Rogue Resorts

The phrase ‘Rogue Resort’ is another expression coined by yours truly.  It refers to a resort (or it’s management company) that is in the habit of unlawfully refusing to acknowledge the transfer of a timeshare ownership.  Since the 1990’s there has been an ever increasing number of owners ‘dumping’ their timeshares in one way or another.  Resort managers fear that if the trend continues (and it has…big time) poorly run resorts will be forced to close due to lack of income, thus the resort managers will lose their jobs or the resort management companies will lose their lucrative contracts (and they have).  In an attempt to keep their jobs they’ve been trying every which way to prevent owners from escaping the ever-increasing maintenance fees that pay those lucrative management contracts.  Many go so far as to using unlawful tactics. I’ll attempt to explain.

The transfer of a timeshare ownership is quite the same as the transfer of a home or condo (For the sake of simplicity, in this piece we’re going to discuss ‘deeded’ timeshares which make up the vast majority of timeshare ownership in the United States).  The vehicle used to transfer ownership of real estate is called a Deed.  The deed basically identifies the property and states that the current owner is handing over ownership of said property to the new owner.  The current owner signs the deed and hands it to the new owner.  Voila!  (That’s French for Eureka!)   The transfer of ownership is complete.  Keep in mind that this new deed needs to be recorded in the county records to make it ‘official’, however technically speaking the ownership changed hands when that deed was signed and handed over to the new owner. 

To understand the unlawful acts of a Rogue Resort one must first understand a few of the legal responsibilities a resort (or its management) has when it comes to maintaining the records of its owners.  First, it’s important to understand that resort management has no authority to decide who can or cannot own a timeshare. This would open the door to discrimination, and there are laws that protect against this.  The responsibility of a resort is to be the keeper of the records.  When a timeshare ownership is properly transferred the resort is required to acknowledge the transfer by removing the exiting owner from their records and adding the new owner.  The resort management must now treat that new owner the same as all other owners.  The new owner is provided with all the benefits of ownership in that resort and is also made responsible for maintenance fees, taxes, etc.  That’s it.  That is the extent of the resort’s responsibility with regard to new owners and old owners. 

Rogue resort mangers have been known to make up new  (unlawful ) ‘rules’ regarding the transfer of ownership in an attempt to curb escaping ownership.  A common rule is an exorbitant Exit fee, commonly referred to as a ‘Resort Transfer Fee’.  In most cases this fee is set so high (they range up to $8,000 or more) as to deter anyone from actually transferring their ownership.  Another common new rule is the requirement of the new prospective owner to provide lots of personal information such as social security number, drivers license, passport, and submit to a credit check in order that the resort may ‘consider’ you for arbitrary approval.  May I remind you that none of this is legal as it opens the door to discrimination? 

Imagine for a moment that you are selling your home.  Does the Mayor of your town have the authority to ‘approve’ of the people you are selling to?  Can the Mayor demand to see a driver’s license, or require a credit check before he ‘authorizes’ the sale of the property to the new owners? Of course not.  The Mayor has specific duties and responsibilities.  His duties might include keeping the streets clean, managing the police and fire departments, etc.  His responsibilities might include sending you the annual real estate tax bill and making sure you pay it.  But when it comes to determining who can or cannot be the owner of your home, the Mayor has no authority.  It’s the same with a condominium association or a homeowner association or a timeshare resort.  The Board of Directors and/or Management Company are responsible for running the place (cleaning, maintenance, guest service, etc.) but have no authority to decide who can own a timeshare, nor can they create new rules as to how ownership is legally transferred.

Resort managers have been getting away with these sorts of shenanigans for many years but are finally seeing some pushback.  A few disposal firms and a whole lot of attorneys have been taking on the resorts and have been calling them out on their unlawful ways.  Slowly but surely the timeshare owning community is being educated as to their rights as owners and the fiduciary of the managers whose salaries and contracts they pay.  Many have made complaints to State Attorneys General and slowly but surely some are taking up the mantel on behalf of their constituents.  One fairly large management company recently received a written ‘spanking’ by the Florida Department of Business and Professional Regulations. We need more of these spankings to occur. However I fear that with the seemingly limitless amount of money behind the timeshare management companies, not to mention the political power that this money has been known to purchase, the battle will continue to be long and difficult.