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Unable to buy because seller is behind on fees

echino

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Here's the situation. I found a Marriott timeshare that I would like to buy, the seller agrees on price, but the broker says the transaction cannot go through because the seller's 2018 maintenance fees are long past due.

The broker says Marriott will not even look at ROFR if there are past due fees. He says the seller has no money to pay the fees, and they cannot come out of the proceeds, the fees must be paid before the paperwork is sent in to Marriott for ROFR.

If I pay the seller's fees upfront and then Marriott takes the week via ROFR, I lose money. Is there a way out of this circle?
 

cp73

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Your best bet is probably to walk away and find another unit. Only other way would be have to seller pay first, but you said they have no money. I wouldn't pay with hope that Marriott doesn't ROFR. There are thousands of other timeshares to purchase with clean title.
 

AndySamuels

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Hypothetically you could have an attorney draft a loan agreement between you as the lender and the seller as the borrower for the 2018 MFs. Whether or not you would be able to recover your funds from the seller (borrower to you) in case Marriott executes ROFR is another matter obviously.

Time to move on probably. Just my two cents.
 

echino

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This is a very valuable week at half the going resale price, $7k instead of $15k. Marriott is very likely to ROFR, unless they cannot due to timing at the end of the year, so I was hoping to get the week cheap. No way around this situation?
 

tschwa2

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This is a very valuable week at half the going resale price, $7k instead of $15k. Marriott is very likely to ROFR, unless they cannot due to timing at the end of the year, so I was hoping to get the week cheap. No way around this situation?
I think the fact that they won't even look at it without the back fees being paid are somewhat new. I have bought in the past and was pretty sure the way the ebay/postcard company was getting around ROFR was to put in the contract that the fees would be brought up to date plus the purchase fee would be paid contingent on passing the ROFR and if the ROFR was exercised the current owner would not bring the fees up to date.
 

davidvel

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Having read the ROFR language in a few different MVC CC&Rs, I don't recall any language that would allow Marriott to place this restriction on a bona fide sale. They certainly could (and will) restrict usage until the fees are paid, but should not be denying to review the terms of the sale per ROFR.

Presuming you are willing to pay the 2018 fees in addition to purchase price (or ask for a credit at closing), instruct the broker to submit the deal for ROFR waiver, or do it yourself if they refuse. If Marriott says they won't review, tell them you will pay past dues if it passes, and make them show you language that they can refuse the sale.
 

echino

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Here is what the broker told me:

They had accepted an offer in the past from one of my buyers but when it went to Marriott for review the sellers were behind on their 2018 maintenance fees. Marriott will not allow transfers from this resort unless the account is current and it cannot be taken from their net proceeds. Until the seller is up to date with their fees this cannot be sold.
 

controller1

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Having read the ROFR language in a few different MVC CC&Rs, I don't recall any language that would allow Marriott to place this restriction on a bona fide sale. They certainly could (and will) restrict usage until the fees are paid, but should not be denying to review the terms of the sale per ROFR.

Presuming you are willing to pay the 2018 fees in addition to purchase price (or ask for a credit at closing), instruct the broker to submit the deal for ROFR waiver, or do it yourself if they refuse. If Marriott says they won't review, tell them you will pay past dues if it passes, and make them show you language that they can refuse the sale.

But doesn't Marriott have the right to place a lien on the property in the case of unpaid maintenance fees? If so, the lien would prevent the closing from going through until such time as the MFs are paid.
 

davidvel

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But doesn't Marriott have the right to place a lien on the property in the case of unpaid maintenance fees? If so, the lien would prevent the closing from going through until such time as the MFs are paid.
Maybe, but the lien would already have to be recorded. Even if it was, it would not bar closing unless the buyer demands so to escrow (if there is an escrow).

Obviously in a traditional property sale the buyer and lender insist all liens are satisfied in their agreement to fund, but they don't have to be. If a lien is not paid off in the sale, the buyer simply takes subject to that lien.

And in your example OP gets what he wants, as he seems to be willing to pay the fees somehow as it's a screaming deal.
 

TheTimeTraveler

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Here is what the broker told me:

They had accepted an offer in the past from one of my buyers but when it went to Marriott for review the sellers were behind on their 2018 maintenance fees. Marriott will not allow transfers from this resort unless the account is current and it cannot be taken from their net proceeds. Until the seller is up to date with their fees this cannot be sold.



I'd offer the seller $8,000 (which is still a bargain if you think it's worth $15K). I bet the seller would figure a way to find the funds to pay the 2018 maintenance fees so that the sale could proceed!

If he doesn't bite then it's time to walk away as you're probably just spinning your wheels for nothing.

Remember; make sure that none of your funds are used to pay this past due fee!

The Broker was foolish to take this listing under these circumstances.




.
 

vacationhopeful

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Tell the BROKER if he wants to earn HIS COMMISSION he needs to advance the past due fees to Marriott .... and collect the money from the proceeds at closing of the timeshare sale he is selling to YOU.

AS the broker is controlling the closing ... he will get his money at the time of closing. DO NOT USE the BROKER'S closing company as the SALE might never happen. It is a COST of NOT doing his (BROKER'S) due diligence when he listed and offered the property for SALE for this seller.

Your (indepentant) closing agent should NOT hand over the proceeds of the sale BEFORE the closing ... there is NO CLEAR ownership at this point in time .... which the broker represented to you when you AGREED TO BUY.

Oh, ... the 2019 MFs will VERY SOON be due. Marriott MAY NOT recognize the buyer as NEW owner .. as the NEW owner COULD be required to PAY the 2019 MFs before the change of ownership can be recognized.
 

BocaBoy

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The broker says Marriott will not even look at ROFR if there are past due fees. He says the seller has no money to pay the fees, and they cannot come out of the proceeds, the fees must be paid before the paperwork is sent in to Marriott for ROFR.
I would call Marriott myself and pose the question because this makes no sense. The best way for Marriott to collect their overdue fees would be to let them come out of the proceeds at closing. If Marriott exercises ROFR, then the fees would still come out of the purchase price at closing. Marriott should like this. The last thing Marriott should want is to prevent a sale of this property because that would undoubtedly mean further fee delinquencies going forward. I would not take the broker's word at face value here.
 

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Agree. Call Marriott as suggested by BocaBoy. Why have some broker interpret for you?

George
 
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Dean

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I agree, it makes no sense. It's to Marriott's, the sellers and the HOA's advantage to get this moved either to Marriott or to a new owner to make the week current on the dues. I'd also call directly. I can see them not transferring the title but to hold up ROFR is crazy. I'd call and if that didn't answer the question or they won't discuss with you (they'll need a release from the owner anyway to give any specific info), I'd ask the broker if they'd draw up a contract with the fees included and put the entire amount in escrow with fees brought up to date (including 2019) with the transfer which is standard procedure as I understand it. That way you aren't in a situation where you paid the dues and Marriott takes it anyway.
 

Shelley

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Marriott considers all bona fide offers evidenced by a signed contract between buyer and seller. There are no restrictions in place regarding maintenance fees - either past, present or future. The buyer and seller are free to negotiate any terms they choose and Marriott can either exercise ROFR and perform same terms or waive their ROFR option. Anyone is welcome to private message me if they wish to discuss this further.
 

TravelTime

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Here's the situation. I found a Marriott timeshare that I would like to buy, the seller agrees on price, but the broker says the transaction cannot go through because the seller's 2018 maintenance fees are long past due.

The broker says Marriott will not even look at ROFR if there are past due fees. He says the seller has no money to pay the fees, and they cannot come out of the proceeds, the fees must be paid before the paperwork is sent in to Marriott for ROFR.

If I pay the seller's fees upfront and then Marriott takes the week via ROFR, I lose money. Is there a way out of this circle?

Can’t you just have an agreement with the seller and agent that your funds to pay off will be held in escrow until the deal goes through? Otherwise I would abandon this deal. But often it works out because I had a very complicated purchase of MVC points. It took 1-2 months longer than the agent had disclosed but in the end, I got a fabulous deal.
 

TravelTime

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Your best bet is probably to walk away and find another unit. Only other way would be have to seller pay first, but you said they have no money. I wouldn't pay with hope that Marriott doesn't ROFR. There are thousands of other timeshares to purchase with clean title.

If Marriott exercises ROFR, the deal should be structured in a way that the purchaser does not lose anything.
 

TravelTime

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This is a very valuable week at half the going resale price, $7k instead of $15k. Marriott is very likely to ROFR, unless they cannot due to timing at the end of the year, so I was hoping to get the week cheap. No way around this situation?

Ask the agent to structure the contract for a higher purchase price to take into account that you would be paying the seller’s past due MFs. Otherwise this seller will never get out of their contract. It is in everyone’s best interests to move past this and get a new owner. Plus do not pay off the seller’s past due MFs until you pass ROFR.
 

echino

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I abandoned this transaction at this point.

Broker now says the sellers don't want to do anything with the timeshare any more and apparently just abandoned it.

Broker already apparently received the listing fee (SMTN), and did not have much incentive to do anything further.

This was Aruba Ocean Club 2br annual Platinum.
 

emeryjre

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Does Marriott receive the unit back as a foreclosure at this point?
 

Theiggy

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I abandoned this transaction at this point.

Broker now says the sellers don't want to do anything with the timeshare any more and apparently just abandoned it.

Broker already apparently received the listing fee (SMTN), and did not have much incentive to do anything further.

This was Aruba Ocean Club 2br annual Platinum.

So sad. I’ll take it off their hands!


Sent from my iPhone using Tapatalk
 

infamazz

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I abandoned this transaction at this point.

Broker now says the sellers don't want to do anything with the timeshare any more and apparently just abandoned it.

Broker already apparently received the listing fee (SMTN), and did not have much incentive to do anything further.

This was Aruba Ocean Club 2br annual Platinum.
Unless the broker involved is very reputable, this almost seems like a variation on the old timeshare scam of paying upfront fees. It's for the best that you stood firm and did not agree to make any payments.
 
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