Diamond Resorts International Threatens Lawsuit

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It seems there is some controversy coming out of the Hawaii timeshare community, mainly from one resort in particular the Point at Poipu. This resort is currently managed by Diamond Resorts International, a well known name in the timeshare industry. It seems that recently owners have shown a growing concern for the raise in maintenance fees at this resort which have increased by 50% in the last two years and almost doubled in the time period between 2001 and 2009. From the story I found the owners are upset because they have no say as to when and how much the maintenance fees are increased. The board of directors for the resort voted unanimously to increase the fees given to owners to help cover operating costs and upgrades throughout the resort. All board members were duly elected to their position according to Hawaii law, however three of the board members are considered “developer reps”, basically giving the management company the ability to pass any vote presented to the board. Mike Givens of Janas Consulting Management has recently started an initiative to try and find new management for the resort and bypass Diamond Resorts International. Givens said “It’s a matter of the owners taking legal steps to bring the management company to the table to get something done, as long as the majority of owners desire to do so, they can remove management.” Diamond has threatened to sue Givens for interfering with business operations and making defamatory, false statements. If you would like to read further about this situation and the parties involved the above information was pulled from the following two articles, “Diamond Resorts threatens legal action” and “Point at Po‘ipu timeshare owners struggling with management”.

Maintenance fees are a necessary evil to keep any resort in operation, after all they cover most of the day to day operations of the resorts and any improvements that the resort will undertake, ie upgrades in furniture for the rooms, new television, and new amenities throughout the resort. It seems there has been a trend lately where many resorts are raising these fees despite the current state of the economy. There are a couple of reasons that come to mind when trying to figure out the resort’s position in raising maintenance fees in a bad economy. The first goes hand in hand with the economy, since people are finding they have less money to spend and are trying to save more they may default on their timeshare property if a number of people do this the resort is forced to raise fees for the owners who are left. Simply put there are now less people paying but the cost remains the same no matter how many owners buy into a given resort. The second may have to do with inflation, which everyone is familiar with. Due to inflation the cost of items necessary to run a resort will rise such as utilities, paper goods, insurance, and other items used in the day to day operation of the facility. Since the resort is required to have all these items the cost passed along to owners in the form of maintenance fees and special assessments. Obviously these are just a couple of reasons why owners continue to see higher amounts being expected from the resort, these may not apply to every case.

We know that many of the readers of our blog are timeshare owners themselves, what do you think about your current maintenance fees, are you happy with them are they too high? If you are the owner of a resort where many owners felt the fees were to high what actions were taken by the board of directors or owners association? If you have other suggestions on why fees would rise we would love to hear those as well.

Comments

Comment from Cindy Koh
Time October 29, 2009 at 1:39 pm

It just so happens that I was wondering, and have been asking Diamond Resorts personnel about complaints I’m certain must be flooding in to them. They won’t give me any information whatsoever. How I would state our problem as owners is this:
1)I have paid $15,000 in order to pay more per night than those who are not members! If my $1000/year cost is broken down to a per night fee, I would pay less to not use my points.
2)We were Sunterra owners. We bought our membership while in AZ, away from our computer and ability to research via internet. We trusted their answers. They falsely represented Sunterra to us! They told us they didn’t expect maintenance fees to rise much since the history showed they only increased by 10% previously. Yet, they misrepresented themselves, knowing that they would be sold to Diamond Resorts.

But…my hope is that we can do what another Sunterra ownership group did in Sedona, AZ – sue to take over the management of our property! I own at The Ridge in Sedona. Is anyone out there who would like to find another company to take over the management? Please email me!

Comment from Rick Eyman
Time December 15, 2009 at 8:21 pm

I too bought in to EPIC, which sold to Sunterra, which sold to Diamond Resorts. I’m dizzy. Last year Diamond Resorts uped my maintenance fees by almost 50%. just recieved my 2010 bill and again it went it about 10%. I want out.

This company is a joke and I’m ready to sell. Interested? We need a class action law suit.

Comment from Traver
Time December 18, 2009 at 10:16 am

Hi Rick,
Thanks for reading and we appreciate your input. I am sorry to hear about your fees rising so much in the recent years.

Although we can not help you with a class action suit we can help you sell your timeshare, if you are interested please visit the following page:
http://www.vacationtimesharerentals.com/sell-rent-Timeshare.asp

Please let me know if you have any questions.

Thank You,
Traver

Comment from Christina Bossany
Time February 3, 2010 at 4:54 pm

As a retired senior citizen I am not going to receive an increase in my social security because there was no inflation during the past year. However I can’t understand why all other aspects of the economy has risen in cost, gas, electric, food, taxes. Taxes, even though the value of our homes have gone down. The President has stated that was part of the reason that there was no increase in social security benefits. If all costs have gone down according to the government we should get a reduction in our yearly maintenance fee. I am ready to sell my time share to the highest bidder. How high do you think this would go in todays economy? I can’t understand what is going on, I called and asked for what the maintenance fee would be for the year 2010 and was told that my balance is 0. They said I do not owe anything for 2010. However, when I go to Hawaii in Feburary and want to book my next year they ask if I have paid my maintenance fee for the year 2010 and what can I tell them? What web site can be used to protect yourself? Christina

Comment from robin burton
Time July 27, 2010 at 9:31 am

It is quite clear that this is an organization using theoretically legal, though highly immoral and unfair means, to extort money from vulnerable people. Around 15,000 people in the UK are currently affected. They are also creating the environment for scammers of a wide variety of types to thrive. They need to be stopped.

It seems that they have taken over the management of a holiday club (Grand Vacation Club) and then engineered changes in the rules to make it almost impossible for members of the club to dispose of their “points”. At the same time they have hiked “management charges” by 40% in one year. These management charges now cost members more than it would cost a private individual to rent an equivalent property all in.

This, unsurprisingly, has both destroyed the value of members’ points holding and left them with, in many cases, totally unaffordable charges. They have then issued threats to anyone slow on payment. These include late night phone calls from the US and warnings of referral to debt collecting agencies. I have no doubt that these tactics are causing serious worry to many people. Attempts to return points and to exit the scheme are met with the reply that you remain liable unless the points are sold (effectively impossible because of the way that their policies have destroyed all value).

For someone who is caught in the web (me), it seems impossible to get out. The only suggested options are bankruptcy and death. Even then it seems they demand that the liability be picked up by your heirs. This leaves members vulnerable to a large number of fraudulent offers from a variety of crooks. One attempt to defraud me was made only yesterday by someone who promised that if I gave him £5000 he would take on my points.

If ever a subject deserves coverage, this is it. Hopefully this is an evil which cannot flourish when exposed to the full light of public scrutiny.

Comment from lu
Time August 13, 2010 at 2:16 pm

Diamond Resorts must have so many complaints. They have exhorbitant maintenance fees and special assessments. On top of that, I find that their website is horrible to use for reservations. You can only book what is available at the time you get on line. There is no search function. However, they will gladly sell more points to so that I can become a Silver member and be able to search. RCI does that as a basic member service. They fooled me into paying money to convert my week into points, I will not be fooled again to give them any more of my hard earned money. I agree that it is absurd that I am paying more money than non-owners to stay at home resort and probably having a harder time booking a week if we don’t book in the 13 months ahead. There seems to be no way out without losing the initial investment.

Comment from Clay
Time December 10, 2010 at 8:55 pm

My Maint Fees for 2010 $6500! I am not rich, a government worker with two deeds, and 50,000 POINTS, but they charge you per point, not by deed.. This is crazy, I am going to sell it this year, don’t want to leave my kids this buren of payment, Motel 6 is looking better and better..

Comment from David/ Sue
Time January 8, 2011 at 8:53 am

We bought into Epic and then went to Sunterra. Not long after that Diamond Resots bought us and we are so disgusted with the fee rate increases.There must be something one can do to get rid of the property. We owe no balance on property, and have points ( not a particular week). Has anyone successfully stop paying fees and not had repercusions?

Comment from Bruce Rigsby
Time February 25, 2011 at 11:06 am

We would be very happy to include ourselves in a class action lawsuit against this unscrupulous and deceitful corporation. They need to be stopped and taken down. They ruin lives and cause enormous problems for the trusting people who fall prey to thier lies and scams. Please contact me if you are interested in starting legal action against Diamond Resorts.

Comment from Dave
Time March 30, 2011 at 8:20 am

I am a member of a group in the UK of over 1200 people who are refusing to pay this company another penny! We were lied to at point of sale and DRI have changed the rules to suit themseleves. I have seen no evidence of any refurbishment on resorts so where is the money raised from Management Fees going? People are becoming so desperate to get out of this companies clutches some are falling foul of the even less reputable resale agents. Things are so bad since this odious company took over you cannot even sell points on e-bay for a £1!! Mind you DRI now say you can only sell to another member through a resale agent appointed by them! What a surprise?!!

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