[2016 - Lennen v. Marriott]

[JIMinNC]

I agree with the article. The value of my Manor Club week went down substantially after the points system was introduced. They said they wanted to add flexibility, however, my week was devalued by Marriott. I used to trade for another Marriott annually. Now, with the points I get from Marriott, I can trade for another Marriott every other year. I also notice that is is much harder to get another week as most are probably not trading anymore. Plus, my maintenance fees have increased from $546 (2001) to $1,261 (2016) per year!!! Hopefully something comes out of the lawsuit. I feel like I'm being held captive by Marriott since they can raise price/point at anytime and change what my week is worth anytime as well.

Your week has not been devalued as you imply. As an enrolled owner, you do not have to elect for points. You can continue to use or trade your week as you always have through II.

Secondly, the II exchange option is not, and never has been, a "right" of ownership. The legal documents clearly state that it is an enhancement to the base owner rights and can be changed or eliminated at Marriott's option. The only true legal right you have is to use your week at Manor Club in your season. Anything else is a special benefit that Marriott is free to offer or remove at any time. It would certainly be unfortunate if Marriott eliminated the exchange benefit (not likely), but they are 100% free do do this per the contracts we all signed at purchase. I don't see how any "devaluation" of trading benefits is something that can be successfully challenged in court. There never was an absolute legal right to trade.

Your maintenance fee increase comes to a little over 5% a year, which is in line with other Marriotts. The maintenance fee issue has been beat to death recently in This Thread.

I don't think you are being held captive at all. You can always sell your week if you think it is no longer working for you. Before we bought Marriott we owned in another system that no longer worked for us, so we sold it and bought Marriott.

 

[Lv2Trvl]

JiminNC - I agree with your summation. Our weeks are just as valuable as before the points were added. We all read and understood (or should have) what we were purchasing. In our case, we think the points have added value to our weeks.


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[Ralph Sir Edward]

Your week has not been devalued as you imply. As an enrolled owner, you do not have to elect for points. You can continue to use or trade your week as you always have through II.

Secondly, the II exchange option is not, and never has been, a "right" of ownership. The legal documents clearly state that it is an enhancement to the base owner rights and can be changed or eliminated at Marriott's option. The only true legal right you have is to use your week at Manor Club in your season. Anything else is a special benefit that Marriott is free to offer or remove at any time. It would certainly be unfortunate if Marriott eliminated the exchange benefit (not likely), but they are 100% free do do this per the contracts we all signed at purchase. I don't see how any "devaluation" of trading benefits is something that can be successfully challenged in court. There never was an absolute legal right to trade.

Your maintenance fee increase comes to a little over 5% a year, which is in line with other Marriotts. The maintenance fee issue has been beat to death recently in This Thread.

I don't think you are being held captive at all. You can always sell your week if you think it is no longer working for you. Before we bought Marriott we owned in another system that no longer worked for us, so we sold it and bought Marriott.

I concur from just the opposite perspective. I found that post points, availability of my home weeks became a problem. So I sold my Marrriotts back to Marriott, and bought Bay Clubs with the proceeds. (one annual and two EOYs). Net cost was about $1600, plus a bump in MFs of about $800 a year. (But I'm in Hawaii in the winter!)

HGVC's point system suits me perfectly. I have no problem with availability in the owner's only window, which is all I care about.

Choose the system that best fits your needs - you'll be happier in the long run. . .

 

[answeeney]

Like most posters, I think that the lawsuit will fail. The DC system also works for me so I have a vested interest in not wanting it damaged.

However, I do think the lawsuit is yet another an indication of how, despite much regulation, timeshare sales are still too much like the wild west.

I also feel a bit uncomfortable about the alacrity with which many tuggers point to the small print in support of Marriott's bad sales practices. Yes, it is absolutely correct that legally speaking the buyer of a week is only entitled to the week in their season but this is definitely, absolutely, not what the vast majority of them (not being knowledgable tuggers) thought they were buying. 90% of every presentation focuses on all those other resorts and locations that buying a week can gain you access to, whether through MRPs or II. The week you purchase is just your entry fee to the club. And yet when these options are devalued or removed the answer is always - you should have read the small print.

Imagine if investments were sold on the basis that they can only go up in value. Do you think the salesman would get a free pass by just pointing at some small print?

 

[JIMinNC]

Imagine if investments were sold on the basis that they can only go up in value. Do you think the salesman would get a free pass by just pointing at some small print?

That's why virtually every piece of marketing material that a licensed investment broker uses is required to contain language (generally at the bottom, and not always in prominent places) that discloses that investments can and do lose value. Most investment sales people emphasize the historical performance gains over time. They don't focus on the bad years - but like timeshare contracts, the information is there if you read the prospectus and do your homework. So it's sorta in the fine print there too - "Past performance is no guarantee of future returns."

 

[answeeney]

That's why virtually every piece of marketing material that a licensed investment broker uses is required to contain language (generally at the bottom, and not always in prominent places) that discloses that investments can and do lose value. Most investment sales people emphasize the historical performance gains over time. They don't focus on the bad years - but like timeshare contracts, the information is there if you read the prospectus and do your homework. So it's sorta in the fine print there too - "Past performance is no guarantee of future returns."

The warnings for investments are not in the fine print but are far more prominent e.g. key features documents. My point is that timeshare sales can get away with burying the risks and putting a spotlight on features that can be removed at any time.

 

[davidvel]

The biggest problem with these lawsuits (class actions aside) is what is evident in these threads: the attorneys know little to nothing about the underlying governing docs, disclosures, etc. I've personally spoken to more than one of these [proposed class] counsel.

Nearly all the people on TUG know 100x what they do about the structure, and just glom onto the 'devalued my interest" theory.

 

[BocaBoy]

It seems to me that many of the posts here are missing a critical point of the lawsuit, namely that this is not a real estate investment but is marketed as one. Not to argue to merits of the case, because I really do not know, but a layman's common sense says this is an ownership interest in a trust that happens to own real estate. Why, the laymen might say, is that different from an investment in a REIT that happens to own real estate? Shareholders in a REIT do not have a real estate investment. It may well be that the trust vehicle passes through that ownership as a technical matter where a REIT does not, and that is technically why the lawsuit may fail. But I have sympathy for the plaintiff's argument.

 

[BocaBoy]

Yes, trust points owners do have the right to vote their shares. Cheers.

In the sense that I meant? I doubt it. Voting for trust officers or Board members is not the same as voting as an owner of real estate on the issues at each property, which is what you would be able to do if you were really an owner there.

 

[dioxide45]

Sit is often the small print and T&C that get companies in to trouble in these lawsuits. You can't market your product one way and then have your small print and T&C say something else just to get around how you are marketing the product. If Marriott is selling the DC trust as a real estate investment and the plaintiffs can prove it, then they likely have a very good case regardless of what the small print and contracts say.

 

[SueDonJ]

We've talked about a few lawsuits filed since the DC related to selling practices, perceived devaluations and limited exchange opportunities. Don't know if these are still making their way through the courts or if they've been resolved but I'm dropping the links here for reference:

Lawsuit against Marriott over forced title insurance [McIntyre v. Marriott]

lawsuit sterman v marriott - any more info?

class action suit [Desantis v. Marriott] (The Orlando Sentinel article linked upthread about this newest lawsuit says this Desantis action, "was tossed out by Orlando U.S. District Judge Gregory Presell.")

New class action suit [Abramson v. Marriott]

 

[SueDonJ]

The biggest problem with these lawsuits (class actions aside) is what is evident in these threads: the attorneys know little to nothing about the underlying governing docs, disclosures, etc. I've personally spoken to more than one of these [proposed class] counsel.

Nearly all the people on TUG know 100x what they do about the structure, and just glom onto the 'devalued my interest" theory.

I agree it seems the one thing they all seem to have in common is that the lawyers get an education as they go, rather than reviewing the docs in preparation. Seems a waste of their clients' time and money.

 

[Fairwinds]

It seems to me that many of the posts here are missing a critical point of the lawsuit, namely that this is not a real estate investment but is marketed as one. Not to argue to merits of the case, because I really do not know, but a layman's common sense says this is an ownership interest in a trust that happens to own real estate. Why, the laymen might say, is that different from an investment in a REIT that happens to own real estate? Shareholders in a REIT do not have a real estate investment. It may well be that the trust vehicle passes through that ownership as a technical matter where a REIT does not, and that is technically why the lawsuit may fail. But I have sympathy for the plaintiff's argument.

Right you are. And although I think it's interesting I chose not to dive in on the primary complaint because I knew I would be in deep water very quickly. This is a first for me and I'm quite proud.

 

[JimC]

I agree it seems the one thing they all seem to have in common is that the lawyers get an education as they go, rather than reviewing the docs in preparation. Seems a waste of their clients' time and money.

Hopefully for the clients it is a contingent fee case, so clients pay nothing unless they win.

 

[freediverdude]

In DVC, you actually own a piece of a leasehold condominium as the contract, whereas in this Marriott thing it looks like you only own points, no mention of owning a percentage interest in unit X of property Y, etc. There's a thread over on the Disboards discussing it and quoting pieces of the contracts. I agree that if you only own points to make reservations, there shouldn't have been a deed and closing costs, etc. if I understand this correctly.

 

[SueDonJ]

In DVC, you actually own a piece of a leasehold condominium as the contract, whereas in this Marriott thing it looks like you only own points, no mention of owning a percentage interest in unit X of property Y, etc. There's a thread over on the Disboards discussing it and quoting pieces of the contracts. I agree that if you only own points to make reservations, there shouldn't have been a deed and closing costs, etc. if I understand this correctly.

For those interested, here's a link to the DISboards.com thread: New Lawsuit Against Marriott Vacation Club

And thanks to that thread, a link to nflip.com where the Complaint can be downloaded: Newman/Ferrara LLP - Lennen v. Marriott Ownership Resorts, Inc., et al.

 

[davidvel]

In DVC, you actually own a piece of a leasehold condominium as the contract, whereas in this Marriott thing it looks like you only own points, no mention of owning a percentage interest in unit X of property Y, etc. There's a thread over on the Disboards discussing it and quoting pieces of the contracts. I agree that if you only own points to make reservations, there shouldn't have been a deed and closing costs, etc. if I understand this correctly.

Yes these are the core allegations. Having read the entirety of the Complaint, I think they make a very cogent argument on this issue at least.

 

[SueDonJ]

We've talked about a few lawsuits filed since the DC related to selling practices, perceived devaluations and limited exchange opportunities. Don't know if these are still making their way through the courts or if they've been resolved but I'm dropping the links here for reference:

Lawsuit against Marriott over forced title insurance [McIntyre v. Marriott]

lawsuit sterman v marriott - any more info?

class action suit [Desantis v. Marriott] (The Orlando Sentinel article linked upthread about this newest lawsuit says this Desantis action, "was tossed out by Orlando U.S. District Judge Gregory Presell.")

New class action suit [Abramson v. Marriott]

This thread's Lennen v. Marriott topic came up today in the thread about VAC's 2016 4th qtr filing. I'm wondering if any of the lawyers here can find the latest info related to the above 4 lawsuits? Thanks!

 

[Boom-chaka]

I just sat through the relentless sales pitch for the first time and was told that any interest on loans for the MVC fees and points were tax-deductible because the product is a share in a land-based trust.

Sounds like this case is stating otherwise?

 

[vacationtime1]

I just sat through the relentless sales pitch for the first time and was told that any interest on loans for the MVC fees and points were tax-deductible because the product is a share in a land-based trust.

Sounds like this case is stating otherwise?

Ask the sales staff to put that tax advice in writing as part of the purchase documents; they won't. Which gives you your answer.

 

[Dean]

I just sat through the relentless sales pitch for the first time and was told that any interest on loans for the MVC fees and points were tax-deductible because the product is a share in a land-based trust.

Sounds like this case is stating otherwise?

As I understand it, any loan would have to be written as a mortgage to be deductible among other requirements. They'd have to send out a 1098 to do so.

 

[dioxide45]

As I understand it, any loan would have to be written as a mortgage to be deductible among other requirements. They'd have to send out a 1098 to do so.

DC points financing are written as mortgages and mortgages are recorded against the deed.

 

[Talent312]

[Threads merged.]

I'm not a MVC owner or buyer, but I thought those who participate here might be interested in this news story:

"Time-share law change at heart of Florida lawsuit involving Marriott Vacation Club"

See: http://www.orlandosentinel.com/busi...share-legislation-20170719-story.html?ref=yfp

.

 

[KarenP]

Sounds like the law is giving more separation between the ownership rights of weeks based owners and owners of points.

 

[Theiggy]

Someone posted this on an MVC Facebook group. Uh oh.
https://www.nyrealestatelawblog.com...tral-claims-in-suit-ag/#.XKZAISFvVH0.facebook


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[Threads merged]