Brokering Timeshares WITHOUT a License, Is it Legal?

[AKGOLFER]

I've always wondered if it was legal to Broker Timeshares WITHOUT a license as I know timeshares can be a fussy area of Real Estate.

Based on my research, I concluded it was NOT legal (if it makes a difference, I'm specifically talking about Mexico Timeshares) unless all you are doing is charging an upfront fee to advertise it for them. However, a fellow friend from Canada who also owns timeshares in Mexico has begun to Broker units for a number of other owners without a license and when I talked to her about it she said that there was a loop hole in the law and it was actually legal to do. She's not charging a "listing fee" but takes a commision on the end of the deal.

Is this legal in the US? in Canada?

I've spend a lot of time managing my own timeshares in Mexico and have always directed others to the free/low cost sites to do their own advertising or a couple brokers I trust if they didn't want to mess with it and were willing to pay a high fee and had time to wait.

I guess if it was legal to Broker without a license (take a commission when unit was sold), I would help them out myself.

Just wanted some TUGGER advise before heading down this road.

Look forward to your input,
Bill

 

[johnmfaeth]

From every state law I've ever seen, the act of receiving a commission on the sale of real estate which you do not personally own is considered real estate brokerage. This can result in Civil and/or Criminal Penalties.

The up front fee guys work under the same premise as a newpaper, they are simply advertising vehicles.

 

[abc31]

I've been wondering the same thing about rentals. Would it be illegal to act as an agent for a timeshare rental? Would that fall under the heading of Realtor or of Travel Agent? Also, a real estate license is issued by the state, so how could you be licensed to do vacation rentals in all of the states/countries that have timeshares?

abc

 

[T_R_Oglodyte]

From every state law I've ever seen, the act of receiving a commission on the sale of real estate which you do not personally own is considered real estate brokerage. This can result in Civil and/or Criminal Penalties.

The OP referenced Mexican timeshares, virtually none of which are real estate.

 

[Phill12]

Deleted my post of humor because of changes because of fixed quote tag! What ever that means!

 

[Jennie]

Lisa Ann Schreier, author of Timeshare Vacations For Dummies (Dummies Travel series), is a strong advocate for global licensing of timeshare salespeople, precisely because of the prevelance of owners living in one state and buying or selling timeshares in other states, or countries. It's quite a burden too for large companies like Fairfield to go through all the legal procedures and expense to be able to do business in so many different jurisdictions.

 

[johnmfaeth]

The OP referenced Mexican timeshares, virtually none of which are real estate.

Hi Steve,

This is from the very first paragraph of the New York State's Article 12-A Real Estate Licensing Law:

"of an estate or interest in real estate"

An "estate" being the term for outright ownership. An "interest" being the term which would include leases, which cover Mexican, Caribbean, and most international TS and Fractional Ownerships.

Mexican TS are 100% real estate, you just get a lease, not outright (deeded) ownership.

I tried to keep my initial answer concise. But yes, the answer remails the same.

Rentals of TS you do not own also requires licensing as a travel agency unless you are just a "listing" service.

The loophole on each is that your personal property rights always include the right to sell or rent what you actually own. Some states try to bend that if you have commercial vs. personal use desires (akak NC and SC) but they don't seem to do any real enforcement of such.

 

[JLB]

Being near an area where there is a lot of vacation property selling going on, I can say that some require a RE license and some do not.

(Some seem to only require a degree from a bible college. You would have to have been with us on one of our Orlando tours to understand that comment. )

Google-search each state to find out.

 

[e.bram]

There used to be a publication called the Want Ad Press, which would only charge a listing fee if the item were sold. I sometime advertise my business with coupons where some of the fees were base on response. If the listing contract were structured thery could effectivly charge a commission without violating real estate laws
Also if you are in New Jersey and sell a TS in Mass. whose real estate laws are being violated? If Mass what would be there jurisdiction in New Jersey. Even if they could(Mass) would they bother considering the amount of money involved.

 

[Docklander]

I've been wondering the same thing about rentals. Would it be illegal to act as an agent for a timeshare rental? Would that fall under the heading of Realtor or of Travel Agent? Also, a real estate license is issued by the state, so how could you be licensed to do vacation rentals in all of the states/countries that have timeshares?

abc

I cant find the post now but a similar point was made a while back. The answer that came back was that in the case of TSs you only has to be registered as a realtor in one state to be allowed to deal with units all over the place.

 

[e.bram]

As I understand it a state RE license allows the holder to sell RE in the state where the RE is physically located ONLY. Since most RE property is sold out of state what RE license are we talking about.

 

[JLB]

If you believe everything on the Internet, the answers seems to be Yes and No.

http://www.google.com/search?hl=en&...license+to+sell+timeshares&btnG=Google+Search

 

[BocaBum99]

Regulation of Real Property rights is the responsibility of the States. Each has its own statutes that regulate the buying, selling and renting of timeshares. A Timeshare is nothing more than a condo that is subdivided by timeslot as well as unit. So, a state's Real Estate laws generally apply to timeshares.

In most states, it is considered practicing real estate brokering without a license if you receive a commission for selling a timeshare on behalf of another party.

The post card companies try to bypass Real Estate laws by having the owner sign Power of Attorney to sign on their behalf. But, the compensation that they receive can be construed as unlicensed real estate activity as one PPC was charged in Washingon State earlier this year.

Lisa Ann Schreier is clearly clueless about what it would take to have a global license for timeshare sales. Not only would you have to take into account every individual states real estate laws, but you would also have to consider every other country's real estate laws as well. That would be impossible.

Typically, a broker who sells timeshares with a Real Estate license sells timeshare listing from multiple states. They just write the listing agreements and contracts in the state that they are licensed in. This is a gray area. Technically, a licensed real estate agent should only take listings and sell timeshares in their own state. But, that would be impossible except or in a few states. So, Real Estate commissions tend to look the other way, which is probably how the PCCs get away with what they do.

 

[AKGOLFER]

More Specific: Is a Mexico TS that is RTU different?

Any comment specificly on Mexico TS that are Right to Use only. Is it officially Real Estate?

Thanks everybody for your responses and without additional info convincing me otherwise I'm not going to go down this road.

Look forward to any Mexico specific response.

Thanks,
Bill

 

[PerryM]

What about WorldMark?

WM Credits are what? 1) Real estate and part ownership of 5,000+ condos or 2) Membership in a vacation club?

Can I sell the WM credits of another owner and get a commission?

Then to go further, can I reside in Hawaii and do the same? (WM is forbidden to sell in Hawaii)

 

[Bill4728]

Then to go further, can I reside in Hawaii and do the same? (WM is forbidden to sell in Hawaii)

WM is forbidden from selling in Hawaii?? What is that about?

 

[e.bram]

As a practcal matter, the only implication of the licensed brokers(and lawyers) ability to collect commission is that non lincensed persons would not be able to sue if they were not payed the commission.Otherwise if the commission is collected the issue is moot.(meaningless). So ebay sellers have no prpblem since they collect there fees upfront as well as the "upfront companies"

 

[PerryM]

WM is forbidden from selling in Hawaii?? What is that about?

Hawaii requires that timeshares sold for Hawaiian usage (like WM's 2 resorts) be deeded weeks and processed thru the Hawaiian state bureaucrats.

FairField (Wyndham) is fine since that's exactly what they do. WM sells credits in their club and 2 resorts are not deeded thru Hawaii.

This is how someone at WM explained it to me 3 years ago when we stayed at the WM Kihei and saw the sales gallery filled with rugs instead of dozens of smiling salesreps.

 

[nazclk]

Akgolfer

I don't agree with the notion that when you buy a Mexico timeshare you are getting an "interest" in the property. I think that is why many of them are called memberships. You are given a right to use the property for a specific amount of time not forever, in other words, you are pre-buying vacation weeks. Just my opinion

 

[jbug]

Orig. post, Canada person selling Mexico, selling vacations has to be a agent.

First requirments depend on the laws of the country from which you are selling. In the US you need to at least be an Agent, under a licensed broker (real estate) to sell properties other than FSBO's. Some work around this by buying properties, owning them in their name then selling.

Also skirt the issue as well by "referral fee" type situations as well as the listing fee "advertiser type" discussed above.

Buying from a non agent or creditable licensed seller, you loose some recourse just as you would if you bought a lemon from a private individual vs. a dealer.
Buyer beware

"also requires licensing as a travel agency" , you can actually sell travel without a license, they call them referring agents. Basically lead machines. But again, these individuals have had no training, etc. Again buyer beware.