Timeshare Management Company Requiring Credit Check Before Transfer of Ownership

Here's something new, found in Ebay tonight. If this trend continues, it leaves the management company holding owners hostage with units they can't sell and fees that can rise out of sight quickly without any way to control them.

Here is your chance to own a Leasehold Property (Expires in 2025) at a fraction of the developer price! One Bedroom Suite with One Bathroom (Sleeps 4), Floating Red Weeks 1-52 (Allows you to book one of the aforementioned weeks on a reservation basis; Friday - Check In/Out) at Club Land'Or 'A Land'Or International Resort, an RCI Affiliated Resort located in Paradise Island, Bahamas. All fees are current with mortgage paid in full, you will receive clear title guaranteed. Your usage is Annual. Your usage starts next year 2011. Maintenance fees are billed annually in the amount of $1,099. New owner will be responsible for the 2011 maintenance fees. This resort does require a credit check prior to transfer. The new owner must have a minimum of a 600 credit score to qualify. Should the buyer not pass the credit check, they will receive a full refund immediately! Purchase this exact ownership NOW at a fraction of the original price!

*****BONUS!!! Winning bidder will receive a complimentary $300 AMEX Gift Card with the purchase of this timeshare. Take Advantage of this offer while supplies last!!!

This trend is rather frightening actually. If we ever needed to sell, we'd be completely stuck. There's a discussion in our household about getting out of timeshare ownership completely right now while there is still some possible way of leaving.

Management companies often do things they cannot legally do in transfering ownership. Under the condo docs and state laws of many resorts, they cannot legally charge a transfer fee but many do anyway. At a deeded resort, I would think the liklihood of being able to refuse to transfer on the resort's books after the local Register of Deeds recorded the deed would not be legal. They probably have more leeway to do things like that at an RTU resort.

This isn't a new process. That resort is a non-deeded ownership and buyer approval has been part of the transfer process for some time. Most likely, the PCC finally got someone to accept an ownership and discovered the credit check requirement- so have now added it to the ad text.

Funny, though... They don't seem to be mentioning the high surcharges that are charged at this resort on top of the maintenance fee when an owner actually uses their week! Also, in the past the resort transfer fee was $950.. All these things combined make this a property that is virtually impossible to sell, and this has been the case for years. When you pile on with the high airline taxes, I'm amazed anyone is buying at the moment.

There is also another resort in the Bahamas that has an even more difficult approval process, the Regattas of Abaco.

This may be legal on an RTU ownership but not for a deeded ownership UNLESS it is in the original docs. I doubt many, if any, deeded resorts have a clause like that. One of the great things about deeded ownership is your ability to sell / transfer to a new owner. Making it contingent on the credit score of the buyer is not allowed. A Developer could do that as they are usually offering financing but not the Association / Resort. If you have a deeded week they can require fees to be current to complete the transfer, they can (in most states) chargea transfer or recording fee but that's about it. Otherwise you are free to sell / transfer your deeded rights.

Actually, I can understand the requirement for the buyer to pass a credit check. Property management companies have to spend a lot of time and money collecting past due maintenance fees, this just helps prescreen and prevent this issue.

Note that I am not an advocate for this. I'm actually trying to get rid of mine.

GrueMaster said:

Actually, I can understand the requirement for the buyer to pass a credit check. Property management companies have to spend a lot of time and money collecting past due maintenance fees, this just helps prescreen and prevent this issue.

Note that I am not an advocate for this. I'm actually trying to get rid of mine.

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I agree with you. This is probably a result of so many owners not paying their maintenance fees now so they are trying to protect themselves.

Originally Posted by GrueMaster
Actually, I can understand the requirement for the buyer to pass a credit check. Property management companies have to spend a lot of time and money collecting past due maintenance fees, this just helps prescreen and prevent this issue.

Note that I am not an advocate for this. I'm actually trying to get rid of mine.

John Cummings said:

I agree with you. This is probably a result of so many owners not paying their maintenance fees now so they are trying to protect themselves.

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Seems to me that ROFR would do that much better.

DrBopp said:

Originally Posted by GrueMaster
Actually, I can understand the requirement for the buyer to pass a credit check. Property management companies have to spend a lot of time and money collecting past due maintenance fees, this just helps prescreen and prevent this issue.

Note that I am not an advocate for this. I'm actually trying to get rid of mine.


Seems to me that ROFR would do that much better.

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Neither is legal unless in the bylaws. And ROFR does nothing to assure payments or credit worthiness.

Why do we keep getting sidetracked into these ideas that cannot be implemented rather than dealing with something that might actually work like somehow tying fees to trade / rental value? None of it is easy to do but somethings, like credit checks for resale buyers, aren't even in the realm of possibility! Build facilities that create off season value, get the fees in line with value, find markets for owners foreclosed weeks - things that will actually bring down fees & bring in income rather than ideas that are unworkable.

ROFR helps no one unless it is implemented with a floor price & has an outlet for the time thus obtained. Neither of those exist either. Dead end. Be creative and find a real answer.

I didn't say it was legal or even a good idea. I just said that I can understand why they might do it. After all, a person's credit score is now being used in many areas not related to getting a loan. For example many employers are now using your credit score as a criteria in hiring people. Is that legal?

If they started trying to charge different fees based on perceived value, there will be a lot of very unhappy people.

What type of facilities can a resort build to enhance off season value. I can't think of any that are going to entice people to visit most places during undesirable weather which is the primary determining factor for off season.

Rather than a credit check (which I simply find hypocritical since the developers have always fought so hard to AVOID credit worthiness requirements for initial developer sales) , I'd prefer to see regulations that if a business or individual currently owns at the resort- and their account is not in good standing- that they are restricted from acquiring any additional ownerships without bringing all the accounts current..

In other words, both the buyer and the seller accounts have to be current in order for a transfer to be completed.

This wouldn't stop the PCC's from taking ownerships (they could always create new holding companies), but would create another obstruction for them to overcome.

With that being said- Club Land'or does not receive any of my sympathy! In my personal experience, they have a long history of discouraging resales entirely- which in my opinion shows their absolute disregard for their owners as well as a total lack of faith in the product that they sell!

timeos2 said:

This may be legal on an RTU ownership but not for a deeded ownership UNLESS it is in the original docs. I doubt many, if any, deeded resorts have a clause like that. One of the great things about deeded ownership is your ability to sell / transfer to a new owner. Making it contingent on the credit score of the buyer is not allowed. A Developer could do that as they are usually offering financing but not the Association / Resort. If you have a deeded week they can require fees to be current to complete the transfer, they can (in most states) chargea transfer or recording fee but that's about it. Otherwise you are free to sell / transfer your deeded rights.

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What is "Wastegate Resorts" ?

timeos2 said:

Neither is legal unless in the bylaws. And ROFR does nothing to assure payments or credit worthiness.

Why do we keep getting sidetracked into these ideas that cannot be implemented rather than dealing with something that might actually work like somehow tying fees to trade / rental value? None of it is easy to do but somethings, like credit checks for resale buyers, aren't even in the realm of possibility! Build facilities that create off season value, get the fees in line with value, find markets for owners foreclosed weeks - things that will actually bring down fees & bring in income rather than ideas that are unworkable.

ROFR helps no one unless it is implemented with a floor price & has an outlet for the time thus obtained. Neither of those exist either. Dead end. Be creative and find a real answer.

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I think a lot of the fees are charged by the Reseller industry. I wanted to buy one particular resale and the reseller company was charging $300 as a resort transfer fee, part of the closing costs. I called the resort and they admitted that they only charge $100 resort transfer fee.

johnmcguir said:

What is "Wastegate Resorts" ?

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The corrupt & sleazy group aka Westgate. If you have had a negative timeshare experience there is a very good chance that Wastegate was involved. They're THAT good at being bad.