The Insurance Issue for Summer Bay Resort Timeshare Owners

The Insurance Issue for Summer Bay Resort Timeshare Owners

Summer Bay Resort
Summer Bay Resort (photo credit: Orlando Sentinel)

This week got off to a dramatic (and traumatic) start when a sinkhole caused the collapse of two adjoined buildings and the condemning of another one at Summer Bay Resort, just outside of Orlando, Florida. (See: Is the Orlando Summer Bay Resort Timeshare Sinkhole Growing?)  For the guests and owners at Summer Bay Resort, all are physically unharmed and it appears they will be, for the most part, fiscally unharmed as well.

Most importantly, all occupants of the building were safe. This fact alone seems amazing considering that the event became apparent around 11 PM in the evening, meaning that some occupants were already sleeping, others were in varying stages of preparing for bed, and many had sleeping children to roust and gather before evacuating. One woman was even enjoying a relaxing soak in the tub when the room around her began to collapse.

The staff at Summer Bay Resort deserves tremendous praise for its successful evacuation efforts and effectively dealing with the relocation of guests and timeshare owners who had lost everything they had with them. But the problems facing Summer Bay Resort vacationers didn’t end when the ground stabilized.

Displaced guests were without medications, eyeglasses, car keys, wallets, and credit cards. There was a temporary interruption of utilities that impacted other buildings on the property. Guests and owners throughout the resort were awakened, frightened, and were no doubt, peppering the Summer Bay Resort staff with anxious questions. And then there was the ongoing stream of news coverage, reporters, helicopters, repair crews, police, firefighters, and other emergency workers called onto the scene. This was a summer vacation gone wrong in the worst way for many people.

But when the dust, literally and figuratively settled, the obvious question on everyone’s mind is: who pays when a sinkhole swallows you timeshare, or it is damaged or destroyed by lightning, flooding, wind, tsunami, or any other type of natural disaster?

The answer to this important question can vary significantly, depending upon the resort at which you own timeshare and the type of disaster. This blog post looks only at the Summer Bay Resort sinkhole situation.

Who Picks Up the Cost When a Natural Disaster Impacts Your Timeshare Resort?

In the case of Summer Bay Resort, let’s put this situation into perspective. This resort property is very large occupying some 3,000 acres with approximately 900 timeshare units, vacation houses, and a hotel located on the resort grounds. Most of the more than 4,500 guests who were at the resort this week, were unaffected by the sinkhole and the resort has experienced few cancellations for upcoming weeks.

Timeshare owners at Summer Bay who own units in the buildings that were impacted, report that the resort management is telling them insurance will cover damages from the sinkhole. This should prove to be reliable information, backed by recent legislative changes pertaining to Florida sinkholes.

Florida Sinkhole Legislation Changed

Sinkholes were already a hot topic in Florida this year, even before the earth opened up the 120-foot wide chasm on the resort grounds of this popular Florida vacation ownership resort. Last year, Florida legislature approved a law defining that any catastrophic collapse caused by a sinkhole is fully covered under Florida property insurance. This is great news for the timeshare owners at Summer Bay Resort.

It is not such great news for other Florida timeshare owners and owners of residential property whose timeshare, homes, garages, or other structures are damaged over time by slow or small shifts in the earth. The new law clearly states that there must be an “abrupt land collapse, structural damage, and a condemned property.” However, for purposes of this blog post, let’s consider only the type of collapse and damaged experienced by Summer Bay Resort.

Many Florida insurance experts are commenting to the press that the resort’s property and casualty insurance should cover the loss and should prevent the need for any related special assessments against the timeshare owners.

Breaking Down the Insurance Issue for Summer Bay Resort Timeshare Owners

Timeshare owners and guests directly effected by the sinkhole, experiencing the loss of personal property, and who have insurance that covers their residence elsewhere, will likely find that their homeowners insurance also covers their personal property when they are traveling. Others who took out vacation insurance will probably find aspects of their time or personal property loss covered by their vacation insurance policy. And this is not to imply that personal property lost in the building collapse won’t be covered directly by the resort’s insurance that is covering this event. But some owners and guests may find they have additional types of insurance that they personally carry that also will benefit them in this situation.

Right now, Summer Bay Resort says it plans to rebuild the damaged buildings on some other part of its large property. So are the owners off the hook, for paying a special assessment or an increase in their maintenance fees?

Not necessarily. Insurance will cover the property as it was before the loss, plus depreciation, which is the difference in the cost today to replace items and property as compared to what it cost originally. But if the resort looks to update or upgrade the timeshare units in the rebuilding process, and there is added cost in so doing, that cost will be above any insurance coverage.

For example, what if the timeshare units being replaced had carpeting and the decision was made to update and upgrade to an engineered wood or other type of flooring that in the long run is more durable and perhaps more aesthetic? In that case, the insurance dollars allowed for replacing the carpet might fall short of the amount needed to switch to a more currently preferred type of flooring.  This cost could logically be borne by the thousands of Summer Bay vacation owners, in an apportionment equal to the number of units or weeks they own and the size of those units.

The Bottom Line

Most Summer Bay Resort owners who have commented publicly on the sinkhole have expressed relief that no one was harmed and have shown great compassion for anyone who was directly part of this bizarre event. Yet a few have demanded that the resort “guarantee” this won’t happen at other buildings on the property.

Let’s let Summer Bay Resort, and all other hotels, timeshares, and vacation properties off the hook on this type of demand. No one can offer guarantees against natural disasters, nor should we expect them to try.

Assuming that a resort makes all reasonable efforts to protect its guests and timeshare owners, and that to any degree determined by logic or law, the resort structure and property are safe, stable, and functional, then the resort has done all it can possibly do.

Things happen. You can personally procure insurance to protect you against most of them, including inclement weather and loss of vacation. If your peace of mind is enhanced by knowing you are covered against all possibilities, then you should explore the options for the many types of insurances that are available.

Win a Wyndham Timeshare Vacation With Your Vacation Pictures

Win a Wyndham Timeshare Vacation With Your Vacation Pictures

Your summer vacation may be just a great memory at this point, but don’t file those vacation pictures away just yet. Here’s an option to win a fabulous 7-night Wyndham timeshare vacation, if your summer holiday photos wins the most votes on Facebook.

Here’s how the contest works: Wyndham Extra Holidays, a subsidiary of Wyndham Vacation Ownership is inviting you to share your best summer vacation photo on their Facebook page: Wyndham Extra Holidays on Facebook.

First “Like” the page, then follow the instructions you’ll find there for submitting your vacation photo. Tell everyone you know about the contest so your friends, family and co-workers can go to Facebook and vote on the Wyndham Extra Holidays page for your picture. The easiest way to do this is to “share” your picture on Facebook.

The Grand Price Winner of the contest will receive a 7-night timeshare resort vacation. Second and third place prizes will also be awarded, with the second prize being a 5-night vacation, and the third being a 2-night vacation.

Winners can choose a one-bedroom timeshare from more than 100 resorts across the US. As Paul Carney, vice president of resort operations and rentals, Wyndham Extra Holidays, explains, “We are thrilled that we can salute this year’s summer vacation memories with the Wyndham Extra Holidays Snapshots of Summer Photo Contest. With more than 100 resorts across the U.S., a memorable vacation with Wyndham Extra Holidays is just a click away during any season.”

(View Official Rules for complete entry and voting details here.)

Gurney’s Inn Timeshare Owners Can Turn in Their Shares or Turn in their Shares

Gurney’s Inn Timeshare Owners Can Turn in Their Shares or Turn in their Shares

Less than two weeks ago we shared with you the news that Gurney’s Inn timeshare, a Long Island resort and timeshare, had been purchased by new investors. (see: New Investor Takes Over Troubled New York Timeshare Resort.) Was it clear to you from our article that the new owners of Gurney’s Inn planned to eliminate entirely  the timeshare ownership component of  the resort? Because it wasn’t clear to us …

Although the timeshare owners were being given the chance to turn over their shares to the new property owners, George Filopoulos of Metrovest Equities and Lloyd Goldman of BLDG Management, the original information seemed to indicate that retaining ownership of your timeshare unit was one of the options. (See Option 3 below)

As we wrote in our previous blog about Gurney’s Inn, the choices the owners were given were to:

  1. Turn in their shares in December in exchange for a 20-percent maintenance reduction for 2012.
  2. Turn over their shares and keep their units until the end of 2017, with no maintenance or assessments during that time.
  3. Keep their units until the end of 2017, and take their chances that the inn will be resold at a profit after that point.

Now, is reporting that the property will, “shed its timeshare model in five years.” This certainly indicates that owners can turn in their shares now or (option 3) turn them in five years from now.

Pat Boffa, is president of Gurney’s Timeshare Owners Inc. ( Boffa explains, “It couldn’t continue as a timeshare forever, we all knew it. At the rate the maintenance was going up and the assessments that were pending, it just didn’t work anymore.”

Hopefully, all of the owners are getting the information they need and clarity on any questions they may have.

Gurney’s Inn has approximately 109 units or suites, with more than 30 of those being timeshare units. The historic resort, Gurney’s was founded in 1926 when Maude Gurney opened a 20-room inn as a summer retreat for New Yorkers. In 1956, the Monte family purchased the property and turned it into a resort.

Looking at the Bachelor Gulch HOA Vote on Ritz-Carton Management

Looking at the Bachelor Gulch HOA Vote on Ritz-Carton Management

Bachelor Gulch votes for change.
Bachelor Gulch votes for change.

It isn’t everyday someone says “no” to Ritz-Carlton, but that’s exactly what the timeshare owners at the Ritz-Carlton Club Bachelor Gulch have done, voting out the Ritz-Carlton hotel and property management company. With this vote, the prestigious Ritz-Carlton name will be dropped from the ski-in/ski-out resort property. Replacing Ritz-Carlton will be Timbers Resorts as the new management company.

In a 5-page letter to its membership, date May 17, 2013, the RCC-BG Condominium Association, Inc. Board of Directors voiced how difficult the decision had been and how carefully they had considered their actions. The following is excerpted from the Board’s letter to the member/owners at Bachelor Gulch.

“As we have shared previously, members of the Board and our fellow members were completely caught off guard and surprised by MVW’s sudden announcement on July 17, 2012 regarding the overall direction of the Ritz-Carlton Destination Club (“RCDC”) brand. MVW stated that:

  1. The Abaco (Bahamas) and Kapalua (Hawaii) properties would no longer be in the RCDC system, and
  2. MVW would begin providing cross-access between the exclusive RCDC system and the 51 Marriott Vacation Clubs.

The Board felt that MVW’s announcement and its planned course of action would undermine the significant investment each of us has made in Bachelor Gulch. Instead of simply accepting the changes, we decided to seek measured, proactive solutions regarding the new Marriott Vacation Club affiliation and overall management of our Club. Through this process, our desire was to maintain our relationship with MVW. Members of the Board reached out to and met with the MVW executive leadership personally and shared our member’s interest in remaining a Ritz Carlton Destination Club. However, despite our repeated attempts for MVW to clarify their intent and to address numerous concerns raised by our members, we realized that MVW’s actions and positions were not consistent with that of an exclusive Private Residence Club investment and exchange experience. “

The Big Picture on Bachelor Gulch Resort

Bachelor Gulch is a 54-unit resort on Beaver Creek Mountain near Avon, Colorado, with some 650 owners. Those who bought ownership at the private residence club (which is essentially an exclusive timeshare) from Ritz-Carlton Destination Club paid hundreds of thousands for their ownership.

With this decision comes a rebranding of the resort as it will no longer carry the Ritz-Carlton name. (Note: The connected Ritz-Carlton Bachelor Gulch hotel will retain the Ritz-Carlton name.)

The loss of the Bahamas’ Abaco Club at Winding Bay and of Kapalua Bay on Maui as exchange destinations was addressed twice in the Board’s letter, as was the point that the new management company of the former Ritz-Carlton Club Kapalua Bay is the Timbers Resorts. (Interesting note: this Timbers management agreement is a temporary 7-month contract.)

Two other resorts have been removed from the Ritz-Carlton Destination Club, with the Bachelor Gulch decision becoming the third departure, leaving six Ritz-Carlton Destination Club remaining.

The Denver Journal quoted Ritz-Carlton Destination Club Spokesman Ed Kinney as saying, “The homeowners association has the option to not renew a contract if they so choose, and we certainly respect that. We would have loved to have kept the property but we understand it’s their prerogative to let the members vote.”

In response to concerns voiced by owners at Bachelor Gulch that Marriott Vacations Worldwide will be offering exchange privileges between the Ritz Carlton Destination Club system and Marriott timeshare owners, “Kinney said members could choose to not visit Marriott destinations, and that Marriott timeshare owners would need a “tremendous” amount of points to use a property such as Bachelor Gulch.” (source: The Denver Journal )

Nonetheless, the position of many Bachelor Gulch owners seemed to be summed up by this letter written by an owner to the BG Condominium Association, “So people that could afford to buy Ritz Carlton Destination Club for $200,000+ or so can now use a Marriott Timeshare that can be bought resale for less than $5,000.”

The member/owner vote on the decision to make this significant change was as follows:

  • 67.86 in favor of the change
  • 8.61 against the change
  • 23.53 non-voting

In a PDF document available from the Timbers Resorts the management company addresses the transition, saying, “Timbers Resorts is pleased to be the RCC BG Board’s recommendation from the Request for Proposal (RFP) submission for the property management, exchange services, & member benefits for the current Ritz Carlton Club Bachelor Gulch. We feel that we are uniquely qualified to assist in every facet of this project; real estate sales/ marketing, hospitality operations management, HOA management, and project repositioning.

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