How does the Diamond Resorts scam work?


Quick Answer

The Diamond Resorts vacation ownership system, a time-share company, was accused by its members of improperly charging them for construction repairs, stacking the board of directors with company employees and preventing owners from organizing to protect their rights. The Association of Apartment Owners of Po‘ipu Point, Hawaii, filed a federal class action lawsuit against Diamond Resorts in 2012 after it attempted to hold vacation time-share owners responsible for $65 million in facility repairs, according to The Garden Island.

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Full Answer

The property in Hawaii is a 219-room hotel and vacation time-share resort managed by Diamond Resorts International that was determined to have serious structural problems, reports The Garden Island. When a property assessment determined the need for extensive repairs due to water intrusion, Diamond Resorts filed an insurance claim, but the insurance company declined to cover it, saying that the problems were caused by faulty workmanship and normal wear and tear.

Diamond Resorts was unable to sue the construction company because the statute of limitations had passed. It then began the process of charging time-share interval owners more than $6000 each, in addition to regular fees, to cover the cost. The owners disputed that they were responsible for the costs and filed a federal class action suit. The lawsuit was settled in November 2012, according to The Point at Poipu Owners Association.

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