Wednesday, February 13, 2019

Something’s Fishy With This Broker’s Fiduciary Responsibilty

Look at these listings, the first page of many, that I found on a timeshare broker’s site for Wyndham points at their Bonnet Creek property. 

POINTS    PRICE
400,000  $48,500 
154,000   $1,900
126,000    $17,000
105,000    $11,000
189,000     $21,000
 64,000      $12,000
 84,000       $10,352
320,000     $21,900
 84,000      $152,258
126,000      $8,500
105,000      $10,500
168,000      $11,281
105,000      $8,600
128,000      $15,832
 84,000       $12,277.70
511,000       $60,000
525,000      $28,000
 84,000        $12,507
166,000       $12,130

I don’t know about you, but these listings make absolutely no sense and send a clear warning sign that something is amiss. All of these listings are for the same resort and all are for points. Points, for those of you unfamiliar with timeshare, are the ‘currency’ whereby an owner has access to a reservation system. You don’t actually own much of anything. So while no one house or condo is exactly the same-difference with lot size, view, layout, floor of building, etc. , points at a resort are all exactly the same. 

Now how is it that in this broker’s exact words from their own website; “15 years of experience and an outstanding reputation in the timeshare industry, our licensed real estate agents are vacation ownership experts and we promote timeshare listings using extensive digital marketing
that provides exposure to prospective buyers from across the globe” they can charge such drastically different prices for the exact same product while all the while, operating with the seller’s fiduciary interests at heart?

One of the reasons I tell people to work with a broker when selling their timeshare is that in theory, a broker will help owners determine a sensible price to list their timeshare for in order to maximize their chances of a sale. 

If these insane listings aren’t bad enough, a quick glance at Sharket.com will clearly show that the average selling price of a timeshare at Wyndham Bonnet Creek dating back from 2012 is $1,000 based on more than 1,000 verified sales. 


Something is fishy here and this broker has some questions they need to answer. 

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Friday, February 8, 2019

There Aren’t Enough Cliches To Describe These Proposed Laws

The people who run the very large timeshare industry in Florida have proposed some significant changes to the existing laws as they pertain to the so-called timeshare exit companies. 

You can read the entire proposed bill here:  http://m.flsenate.gov/session/bill/2019/435/billtext/filed/pdf

Now while I agree that consumers are being ripped off at an alarming rate by the vast majority of these firms, some, if not most of the proposals being put forth are laughable. If this isn’t a case of the pot calling the kettle black, I don’t know what is. 

While these proposed rules and oversights directed at timeshare exit companies, are well intended and do provide some protection for consumers, I feel strongly that they go above and beyond current rules and oversights in place for the timeshare industry. If the legislature chooses to implement these rules, I ask that similar rules be implemented for the timeshare developers engaged in the sale of timeshare interests, whether weeks or points. 

In particular I find that if the consumer is to be provided with a copy of the agreement to review at least 1 business day before the purchaser is to sign the agreement (Lines 316-318), the same methodology must be implemented by the developer attempting to sell a timeshare interest. It’s important to remember that the current paradigm of a “90 minute sales presentation after which the consumer is forced to make a purchasing decision or forfeit their right to make a decision in the future without benefit of seeing, much less reading the contract, POS, etc.” was instituted 40 years ago by the timeshare industry and can be easily changed if they wanted to change it. 

Additionally I find that if exit companies are to perform “random recording and testing of the oral representations made by employees or independent contractors
engaged in sales or other customer service functions, if the provider uses telemarketing” the timeshare developer should do the same as a way to protect the interests of the consumer. 

If a consumer is to be informed about options before dealing with an exit company, then should timeshare developers not give out similar options to consumers, such as AirBnB, etc?  At the very least, the timeshare seller should be required to make it clear that they are working in the interests of the developer, such as a real estate agent must disclose they are a seller’s agent. 

These are just a few of what I consider salient points of this proposed legislation that deserve a very careful review. As I said, at first glance it seems both innocuous and a boom to consumers. Read it again. 

Of course, none of these proposed rules and oversights would be necessary for timeshare exit companies if in fact the timeshare developers themselves offered viable alternatives for consumers who for one reason or another, do not want their timeshare interest any longer. The timeshare industry has done everything in its power to suppress a secondary market, thereby opening the doors for these exit companies to thrive as consumers feel they have no other choice. 

If you feel strongly about this, as I do, here’s who you should contact

Senator Travis Hutson

Representative Mike LaRosa

Representative Wyman Duggan


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Friday, February 1, 2019

Governor Bryan Wants Overhaul of Timeshare Sales Regime in USVI

The United States Virgin Islands won't have a timeshare amendment added to the books this year, after newly elected Governor Albert Bryan took a strong, independent stance and vetoed Timeshare Bill 32-0351. The American Resort Development Association (ARDA), the industry trade group of developers in the United States, drafted what it called a new set of "model laws" that would take recent changes in the industry into account. 

What were those changes? In the most basic terms, the current laws in the USVI are similar to most states in the U.S. which are structured around the sale of deeded timeshare ownership, which is real property, as opposed to what many consider a service contract of a points club membership which do not involve any real estate interest whatsoever. Today, nearly every major resort developer sells a points model program with only a small number  still selling the original deeded vacation product. So ARDA worked to get their bill sponsored and lobbied aggressively to get it passed through the territory's legislature. 

Many observers agreed that this bill favored developers to the detriment of the consumer. Last year, ARDA also filed litigation against the territory after the "timeshare room tax" was deleted and replaced with an impact fee that appeared to have no difference in cost to consumers, but had apparently never been enforced. Developers said those extra fees would make it more difficult for them to sell vacation club points to members. 

While ARDA was seeking to get its "model" amendments added to the existing laws, both the litigation and perhaps more importantly the recent changes to the vacation club product seem to have crossed the Govenor's desk at the same time. In one of his first acts, he decided not to sign the bill and requested instead that the legislature act on a comprehensive overhaul of the timeshare sales regime to include ownership rights, sales protocols, licensing and regulation of salespersons, property taxation reporting and foreclosure.  

This more stringent overhaul sends a clear message that Governor Bryan is not willing to settle for the same old practices that have been in place and perhaps signals that consumers need more protection than had been previously granted them in the US Virgin Islands. 

Sources: 

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