In the world of suspect timeshare transfer activity, a common characteristic of transferees, both entities and individuals, that default on their HOA dues, is a lack of liquidity.
Liquidity (financial ability) is defined as having more assets than liabilities. So, as an example, if you have an LLC that has taken title to 100 intervals, the current dues liability for those intervals is approximately $75,000 (at an average of $750 per week). A balance sheet for the LLC would reveal whether they have sufficient liquid assets (cash equivalents) to cover the liability. The LLC can’t use whatever they claim the “asset value” of the weeks to be to offset the liability because the dues obligations are cash obligations.
What your HOA should ask for:
Asking for financial statements is a reasonable request when public records show a company has taken title to an unusual number of timeshare interests. The same is true for an individual. It is not unreasonable to require that they demonstrate the ability to meet their obligations.
You might want to write a letter that includes something similar to the following:
Public records show that Mr. _______ has recently taken title to _____ timeshare intervals. These timeshare interests represent approximately $___________ in annual cash obligations. Please provide proof that he has adequate cash liquidity or income to fulfill the obligations for the timeshare interests he has recently taken title to.
Typically a shell LLC formed for the purpose of taking title with the intent to defraud will not have a valid balance sheet or income statement. It is unlikely they will have any financial statements. Just asking for financial statements should have a chilling effect.