Letter to South Carolina Real Estate Commission dated March 14, 2008
I am writing this letter to you to report an official complaint against Spinnaker Resorts of Hilton Head Island. We are currently owners of a timeshare at Egret Point in Shipyard Plantation on Hilton Head Island. This property is owned by Spinnaker Resorts and during our vacation trip in August of 2007; we attended a sales presentation given by Spinnaker as a means of selling additional timeshare units. We currently own another timeshare at Ron Jon Resorts in Cape Canaveral, Florida.
Despite the fact that we told our sales person, Chris Houck that we could not afford another timeshare, he falsely led us to believe that we could sell our unit at Ron Jon Resorts and purchase a second week of timeshare from Spinnaker. Thinking and trusting him that he could put us in contact with a company that could quickly sell our Ron Jon unit; we purchased the second week of timeshare committing ourselves to a seven year loan in the amount of $18,000.
After making two payments of $364 each and investigating the procedure that was being used to try and sell our Ron Jon unit, we quickly realized that the statement by Chris that the resale company resells timeshares all the time was a fraudulent misrepresentation of what actually could happen.
Spinnaker was very smart. They set up two loans, using equity in our 3-bedroom unit for partial payment on the new2-bedroom unit. That way, they set it up so that if we defaulted on the loan, we would lose both of our properties rather than just the new 2-bedroom unit. We told Chris Houck that this made us very uncomfortable because we did not want to do anything to jeopardize that property since it was paid for already. He said that Egret Point was paid for already and there was no way they could take both properties if we were unable to make payment on the new 2-bedroom unit at Waterside. In our sales presentation, Chris Houck told us that the equity used from our Egret Point property with Spinnaker would be returned to that property in a few days. We now know that was not the case or the truth.
We have since contacted Mr. John Cabaniss, Corporate Customer Service Manager for Resort Sales by Spinnaker and explained the situation to him. We mentioned that we are unable to continue paying on this loan for the property and requested that he try and get us out of this contract. I have attached a copy of the letter that we sent to John outlining our experiences with Mr. Houck. In the letter, we requested that because of the fraudulent misrepresentation that was made to us by Mr. Houck, we wanted out of the contract.
I have attached an e-mail from Mr. Cabaniss acknowledging receipt of my letter. We heard from Mr. Cabaniss on Monday, January 14, 2008. He proposed the following offer to solve our problem. They would take our 3-bedroom unit, which cost us $13,900 and was fully paid for, and sell us a 2-br flex unit at $19,900 and reduce our loan from $18,000 to $6,000. With this new offer, Spinnaker had raised the price of the same 2-br unit that they were willing to sell us in August from $18,000 to $19,900, almost a $2000 increase. Because of the way they set up our contracts and realizing that we could legally lose both our 3-br unit and the new 2-bedroom unit, we agreed to this arrangement.
Summarizing this situation, we are surrendering a 3-bedroom unit which Spinnaker is currently selling for $24,000 and getting a 2-bedroom unit in return plus we have to pay an additional $6,000. You can just imagine how we feel about this situation but we certainly didn't want to lose everything.
With so many people going into debt these days, it is very unfortunate that these types of sales practices are going on in the real estate industry. We didn't want to have foreclosure proceeding started on both of our properties since this would tarnish our excellent credit rating that we worked our whole lives to achieve. I certainly hope that some kind of action can be taken by you to prevent this unfortunate occurrence from happening to some other poor customer. Thank you for your attention to this letter.