Diamond Resorts / association dues
To whom it may concern;
My wife and I purchased an 8 day 7 night stay at the Kaanapali Beach Club Resort for $1, 100 back in April of 2007. We pre purchased the stay for March 28th 2008 through April 4th 2008. We had sat through Sunterra’s timeshare presentation and did not buy so they offered us to stay at that rate if we purchased the stay at that time. One of the conditions to stay there was that you had to sit through the timeshare presentation again.
When we went there this year we had found out that Diamond Resorts had bought out Sunterra sometime in 2007. Our salesman was Johnathan Wise. When we were going through the presentation we asked him specifically, ” If we purchased the timeshare today, when would our first association fees be due?” He told us we would not owe any dues till November and those dues would be for 2009. Mind you the total cost of our timeshare was over $14, 000 dollars.
Sometime in early June I received a bill from Diamond Resorts Hawaii Collection Members Association. The bill is for $674.05. I called the number for the association and talked to a representative who told me I signed a contract and no matter what the salesman said I owe this money and that was that. I asked to talk with a manager and he refused my request. Along with the bill they sent a copy of the 2008 budget. On the back of the budget it shows that the 2008 dues were due on January 1st 2008 and would be considered delinquent if not paid in full by January 31st. We purchased our timeshare on April 1st 2008. Diamond Resorts had their 2008 budget for association dues and at the time of our presentation and they never disclosed that budget to us. They only had a 2007 budget that was in our disclosure package and it was the Club Sunterra Association Budget.
After looking at the two budgets, which are night and day in difference, and now knowing that we would be paying an additional $1, 348.00 in association dues before we would ever be able to use our timeshare, WE WOULD NEVER HAVE PURCHASED the timeshare based on the financial aspects of the deal.
I have taken some time to read through the disclosures and bylaws they had given me and have found where Diamond Resorts is in violation of Hawaii’s Department of Commerce and Consumer Affairs Chapter 106 Time Sharing 514E-11.3. Enclosed is a copy of Hawaii’s chapter 106 laws and remedies 514E-11.3. Diamond resorts and RME are in violation of section 16-106-2.5 Conduct (a) To fully protect the general public in its timeshare transactions, every registrant shall conduct business in accordance with this section. (c) The registrant shall ascertain and disclose all material facts concerning every time share interest so that the registrant may fulfill its obligation to avoid error, misrepresentation, or concealment of material facts. (f) The registrant, for the protection of all parties with whom the registrant deals, shall see that financial obligations and commitments regarding timeshare transactions are in writing, expressing the exact agreements of the parties, and that copies of those agreements, at the time they are executed, are placed in the hands of all parties involved.
We were never given, or shown, a copy of the 2008 association budget, which they had already made, to compare with the 2007 budget which my wife and I consider to be crucial financial information. Diamond Resorts also failed to express exactly how they would bill association dues when a party buys their timeshare in mid year. The salesman gave false information and mislead us to believe we would only be billed for our association in November for our 2009 dues.
Diamond Resorts also has some problems with their disclosure statement they gave us. All of the disclosures and documents we signed were for Sunterra, not Diamond Resorts. In their disclosures they have Michael Peters as the Plan Manager and he is with Resort Management International. When you call his number [protected] you get Diamond Resorts. In the disclosure book page 32 number 20 it states” If the developer or its affiliate is terminated as Plan Manager, then the Association must change its name so that the word ” Sunterra” is deleted from the name and usage by the association and the board, and no member may use the name “ Sunterra” with respect to the association, their membership, the club accommodations or Vacation Club. [Declaration13.4]. I called the [protected] and confirmed with the person that answered that Diamond Resorts had bought out Sunterra sometime in 2007 and the Plan Manager, Michael Peters, was no longer the Plan Manager. Diamond Resorts Name is not in the disclosure documents, there is not a rider attached to the document, and Exhibit “E” is the 2007 Cub Sunterra Vacations Hawaii Members Association budget. The plan manager had changed and under their own guidelines they were not supposed to use Sunterra’s name in their documents. On page 16 letter (C) it states that the association fees are comprised of 2 assessments. Diamond Resorts is in conflict in the number of assessments they disclose in writing, the bill we received for the 2008 association dues also states that the assessment fess are comprised of 2 assessments. When you look at the bill you have 3 different components that make up the bill plus a $5.00 Voluntary contribution. When you look at the back of the bill it also confirms that association dues are billed in the subsequent year in November and due by January 1st. Again we purchased our timeshare on April 1st 2008 for over $14, 000.00 and were never shown this association assessment nor did we receive anything in writing showing that we would owe this amount buying the timeshare already three months into the year after the 2008 assessments were due. The terms used in their documents and billing refer to annual assessments. Annual is a 12 month assessment, and not only are they not clear on how they would bill for a partial year, they are trying to collect for a full years worth of assessments that include property taxes and costs that anyone purchasing a partial year should not have to pay for something they did not receive a benefit from. When you look through section C you will also see that the Board of directors are responsible to use reasonable judgment when determining increases in the association assessments. When you compare the differences in the2007 budget and the 2008 budget you will see that the budget went from $2, 510.618.00 to$5, 793, 744.00. This is and increase of over 115 . I would not consider this to be reasonable. The board of directors of the association have a fiduciary responsibility to protect the timeshare holders as well as the developer. The more people who buy into the timeshare should spread out the costs to make it go down not up.
Enclosed is the documentation that proves we were not fully disclosed on the financial obligations we were being committed to. Based on Hawaii’s Department of Commerce and Consumer Affairs Chapter 106 and page 24 number 18 of the Club Sunterra Vacations Hawaii disclosure statement Sales in violation of Hawaii timeshare law. Section 514E-11.3 of Hawaii law provides that every sale or transfer made in violation of the Hawaii Time Share Law is voidable at the election of the buyer. I am choosing to exercise my rights afforded me through my Visa card and void this transaction # 2889 trans. Date 04/14/2008 posting date 04/16/2008 in the amount of $12, 906.00. I am requesting that Diamond resorts cancel my timeshare purchase and refund me 12, 906.00 on my credit card as well as the $230.00 initial deposit and an additional $349.00 paid in closing costs. You have 15 days to comply.
Larry and Tracy Beck
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