 ResortsTM 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 ResortsTM, 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 ResortsTM 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 ResortsTM to give Boards, owners and associations what they richly deserve and desperately need.
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