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Raintree Complaints - Trying to charge a "Special Assessment"

Review all Raintree complaints

Raintree
Posted: 2009-06-06 by   MrD
Trying to charge a "Special Assessment"
Complaint Rating: 98 % with 41 votes
Company information:
Raintree Vacation Clubs
United States

Got a letter in the mail today from Raintree Vacation Club of which we have been members for 6 years. They are whining about not being able to meet all the "upgrades" their members want, so they now have to charge an $820 "Special Assessment". This company is a joke. Every time we have tried to book a timeshare vacation with them we have either been unable to or have had to jump through major hurdles to do so. Now because they are affliated with RCI, everytime I try to book, they want to push me off onto RCI's resorts, not Raintree's.
I urge all Raintree members to join together and file a class action lawsuit against this scam company.
Comments United States Vacation Clubs
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More Raintree complaints
Raintree - Special Assessment Fee
Raintree - Special Fee
Raintree - Special Assessment
Raintree - Letter to Doug Bech

Comments

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 166 days ago by   Moe +3 Votes
I checked my documents (joined in 1998) and could not find a single reference giving Raintree the right to levy a Special Assessment. In his letter, Doug Bech says this special assessment includes "normal maintenance items ... and updating furnishings, bedding and kitchenware." What have they been doing all these years with the maintenance fees while they permit their units to fall in disrepair? They should have been making the needed repairs each year, instead of letting things get to such an extent they have to resort to this crap. And then part of the special assessment is to upgrade their IT system so everyone can have online booking access. What, Raintree can't pay for their own computer systems?

Maintenance fees are a cash cow to these groups and are are huge source of profit they never reveal. And when was the last time anyone received financial statements, audited or otherwise? Or have the maintenance fees been used in part for Raintree to go on an acquisition spree? The bottom line is this group is poorly managed and most all of the so-called new resorts they add are old "has beens" which they attempt to refurbish. Judging by the way they let Cancun, PV and Cabo go down the toilet, don't expect anything positive.

Today I spoke with a Raintree representative, who really is an RCI staffer. She told me today was the first day the Special Assessment letters were received, and they already have heard an earful. They are bracing themselves for next week when they expect to hear from a bunch of angry members. She also told me the number of members who have defaulted in paying their maintenance fees was simply huge and continuing to rise. And when Raintree first told them they were going to levy a Special Assessment, they were just stunned. People are losing their jobs, their homes, their savings have been depleted, and now Bech wants a Special Assessment. Is he kidding, or taking a page out of Obama's playbook? Raise taxes during a recession --- you can't be serious.

Maybe this Special Assessment is a giant ruse to cover the loss of revenues from those not paying their maintenance fees. If so, then it's a Barney Frank tactic where those who play by the rules have to cover for the deadbeats. You know, collectivism.

I personally think Raintree, like many others, is in financial trouble with a large debt burden to service. And they probably can't tap into any credit facilities at this time because who would lend to these organizations where their principal source of revenue is from the discretionary income of their members, which is shrinking nationwide. For those who are financially hurting, this is the last bill to be paid, if it is paid at all.

My advice on the Special Assessment. First, complain like hell, and make certain you call their Houston office (Sharon Racine) and tell them you never voted or approved of this, nor does Raintree have the right to charge these outrageous fees unless they can show it in your contract. And second, simply don't pay the damn thing with the objective being to force these clowns to withdraw or rework it. You might also ask for a copy of Raintree's financials. The thinking being that you don't want to pay the Special Assessment only to learn that Raintree later files for Chapter 11 and you are an unsecured creditor.

Really a poor decision by Doug Bech, and that's being charitable. No, a really stupid decision that carries with it a PR disaster for years to come.

Moe
 166 days ago by   Bob Jones -1 Votes
I sent them an email asking for a copy of my original contract. I want to read through it and determine if I should seek legal help.

Since joining they have raised my fees from $850 to now $1, 350, and now they want $1, 350 in addition and they are asking for the payment by July this year!

I guess the question is can they legally do this.

Bob
 166 days ago by   Moe 0 Votes
Bob:

You have to read your contract to determine whether they have the authority to levy a Special Assessment and under what conditions. Their contracts have changed over the years, so it really depends on which contract you have; you also have to read the Regulations they usually make reference to. In my case, the contract goes back some time and includes several references to maintenance fees, but not Special Assessments. It also is subject to Mexican law (it was Club Regina) and appears to have a mediation clause in it before one can file a judicial claim, which must be brought in the Mexican Federal District (Mexico City). Contesting or litigating these things in Mexico is a waste of time and takes forever; besides, any member seeking redress down there will most certainly lose because Raintree is a big employer.

If your contract actually makes reference to or gives Raintree the right to collect Special Assessments, you then need to determine whether they have defined this term in the papers. Special Assessments normally are levied for unusual, catastrophic or non-recurring events which are not reasonably foreseeable, such as hurricanes and the like, in addition to capital improvements. The problem with the Raintree Special Assessment is that it covers many items that are normal or routine in the maintenance of the properties. The replacement of bedding is just one example. Items such as these should be covered under the annual assessment, but too often these resort owners suck out as much cash as they can and let the properties deteriorate to the point where there is no other choice. And the general overhead for which a part of the annual maintenance is paid is loaded with all sort of goodies, like social security, health care and year end bonuses for staff and workers (Mexico specific), plus a handsome profit to Raintree itself as a management fee.

In short, all these timeshare groups will simply do what they can get away with because they know members have little or no recourse. It's not a democracy, but a dictatorship where they set the fee and are accountable to no one. And if you tell them they can have their membership back, they will tell you they won't take it and you are bound for the life of the contract to pay them whatever they say is owed. Finally, they attempt to put the fear into people by saying that if you don't pay, they will report the default to the credit agencies and will turn the account over for collection. But the last time I checked, a membership is a voluntary association and you should be able to quit at any time. If failure to pay a membership fee does show up on your credit report, it usually is flagged as such and discounted in importance in arriving at the credit score. Not paying either an annual maintenance fee or Special Assessment should be no big deal. For it to have any teeth, Raintree would have to file a legal action and obtain a judgment, and that requires legal fees which I know they don't have the money to cover. They will just keep hasseling everyone through the collection process.

Under these circumstances, what is one to do? As I previously said, the most effective way of contesting this is for members to collectively refuse to pay and see what then happens. If during this period you are unable to use your time, it hurts Raintree more than it does you.

I have met Doug Bech on several occasions and he is a nice guy and a former partner at the law firm of Akin Gump (Houston) where he practiced in the field of securities and mergers and acquisitions. Bech knows the firestorm this Special Assessment will trigger, and for him to g down this path given the current economic conditions indicates to me Raintree is in financial difficulty. Everyone should hold firm on this one and send a message.

Fractional ownership with full equity participation is the trend of the future, not timeshares. I cam across an excellent website for a fractional that really tells the hidden truth about maintenance fees and the scams that they are. See, www.cabofractionalproperties.com.

Moe
 165 days ago by   Bob Jones +1 Votes
Moe,
Thank you for your detailed email.

I read through my contract dated March, 2000. Not anywhere does it state that they are allowed to charge an assessment fee.

My maintenance has increased from $700 to $1, 350 over a nine year period (a warning for potential future buyers), 51% which is nuts. It seems that because I am a long term client who has one of their original memberships they unfairly try to force me not pay fees and therefore end my contract. Which would allow them to resell.

I have sent them an email asking for their legal language and to indentify where it states that they are allowed to charge such a fee.

My original contract was with RCI and it does look like it is under Mexican law.

Regards
 165 days ago by   Moe +1 Votes
Bob:

Your are on the right course because if your Raintree contract has no provision giving them the right to levy a Special Assessment, they have none and are confined to collecting just the annual maintenance. Ask them to specifically show you where their authority lies. You might also ask whether they would accept a termination of your membership if you so chose. That would be an interesting one. My guess is they would say no, and then state you are bound for the life of the contract. My rejoinder would be they don't have to accept, but rather I simply quit and here is the certified letter saying so.

Aside from what may be Raintree's questionable authority to charge these Special Assessments, to do what they have without prior or advance notice to members is pretty outrageous. Since I have been a member, I have never once seen a financial or other statement showing how the annual maintenance fees are used or allocated. A few years back, members were told Club Regina Cancun was in the process of a major refurbishing. I guess that never happened because Cancun is on their list of targeted improvements.

Believe me, Raintree doesn't want to actually litigate a collection claim, whether in Mexico or the US. Through pre-trial discovery, a member-defendant presumably would be in a position to not only depose Raintree executives, but also access their financial and other records. With such disclosures, I believe a strong case could be made for the misappropriation and/or misapplication of funds received from annual maintenance fees. Such fees are represented to members as necessary to keep the existing resort properties in a satisfactory state of repair, including general and administrative overhead. But if any of these fees are diverted for other purposes, such as acquiring new properties, there could be major problems for Raintree.

Like you, I have looked at the historical record of Raintree's annual maintenance fees. In my case, they increased 24.1% between 2005 and 2006. For the years 2005 through 2009, they have increased at an annual equivalent rate of 13%, way beyond the rate of inflation. This is not only unsustainable for members, but it also suggests something is not right.

For your information, Raintree Resorts International, which I believe is the parent organization, is located at 10000 Memorial Drive, Houston, Texas 77024, (713) 613-2800. If I have any further information about this debacle, I will post it on this site. Best of luck.

Moe
 165 days ago by   MrD +2 Votes
Well we've begun by filing a complaint with the Houston BBB. This is just the beginning.

The BBB that will handle your complaint is:

BBB of Metropolitan Houston
(Houston, TX)
1333 W. Loop South, Ste. 1200
Houston, TX 77027
Phone: (713)868-9500
Fax: (713)867-4947
Email: bbbinfo@bbbhou.org
Web: http://www.bbbhou.org
 165 days ago by   MrD +1 Votes
There is power in numbers. We need a way to gather member names and contact info. Does nayone have some ideas on the best way to do this?
 164 days ago by   Annie 0 Votes
We are members as well and received our letter today. I completely agree with your take on the situation Moe. We will definitely refuse to pay! Greed, greed and more greed!
 164 days ago by   Mike Turley +1 Votes
I agree with the majority... this fee was never part of my original contract. We never had a chance to vote on it as fractional owners. It's bogus. Everybody needs to refuse payment. When I can, I'm getting out of this stupid timeshare business. Staying in the USA at La Quinta or somewhere seems to be a better option.
 164 days ago by   CBear +1 Votes
I just received my $820.00 special assessment and agree with many of the perspectives expressed above. While the Raintree facilities have been pleasant to stay at in the past, the economics of the RVC/Club Regina relationship are making it less and less attractive.
In my mind, there are three options on the table that can be taken to respond to the special assessment:
1. Check your contract to see about RVC's right to assess...and in any case complain
2. Consider your investment in the Club Regina/RVC a sunk cost and walk away. They can take your "asset" back and cancel your membership. It is hard to imagine they would have any recourse to one's credit rating given that the time share has been fully paid for. If they do pursue you...ignore the collection phone calls and rest assured that the potential remark in your credit file will be discounted due to its nature.
3. We should encourage every Club Regina/RVC member to register their thoughts and feelings about the special assessment on thiswebsite and http://tugbbs.com/forums, and invite RVC/Regina "leadership" to review the comments and reconsider their decision and seek other sources of funding.
4. Pursue the class action lawsuit avenue...long and arduous, but perhaps the best way to recoup some of our investment.
One gets the sense that this organization is going down...and in my mind it would be foolish to, in all probability, throw good money after bad
 164 days ago by   CBear 0 Votes
Any ideas as to how to get a plan of action (i.e. refuse to pay) out to all RVC/Regina members?
 164 days ago by   smlugo5 0 Votes
We also recived ours today and are outraged to say the least. We tried to call as soon as we go the mail but the office was already closed. My husband will be calling tomorrow to share our complaints as well!
 164 days ago by   Dan92 0 Votes
I am very interested in a filing a class action lawsuit. Please count me in
 164 days ago by   jer 0 Votes
I have points with Raintree also. Got my assessment notice today also. I thought it was a reminder of my annual dues that are due next month, I wish. Count me on on a the class action suit.
 164 days ago by   John W 0 Votes
I might also suggest that we all send emails expressing our outrage to the letter's author, Douglas Y Bech via the Frontier Oil website, of which he is one Board of Directors. Maybe a barrage of emails to this company embarrassing him in front of his peers might have an impact into his succumbing to our demand to rescind the "Special Assessment."
The web address is:
http://www.frontieroil.com/contact/
Be sure to mention his name specifically.
 164 days ago by   GFL 0 Votes
THESE "SPECIAL ASSESSMENTS" ARE OUTRAGEOUS !!! IT HAS BEEN BAD ENOUGH THAT THE ANNUAL MAINT FEES HAVE INCREASED SO ROUTINELY ! I'd like definitive ways to cut my ties to this organization totally.
 164 days ago by   tgrafix +1 Votes
I want to join in and file a complaint against Raintree, I just received the SA today and says it's due JULY 15 this year, but what will it mean if I don't pay it? I have a reservation already paid for in late August with plane tickets already paid for and unfortunately not refundable. Can Club Regina cancel my reservation and take my money?

I want to fight this, my contact email is ilanatay@gmail.com and I'm in CA.

I appreciate any help to get this going and for any other help with how to deal with this. I am new owner and the original contract was purchased by someone else in 1991 and when last year was my first time at the resort and I became ill from their A/C and had to stay inside for a week of my time there.

Do I have any recourse?
 164 days ago by   Moe  Best Advice +4 Votes
Mr. D:

Good idea on the BBB because any negative PR hurts them.

I also agree there is power in numbers. If just 30% of the members refuse to pay, that most certainly will affect their plans. It also would send them a message forcing them to rethink Special Assessments in the future and how to make the most out of the annual maintenance.

I want to be clear that I am not against Special Assessements in general, as there are unforeseen circumstances which occur that require such collections. Hurricane damage not compensated by insurance would be an example, including severe beach erosion. I can also envision Special Assessments for certain capital improvements, as opposed to normal or recurring repairs. If justifiable, I can support these charges if there is adequate planning and advance notice to the members, and provided the amount in question is reasonable. This assumes, of course, that Raintree has the authority to collect these amounts in the contracts with their members.

But the arrogance of this group is really astounding. This took everyone by surprise with the justification being the responses from member surveys. That's not persuasive for me because if members knew in advance what they were looking at, especially the amount and time within which to pay, I am almost certain there would have been a different result and a corresponding downsizing of the overall program.

My other complaint is that many of the targeted expenditures should be covered by the annual maintenance fee. If you peruse their list, you will see several items that could be categorized as normal or recurring, or repair related, not to mention those that are foreseeable in the resort business. Changing out ceiling fans, new bedding and linens, and the refinishing, renovation or refurbishing of several items they describe are customary and normal in this business. They also are foreseeable, or the result of ordinary wear and tear or usage. Please note their frequent use of the term "replace" in an attempt to somehow convert these foreseeable items into what they hope will be viewed as capital expenditures that are usually the basis for collecting Special Assessments . That's a slight of hand with which I am quite familiar. And I am sorry, upgrading their website to provide online booking doesn't cut it.

Raintree has permitted their properties to fall into state of disrepair that really is inexcusable. This often occurs when there has been mismanagement of the annual maintenance fees, or a diversion of such fees for purposes other than maintaining the properties. Finally, these fees are routinely used as a source of profit, which may then be moved upstream to a parent organization for corporate staff or debt service. As their inventory of available space shrinks (i.e., they sell out a resort), the annual maintenance fees then become a static source of revenue in a universe of rising costs. To squeeze every last dollar out of a property, these timeshare groups sometime oversell their inventory (selling more than 52 weeks per unit) knowing that some members may not use their weeks during a given year. And there is absolutely no regulation of the industry or protection for members in places like Mexico. In short, these groups are really free to do as they please, and Raintree seems to be no exception with the lip service they give to member services. The truth behind this Special Assessment may be multi-faceted and probably will never be known by members, but I think it's clear they have not planned this well.

An effective means for members to communicate with each other and obtain information probably is to direct them to a central website, such as this one, which I came across by chance after seeing your initial entry on June 6th. To this end, I plan to periodically review as many other websites as possible with the aim of doing just that. Having members flood their corporate offices with phone calls also would send a powerful message.

The rapid escalation of Raintree maintenance fees leads one to seriously question whether owning a membership is truly worth it. Add items such as this Special Assessment and I think the conclusion is negative. I just wonder what they will be two or three years from now.

Moe
 164 days ago by   Jose M. Hern +1 Votes
I'm in. Just a short time ago RVC announced that they had renovated their Culb Regina resorts and now these same resorts are on the Special Assesssment list! I want to fight these crooks. Let me know how I can help. I'll start with the BBB as listed above. Send me any other websites that may help. I'm calling them tomorrow to register my displeasure.

Contact me at josemhern@aol.com.
 164 days ago by   Jose M. Hern +1 Votes
I just sent to the BBB and to Douglas Bech, at frontier oil, my thoughts on this outrageous special assessment. Everyone reading these complaints againt Raintree should do the same and if possible do it more than once. Let these people know that we're not going to take it.

If you don't know what to say, just copy and paste some of the great points of view in this blog and send them off. Tomorrow, I'm going to call them every chance I get to tell them what I think. They are threatening to hold my timeshare as a hostage if I do not pay. Nice people, right?

Their "Regulations" state that they are required to have a simple majority vote from their members to pass any large increases in the maintenance fees. I did not receive a ballot, has any other legitimate member? not that I know of.

They have 21 resorts with over 50, 000 members. Do the math, with an average assessment of $900 per membership that's $45 MILLION! The curious thing is that Raintree, a few months ago, announced that they had renovated several of the Club Regina Resorts, but, these are also on their "Special Assessment" list of resorts. Does that make sense??

Raintree should rescind the Special Assessment, NOW!

josemhern@aol.com
Member Club Regina Los Cobos since 2003.

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