Ocean Shores, WA

If your interested in purchasing real estate in Ocean Shores, Washington, be careful!  Many of the lots in Ocean Shores are part of a scam called the Ocean Shores Community Club.

This club, the product of the club’s attorney, Michael Valdez, is simply a social club – a cash cow for Mr. Valdez since he is on retainer and his office gets ALL the legal work which this situation created.  The club offers nothing other than recreation services and yet it has liens on member’s home to insure dues payments.  This is a private club in an incorporated town that is not part of a homeowners or condominium association and because of that, is illegal under Washington State law.  Only a questionable bankruptcy court proceeding insures it’s continuance.  This club, via it’s attorney, can, will, and have foreclosed (or forces the banks) on hundreds of properties for failure to pay dues.

We call this club a scam because a large number of members are denied their property rights as club members and banned from participating in the governing process.  The club’s attorney declared any attempt to change the dues collection stream (to voluntary) would be detrimental to the financial stability of the club (we would argue it’s the members’ right to determine whether or not it would be detrimental).  Through a “Loyalty Oath” (that is not required in either the by-laws or articles, thus illegal) for holding a position, the club eliminates any attempt to place someone on the board who favors voluntary membership.  Thus, this is not a club run by the members, but by the club’s attorney and a very small number of people.

By denying a large body of members their right to serve on the board and make changes, and interfering with the election process, the Club is no longer a legal operation and is now nothing more than an extortion scheme to take money from members who do not wish use the club’s facilities.

If you think we’re making this up, we’re not.  It happened to us.  Robert tried to run for the board, but refused to sign any loyalty oath that was not required by the club rules.  He was denied because he wouldn’t sign.  A couple of years later, he ran again.  Within FOUR DAYS of filing with the club, we were served with an injunction from the court (which we could not afford to fight) that took away our right to seek a board position, speak to any member about the voluntary membership, and denied us the use of the courts for redress.  They were waiting for us and didn’t seem to mind they were violating their own by-laws, articles of incorporation and the bankruptcy decree, in doing so.

That’s when we abandoned our house and left Ocean Shores for good.

The legal mess was just beginning and then was compounded by GMAC (the mortgage service company of General Motors).  A refinance loan from 2008 had never been recorded against the house!  Around this time, a company called OCWEN took over from GMAC and it took three years of dealing with multiple “account representatives” and a run-a-round job that would impress the best, before we discovered OCWEN had a ombudsman.  It then took another two years for their lawyer and our useless lawyer, to work out the paperwork.  All in all, it took six years before we got clear of Ocean Shores.

We, like a great many others in town, were never told about the club having liens, in fact, our agent told us the property was “free and clear”.  Our bank, USAA, also failed us.  Their policy was not to make loans on properties with liens.  Yet, they gave us a loan.  Buying our first home we relied and trusted the “professionals”.  Big mistake.

How this situation can exist in a city in America is beyond belief, but seems small potatoes compared to the rip offs on the national scene.

A more detailed discussion and documentation about the club’s bankruptcy can be found HERE.