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Should Renter Bear Risk of Closure Due to Hurricane

chapjim

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Wow. Makes me glad I didn't buy Marriott. What a crappy way to treat its owners, IMO.

I agree with THAT! I thought more of Marriott.
 

tschwa2

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I agree with THAT! I thought more of Marriott.
I think that's the way most systems treat the deeded owners. They are owners and they have to take the responsibility when the resort closes. Points "members" are going through and internal exchange or are eligible for the internal exchange and it is easier to compensate with system wide points then another week at a specific resort that was closed down.
 

echino

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As an (non-US) owner, can I buy insurance to cover the rental in this situation? I know the renter easily can, but I don't think any coverage is available for me.
 

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As an (non-US) owner, can I buy insurance to cover the rental in this situation? I know the renter easily can, but I don't think any coverage is available for me.

While there are travel insurance policies out there, for US and non-US, I don't believe that you, as the "landlord" (as opposed to the renter) can actually get insurance for a timeshare that you've *rented out*.

I found some articles that claim travel insurance will cover this if you're the owner booking your own week, but they did not provide any actual factual evidence to support their claims. If you read the actual travel insurance policy/certificate it's certainly vague and doesn't specifically mention timeshares (at least any of the ones I've seen).

This article on Redweek was quite useful and did list some specifics:

https://www.redweek.com/resources/ask-redweek/timeshare-owners-need-travel-insurance

But there are variations with the policies themselves (I think the article mentioned that some insurance companies may consider this "act of God" and thus you're hosed).

I know with Hilton, our only coverage through them is the Cancellation Protection, however, I believe that Hilton did work with the owners when this happened last time to refund/redeposit things (unlike Marriott).

However, not sure about Hilton owners who exchanged into RCI. I'm not sure what RCI did in that case.

Either that or you get a Cancel for Any Reason rider/add-on (I know you can get that as a non-US owner as there's someone in the UK on Flyertalk who mentions it all the time). Adds on about another $200 USD to the cost of the policy though and only reimburses 75% of the non-reimbursed expenses.
 

hurnik

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I'd read through this FAQ. The way I read it, the Vacation guard would not cover a rented out timeshare.

Plus lots of other stipulations even if the owner is using their own stuff.

https://vacationguard.info/FAQ/TimesharePlus/

This is the policy that Hilton *used* to offer members. I wanna say WAY back when it was $69?

Unfortunately the only way to get the policy is through the Provider (Hilton in my case, and it's no longer offered).
 

echino

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That's my point exactly. The owner cannot get insurance, but the renter can. Therefore, when I rent out my weeks, it is non-refundable for any reason, and the renter is advised to get insurance.

I will not refund the renter if the resort is closed by hurricane. The renter was advised to get insurance for that, and if they did not get insurance and chose to risk their vacation, it's on them.
 

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I only rent out Event Weeks with my Wyndham points. The resort actually was evacuated for 3 days during a recent hurricane. (Force Majeure) Wyndham cancelled all reservations and refunded all points, but I was able to rebook most of my clients for the 4 days, and since it was in October, near the end of year use, the remaining points weren't worth much to me, so I applied them to MFs at 1/3rd their cost to me. I then refunded that amount to my clients. Most were understanding, and the one that wasn't, I gave him a break at his next rental. I have no written rental agreement, so the risk is theirs. Being kind, I would do what I could to help. I rarely use Ebay or Craigslist, but have had success on both. Caveat emptor!
 

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I refunded 3 rentals when the hurricane hit St Thomas. They were Christmas weeks and a heavy hit $15,000. I felt it was the right thing to do. The resort was closed so I couldn’t provide the goods that they had purchased. Marriott provided us with 0 compensation as owners - no free weeks, points or anything else - unlike Westin and Hyatt who did. I do now put in my rental agreement that they will get a refund if the resort is closed, but as long as it’s open, no refund. It’s just the way I want to do business.

I use Allianz insurance in my travel business and it is excellent insurance. They pay their claims promptly for anyone who wants a reputable company.

Suzanne do you purchase the insurance provided by Marriott? If so, your m/f’s would be covered, right?
 

dioxide45

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That's my point exactly. The owner cannot get insurance, but the renter can. Therefore, when I rent out my weeks, it is non-refundable for any reason, and the renter is advised to get insurance.

I will not refund the renter if the resort is closed by hurricane. The renter was advised to get insurance for that, and if they did not get insurance and chose to risk their vacation, it's on them.
Your ability to obtain insurance really is no concern of your renter. Think of it like a lawn mower you rent to someone. You are the owner. You hire a guy to deliver it (the management company). Problem is that the lawn mower never makes it to the renter. Who is liable in this instance. Perhaps the person you are having it delivered by? But that is between you and the delivery guy. The renter still didn't get what they contracted for.

THere very likely is an insurance product out there you can buy. It just won't be travel or trip insurance but likely some kind of commercial or business insurance to cover a commercial operation.
 

Marathoner

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Providing the minimum required legally is not how I want to be treated and how I want to rent out my weeks. I would refund my clients if I could not provide them with the week promised, regardless of the law. I believe those who say the burden is on the client for force majeure events, they are very selfish and I would never rent from them.

Sent from my LG-H932 using Tapatalk
 

chapjim

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That's my point exactly. The owner cannot get insurance, but the renter can. Therefore, when I rent out my weeks, it is non-refundable for any reason, and the renter is advised to get insurance.

I will not refund the renter if the resort is closed by hurricane. The renter was advised to get insurance for that, and if they did not get insurance and chose to risk their vacation, it's on them.

Well, the owner most certainly can get insurance -- somewhere and at some cost. Virtually anything can be insured. But, it's a question of efficiency.

The point about efficiency -- my point anyway -- is that only the renter (not the owner) can determine the cost (monetary and otherwise) of cancellation. That is a subjective value. The renter is also one who most easily can cover the risk of loss (by purchasing readily-available and reasonably priced travel insurance). That is the efficient outcome.

A rental contract can say anything. The problem is the more clauses are inserted by the owner, the more Draconian it will sound and the more likely prospective renters will be scared off.

If you want to queer a deal, get the lawyers to start inserting contract clauses. (I am one, by education and licensing, if not by vocation.)
 

chapjim

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Your ability to obtain insurance really is no concern of your renter. Think of it like a lawn mower you rent to someone. You are the owner. You hire a guy to deliver it (the management company). Problem is that the lawn mower never makes it to the renter. Who is liable in this instance. Perhaps the person you are having it delivered by? But that is between you and the delivery guy. The renter still didn't get what they contracted for.

THere very likely is an insurance product out there you can buy. It just won't be travel or trip insurance but likely some kind of commercial or business insurance to cover a commercial operation.

If your lawn mower delivery guy is analogous to a management company (i.e., a volume of transactions similar to a management company), HE is in business and HE should have insurance (because he knows the probability that a loss or damage will occur).

It may be worth it for a travel agency to purchase some type of insurance because the cost can be spread over the large number of transactions. The timeshare owner who rents on a casual basis is different. He is not a commercial operation and may not even be said to be "in business."

This thread arose in the context of hurricanes in South Florida, which are certainly to be avoided. What about snow at a mountain ski resort? Is the owner to insure against loss because of a snowstorm when it is snow that is the attraction? Maybe the resort is open but the road the renter has to take to get there is closed or difficult. Owner's loss? Why?
 

dioxide45

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This thread arose in the context of hurricanes in South Florida, which are certainly to be avoided. What about snow at a mountain ski resort? Is the owner to insure against loss because of a snowstorm when it is snow that is the attraction? Maybe the resort is open but the road the renter has to take to get there is closed or difficult. Owner's loss? Why?
This would be covered by travel insurance for the renter. It would really be no different if their flight was cancelled or delayed due to weather.

While it may not make sense for an owner to buy insurance to cover the occasional rental, that doesn't release them of the liability if they can't make the unit available to the renter. If you are renting for a profit, one could consider that commercial. In the US the income would be claimed on a Schedule C - Profit or Loss from Business.
 

chapjim

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This would be covered by travel insurance for the renter. It would really be no different if their flight was cancelled or delayed due to weather.

While it may not make sense for an owner to buy insurance to cover the occasional rental, that doesn't release them of the liability if they can't make the unit available to the renter. If you are renting for a profit, one could consider that commercial. In the US the income would be claimed on a Schedule C - Profit or Loss from Business.

It could ALL be covered by travel insurance! That's my point!!

I'm not talking about legal liability although in absence of a rental agreement that addresses the issue, I think a court might well side with the owner because it is much easier for the renter to deal with the contingencies we've been talking about. I don't have a Lexis account but I'll see if I can find something on point.

I'm quite familiar with Schedule C and the records that one must maintain to support Schedule C!
 

chapjim

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Results of my research so far (https://www.nolo.com/legal-encyclopedia/hurricane-ruined-vacation-rental-65359.html):

I'm summarizing what is on the web site. In absence of a rental agreement that covers the situation, look to the following three sources, in the order listed.

1. State Law. North Carolina law directly addresses what will happen when mandatory evacuation orders affect the rental: Tenants are entitled to a refund, but not if they have either refused the landlord's or broker's offer of insurance (which would have compensated them for loss of use), or if they purchased insurance that covers the situation. [Question: if the owner recommends insurance, is that the same as an "offer of insurance?"]

2. Court Cases. California, which has a robust vacation rental scene, has not passed legislation covering these rentals. This results in a rather harsh rule, following a 1926 case. Unless the rental agreement specifies otherwise, prepaid rent cannot be recovered when the property has been destroyed (Pedro v. Potter, 197 Cal. 751 (1926)).

3. Default Rules. In some situations, neither the lease nor state statutes or cases will address the problem of pre-paid rent for a vacation rental that can't be enjoyed. When that happens, a court is likely to look for past similar cases from higher courts and follow the solutions handed down. Most courts will insist that prepaid money be refunded, as long as the event that frustrated the lease was not only beyond the power of the landlord to control, but unforeseen. That last requirement triggers lots of arguments—are hurricanes during hurricane season truly unforeseen? What about road closures in the mountains in the winter—when they happen frequently, isn't this a risk that tenants are assuming? The answer is likely to be yes, especially when the landlord has urged the renter to purchase insurance.

I don't know about North Carolina but in Virginia, statutory provisions like this are not mandatory. In other words, they are there to fill in gaps. If a rental agreement covers the situation, the statutory provisions don't override the rental agreement.

I'm surprised that California, of all states, has no statutory provisions and a court would have to rely on a 1926 case.
 

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Tenants are entitled to a refund, but not if they have either refused the landlord's or broker's offer of insurance (which would have compensated them for loss of use), or if they purchased insurance that covers the situation. [Question: if the owner recommends insurance, is that the same as an "offer of insurance?"]

I wonder if the landlord could show due diligence re: "offer of insurance" by including a link in the rental agreement to a renter's insurance broker with a checkbox where the renter acknowledges receipt of the option presented?
 

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I’m not advocating capitalizing on the event of a storm if my resort closed. However, the OP wants the owner to bear all the burden of resort closure due to hurricane damage. The OP said he didn’t want to buy trip insurance because “I am very leary of travel insurance policies because of the difficulty collecting on those policies.”

This appears to be a cop out because he is either too lazy to be bothered or too cheap to secure the investment of his rental. He wants the entire burden of time, expense and trouble to fall on the owner of the week. If he purchased the week via an exchange or getaway with II and didn’t purchase trip insurance he’d have to bear the consequences of what II or the resort provided.

I just purchased flights to NYC at the end of December. Normally for these short trips I gamble and decline trip insurance. Being that it’s during winter storm season I opted for the insurance. I’ve been stuck at an airport from winter storms.

The OP also says “My view has been a pretty simplistic one”. I agree. I’ve said several times in this thread, storms are just one of many reasons a person may not make it to the resort. The more people going on the vacation the higher the probability of an illness or accident. Trips can be cancelled not just from storms, illness or accidents. Death in the immediate family will cancel a trip. All these possibilities are so negative but that’s what trip insurance is for, the negative aspect to travel planning.

Will the OP put the burden on the owner to be reasonable and request a refund because of a gut wrenching tale of woe? Woe sometimes happens. Trip insurance doesn’t fix the woe but it reimburses the costs of a failed trip. This renter looks to be trouble and I would think hard before renting to him.

Every year (I should say every phone call) Marriott repeatedly suggests I protect my weeks with their insurance. It’s paid off twice. Once because of a lost item on a plane and another because of pneumonia.
 

chapjim

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I’m not advocating capitalizing on the event of a storm if my resort closed. However, the OP wants the owner to bear all the burden of resort closure due to hurricane damage. The OP said he didn’t want to buy trip insurance because “I am very leary of travel insurance policies because of the difficulty collecting on those policies.”

This appears to be a cop out because he is either too lazy to be bothered or too cheap to secure the investment of his rental. He wants the entire burden of time, expense and trouble to fall on the owner of the week. If he purchased the week via an exchange or getaway with II and didn’t purchase trip insurance he’d have to bear the consequences of what II or the resort provided.

I just purchased flights to NYC at the end of December. Normally for these short trips I gamble and decline trip insurance. Being that it’s during winter storm season I opted for the insurance. I’ve been stuck at an airport from winter storms.

The OP also says “My view has been a pretty simplistic one”. I agree. I’ve said several times in this thread, storms are just one of many reasons a person may not make it to the resort. The more people going on the vacation the higher the probability of an illness or accident. Trips can be cancelled not just from storms, illness or accidents. Death in the immediate family will cancel a trip. All these possibilities are so negative but that’s what trip insurance is for, the negative aspect to travel planning.

Will the OP put the burden on the owner to be reasonable and request a refund because of a gut wrenching tale of woe? Woe sometimes happens. Trip insurance doesn’t fix the woe but it reimburses the costs of a failed trip. This renter looks to be trouble and I would think hard before renting to him.

Every year (I should say every phone call) Marriott repeatedly suggests I protect my weeks with their insurance. It’s paid off twice. Once because of a lost item on a plane and another because of pneumonia.

If the week is expensive and/or important to a renter, he should protect himself.
 

dioxide45

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Keep in mind that a travel insurance policy may not cover the closer of a resort for repairs long after the storm. Sure, if there is an evacuation notice and you are traveling during the storm, you are likely covered. The question here is not related to the resort being closed at the time of the storm, but because of extensive damage resulting from the storm. Even the policy that Marriott previously sold did not cover those who had reservations cancelled long after the storm passed.

There are many reasons to get travel insurance, but it may not always cover you in this type of situation.
 
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