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[2012] First Issue Renting my Timeshares

Discussion in 'Buying, Selling, Renting' started by HenryT, Apr 30, 2012.

  1. rickandcindy23

    rickandcindy23 TUG Review Crew: Expert TUG Member

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    You can definitely rent that week to someone else.
     
  2. TUGBrian

    TUGBrian Administrator

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    if the cc companies will uphold the scam written agreements from the upfront fee companies, they should most certainly uphold yours.
     
  3. tombo

    tombo Tug Review Crew: Rookie TUG Member

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    Ask for payment by check. That is what I do. Once the check clears there is no backing out. Paypal and Credit Card payments can be cancelled even after the renter has vacationed in your unit for a week and returned home. They can simply file a dispute with Patpal or their Credit Card company that your week wasn't as advertised and you have to fight to keep your rental fees. Not a game I want to play. Mail me a check with the rental agreement and we have a deal.
     
  4. HenryT

    HenryT Tug Review Crew: Rookie TUG Member

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    That's a good point to request checks. I do accept checks but I generally prefer PayPal because I like getting my money faster. Also, in some cases I need to reserve a specific week for a renter and if I had to wait until a check cleared the week I needed may no longer be available. I would not want to reserve a specific week unless I was sure the renter would pay up (unless I was reserving a very high demand week in which the risk of not renting it would be low). I normally reserve high demand weeks for my floating timeshares and rent that but sometimes renters want other weeks.

    The other thing with Paypal though is that they required me to link a bank account to my Paypal account in order to sell real estate (including timeshares) on ebay. So even if I transferred money out of my Paypal account Paypal can take funds out of my attached bank account (I have a separate bank account primarily for my Paypal transactions so this is not my main bank account).

    I have to say though that I have been renting my timeshares for many years and this is the first time I had an issue with Paypal/renter so for the time being I will keep using Paypal.
     
    Last edited: Apr 30, 2012
  5. DeniseM

    DeniseM Moderator

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    Set up 2 bank Accts. for Paypal. As soon as the money hits bank Acct. #1, transfer it to bank Acct. #2. Make sure Acct. #1 doesn't have over-draft protection.
     
  6. oregonguy

    oregonguy Guest

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    I don't see how removing funds from your bank account is going to protect you. Yes, it makes it difficult for paypal should they decide in favor of the buyer, but ultimately, all you've done is shifted things around between a dispute between the owner and the renter, to the owner and paypal. I'm sure there multi volume user agreement addresses this very issue, and you could find yourself on the other end of a lawsuit. Not sure that is a better resolution. Seems not accepting paypal or a credit card in the first place might be the way to go.
     
  7. pathways25

    pathways25 TUG Member

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    There's actually not even a need to do that. Once PayPal sends the random deposit to your account and confirms it, just instruct your bank to put a debit block on the account. With a debit block in place, funds can be sent to you, but any ACH debits posted to your account will be rejected.
     
  8. DeniseM

    DeniseM Moderator

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    Let me clarify a few things:

    I have never violated any Paypal terms or conditions - this is a theoretical discussion.

    I continue to use Paypal because there aren't any great alternatives - but I believe in the future there will be.

    I have had a few disputed payments with Paypal and I was able to quickly resolve them with the renter - to our mutual satisfaction - without involving Paypal.

    I'm not talking about an honest dispute between a renter and an owner - I'm talking about the rare occasion in which a renter is actually trying to scam the owner. I'm not going to make it easy for them. YMMV ;)
     
    Last edited: May 1, 2012
  9. Beefnot

    Beefnot TUG Member

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    Why would the mechanics of timeshare rental differ from that of renting my vacation home? If paypal is considering phasing out timeshare rental support, it would seem to be for reasons other than Denise's behavior, which is entirely legitimate as far I'm concerned.
     
  10. HenryT

    HenryT Tug Review Crew: Rookie TUG Member

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    PayPal's Policy on Timeshares

    I was just looking at PayPal's policy on timeshare transactions

    https://www.paypal.com/webapps/helpcenter/article/?currentIssueID=207124&m=SWS

    and saw the following in their Help section:

    "What is PayPal's policy regarding the sale of real property?

    You can’t use PayPal to buy or sell real property, including buildings, land, or anything affixed to the land.

    Besides the direct sale of real property, we also don’t allow transactions that involve:


    Raffles or lotteries offering the opportunity to purchase or the chance to win a specific house.

    Real estate auctions that allow prospective buyers to sort through property listings and place bids on the property they want. There are many variations on what it takes to win. Typically, though, the winner is the highest bidder or the person whose bid is closest to the actual value of the house.

    Reverse auctions offering properties for sale not to the highest bidder, but to the person who has the lowest unique bid. In a reverse auction you usually have to pay an administration or bidder’s fee before you can make a bid.

    Tax lien certificate auctions in which prospective buyers place bids on tax lien certificates. These are certificates that represent a claim, or partial claim, on a property for the sum of unpaid taxes. The winning bidder becomes the property’s new lien holder.

    Timeshare transactions -- offers to buy, sell, or rent rights to the periodic se of a property. A timeshare is real estate that is jointly owned by people who share the right to use the property and take turns using it."

    The above does not make sense to me. Maybe I don't understand the content of this policy since people use PayPal all the time for timeshare transactions.
     
  11. pgnewarkboy

    pgnewarkboy TUG Member

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    Ron is correct. Your week seems highly rent able. Lawsuits, collections'-who needs the aggravation.
     
  12. Beefnot

    Beefnot TUG Member

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    Pragmatism or principle, which does one choose? 9 times out of 10, I choose principle.
     
  13. hipslo

    hipslo TUG Member

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    same approach i take, have never had an issue.
     
  14. Saintsfanfl

    Saintsfanfl TUG Member

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    This is not entirely true. Paypal does advance money for accounts in good standing. An "insta-payment" is an advance and I use it all the time.

    When Paypal reverses a charge because of a dispute Paypal is paying the other side back. The "scammer" is getting their money no matter what unless the dispute is ruled against them. If you don't settle up with Paypal in this case it is legally between you and Paypal and nothing to do with the scammer. Paypal is only a processor like a credit card company. You would obviously have a right to sue the scammer but Paypal would also have a right to sue you. To each his own but I don't see how Paypal can be at fault for the actual business transaction. They only handle the payment. That would be just like holding a bank at fault for a bounced check!
     
    Last edited: May 1, 2012
  15. presley

    presley TUG Review Crew: Expert TUG Member

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    Yikes! I guess I won't be using paypal for timeshare stuff anymore. :ignore:
     
  16. Saintsfanfl

    Saintsfanfl TUG Member

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    Rigley Realty / Vacation Property Brokers will not accept PayPal for this very reason. It seems most the PCCs ignore the policy and accept PayPal anyway.
     
  17. ace2000

    ace2000 TUG Member

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    This thread reminds me of the situation several months ago where the OP was asking for advice on how to get her money back from a person renting their week, even though she made a commitment to rent the unit and paid for it. And the kicker was we had TUG members bending over backwards to help her in that situation. Even telling them to complain to Paypal about fraud, when there was no clear evidence of fraud.

    Now, we have the opposite perspective and we have TUG members bending over backwards to help them. Even some of the same people that helped the other side on the previous episode... Ain't TUG a helpful place? :)
     
  18. am1

    am1 TUG Member

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    Denise does not seem to care about any of that. She sees it as paypal giving their own money back to the buyer when they are just the processor. She has no problem using paypal but does not agree with how it operates. Paypal has no choice to reverse the money when the credit card gets involved.
     
  19. richardm

    richardm TUG Member

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    There are alternatives..

    Here are two alternatives..

    http://depositguard.com
    https://squareup.com

    One is an escrow company that charges the tenant a 3% transaction fee.
    The other is a merchant account that is available to anyone..

    I was one of those rental brokers that had used paypal routinely without a single dispute or chargeback request. I paid thousands in paypal fees. And I have a very long history with eBay. When the timeshare section was originally designed, the company I worked for consulted the then head of eBay real estate, Dave Coglizer, to develop the timeshare platform- and I've been contacted numerous times over the years by ebay to provide information about various timeshare systems.

    Without any notice, I was simply informed that because my account was used for timeshare transactions which are now classified as high risk- a six month hold requirement was being placed on my account. This means that any payments sent to me would be held by paypal for six months without any interest being paid to me.

    I was fortunate in that I was able to deal with this issue and had the means to still be able to pay all my owners out of pocket, but I imagine this could have serious impacts on either rental brokers as well as individuals who use the rental payments to pay their maintenance fees or business expenses.

    I spoke with my legal counsel, and was told that since PayPal is not considered to be a financial institution, they are not bound by traditional banking regulations and have the ability to simply withhold payments as they see fit for as long as they deem necessary.

    I have since spoken with several other rental brokers and a few individual renters who have also had their accounts "investigated" and a similar hold placed on the funds held by PayPal because the accounts were used primarily for "timeshare" transactions. Their actions seem to be sporadic however, as there are other brokers who do a similar volume in rentals that have not been subjected to this hold.

    While this situation was extremely frustrating to me personally, I also understand the need for this type of action. The amount of fraud perpetrated on eBay may well require such drastic action be taken. And historically, their decisions are always heavily weighted on the side of the purchaser- not the seller..

    In truth- I consider myself very fortunate to have had to deal with this. It took some searching, but the alternatives I found have been fantastic and have actually saved me thousands of dollars in company expense.

    If Denise removes the links above- feel free to email me and I'll be happy to send them to you directly.
     
  20. DeniseM

    DeniseM Moderator

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    Richard - thanks for the info. I will definitely check them out.
     
  21. SOS8260456

    SOS8260456 TUG Member

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    Richard,
    I am a small time accountant and I never really dealt with customers with merchant accounts. However, I thought I read somewhere about a new 1099 that merchant account providers are required to send if payments are over a certain amount. Have you had any types of experience with them sending any 1099's?

    Lisa
     
  22. SOS8260456

    SOS8260456 TUG Member

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    PS Thanks everyone for all the info sharing. I feel like a person who bought from the developer and didn't read the fine print. Never realized that accepting payments through paypal for timeshare activity was not allowed.

    We do take checks when possible. But sometimes, we have people checking in the next day or within a few days, and checks will not work for that type of situation. So I am also thankful for the alternative solutions.

    We have just learned a lesson in the past several days regarding accepting checks. We have two potential renters for our summer beach timeshare. The first one claims she could not access our rental agreement, but is sending the check. Then a coworker of my husband's asks about the week and is ready to pay for it. We feel obligated to hold it for the first one, but is has been since Friday and no check yet. I told my husband from now on, he is to clearly state that first payment gets the unit (learned that from BRUCECZ).
     
  23. BocaBum99

    BocaBum99 TUG Member

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    It's simple. Risk assessment. Paypal has decided that its risky to support credit card transactions for timeshare rentals. It's probably their transaction history that validates that risk assessment.

    Just yesterday, I did a transaction with a seller where I was the buyer. The transaction was $2200. I was surprised when Paypal put a 21-day hold on the funds until I cleared it. I thought it was great for me as the buyer. Sucks for the seller.

    In my own paypal account, I usually have at least 2-3 months of average monthly payments in my account at any given time. And, I have done this consistently over the past 5-7 years with less than 5 minor disputes that were cleared up within days. I have no restrictions on my account except I cannot take American Express.



    Go ahead, withdraw funds immediately. You will see where that leads you. What goes around, comes around.
     
    Last edited: May 2, 2012
  24. BocaBum99

    BocaBum99 TUG Member

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    Yes. Paypal sent me a large 1099. I had to report all of the transactions on my tax return.
     
  25. SOS8260456

    SOS8260456 TUG Member

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    Interesting. I didn't consider paypal a merchant account subject to that requirement, but I guess they are. I was questioning the service that Richard had posted about.
     

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