HOA Blocks $1 Sale of Timeshare

4/5/2013 6:07:00 AM, Sam Reynolds
EAGLE, Colo. (CN) - A woman sued the owners association of her Colorado timeshare for blocking her sale of her one-week-a year for $1 on eBay, which she says is all she could get for the place.
     Linda J. Space The Christie Lodge Owners Association in Eagle County Court.
     Space, of New Jersey, bought her week-a-year timeshare at The Christie Lodge in Avon, Colo., near Vail, in 2009.
     "At the time of the sale, Ms. Space had not used the timeshare in a while and no longer had use for the timeshare," the complaint states. "She had attempted to sell the timeshare to several other potential purchasers previously without luck. At the time of the purchase and through the present, Ms. Space had made all required management and assessment payments required by the Christie Lodge of Ms. Space as a timeshare owner.
     "The value of the timeshare at the time was severely diminished by market conditions and by the physical conditions of The Christie Lodge. As previously stated, she had difficulty finding individuals willing to buy the timeshare. As such, she attempted to sell the unit on the eBay website, a site where potential purchasers are allowed to bid on items for sale. After an extended period of time, few bids were placed on the property. The highest bid was $1. Ms. Space did not know the winning bidder and had never met the bidder before. Ms. Space accepted this offer.
     "In May 2012, Ms. Space notified the Association of the sale. The Association refused to acknowledge the sale. The Association stated that they would continue to bill Ms. Space for maintenance costs and for owner assessments. The Association would also not acknowledge the ownership, and not convey the benefits of ownership, to the buyer of the property found by Ms. Space. The Association based this denial upon the assumption that the proposed buyer of the unit would not be personally using the unit, only renting it to others. This was despite the fact that Ms. Space and many other timeshare owners had not personally used their units in years and there is no declaration that prevents a timeshare owner from renting timeshare weeks. In fact it is believed that many other timeshare unit owners rent their timeshare weeks when not using them."
     The Association claimed that the eBay bidder was "suspect," Space says. The claims that the rule it used to block the sale is ambiguous and arbitrary and unfairly allows the Association to block any sale that it "does not like."
     "The restriction under Rule K would label the transfer of any timeshare to an individual or entity who has not used the timeshare interest as suspect," the complaint states. "The rule defines a suspect transfer as 'a conveyance of a timeshare interest to a natural person or an entity ... who has not used the timeshare interest.' The restriction does nothing to prohibit fraudulent conveyances since fraudulent conveyance commonly occurs when an owner seeks to transfer ownership to a family member so that the owner can be relieved of the responsibilities of ownership but still be allowed to use the property. The family member would have used the timeshare interest and would be agreeable under Rule K. By labeling suspect those who have never used the property, the restriction encompasses all but those closest to the owner, thus actually encouraging transactions that are not at arm's length and discouraging arm's length-transactions and promoting transfers to 'insiders' and transactions where debtor 'remains in control' as defined by CRS 38-8-105.
     "Further, the Association can, under Rule K, label as suspect any transfer it simply believes as suspect. This allows the Association to define suspect on its own and apply its power in a capricious manner.
     "The proposed transfer of Ms. Space was not a fraudulent transfer. It was an arm's-length transaction with an individual [with whom] Ms. Space had no prior or subsequent relationship. The price of the transaction was set by the open market for the unit since the sale price was open to bid by all."
     Other timeshares in the area go for more than $1,000 a week, but Space says her maintenance fees cost more than her timeshare is worth.
     She also wants access to surveys the Association conducted of its owners, which she says would shed light on "low customer satisfaction," and documents that would reveal that the Association let similar sales go forward.
     But she says that the tight-fisted owners association even pocketed the cost of a few copies.
     "Instead of providing these and other documents at the price of photocopying, the Association denied or sought to frustrate access to these documents by charging an inflated price to access these documents and by refusing to send documents that Ms. Space did pay to photocopy," her complaint states.
     She seeks declaratory judgment and damages for unjust enrichment, breach of its own rules, unreasonable restraint on alienation of property and interference with contract and a prospective business relationship.
     She is represented by Jeffrey Pederson, of Wantage, N.J. Attachment