Scared to death by the restrictions on resale pts thread

[ftballfan7]

i think the "hub" is the bottom line. Not for me, but
for disney. All the rumors are the spokes leading out
& going in circles. However, i don't think the business
end, are missing all, the trends & how they can effect
their incomes, including potential incomes.

This ship has more than one hole. Therefore, i think it
is self evident , that dvc has many, many changes
they can make.

huh?

 

[dizfan]

DVC is management of the timeshare and DVD is the sales arm. DVD controls all the exchange type perks including DC, DCL, RCI, etc. In addition, per the POS, members have signed away their rights to vote for all but things that would significantly and obviously affect a majority of the membership in a negative way.

As to fiduciary responsibility, realize that this refers to management of the timeshare, something that they do fairly well, IMO. They are not involved in sales or resales, this is DVD's area which is technically and legally separate. They can't be responsible for something not under their control. In addition, the POS clearly states that one should not buy with the expectation of resale or rental and they are required by state law to include such language. You actually need to read both statuetes 718 & 721 to get a full picture. In addition, there are a number of individual rules that come under the statutes.

Dean, thank you for explaining this.

 

[Debbie & Bill]

Marriott Vacation Club sales people use this deception to taint resales, I wrote Mr. Marriott and got a letter back that resales are treated the same, minus Marriott rewards point option for points, small problem. It's most likely the sales people spreading the rumor.

 

[dmoore22]

Marriott Vacation Club sales people use this deception to taint resales, I wrote Mr. Marriott and got a letter back that resales are treated the same, minus Marriott rewards point option for points, small problem. It's most likely the sales people spreading the rumor.

Since this discussion was triggered by statements made by a salesperson perhaps this information from a consumer guide relating to timeshares may be appropriate:

"Many advertising and sales practices are prohibited. Some examples of prohibited activities are:

Making false statements to get potential buyers to make a purchase;

Making statements that an offer is only good on that day;

Misrepresenting the value of a timeshare interest;

Claiming that a timeshare is a financial investment;

Making oral statements that contradict the terms in the written documents;

Misrepresenting the length of the sales presentation;

Failing to clearly disclose a timeshare seller's identity and that timeshares are being offered for sale, at the beginning of an initial contact with a prospective buyer;

Failing to make certain disclosures on any advertising material, including any lodging certificate, gift, award, prize, premium, or discount;

Failing to comply with certain prize notification requirements, if a mail or coupon is sent to prospective buyers;

Failing to put certain information in a timeshare contract that is required by law;

Failing to provide a complete and accurate timeshare disclosure statement containing all of the information required under state laws;
Failing to honor a buyer's cancellation request when cancellation is timely requested;

Breaching an express or implied warranty relating to a timeshare."

 

[Dean]

Marriott Vacation Club sales people use this deception to taint resales, I wrote Mr. Marriott and got a letter back that resales are treated the same, minus Marriott rewards point option for points, small problem. It's most likely the sales people spreading the rumor.

UP until this past June this was sort of true. In addition to the points options (some with resale actually had them, myself included), there were restrictions on the ability to do the resale in house and in the option of having equity upgrades. Non worth a lot but more distinctions than you were quoted. Starting this past June, there are other changes. There is a significant price difference to join the points program using existing memberships, that price difference could be as much as $1300 if ANY of the memberships one wanted to convert are resale even if part are retail. In addition, those who do not convert will lose out on the free II account, free internal exchanges (still an option for a fee at least for now) and the ability to trade into other resorts as much as 13 months out. They will also have little options going forward for any new resorts or any inventory sold under the new points program. OTOH, anyone can join the program if they were a listed member as of the change date and pick up the new options subject to how many points they have and the perks within (they created a limited VIP program with this change).

 

[Dean]

Since this discussion was triggered by statements made by a salesperson perhaps this information from a consumer guide relating to timeshares may be appropriate:

"Many advertising and sales practices are prohibited. Some examples of prohibited activities are:

Making false statements to get potential buyers to make a purchase;

Making statements that an offer is only good on that day;

Misrepresenting the value of a timeshare interest;

Claiming that a timeshare is a financial investment;

Making oral statements that contradict the terms in the written documents;

Misrepresenting the length of the sales presentation;

Failing to clearly disclose a timeshare seller's identity and that timeshares are being offered for sale, at the beginning of an initial contact with a prospective buyer;

Failing to make certain disclosures on any advertising material, including any lodging certificate, gift, award, prize, premium, or discount;

Failing to comply with certain prize notification requirements, if a mail or coupon is sent to prospective buyers;

Failing to put certain information in a timeshare contract that is required by law;

Failing to provide a complete and accurate timeshare disclosure statement containing all of the information required under state laws;
Failing to honor a buyer's cancellation request when cancellation is timely requested;

Breaching an express or implied warranty relating to a timeshare."

These will vary somewhat by state. Plus one must prove this happened in a legal way. Almost impossible in most situations. Realize that family witnesses are not going to fit the bill. This is one area where reality is king, the rest just mental gymnastics.

 

[dmoore22]

These will vary somewhat by state. Plus one must prove this happened in a legal way. Almost impossible in most situations. Realize that family witnesses are not going to fit the bill. This is one area where reality is king, the rest just mental gymnastics.

That's where the maxim "Get it in writing before signing on the dotted line" comes into play. In conjunction with activating the voice memo feature on the smart phone. Or just ask the salesperson if he/she minds if the conversation is recorded. It's saved me many times.

 

[NewDCLGuy]

As to fiduciary responsibility, realize that this refers to management of the timeshare, something that they do fairly well, IMO. They are not involved in sales or resales, this is DVD's area which is technically and legally separate. They can't be responsible for something not under their control. In addition, the POS clearly states that one should not buy with the expectation of resale or rental and they are required by state law to include such language.

I completely agree that Disney has done an excellent job managing the timeshare. I can't think of anything they've done - even the controversial stuff - that can't be justified as being in the best interest of the owners. Which makes it difficult to believe they will suddenly take actions that clearly harm the members for the benefit on increasing sales.

The "technical legal and separate" argument is common in fiduciary situations. Bankers are often also trust officers for instance. And there is a ton of precedence that "switching hats" doesn't automatically relieve the fiduciary obligation. Courts and regulators have been extremely skeptical of such claims and have required dual-roleplayers to conclusively prove that the non-fiduciary didn't benefit in any way from the fiduciary role. A fiduciary has an obligation to avoid even the appearance of self-serving. Given that DVD and DVCMC are run by the same people in the same building, that's going to be tough to show if DVD decides to start harming members for their own benefit.

I don't see how the POS disclaimer limits the fiduciary obligation. Trust agreements are full of disclaimers. The fiduciary isn't required to produce good outcomes for the client. But they are always required to act in their interest.

You actually need to read both statuetes 718 & 721 to get a full picture. In addition, there are a number of individual rules that come under the statutes.

I've certainly read both 718 and 721. I didn't see anything in 718 that eliminates the fiduciary obligation. Did I miss something? As I've said repeatedly, I'm no expert on timeshare law. I want to learn. I'm not being a rhetorical snit here... if there is something I'm missing, I genuinely want to know. What are these "individual rules"? Do they eliminate the obligation?

I see a statute that says they must act as a fiduciary. I know a bit about fiduciary obligations. I assume those apply. If there is something that says they don't, I'd love to hear about it.

 

[Dean]

That's where the maxim "Get it in writing before signing on the dotted line" comes into play. In conjunction with activating the voice memo feature on the smart phone. Or just ask the salesperson if he/she minds if the conversation is recorded. It's saved me many times.

That's just it, anyone purposefully misleading you won't give you proof to the contrary plus given the riot act they're all read, they generally won't give you anything that is not company sanctioned for fear of if being used against them later. Also, recording without consent of the other person in one form or another is a pretty serious crime.

The "technical legal and separate" argument is common in fiduciary situations.

Of course there's no accounting for what might happen if the courts get involved but a number of large and reputable companies take the same stance (Disney, Marriott, Bluegreen, Wyndham). In many cases not only have they driven the resale value to zero, they have created a VIP system that says that not all members are created equal that has largely been responsible for further erosion of resale values. As for the Statues, I was merely pointing out where the rules were and I was not suggesting that they specifically spoke to this issue other than the general statement you quoted and the disclaimer that must be included in the POS that I referenced. You quote bank execs when wearing multiple hats, I'm guessing there is plenty of case law on that subject. I think the difference here are that there is no case law suggesting what you're asking about and that the management company itself has little to no control over resale value.

 

[Brian Noble]

As I've said repeatedly, I'm no expert on timeshare law. I want to learn.

I'm not a lawyer, so I can't speak to the legal questions. However, the simplest argument for "they can" is that "almost every other timeshare developer has." And, nearly every one of those other developers does business in Florida---some are headquartered there. Presumably, if it were an easy case to make, those timeshare developers would have already been found to be afoul of the relevant statutes. They haven't. So, the requirement you imagine either (a) doesn't really exist or (b) hasn't been pursued carefully in the courts just yet.

Given the size of many of these systems---hundreds of thousands of families in some cases---the chances that none of those families has a clever lawyer with a bit of time on his or her hands seems pretty remote. So, while a legal action could eventually prevail, Occam's Razor suggests that it wouldn't.

 

[bookwormde]

Last I checked the other timeshare boards (6 months ago) there were active regulatory complaints and some lawsuites around the creating of new "classes" of members after the fact.

 

[Brian Noble]

I spend a lot of time on most of those boards. Most of those complaints end up going nowhere. Initiating an action and prevailing are two entirely different things. Indeed, the fact that people have tried and failed is even better evidence that this supposed requirement does not exist.

 

[NewDCLGuy]

I'm not a lawyer, so I can't speak to the legal questions. However, the simplest argument for "they can" is that "almost every other timeshare developer has."

Brian,

Would you be willing to provide some background on what the other developers have done? I know many have retail/resale restrictions, but those could have been set up initially or put in place via the addition of something that helped the membership as a whole.

Have other timeshare managers really implemented changes that harmed the ownership as a whole for their own benefit?

 

[Dean]

Brian,

Would you be willing to provide some background on what the other developers have done? I know many have retail/resale restrictions, but those could have been set up initially or put in place via the addition of something that helped the membership as a whole.

Have other timeshare managers really implemented changes that harmed the ownership as a whole for their own benefit?

In post 139 I gave you a summary of the Marriott info with more info in post 185. I can also tell you what BG has done over the past few years, given I came into their system in the middle of some of these changes, look at the big picture.

First, they created a VIP system with 3 levels (base, Silver & Gold) where those in higher levels had the opportunity to book earlier, have less fees and get other perks like free off season weeks to use or exchange. At this time banked and borrowed points were the same as any other point but you had to remember to bank much like DVC. Then they made the points bank automatically but made banked points able to only be used for lower seasons (Adventure to Dream wold be comparable). Somewhere in here they made it where that you could book less than a week at any time where previously you had to wait until 5 months out) Then they added 2 more levels (Bronze & Platinum) further strengthening the benefits for the highest levels and reducing the benefits accordingly for those at the lowest levels. Then they made it where resale points didn't count for those levels (some exceptions) unless bought from them resale. The most recent change was to set a min price that one must pay to get those benefits even if bought resale directly from their resale arm. The price is somewhat equivalent to around $75 a point as a ROUGH guide. So there were some positives to everyone and huge positives for the few top owners. BG is based in FL and they have a number of resorts there. Marriott is also based in FL