# ROFR exercised on gift transfer



## Brianhillmaui (Aug 13, 2020)

I am the transferee....signed a "sales agreement" at zero dollars and indicated in the agreement its a gift transfer. Hyatt notified current owner that they are exercising their ROFR. Is that legal? Can they exercise a ROFR for the gift of a deeded property? Any advice?


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## dioxide45 (Aug 13, 2020)

Is it a gift to a complete stranger? With a sales contract at $0, it seems that it is a sale for $0 if it is to a complete stranger.


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## travelhacker (Aug 13, 2020)

Brianhillmaui said:


> I am the transferee....signed a "sales agreement" at zero dollars and indicated in the agreement its a gift transfer. Hyatt notified current owner that they are exercising their ROFR. Is that legal? Can they exercise a ROFR for the gift of a deeded property? Any advice?


I haven't read the legalese, but I don't think there is a provision to gift it. 

I don't think the seller has to go through with the sale to Hyatt though.


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## dioxide45 (Aug 13, 2020)

travelhacker said:


> I haven't read the legalese, but I don't think there is a provision to gift it.
> 
> I don't think the seller has to go through with the sale to Hyatt though.


Doesn't the developer just take over the contract as the buyer? So if you were obligated to sell it to the original buyer, you would still be obligated to sell it to Hyatt? Of course I doubt Hyatt would actually bother to enforce the contract, but they could.


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## travelhacker (Aug 13, 2020)

dioxide45 said:


> Doesn't the developer just take over the contract as the buyer? So if you were obligated to sell it to the original buyer, you would still be obligated to sell it to Hyatt? Of course I doubt Hyatt would actually bother to enforce the contract, but they could.


Yes. However, I haven't seen any language that punishes the seller in any of the contracts I've bought. Seller could _try _notifying the closing company of the intent to withdraw and see what would happen.


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## Pathways (Aug 13, 2020)

dioxide45 said:


> Doesn't the developer just take over the contract as the buyer? So if you were obligated to sell it to the original buyer, you would still be obligated to sell it to Hyatt? Of course I doubt Hyatt would actually bother to enforce the contract, but they could.



I know someone who submitted the same property multiple times (same property,buyer/seller) and raised the price until HRC passed on the ROFR.  They said they had done that on 4 or 5 different sales. As long as you didn't put into the contract a penalty if the seller doesn't complete the sale, you can generally back out any time. 

As everyone knows who buys/sells timeshares - there are always 'outs' until the deed is done.



Brianhillmaui said:


> I am the transferee....signed a "sales agreement" at zero dollars and indicated in the agreement its a gift transfer. Hyatt notified current owner that they are exercising their ROFR. Is that legal? Can they exercise a ROFR for the gift of a deeded property? Any advice?



Never heard of an attempt to ROFR a properly written gift transfer.  If this is truly a 'gift'. such as to a family member, I certainly would not complete a transfer to Hyatt.   I will not suggest any of multiple ways to get around this, as only you know if your transfer is legitimately 0.00


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## bdh (Aug 18, 2020)

dioxide45 said:


> Doesn't the developer just take over the contract as the buyer? So if you were obligated to sell it to the original buyer, you would still be obligated to sell it to Hyatt? Of course I doubt Hyatt would actually bother to enforce the contract, but they could.



The seller is not required to complete the sale to Hyatt in a ROFR situation - however most sellers do as they no longer want the TS (and they don't care who winds up with the TS - they're just glad they no longer own it).  When Hyatt exercises ROFR, the seller can simply say they changed their mind and the entire deal dies.  As Pathways noted above, a sale can be submitted for the same property multiple times (same property,buyer/seller) and raise the price until it passes ROFR.


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## RX8 (Aug 18, 2020)

Pathways said:


> I know someone who submitted the same property multiple times (same property,buyer/seller) and raised the price until HRC passed on the ROFR.  They said they had done that on 4 or 5 different sales.



Umm, isn’t this outright fraud?  The seller and buyer are obviously in cahoots to create fake contracts in an effort to maximize their selling price.


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## bogey21 (Aug 18, 2020)

RX8 said:


> Umm, isn’t this outright fraud?  The seller and buyer are obviously in cahoots to create fake contracts in an effort to maximize their selling price.



Not sure they are trying to maximize the selling price but rather are trying to make sure a preferred buyer gets the Week...

George


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## RX8 (Aug 18, 2020)

bogey21 said:


> Not sure they are trying to maximize the selling price but rather are trying to make sure a preferred buyer gets the Week...
> 
> George



Oh yes, you are absolutely correct. I was reading it that they buyer didn’t want it but rather the seller wanted HRC to exercise ROFR. 

Even at that, there is still an element of fraud since they are executing multiple contracts all in an effort to bypass HRC’s contractual right to take over as buyer through ROFR.


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## Kal (Aug 18, 2020)

IMHO, the seller wants the unit to go to a specific "buyer" and not to Hyatt.  Obviously, there is a relationship between the two.  If the owner simply wanted to part with the annual MF, there would be no issue of who obtains the unit.  To make the desired transaction function, the seller will need to change the approach.  One way is to continually raise the selling price until it exceeds Hyatt's "sweet spot".  Other options are also available.


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## Pathways (Aug 18, 2020)

RX8 said:


> Oh yes, you are absolutely correct. I was reading it that they buyer didn’t want it but rather the seller wanted HRC to exercise ROFR.
> 
> Even at that, there is still an element of fraud since they are executing multiple contracts all in an effort to bypass HRC’s contractual right to take over as buyer through ROFR.



HRC never loses their rights, they can always exorcise at the higher price.  If it is simply the intent of the 'corporate' entity to purchase the week, they could reach out to the seller and negotiate. If the intent is to simply support the price, or simply take the week if it is dirt cheap only, then I see no issue. 

I purchased two Marriott weeks, and used the same law firm that Marriott uses for their 'developer' sales.  They filled out the ROFR form as a gift.  I questioned them, and they said on their resales they do it that way so the sale always goes through.  Not sure what you call that, but hey, they are the legal minds!  (I was surprised the seller in each case didn't care, as each was a 5 figure sale. I assume they just figured the law firm already had my check, so they were getting paid one way or the other.  But still, the ROFR did not match the sales contract)


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## Pathways (Aug 18, 2020)

I think ultimately the developer just wants to support the price so they can better justify their own pricing.  In that case, I really don't think they care about the multiple submissions, they just don't want a low sales price. Again, if they really wanted to own a specific week, they know who the owners are. They could just reach out a make offers.

I figure that is why some charge for the ROFR submission. That way, they are making money no matter.  I heard a MOC fixed week/unit got submitted four times before Marriott let it go. 

The seller (unless personal friends with the buyer) is kind of taking a chance themselves if they participate.  If after multiple submissions the buyer ultimately backs out, they are stuck with no personal sale and no ROFR sale.  So I doubt it occurs frequently.


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## win555 (Aug 18, 2020)

RX8 said:


> Umm, isn’t this outright fraud?  The seller and buyer are obviously in cahoots to create fake contracts in an effort to maximize their selling price.





RX8 said:


> Oh yes, you are absolutely correct. I was reading it that they buyer didn’t want it but rather the seller wanted HRC to exercise ROFR.
> 
> Even at that, there is still an element of fraud since they are executing multiple contracts all in an effort to bypass HRC’s contractual right to take over as buyer through ROFR.


The seller simply changed their mind.. they should be allowed to do that. Bait and switch is a common tactic in TS sales.. except that the developer is at the receiving end now. Is there anything in the contract between the seller and Hyatt that they are required to finish the transaction? If it is fraud, why doesn't Hyatt pursue the seller legally?

Considering all the "fraudulent" activities developers engage in, I'm sure they don't think of this as serious enough fraud to pursue these sellers.


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## dioxide45 (Aug 18, 2020)

win555 said:


> The seller simply changed their mind.. they should be allowed to do that.



You have a contract. Changing your mind really shouldn't be an option. You can't change your mind simply because the developer exercises ROFR. You still have a contract.


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## win555 (Aug 18, 2020)

dioxide45 said:


> You have a contract. Changing your mind really shouldn't be an option. You can't change your mind simply because the developer exercises ROFR. You still have a contract.



You got me.

I know guys will come down hard on me but let me just admit that I don't see anything wrong with these tricks. They are in the same spirit as tactics used by timeshare developers: a way to use the system in your favor.


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## HenryT (Aug 18, 2020)

The contract is between the seller and the original buyer isn't it? The developer is not part of that sales contract. If the developer took the unit via ROFR, a new contract would need to be generated between the seller and the developer. The original contract would no longer be valid. Under these conditions I would think the seller can decide if they wanted to sell to the developer or not.


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## Pathways (Aug 18, 2020)

dioxide45 said:


> You have a contract. Changing your mind really shouldn't be an option.



I know I have felt that way every time the sale of one of my weeks falls through. But the broker always tells me otherwise.


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## dgalati (Aug 18, 2020)

win555 said:


> You got me.
> 
> I know guys will come down hard on me but let me just admit that I don't see anything wrong with these tricks. They are in the same spirit as tactics used by timeshare developers: a way to use the system in your favor.


Nothing wrong with using every loop hole available to stick it to the TS developers. That's what I have been saying "use the system in your favor" !!!


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## pacman777 (Aug 18, 2020)

RX8 said:


> Umm, isn’t this outright fraud?  The seller and buyer are obviously in cahoots to create fake contracts in an effort to maximize their selling price.



Lol. I think this pales in comparison to the real fraud that comes out of these timeshare salespeople’s mouths.


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## win555 (Aug 18, 2020)

pacman777 said:


> Lol. I think this pales in comparison to the real fraud that comes out of these timeshare salespeople’s mouths.



I don't think it's fraud if the developer does it .. if the seller does it to get a small fraction of the initial purchase price, it is outright fraud


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## Kal (Aug 18, 2020)

pacman777 said:


> Lol. I think this pales in comparison to the real fraud that comes out of these timeshare salespeople’s mouths.


It's only fraud if their lips are moving.


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## dioxide45 (Aug 18, 2020)

Two wrongs now make a right?


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## sjsharkie (Aug 18, 2020)

dioxide45 said:


> You have a contract. Changing your mind really shouldn't be an option. You can't change your mind simply because the developer exercises ROFR. You still have a contract.


There is no contract if the seller decides not to sell unless the contract has a penalty or some other clause in it stating as such.

All of the sales contracts I use as seller state that if seller backs out for any reason, they are responsible for all closing costs and nothing more.  Most of the timeshares I buy have similar language.  I suppose you could add in clauses to state that there is a penalty for backing out, but I haven't seen one in any of my purchases.

-ryan


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## NiteMaire (Aug 18, 2020)

dioxide45 said:


> Two wrongs now make a right?


No, but 3 lefts do!


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## TamaraQT (Aug 18, 2020)

Pathways said:


> they know who the owners are. They could just reach out a make offers.


This has always been something I questioned and never understood. When they notice the owner is trying to "sell", "transfer" or "gift" their unit, why doesn't the developer/company reach out and make an offer to the owner. Especially when it's someone who has owned for over 10 years. I think it's the least they can do when it comes to an owner that successfully satisfied their mortgage, and pays their maintenance fees regularly. They received MORE than enough in taxes and fees from the owner over the years. Offer to take it back with a minimum offer of at least one year of maintenance fee reimbursement. This way the seller/owner gets something "more" than they would if they were to give it away or sell for a $1.  The developer can find another unsuspecting soul(Non-Tug Member) to sit in a presentation and sell it to. Why doesn't the developer just take it off their hands and offer them "something" for being a good customer for the time they owned it?


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## Pathways (Aug 18, 2020)

TamaraQT said:


> This has always been something I questioned and never understood. When they notice the owner is trying to "sell", "transfer" or "gift" their unit, why doesn't the developer/company reach out and make an offer to the owner. Especially when it's someone who has owned for over 10 years. I think it's the least they can do when it comes to an owner that successfully satisfied their mortgage, and pays their maintenance fees regularly. They received MORE than enough in taxes and fees from the owner over the years. Offer to take it back with a minimum offer of at least one year of maintenance fee reimbursement. This way the seller/owner gets something "more" than they would if they were to give it away or sell for a $1.  The developer can find another unsuspecting soul(Non-Tug Member) to sit in a presentation and sell it to. Why doesn't the developer just take it off their hands and offer them "something" for being a good customer for the time they owned it?



ROFR is actually the ultimate scam.  It has a dark past in some condo type real estate, where they used it to keep out 'undesirables'.

In timeshares I really don't see any other reason for it to exist except for a developer to play the game with a 'stacked deck of cards' since only the developer knows all the numbers.  I'm struggling to think of another business where a sale between two parties can be blindly hijacked.  And for the sole purpose of taking the ownership and reselling for a higher profit than the seller is making. 

Even at a 40% commission, at least Marriott used to be somewhat open about the pricing when they helped an owner make a sale. There really should be a law requiring the entity with ROFR to openly declare their price offer.


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## win555 (Aug 19, 2020)

dioxide45 said:


> Two wrongs now make a right?



I disagree (but disagreement does not mean dislike). Rules are set up by developers to screw buyers and sellers. Blind adherence to such rules isn't "right" to me. Developer is going to do what's in their best interest and I'm going to do what is in my best interest. They can sue in court if they think what the seller is doing is illegal.

Many employers used to ask your salary in a job interview so they could screw new employees by paying them less. Interviewers frequently inflated their salary number. At that time, you could say what these prospective employees were doing was fraud or wrong. But eventually this practice of asking for your current salary became illegal. There are lots of practices that are legal at one time but later outlawed. I don't see a reason to conform to a rule that is clearly designed to screw me. 

PS: I'm not a seller but a prospective Hyatt buyer.


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## win555 (Aug 19, 2020)

Pathways said:


> ROFR is actually the ultimate scam.  It has a dark past in some condo type real estate, where they used it to keep out 'undesirables'.
> 
> In timeshares I really don't see any other reason for it to exist except for a developer to play the game with a 'stacked deck of cards' since only the developer knows all the numbers.  I'm struggling to think of another business where a sale between two parties can be blindly hijacked.  And for the sole purpose of taking the ownership and reselling for a higher profit than the seller is making.
> 
> Even at a 40% commission, at least Marriott used to be somewhat open about the pricing when they helped an owner make a sale. There really should be a law requiring the entity with ROFR to openly declare their price offer.


I think it's kind of a discrimination against lower income people to not allow them to buy a Hyatt week at the market rate. The market rate for many of the Hyatt weeks (Gold and below) is 90% less than the prices from Hyatt. 

Hyatt is preventing people cannot afford retail prices to not buy into the Hyatt system by using the ROFR system. Hope this discriminatory system gets outlawed some day.


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## Tucsonadventurer (Aug 19, 2020)

win555 said:


> I think it's kind of a discrimination against lower income people to not allow them to buy a Hyatt week at the market rate. The market rate for many of the Hyatt weeks (Gold and below) is 90% less than the prices from Hyatt.
> 
> Hyatt is preventing people cannot afford retail prices to not buy into the Hyatt system by using the ROFR system. Hope this discriminatory system gets outlawed some day.


It is about finding that sweet spot. We have payed as low as 3,000 but it depends on Hyatt's inventory at the time. There are still good deals that go through but a diamond week for 1,000 will be bougt up. Don't give up


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## AJCts411 (Aug 20, 2020)

win555 said:


> I think it's kind of a discrimination against lower income people to not allow them to buy a Hyatt week at the market rate. The market rate for many of the Hyatt weeks (Gold and below) is 90% less than the prices from Hyatt.
> 
> Hyatt is preventing people cannot afford retail prices to not buy into the Hyatt system by using the ROFR system. Hope this discriminatory system gets outlawed some day.



Then...we should also ban, make illegal those UN-affordable flights,  steaks and luxury cars.


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## win555 (Aug 20, 2020)

AJCts411 said:


> Then...we should also ban, make illegal those UN-affordable flights,  steaks and luxury cars.



Are these available at 90% off to one set of people and a certain demographic prevented from purchasing?


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## geist1223 (Aug 20, 2020)

win555 said:


> I think it's kind of a discrimination against lower income people to not allow them to buy a Hyatt week at the market rate. The market rate for many of the Hyatt weeks (Gold and below) is 90% less than the prices from Hyatt.
> 
> Hyatt is preventing people cannot afford retail prices to not buy into the Hyatt system by using the ROFR system. Hope this discriminatory system gets outlawed some day.




Oh no has the Cancel culture made it to TUG?


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## pacman777 (Aug 20, 2020)

win555 said:


> I think it's kind of a discrimination against lower income people to not allow them to buy a Hyatt week at the market rate. The market rate for many of the Hyatt weeks (Gold and below) is 90% less than the prices from Hyatt.
> 
> Hyatt is preventing people cannot afford retail prices to not buy into the Hyatt system by using the ROFR system. Hope this discriminatory system gets outlawed some day.



this sounds like it would be a good class action lawsuit against Hyatt for its ROFR practices if you present it that way. Any attorney bored and want to take it on?


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## Sapper (Aug 20, 2020)

pacman777 said:


> this sounds like it would be a good class action lawsuit against Hyatt for its ROFR practices if you present it that way. Any attorney bored and want to take it on?



If Hyatt were discriminating against a specific race, religion, creed, disability, etc... they would have the pants sued off them. However, being “low income” is not a protected class.  There are some social safety nets in place for low income folks, but owning a timeshare is a want not a need like food, shelter, or medicine.


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## geist1223 (Aug 21, 2020)

pacman777 said:


> this sounds like it would be a good class action lawsuit against Hyatt for its ROFR practices if you present it that way. Any attorney bored and want to take it on?


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## bdh (Aug 22, 2020)

pacman777 said:


> this sounds like it would be a good class action lawsuit against Hyatt for its ROFR practices if you present it that way. Any attorney bored and want to take it on?



The HRC TS Association rules were written by the developer to favor the developer - Attorneys have already looked at it and unfortunately, ROFR is legal.


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## Mongoose (Sep 28, 2020)

travelhacker said:


> I haven't read the legalese, but I don't think there is a provision to gift it.
> 
> I don't think the seller has to go through with the sale to Hyatt though.


I "purchased" a week via a "Gift" back in March.  The transfer fee is also less.  I assume the owner can decline to honor the ROFR and keep it to sell if there is any value.   Wonder if it was a Platinum or Diamond?


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## Kal (Sep 28, 2020)

Who knows?  This may have a method of baiting Hyatt to take the unit.  Owner thereby avoids endless Maintenance Fees forever.


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## Sandy VDH (Sep 28, 2020)

It makes good business decision for the developer to purchase back wanted inventory at reduced prices.  It is probably significantly cheaper to buy it via ROFR then to develop new inventory from scratch.  It also keeps up resale prices and lessens to collapse of the house of cards.


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## BJRSanDiego (Oct 1, 2020)

sjsharkie said:


> There is no contract if the seller decides not to sell unless the contract has a penalty or some other clause in it stating as such.
> 
> All of the sales contracts I use as seller state that if seller backs out for any reason, they are responsible for all closing costs and nothing more.  Most of the timeshares I buy have similar language.  I suppose you could add in clauses to state that there is a penalty for backing out, but I haven't seen one in any of my purchases.
> 
> -ryan


I bought a Marriott timeshare through Redweek.  I wrote up the offer with a lot of detail including who is responsible for the maintenance fee and taxes for which year. I was very specific.  Based on their acceptance of my offer, we made a contract that was essentially a "copy/paste" of my offer.  Apparently neither the seller's agent nor the seller digested that because when it went to closing, the seller's agent and seller thought that I should pay the MF for the entire year prior to my first use year.  At one point, the seller made signs that they were backing out.  That is when I realized that I hadn't addressed the cancellation issue with the offer letter to seller.   So, short of suing for Specific Performance, there wasn't much that I could do.  But in the end, the seller's agent talked them out of walking away.  

So, I suspect that if the TS company exercises the ROFR that there isn't much that they can do if the "seller" or giftor back out.


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