Timeshare Accounting Irregularities
Recently we had occasion to request an accounting statement to justify the assessment of annual maintenance dues for a large timeshare developer. What we found out was interesting. This developer was able to justify, at least on paper, the assessment of annual dues equating to over twenty million dollars ($20,000,000) for one, 576 unit resort. Of course, this number defies belief, so we took a close look at the figures. This is what we found out:
1.The resort is overbooked – we surmise that all deeded interests have been sold and yet the Developer continues to sell ‘points’ interests in the Resort; 2. Apparently the developer is replicating claims for ‘management’ fees and possibly other items; 3. The Developer continues to control the Association and thus the management group, which is itself an arm of the developer, even though the accounting indicates that the resort is substantially sold out to private individuals. The rationale given in the developer’s annual report is less than compelling. It is apparent that the interval owners simply do not contest the proxy proposals indicated in the annual reports, the members of which are controlled by the developer, and thus management control by the developer persists with no meaningful cross-checks and balances allowing for the kind of financial abuses reflected herein. Indeed, this developer’s annual report with the SEC reflects that seldom if ever has it been supplanted from management of its ‘own’ resorts. Please call us if you are concerned about developer abuses and are interested in cancelling your timeshare.
Learn more about timeshare accounting irregularities by contacting our dedicated timeshare cancellation attorneys for a free confidential consultation. Let our experience work for you.