The claims of more than a thousand people who say they were cheated of their investments in vacation "time-share intervals" in Ocean City condominiums will be the subject of a Dec. 15 hearing before the Maryland Real Estate Commission.
Claims talleyed so far total nearly $2 million and "we're still counting," said Martin Kandel, attorney for the commission. He said the amount could double by the time all the claims against Seatime Associates Inc. are added.
The affected buyers, including many from the Washington area, are seeking reimbursement from the state's Real Estate Guarantee Fund, established to aid people who have been damaged by the misconduct of licensed brokers and salesmen.
At the hearing, the commission will first determine whether the fund is liable in the Seatime case, and if so, how much will be awarded. The two principal officers of Seatime were licensed brokers and salesmen, making it likely that the commission will rule that the fund should reimburse the buyers, Kandel said.
The fund now contains about $1.25 million. Officials hope that only about $900,000 will be needed to pay off the debts and claims against the time-share holdings, enabling all the affected buyers to receive clear title to their intervals. Buyers with claims are being represented by the Seatime Timeshare Interval Association, made up of time-share owners in the two buildings, Kandel said.
The real estate commission and the state Consumer Protection Division filed suit in early September, charging that Seatime sold intervals in condominiums to which it did not hold a clear title, sold time shares in three units that it never owned and, in some instances, sold space in the same apartment for the same period to more than one person. According to court documents, the company is insolvent and the whereabouts of its former president, Kenneth Puckett, are unknown. Retired circuit court judge Daniel T. Prettyman was appointed receiver to direct the company's affairs.
Kandel said "several substantial offers" for Seatime's unsold intervals have been received. The available intervals include "many prime weeks" with a total retail value of about $1 million, he said. Proceeds of the sale would be used to reimburse the guarantee fund.
Seatime marketed vacation time in 54 of the 100 condominiums in two buildings, selling customers fractional interests, usually for one or two weeks, on a long-term basis. The popularity of purchasing fractional ownership of vacation property made time sharing a $1.3 billion industry last year, although its image has been tarnished by the failure of several resort projects.
The hearing is scheduled for 1 p.m. Dec. 15 at 501 St. Paul Place in Baltimore.