# Article Collaboration Time...just trying new stuff out



## TUGBrian (Jan 23, 2010)

Ok, so id like to begin publishing a new "common question" article each week on TUG.  While some are easy enough to answer, the others I would like to use the common knowledge of the group to create.

Id like to give a membership extension out for the individual who contributes most to the article and of course they will get their name as the co-author on the article itself.

*first one to try would be "what is ROFR"*

When the article gets published, ill post a poll for those to vote on who contributed most to the article to get the free membership extension

so lets have it shall we...how would you answer this question if it were asked of you.  remember this will be for an entire article...so while "right of first refusal" is a valid answer...it doesnt explain anything but the acronym!


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## jacknsara (Jan 24, 2010)

Brian,
Wikipedia contains a post that addresses the specific question, what is rofr
http://en.wikipedia.org/wiki/Right_of_first_refusal
Perhaps you are looking for an article that summarizes all sides of the debate regarding who & what it is good for that grace the tug archives??
Jack


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## KauaiMark (Jan 24, 2010)

*ROFR*

ROFR means "Right Of First Refusal"

ROFR is a stipulation in *some *timeshare agreements that states the resort has the right to match any offer to buy back your timeshare before a third party. 

If you want to sell your timeshare and you have found a buyer, you must submit the sales contract to the resort first. They have a time limit in which they can either buy back the unit from you at the contract price or let the sale you negotiated with your buyer proceed.

It's a way for the resort to attempt to control resale prices of their timeshares. Marriott is an example of one company that has a ROFR in their contracts.


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## TUGBrian (Jan 24, 2010)

either or, i just keep a running count of questions that get asked on the forums on a regular basis that IMO would make good actual "pages" on TUG for future people to reference.

this was one of the top ones.


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## jacknsara (Jan 24, 2010)

KauaiMark said:


> ROFR means "Right Of First Refusal"
> ...  It's a way for the resort to attempt to control resale prices of their timeshares. ...


This viewpoint is not universally accepted within tug.  
I accept that resort devlopers / salespeople claim it to be true.
In my personal experience it was a way for a former developer to assert a claim that did not contractually exist to pick up choice timeshare units (OF view) without establishing a minimum buy back price.  In my case, my ebay agent bid was between double and triple my winning bid.  So clearly, the assertion of a rofr claim did nothing to control or raise resale prices.
If a rofr article is to be a useful summary of the spectrum of tug viewpoints, perhaps it should briefly list them and refer to the archives either by containing links or providing useful search terms that would capture the best multi-sided discussions (and indirectly provide an incentive to become a member in order to use search).
I believe there are at least two viewpoints that should be addressed.  One is the potential resale buyer, relatively new to tug, looking to understand terms found in ebay listings.  The other is the potential seller, relatively new to tug, discovering that their resort claims such a right and wondering what impact it might have on their disposition effort.
Jack


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## Bill4728 (Jan 25, 2010)

We also need to add to any discussion of ROFR is there are some resorts which have tried to claim a ROFR when none exist. 

For ROFR to exist, it must be in the contract of sale of the first contract of sale on that TS. 

So if in 2001, Joe bought a TS from XYZ TSs, and there was not a clause giving XYZ TS  ROFR.  BUT in 2005, XYZ TS started adding a  clause in all the sale contracts add ROFR.

In 2006 when Joe goes to sell his TS, the resort does not have a ROFR because it wasn't in the contract in 2001. They can not add that right at a later date. 

There are several TS companies which have tried to say since they added ROFR to all contract after 2005, then they have ROFR on the TS that was sold in 2001.  They are wrong, and you can fight them if you choose. 

SEE this thread about PAHIO & ROFR 

This does not matter to the old owner (Joe) but it will matter to the buyer (Fred). Who got a killer deal on his TS purchase only to have XYZ TS try and steal the deal with a ROFR that isn't legal.


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## TUGBrian (Jan 31, 2010)

ok, first draft...I hope I got all the input included in the article!

http://tug2.net/timeshare_advice/what_does_ROFR_mean_for_timeshares.html


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## FlyerBobcat (Feb 1, 2010)

Hi Brian,

Where did this statement come from?



> Marriott is one example of a timeshare developer still exercising ROFR at the time this article was written  (January 2010).



At this point in time, I think this is a very misleading statement to anyone that reads the article.

As mentioned above:


> Marriott is an example of one company that has a ROFR in their contracts.


but I have seen near-zero reported ROFR activity with Marriott in almost a year.


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## TUGBrian (Feb 1, 2010)

Marriott was just the last developer I had heard of that exercised ROFR.

if they havent done so regularly in awahile, ill remove that line.


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## FlyerBobcat (Feb 1, 2010)

Others can chime in, but as I said -- the word here on TUG is that it's practically non-existent, at best....


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## TUGBrian (Feb 2, 2010)

FlyerBobcat said:


> Others can chime in, but as I said -- the word here on TUG is that it's practically non-existent, at best....



I removed the blurb mentioning that Marriott is still exercising ROFR....however can you confirm they do not include ROFR in their contracts being sold currently?  

or simply just not exercising it?


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## FlyerBobcat (Feb 2, 2010)

TUGBrian said:


> I removed the blurb mentioning that Marriott is still exercising ROFR....however can you confirm they do not include ROFR in their contracts being sold currently?
> 
> or simply just not exercising it?



From all that I read/hear on TUG, it's:  *simply just not exercising it*

Never heard anything related to changing the contracts.


And, of course, some of the older Marriott's (not originally sold as Marriott TSs, do not have ROFR in the contract  --- same as some not in the U.S.)


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## TUGBrian (Feb 2, 2010)

FlyerBobcat said:


> From all that I read/hear on TUG, it's:  *simply just not exercising it*
> 
> Never heard anything related to changing the contracts.
> 
> ...



gotcha, ok i think we are all good with the article as is...any futher comments/edits/additions?


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## ecwinch (Feb 3, 2010)

You might change your example on ROFR to DVC. They still are exercising their ROFR rights.


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## TUGBrian (Feb 5, 2010)

Next question for collaboration!

"What is Title Insurance and how does it apply to Timeshares?"


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## flexonguy (Feb 6, 2010)

*Title Insurance*

I want to make it clear that I am not a real estate or legal professional.  So the following are reflective only of my recent experiences of purchasing Title Insurance on my TS's.  Do not rely on my experiences and opinions as legal advice.  I welcome any corrections of my misunderstandings. 

I purchased two resale time shares recently.  Since my timeshare purchases were thousands of dollars I wanted to protect that money.  Title Insurance from a repeatable third party allows me to protect that initial purchase price only if some unforeseeable thing happens.  It does not protect me from everything but it does protect me if there are judgments or clouds on the title.  It also protects me if the seller does not have the right to sell the TS.  It is possible that you might be able to get your money back from the broker if they are reputable or still in business and willing to cooperate with you but what happens five or ten years from now?  That is where I believe that Title insurance would pay off.

Some resellers say that all you need is a title search and that protects you.  I do not know this for a fact but my belief is that only title insurance or an Owners policy that will truly protect your purchase.  I believe if you ask most repeatable brokers they would recommend it if it is practicable based on the purchase price. 

It should be noted that Title insurance or Owners policy only protects you up to your purchase price and not the closing fees.

Whether to purchase a Owners Policy needs to be weighed against your risk taking tolerance and the purchase price.  Most owner policies fall in the $300 to $450 range.  The profitability of these transactions for these companies is enormous since the cost to insure every thousand of dollars is so inexpensive these days vs the technology available to accurately search histories of the parties involved that the risk for these companies is greatly minimized.

When examining the deed that you are purchasing factors to consider: 

Are you buying from the original owners?  What happens if your reseller buys the TS in their name WO an Owners Policy and resells it six months later to you?  I believe that Title insurance only covers you from the last buyer forward.  It does not cover you from previous buyers back.  It is my understanding that it would then be the title insurance purchased from the previous sellers that would protect those title defects. Would the reseller create an uninsured gap in the title?

Did the previous buyers buy direct from the developer?  If you are buying directly from the sellers that purchased from the developer and you feel that they are in good character then you may not feel the need to purchase the Owners Policy because you are only running the risk on the one seller.  If there were multiple owners then the risk increases of course.

What you are trying to protect from is if the seller has the true legal right to sell.  Also, if there are any liens or judgments on the title, deed issues, MF's or other things overlooked.  If these liens are less than your purchase price and falls under what is covered under your title policy then the Owners Policy may pay for those liens and clear your title.  You may then be able to keep your purchase.

By purchasing Title Insurance on your resale when you sell it down the road it may make a desirable TS worth a little more.  You would be selling it with proof of a clear title.

The bottom line is what are you willing to pay to protect your purchase.


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## TUGBrian (Feb 9, 2010)

flexonguy said:


> I want to make it clear that I am not a real estate or legal professional.  So the following are reflective only of my recent experiences of purchasing Title Insurance on my TS's.  Do not rely on my experiences and opinions as legal advice.  I welcome any corrections of my misunderstandings.
> 
> I purchased two resale time shares recently.  Since my timeshare purchases were thousands of dollars I wanted to protect that money.  Title Insurance from a repeatable third party allows me to protect that initial purchase price only if some unforeseeable thing happens.  It does not protect me from everything but it does protect me if there are judgments or clouds on the title.  It also protects me if the seller does not have the right to sell the TS.  It is possible that you might be able to get your money back from the broker if they are reputable or still in business and willing to cooperate with you but what happens five or ten years from now?  That is where I believe that Title insurance would pay off.
> 
> ...



very nice =)


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## TUGBrian (Mar 10, 2010)

http://tug2.net/timeshare_advice/what_is_timeshare_title_insurance.html


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## TUGBrian (Apr 20, 2010)

latest article

http://tug2.net/timeshare_advice/timeshare_estoppel_letters.html


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