Sale completed and recorded but new owner refuses to transfer to their name

My guess is, Marriott will allege that a proper transfer of ownership did not take place. Since the seller does not seem to have a copy of the buyers drivers license, and the buyer is not cooperating to complete the ownership transfer process, Marriott would seem to be well within its rights to say that the seller did not comply with the law that says that the buyer needs be a legitimate buyer, and not a viking ship, for example.

If Marriott alleges that no proper transfer of ownership took place, and that therefore the seller is still in the hook for the MFs, that will be a huge can of worms.

At that time, the seller will need to find a way to reclaim ownership of the TS (hopefully the buyer agrees to quitclaim, but who knows if they'll cooperate).

Hopefully everyone one involved (Marriott, buyer, and seller) agree to cooperate to deed this back to Marriott. To me this seems like the cleanest solution.

You may be right, in that they don't really care by who, as long as MF's get paid, but please bear in mind the very first thing that was done was to have Marriott approve the sale and go through the ROFR process. It was also specifically for this very buyer, and was approved with his name and personal details known, as well as a bill of sale that was used to record the deed. They absolutely don't ask for a DL at that point.

Any reasonable person would see that it's not a viking ship transaction so they'd probably avoid that argument - I think they have a pretty good name and have been pretty decent to date. Actually, as I think of it, I would think the new owner would not want this association as he appears to be in the Real Estate business and that kind of thing could cause problems for him.

They are very specific that membership transfer can only happen after the full deed is available, then, and only then, do they request a copy of the new owner's DL as an attachment to a form detailing the new owner. It's going to be difficult to argue they didn't approve the sale, and, then, post-recording, argue it wasn't proper. They may be big but they don't make the laws of the land.

That said, they're also big enough to argue any case they want as it would be me vs. big corporation and they have lots more money than I do, so I hope it will all align as you mention and then a simple deed back can be done.

I really, really, don't want to get a lawyer involved in this so keep your fingers crossed that sense will be seen...

A few years back I bought a Marriott timeshare from an LLC that went bankrupt. They recorded a deed to my name but never sent it to transfer. I didn't know they recorded the deed to my name. I declared the money lost and moved on. Three years later I received a bill for multiple years back due fees and taxes - when Marriott went to foreclose on the unit they did a title search and found me as the owner and they transferred the unit to me. I was on the hook for the foreclosure fee and the taxes and fees back due.

So if the new owner does nothing eventually this is what may happen - Marriott will find they own the unit when they try to foreclose and he will either have to let it get foreclosed which may affect his credit if they send it to collections, or he can pay what's owed and catch up at that time. He is the legal owner of record if a deed was recorded.

dominidude said:

My guess is, Marriott will allege that a proper transfer of ownership did not take place. Since the seller does not seem to have a copy of the buyers drivers license, and the buyer is not cooperating to complete the ownership transfer process, Marriott would seem to be well within its rights to say that the seller did not comply with the law that says that the buyer needs be a legitimate buyer, and not a viking ship, for example.

Click to expand...

What law is this, that allows Marriott to ignore the governing documents?

dominidude said:

My guess is, Marriott will allege that a proper transfer of ownership did not take place. Since the seller does not seem to have a copy of the buyers drivers license, and the buyer is not cooperating to complete the ownership transfer process, Marriott would seem to be well within its rights to say that the seller did not comply with the law that says that the buyer needs be a legitimate buyer, and not a viking ship, for example.

Click to expand...

Even if this "law" did exist Marriott already acknowledged a valid purchase agreement when they waived their right to exercise ROFR. Besides, an individual bought the timeshare unit and not an LLC or other undefined entity.

This thread should be a wake-up call on timeshare transfers. A real estate "closing" happens before the deed is recorded. Even though I have done it numerous times it is probably a bad idea to record a deed before everything is completed, including the transfer docs and any other resort requirements. We like to complain when PCC's want a copy of the license before they record the deed but they do this for a reason.

That said, the HOA is either allowed or not allowed to approve a sale. If they have this right then it needs to be done before the closing, or the signing of the deed. If they do not have this right then any attempt to not recognize the sale and refuse the timeshare transfer would be illegal.

Unfortunately unlike a condo there generally isn't enough at stake to force the issue in the courts. Because of this timeshare HOA's get away with doing whatever they want.

Saintsfanfl said:

<snip>....the HOA is either allowed or not allowed to approve a sale. If they have this right then it needs to be done before the closing, or the signing of the deed. If they do not have this right then any attempt to not recognize the sale and refuse the timeshare transfer would be illegal.

Unfortunately unlike a condo there generally isn't enough at stake to force the issue in the courts. Because of this timeshare HOA's get away with doing whatever they want.

Click to expand...

I don't seek to take the thread discussion sideways here, but I must respectfully somewhat disagree by pointing out that in any instances of Viking Ship / bogus LLC "grantee" involvement (not an issue in your transaction, I readily acknowledge), any HOA can easily and defensibly assert (before or after "closing") that any such transaction involving a bogus Viking Ship was essentially willful fraud --- and therefore legally deficient and invalid right from the git go. Wouldn't you agree?

davidvel said:

What law is this, that allows Marriott to ignore the governing documents?

Click to expand...

My guess is that by the time this plays out that what Marriott wants will prevail. Not saying whether they are legally right or wrong. Just being practical.

George

davidvel said:

What law is this, that allows Marriott to ignore the governing documents?

Click to expand...

I'm not a lawyer, I'm just using common sense here.
My understanding of a valid transfer of ownership is between a willing buyer and a willing seller. My understanding is that there are laws against transferring ownership of my house to my dead grandmother, my dog, or a viking ship. The "willingness" aspect of the transfer of ownership is missing in a dead person, a dog, or a zombie organization.
The seller alleges (rightly) that he transferred ownership to someone who doesnt want the ownership anymore.
What's to stop Marriott from alleging that this transfer of ownership was invalid, because the buyer was not willing.
Yes, a ROFR did take place, but that does NOT force the buyer to go through the purchase.

And notice that I'm just talking about making allegations. I'm not talking about what a judge would say on the matter. I'm sure the seller would prevail in the end. But by the time that "end" arrives, many thousands of dollars will have been spent.

Like the previous person says, Marriott will get what they want.

theo said:

I don't seek to take the thread discussion sideways here, but I must respectfully somewhat disagree by pointing out that in any instances of Viking Ship / bogus LLC "grantee" involvement (not an issue in your transaction, I readily acknowledge), any HOA can easily and defensibly assert (before or after "closing") that any such transaction involving a bogus Viking Ship was essentially willful fraud --- and therefore legally deficient and invalid right from the git go. Wouldn't you agree?

Click to expand...

I was more referring to credit checks and such related to buyers deemed worthy by a COA. Florida allows a Condo Association to include in their docs a requirement that they review and approve any potential buyers or "applicants" to buy. This would need to be done before the closing occurs. These would be legitimate buyers and not fraudulent but they may not satisfy the necessary approval process.

In other words the sale made by the OP had the cart before the horse and everyone involved in transactions like this need to realize the ramifications. The resort management may or may not have the right to refuse a transfer per the docs but since timeshares generally aren't worth the fight we need to make sure we have it buttoned up before we sign and record the deed. THis thread has certainly changed my view on how I handle transfers going forward.

dominidude said:

Yes, a ROFR did take place, but that does NOT force the buyer to go through the purchase.

Click to expand...

Not sure that is true. The buyer signed the purchase agreement and therefore is contractually committed to the purchase. The problem with timeshare transactions is the buyer doesn't sign the deed. As soon as they sign the purchase agreement the deal is done provided the seller follows through and signs and records the deed and sends in the transfer. The only thing preventing the OP's transfer is the fact that the copy of the license and the transfer document was not done prior to closing. If it had been there would be nothing the buyer could do to prevent the transfer.

Certainly I would have done things differently though whether any buyer would be happy to sign undated papers of any kind is another matter and whether it would be even legal for me to fill in the dates on signed forms I have no idea, but I suspect not. The moral of the tale is do not trust the most sincere and pleasant of people will carry through.

Marriott is very clear. (1) Record the deed (2) they will do the transfer with the items mentioned that are the sticking point, but only AFTER a complete copy of the recorded deed is received, meaning you have to do it before they'll consider it. Damned if you do, damned if you don't...

As to the documents you need for a deed to be recorded in Riverside, CA, you have to provide

(1) a 'bill of sale' (with buyer and seller signatures), aka the contract
(2) a 'special warranty deed', aka the title (sellers signature only)
(3) a 'documentary transfer tax' form (seller signature only)
(4) and a very much key document, where the one where the buyer absolutely does acknowledge the deed and sale, with his signature, the 'preliminary change of ownership report'.

The latter form is a summary that states it is a sale between two parties, the conditions of the sale and so on, and is only signed by the Buyer. Without signing this, the deed will not be recordable, so if the issue is that the buyer didn't willingly sign off on the transaction, it falls apart at this point.

He did agree to it all, utterly willingly (and there's lots of backup emails and so on to support this as well). The issue is that the deed recorded, and while waiting for it's arrival to finish the transfer to Marriott's requirements, he had a change of heart prompted by a change in circumstances.

I hope to discuss this tomorrow after allowing time for the dust to settle and clearer heads to prevail, as whatever got us to this point, he's now the legal owner so items like property taxes will start to be sent. This limbo is not good for anyone obviously and I'll be suggesting a number of things folk here have suggested to get the job done to the satisfaction of all.

If he's not planning on doing anything then that's when it gets ugly, and that's the crux of it...

It happened to me

It happened to me with a Mexican Timeshare. She signed all the papers and paid the money etc. At the end she wouldn't send in the necessary papers to do the transfer. My closing agent called the timeshare company and told them the timeshare was no longer mine and was now Mrs.xxx's timeshare. The end. I never heard from them again. I would say at this crossroad its Marriott's job to get the timeshare done and in the buyers name. I wouldn't confuse things. Leave it to them to figure out.

Of course, ymmv.

Saintsfanfl said:

Not sure that is true. The buyer signed the purchase agreement and therefore is contractually committed to the purchase. The problem with timeshare transactions is the buyer doesn't sign the deed. As soon as they sign the purchase agreement the deal is done provided the seller follows through and signs and records the deed and sends in the transfer. The only thing preventing the OP's transfer is the fact that the copy of the license and the transfer document was not done prior to closing. If it had been there would be nothing the buyer could do to prevent the transfer.

Click to expand...

I'm not aware of any real property transaction where anyone other than the Seller signs the deed. While a transferee can legally reject a transfer if an owner transfers to that person without their knowledge or consent, that did not happen here. Mark T notes the "buyer" acknowledged the sale by signing the preliminary transfer report and other docs.

The transferee's "refusal" to now provide paperwork and ID to Marriott (not a requirement for transfer of ownership under the governing docs nor law) does not alter the fact that they are the Owner under the governing docs and CA law. And the owner is liable for MF, not a prior owner.

THIS IS NOT A VIKING SHIP SITUATION.

Au contraire...

davidvel said:

I'm not aware of any real property transaction where anyone other than the Seller signs the deed. <snip>

Click to expand...

Fwiw, there are indeed (no pun intended) various places where the buyer (grantee) must sign the deed as well as the seller (grantor).
New Orleans, LA comes immediately to mind as just one such example; I believe that there are at least a few entire states where the grantee also signs the deed.

judys, I can't agree with you more about doing things yourself sometimes (for your own sanity).
I started out in April listing my TS on Tug and found the perfect buyer in July. We immediately hit it off and agreed to make this as simple as possible, Right? (and I know you all are shaking your heads!)
The sale was to be 2 units starting ownership for the buyer in 2017. I have a Deed In Trust so no paperwork for state etc.
The facts are, I am a Points member in RCI and she is not. She and her husband do, however, have membership in RCI. They never intended to put this TS into points. I would stay with RCI until my points were used and then cancel my membership. The fun begins.

Informed resort-got the proper contact person after several emails. Paperwork rec'd and sent back same day. Nine days later I email resort for progress at which time TS Rep says no paperwork returned-half hour later, OPPS, Here is the paperwork-put off to the side because she "Couldn't tell who the Seller was". Additional note on this email-RCI form enclosed.

I had questions about RCI form and the response was "Not to worry, we weren't at that point yet" (PS,all along referring to the buyer by the wrong name!).

Fast Forward--I'm confused as some paperwork looks like the start date might be 2016. I make 5 calls and two emails to resort with no response until the following day saying it is 2017. The reason for my concern? I had just made reservations through RCI for a 3 bed@ the Hilton Seaworld for April using 2015 and 2016 points!

Now it's me and RCI. Explained my situation and they sent me a cancellation form. I indicated I needed someone to call me(one of the choices on this form). In the mean time, I got advise from my resort to book 2017 so that the new owners could use it. AS SOON as I did that, my account said I used some points from 2017. After reading some of the "fine print" on the RCI contract, I flipped because it indicated I could lose all my points for false representation of ownership or to that affect. (I don't own 2017) After 2 sleepless nights, I got the call from RCI-this wonderful Senior Rep, Anita, who straightened it all out-My 2016 points and vaca are restored, 2017 taken from inventory, and new owners set to go!!

During all of the delays, misinformation, and wrong data (incorrect names), the buyer and I worked together assuring one another a positive outcome, To all of you going through something similar, Take charge and don't give up!

davidvel said:

I'm not aware of any real property transaction where anyone other than the Seller signs the deed. While a transferee can legally reject a transfer if an owner transfers to that person without their knowledge or consent, that did not happen here. Mark T notes the "buyer" acknowledged the sale by signing the preliminary transfer report and other docs.

The transferee's "refusal" to now provide paperwork and ID to Marriott (not a requirement for transfer of ownership under the governing docs nor law) does not alter the fact that they are the Owner under the governing docs and CA law. And the owner is liable for MF, not a prior owner.

THIS IS NOT A VIKING SHIP SITUATION.

Click to expand...

This is true but the problem is that it might not be worth it financially to force the legal issue.

Although I wonder if a properly worded letter might be enough to do the trick. Doesn't hurt to try.

davidvel said:

I'm not aware of any real property transaction where anyone other than the Seller signs the deed.

Click to expand...

There are some areas that require both seller and buyer signatures on the deed.

MarkT said:

As to the documents you need for a deed to be recorded in Riverside, CA, you have to provide

(1) a 'bill of sale' (with buyer and seller signatures), aka the contract
(2) a 'special warranty deed', aka the title (sellers signature only)
(3) a 'documentary transfer tax' form (seller signature only)
(4) and a very much key document, where the one where the buyer absolutely does acknowledge the deed and sale, with his signature, the 'preliminary change of ownership report'.

The latter form is a summary that states it is a sale between two parties, the conditions of the sale and so on, and is only signed by the Buyer. Without signing this, the deed will not be recordable, so if the issue is that the buyer didn't willingly sign off on the transaction, it falls apart at this point.

He did agree to it all, utterly willingly (and there's lots of backup emails and so on to support this as well).

Click to expand...

I dont mean to drag this longer than necessary, but, how can you know that the buyer's name correspond to the signature of the buyer?

More specifically, how can Marriott be certain that the buyer is a real person, and that the signature in the "Bill of Sale" and "preliminary change of ownership report" belongs to that real person?

Were either or both those documents notarized, for example?

If both or at least one document was notarize, or you can otherwise "prove" with fair certainty that the signature belongs to the buyer, I'd feel that you need not worry about this after all, and that it is Marriott's and the Buyer's responsibility to figure it out.

Hopefully at least one of the documents is notarized, and this can just be a lesson for everyone who reads this blog. Of course, you'd need to keep us posted of the final outcome

Nevermind!

theo said:

Fwiw, there are indeed (no pun intended) places where the buyer (grantee) must sign the deed as well as the seller (grantor).
New Orleans, LA comes immediately to mind as just one such example; I believe there are at least a few entire states as well.

Click to expand...

scootr5 said:

There are some areas that require both seller and buyer signatures on the deed.

Click to expand...

There may be in other areas, buti n CA (where this property is), there is no requirement (and I've never seen it done) that the buyer, sign the deed.

dominidude said:

I dont mean to drag this longer than necessary, but, how can you know that the buyer's name correspond to the signature of the buyer?

More specifically, how can Marriott be certain that the buyer is a real person, and that the signature in the "Bill of Sale" and "preliminary change of ownership report" belongs to that real person?

Were either or both those documents notarized, for example?

If both or at least one document was notarize, or you can otherwise "prove" with fair certainty that the signature belongs to the buyer, I'd feel that you need not worry about this after all, and that it is Marriott's and the Buyer's responsibility to figure it out.

Hopefully at least one of the documents is notarized, and this can just be a lesson for everyone who reads this blog. Of course, you'd need to keep us posted of the final outcome

Click to expand...

That's the problem with timeshares and why there needs to be laws that are different than the purchase of other real estate that is not normally worthless or a cash flow liability.

A real estate purchase contract is not normally notarized. The reason it is not necessary with normal real estate transactions is because the buyer generally puts up earnest money and there is no risk to the buyer that they will accidentally end up with something they do not want. They still have to come to the closing table and pay up a large sum, otherwise the seller is never going to sign the deed. The deed on the other hand is notarized because the buyer has everything to lose so the signature needs to be nearly 100% certain.

With a timeshare the tables are reversed in many cases. The buyer has the risk of loss due to the zero value nature of timeshares and the seller is probably wanting "out". Because of this there needs to be a process where the buyer is better verified and committed from the outset. Because of this not only should a purchase agreement be notarized for the buyer's signature but the deed should also contain the notarized signature of the buyer as well. Even though it is not required in many areas it probably doesn't hurt to just put in on the deed and have it recorded that way.

On the flip side is it worth it? Should we just let a regretful buyer out rather than go through the extra hassle?

Just a quick update. I'll go into more detail once all is complete.

So, had a conversation with the reluctant buyer and gave him a few options, none of which involved me taking it back, but offered to help him sell or deed back, once all is completed. As a result, all the Marriott desired paperwork is signed, returned to me, and sent off to them today for the transfer. It looks like the required package is complete, but I'll hold off on final comments and lessons learned until I am sure the process is 100% complete.

Luckily he is a very genuine guy in a very difficult personal situation so I'm able to work with him, and offer to assist after all is done.

So, there we have it - it looks like everything will complete. I'm cautiously optimistic at this point, but I suspect we are where we are because everything has remained cordial, no lines in the sand etc.

Watch this space...

As the saying goes --
You catch more flies with honey than you do with vinegar.
.
.

This is why DIY timeshare transfers can be dangerous. Always better to let the professionals do it. For the couple hundred dollars, all of the i's and t's should have been crossed in the real estate closing before the deed was recorded. I think in most cases the closing company obtains a limited POA to sign the transfer documentation for the buyer to send to Marriott. I have never signed the documentation included in post #13.

Well, all is well

Hi All,

Thanks for the help and support. Just wanted to report back that Marriott has transferred the TS to the rightful owner courtesy of getting those last few pieces of paper signed and sent on. I'll assist with the deed back for the new owner as I can, if needed. Anyway, some learnings I thought I'd share.


BEFORE

(1) Obtain and read the CC&R's thoroughly. If push comes to shove, these are your legal last resort.
(2) Obtain the documents the CC&R's say you need regardless of what Marriott say and include them as needed.
(3) Understand that Marriott actually don't follow their own CC&R's and just have their own process
(4) Find out exactly what Marriott want - exactly - not what the CC&R's say and use these as your guide
(5) If you do it yourself, talk to the county and find out exactly what they want to record the deed.
(6) If you use a title company, make sure that they are familiar with all of these items. I'm not convinced they all are as Marriott can change their process without regard to the legalities.

SO, THEN

(1) Arm yourself with all the documents you could possibly need, including those that the CC&R's say you need to offer (like the TS budget, copy of CC&R's etc) and get signed off on, even if Marriott doesn't want them. Keep any extra materials in a file 'just in case'.
(2) Get the new buyer to sign everything at one time and provide a copy of the driver's license - even if some things have to be undated. Even though the process is sequential, record the deed, then do the Marriott transfer, I got caught up in some buyer personal problems because I had the deed recorded then a period of reluctance to supply the last few signatures and a copy of a drivers license. I guess I was too trusting - take trust out of the equation and get everything signed at once.
(3) Make sure all paperwork passes through yourself so you have control over what is where and you can execute the sale and transfer even if things fall apart.
(4) Follow Marriott's process to the letter
(5) Don't deviate from the sale whatever the reason - you can help the new owner to resell or deedback later if you wish
(6) Keep your cool and maintain a cordial relationship even when things are going wrong.

So, all seems well and life goes on. Perhaps a title company would have made it less stressful but they still have to follow the same process (which isn't that hard in truth).

Just thought I'd give a final update and say thanks to all you really helpful TUG folk.

Cheers.