Wording in Estoppel Letter

Hi Everyone,

I'm in the process of transferring my deed to a new owner with the first year of usage in 2016. We will use our home resort this year. I'm using LT Transfers for this transaction. LT emailed the estoppel letter to me, everything looks fine, except the Buyer's 1st Use Year says 2015. I told LT to correct it. LT called SVO and told me to make this year's reservation before the transfer is submitted to them. If there's no reservation from me, the 2015 usage will go to the new owner. I said fine, I'll make a reservation.

After thinking about it for awhile, I'm still not comfortable seeing the new owner's usage as 2015 on the estoppel. So I emailed LT and told them to have SVO issue another estoppel letter with the correct usage year which is 2016. There's also this wording "use year indicated is contingent upon Seller not having assigned his reservation rights to RCI points" which means if I haven't made a reservation yet, this year's usage will go to the new owner--that's how LT explained it to me.

Any thoughts or comments? I don't want to have any problems or dispute with my reservation this year after the transfer. This is my first and only deed transfer so I need all the help I can get.

This is a common scenario. This happens when a resort does not manage usage between the old and the new owner. They are just listing 2015 because the usage is available. Some resorts or systems will manage it and allow the prior owner to call and book a reservation even though transfer has already occurred. They may completely segregate it. Marriott does this. On the other hand many resorts will not do this and will simply allow the new owner to book whatever is available.

What's important is not the estoppel in this situation. It's the contract between you and the buyer. Even if you book a reservation prior to transfer it's possible that the new will be able to cancel or change it. This can happen with a few units I own where the original contract number, ownership number, and complete history remains even when the owner is changed.

As long as you have a clear contract you should be fine but depending on the resort there might not be any way getting around the need to trust the buyer. If you didn't make a reservation before hand they would need to do it for you post transfer.

It's natural to want to buy from someone reputable but I also try my best to apply this due diligence to who I sell to as well.

Agreed: the estoppel letter simply states the current availability of the usage - it cannot change the terms in your contract.

If your contract says that 2016 is the first usage, that is the controlling document.

DeniseM said:

Agreed: the estoppel letter simply states the current availability of the usage - it cannot change the terms in your contract.

If your contract says that 2016 is the first usage, that is the controlling document.

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That's a good point. No matter what resort or system, the ownership estoppel will always state the next available usage regardless of owner. There is no link to the contract nor should there be. My answer went a bit beyond the necessary and more into how the usage is handled post transfer.

I received a Warranty Deed from LT Transfers that we (current owners) have to sign, get it notarized, then return the document to LT. Is this a contract or is there another document?

margalita4 said:

I received a Warranty Deed from LT Transfers that we (current owners) have to sign, get it notarized, then return the document to LT. Is this a contract or is there another document?

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The contract is the agreement you made with the buyer regarding the purchase terms. It may be a formal contract, or an informal verbal, or email agreement?

margalita4 said:

I received a Warranty Deed from LT Transfers that we (current owners) have to sign, get it notarized, then return the document to LT. Is this a contract or is there another document?

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The Warranty Deed is the actual transfer document that is recorded with the county.

You should have a separate purchase agreement that outlines the terms and conditions (including first year of usage) of the sale. This is between you and the seller -- LT has nothing to do with that although they may provide you a template that you can use to draw up a contract.

-ryan

margalita4 said:

I received a Warranty Deed from LT Transfers that we (current owners) have to sign, get it notarized, then return the document to LT. Is this a contract or is there another document?

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The deed is not the contract. You should have prepared a purchase agreement that specified the terms. To make a real estate purchase agreement binding there must be a written contract that is signed by both parties, physically or electronically. I'm not sure if LT does this for you or not.

DeniseM said:

The contract is the agreement you made with the buyer regarding the purchase terms. It may be a formal contract, or an informal verbal, or email agreement?

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Verbal agreements are not legal with a real estate transfer. Or at least not binding. Email is debatable, but some states need certain language to make them complete.

Saintsfanfl said:

Verbal agreements are not legal with a real estate transfer. Or at least not binding. Email is debatable, but some states need certain language to make them complete.

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To Denise's defense, verbal contracts are not illegal -- if everyone is happy, there is no issue.

However, as you note, courts in most states will only enforce a written contract for real property.

To be safe, a written contract should be executed, especially if the OP is worried about clarity of the use year.

-ryan

It is my belief that LTT provided you and the buyer with a PA that you both filled out and signed. I don't believe they would type up the new deed for you to sign until you both signed the PA.

At least that's how it worked when I used them recently.

sjsharkie said:

To Denise's defense, verbal contracts are not illegal -- if everyone is happy, there is no issue.

However, as you note, courts in most states will only enforce a written contract for real property.

To be safe, a written contract should be executed, especially if the OP is worried about clarity of the use year.

-ryan

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You are right on all accounts, but to reiterate, what happens if the buyer or "taker" of the timeshare is no longer happy a year later? What happens if when they get the maintenance fee bill they decide that the particulars were not specified? They could easily go to the resort and state that they never agreed to the acquisition. The deed won't have their signature on it in most areas.

Like you said, to be safe always get a PA. I strongly suggest this be done even if giving away a timeshare. At least do the PA for $1.

csxjohn said:

It is my belief that LTT provided you and the buyer with a PA that you both filled out and signed. I don't believe they would type up the new deed for you to sign until you both signed the PA.

At least that's how it worked when I used them recently.

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I am in process of selling a deed using LT. They sent a PA for myself and the buyer to sign. That is one of the reasons I insisted on using LT.

The PA we just signed for a free timeshare was only signed by us, the purchasers, not the current owner. He has to sign a quit claim deed I know. Not sure if we are going to have to sign anything else.

I should've been clearer in my original post. I'll be giving this timeshare to the new owner so there's no need for a Purchase Agreement. Is that correct?

Anyway, I made my reservation for this year online yesterday. LT said to wait a few days for SVO's system to post the reservation. LT will then ask for a revised estoppel with the correct usage year which is 2016.

Saintsfanfl said:

The deed is not the contract. You should have prepared a purchase agreement that specified the terms. To make a real estate purchase agreement binding there must be a written contract that is signed by both parties, physically or electronically. I'm not sure if LT does this for you or not.

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Makes sense to me. As to Estoppel Letters, I think they are interesting and may point to something that should be checked out but otherwise I think they are worthless. Just my opinion. Others are sure to disagree.

George

margalita4 said:

I should've been clearer in my original post. I'll be giving this timeshare to the new owner so there's no need for a Purchase Agreement. Is that correct?

Anyway, I made my reservation for this year online yesterday. LT said to wait a few days for SVO's system to post the reservation. LT will then ask for a revised estoppel with the correct usage year which is 2016.

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I'd do a simple purchase agreement, even for this. It stipulates usage and such.

margalita4 said:

I should've been clearer in my original post. I'll be giving this timeshare to the new owner so there's no need for a Purchase Agreement. Is that correct?

Anyway, I made my reservation for this year online yesterday. LT said to wait a few days for SVO's system to post the reservation. LT will then ask for a revised estoppel with the correct usage year which is 2016.

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I personally would never legally "give" away a timeshare to a total stranger. I prefer to make it a legal purchase, even if I am paying more than they are. This way the specifics are very clear and legal (especially here in Florida). I do not want the taker of the "free" timeshare coming back later saying they did not fully understand and the transfer should be voided.

mpumilia said:

The PA we just signed for a free timeshare was only signed by us, the purchasers, not the current owner. He has to sign a quit claim deed I know. Not sure if we are going to have to sign anything else.

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That is perfectly fine when you are buying, or "taking". Selling or giving away is another issue.

Thanks for all your responses. I have learned a lot from all of you. Looking back at my paperwork, the Purchase Agreement was signed by us and the new owner many, many weeks ago. It's one of the first documents that LT sent to us. Usage does say new owner will have usage 2016.

Saintsfanfl said:

I personally would never legally "give" away a timeshare to a total stranger. I prefer to make it a legal purchase, even if I am paying more than they are. This way the specifics are very clear and legal (especially here in Florida). I do not want the taker of the "free" timeshare coming back later saying they did not fully understand and the transfer should be voided.

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I agree with the above. A couple of years ago I gave away one of my Weeks to a knowledgeable Tugger. We actually did the transaction for $5 which did change hands.

George

Estoppel letters

bogey21 said:

Makes sense to me. As to Estoppel Letters, I think they are interesting and may point to something that should be checked out but otherwise I think they are worthless. Just my opinion. Others are sure to disagree.

George

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A few years ago we had long discussions about so called estoppel letters. I have never liked the term but understand the use in the title insurance business. Basically if there is a dispute and a party waives the document in the face of a judge it is going to show intent. However it is a legal and evidentiary term which historically is a word of art. So, probably not worthless.
Verbal contracts are not illegal just unenforceable especially in real estate. Some of you real estate gurus remember the statute of frauds?
Nothing here is legal advice. I am most likely not licensed to practice law in your sstate.

Harry

Harry said:

A few years ago we had long discussions about so called estoppel letters. I have never liked the term but understand the use in the title insurance business. Basically if there is a dispute and a party waives the document in the face of a judge it is going to show intent. However it is a legal and evidentiary term which historically is a word of art. So, probably not worthless.
Verbal contracts are not illegal just unenforceable especially in real estate. Some of you real estate gurus remember the statute of frauds?
Nothing here is legal advice. I am most likely not licensed to practice law in your sstate.

Harry

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With timeshares I see an extremely high percentage of errors on so called "estoppel" letters. Many resorts do not have their own so they require the closer to send in a blank form, which a low level clerical person then fills out. Wrong boxes are checked all the time. You know better than I, so is this really an "estoppel" that could be used to enforce something in court? If so, and a buyer thought they were getting a 3BR, but it's actually a 1BR, who is at fault and what is the recourse? In your rough theoretical opinion...