Can a LLC purchase a time share? [merged]

[hammerhammer]

Just thinking how easy it would be to dump it if need be.

Thanks

 

[BevL]

I'm sure you'll get more knowledgeable replies than mine. In theory, sure, yes, it could be deeded to a company. But you have to have approval from a resort to transfer, and more resorts are not allowing transfers routinely into company names for the very reason you've outlined.

It's because many of these timeshare scam places collect large upfront fees from people desperate to dump their timeshares, transfer deeds into what are termed "Viking ship" corporations, then default, leaving the resorts to hold the bag.

 

[ronparise]

Just thinking how easy it would be to dump it if need be.

Thanks

Yes, but thats not the reason to form an LLC. If your plan is to dump it , dont buy it.

Having said that;(and this is Wyndham specific) When that time comes my thought is that it will be easier and cheaper to sell the LLC that owns 20 deeds than it will be to sell each individual deed. because Wyndham charges a $299 fee for each deed. I also expect to be able to transfer my VIP status selling the LLC rather than the individual deeds...

 

[hammerhammer]

Yes, but thats not the reason to form an LLC. If your plan is to dump it , dont buy it.

Having said that;(and this is Wyndham specific) When that time comes my thought is that it will be easier and cheaper to sell the LLC that owns 20 deeds than it will be to sell each individual deed. because Wyndham charges a $299 fee for each deed. I also expect to be able to transfer my VIP status selling the LLC rather than the individual deeds...

Gotcha that is a great idea and plan!!!!

This is the stuff I love to learn here. Thanks again

 

[raygo123]

Yes, but thats not the reason to form an LLC. If your plan is to dump it , dont buy it.

Having said that;(and this is Wyndham specific) When that time comes my thought is that it will be easier and cheaper to sell the LLC that owns 20 deeds than it will be to sell each individual deed. because Wyndham charges a $299 fee for each deed. I also expect to be able to transfer my VIP status selling the LLC rather than the individual deeds...

Have you set up the LLC yet? And did it pass the Wyndham sniff test? Given the number of ways an account can transfer to others, and maintain VIP, were does this fit into Wyndham's rules?

If you have only points and no deeds I can see where adding someones name, but with deeds, don't the persons name have to be added to each, then 299 paid to Wyndham as well?

Last can your name then be removed from the LLC account through Wyndham without losing VIP?

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[Talent312]

As a condition of accepting corporate ownership, some TS resorts (the smarted ones) require that the corporate officers, trustees, partners or what have you, agree to be personally liable for MF's, special assessments, fees and dues, lest they try to hide behind the corporate veil.

Thus, it may not be useful for sticking your fellow TS owners with unpaid MF's, but rather a good device for holding and transferring ownership without the tedious process of a real-estate transaction.
.

 

[raygo123]

As a condition of accepting corporate ownership, some TS resorts (the smarted ones) require that the corporate officers, trustees, partners or what have you, agree to be personally liable for MF's, special assessments, fees and dues, lest they try to hide behind the corporate veil.

Thus, it may not be useful for sticking your fellow TS owners with unpaid MF's, but rather a good device for holding and transferring ownership without the tedious process of a real-estate transaction.
.

With that said, that still leaves open the question of VIP status, when someone is added after the initial purchase from Wyndham. According to Wyndham only relatives can be VIP by way of family.

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[ronparise]

With that said, that still leaves open the question of VIP status, when someone is added after the initial purchase from Wyndham. According to Wyndham only relatives can be VIP by way of family.

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My LLC owns several Wyndham deeds and the account is the LLCs account and the account has Platinum status

heres what it says at the top of my account page


Welcome, Holdings LLC Caloosa Timeshare
CLUB WYNDHAM® Platinum Owner
Logout | Change Password | Contact Us

at present I am the manager and only member but it is no problem to contact my Secretary of State to add another name or to change managers. If I sold the LLC thats what I would do and then notify Wyndham that the owner had a new manager. Thats not a sale of the deeds, so not subject to Wyndhams $299 transfer fee. The LLC still exists and still owns the deeds. it just has a new manager. In theory the platinum status should not change, but I havent tried this so I cant be sure, but thats my plan

This is no different than what yacht owners do. I recently bought a boat from an individual and now I owe the state of California 8% sales tax. A lot of yacht owners set up a LLC to own their boat, that way when they sell the boat, they really dont sell the boat, they sell the LLC that owns the boat, and no sales tax is due.because the boats ownership didnt change

Its not a big deal for the cheap boats like mine but consider the sales tax on a $300000 yacht would be $25000. and its not a big deal for a Wyndham account with one or two deeds, But I have over 100, At $299 plus closing costs; thats almost $50000. which is why I spend as much time as I do developing an exit strategy...

 

[DeniseM]

Just thinking how easy it would be to dump it if need be.

Thanks

Who do you think foots the bills if you abandon a timeshare with a Viking Ship LLC?

 

[ronparise]

Who do you think foots the bills if you abandon a timeshare with a Viking Ship LLC?

I dont think he cares, Denise

 

[DeniseM]

I dont think he cares, Denise

Probably not, but if any newbies are reading this thread and thinking it's a great idea:

If you abandon your timeshare with an LLC, the other owners at the resort have to cover your maintenance fees until it's re-sold, the legal costs of recovering the deed, and the cost of trying to resell it.

The developer pays nothing - the management company pays nothing.

HOA's are starting to get wise to the the Viking Ship scheme, and many will no longer accept a deed transfer to an LLC, unless the principal(s) in the LLC, agree to be personally responsible for the obligation.

 

[Beefnot]

Its not a big deal for the cheap boats like mine but consider the sales tax on a $300000 yacht would be $25000. and its not a big deal for a Wyndham account with one or two deeds, But I have over 100, At $299 plus closing costs; thats almost $50000. which is why I spend as much time as I do developing an exit strategy...

I didn't think that far ahead, otherwise I would have gone the LLC route. I have my deeds/contracts as sole and separate property. Don't know how well it will work, but my exit strategy is for my wife to reject inheriting the contracts upon my death.

 

[ekajun1957]

Now lets think that if this works with the LLC as an exit strategy and the timeshare companies lose any money or group of owners don't like losing money could you then possibly be committing fraud as your "intent" for the LLC was to defraud? You could become the test case and then lawyer fees will be more then than you ever expected. In RonParise's case he set up the LLC for other reasons and used it as a attempt to make money, making it a business. So if you are the only one using the timeshare it could be ruled that it is still YOUR property and the protections of the LLC lost. In the case of the yacht I am sure they also used it for some business purpose part of the time to make it legal.

 

[decadude]

Probably not, but if any newbies are reading this thread and thinking it's a great idea:

If you abandon your timeshare with an LLC, the other owners at the resort have to cover your maintenance fees until it's re-sold, the legal costs of recovering the deed, and the cost of trying to resell it.

The developer pays nothing - the management company pays nothing.

HOA's are starting to get wise to the the Viking Ship scheme, and many will no longer accept a deed transfer to an LLC, unless the principal(s) in the LLC, agree to be personally responsible for the obligation.

Learned something new here thanks for sharing very interesting topic.

 

[ronparise]

Now lets think that if this works with the LLC as an exit strategy and the timeshare companies lose any money or group of owners don't like losing money could you then possibly be committing fraud as your "intent" for the LLC was to defraud? You could become the test case and then lawyer fees will be more then than you ever expected. In RonParise's case he set up the LLC for other reasons and used it as a attempt to make money, making it a business. So if you are the only one using the timeshare it could be ruled that it is still YOUR property and the protections of the LLC lost. In the case of the yacht I am sure they also used it for some business purpose part of the time to make it legal.

No thats not true about the Yacht It doesnt have to be for business purposes (we are not talking about the IRS and trying to evade income tax with a phony business and deducting operating costs as if they were business expenses) We are trying to avoid sales tax by not selling . Not much different than leasing a car. You dont have to be a business to lease one, and you dont need to be a business to form an LLC.

Whenever you buy something (including timeshares, you should be thinking of its ultimate disposition and title it accordingly. My father for example owned everything he had in joint tenancy with his wife and everything went to her when he died. his children got nothing and when she dies whats left will go to her kids. I dont think thats what he wanted (he assumed that she would take care of his children from previous marriages) It didnt make any difference,however. She blew it all and now is an 80 yo living in poverty (she was a millionaire when he died). If he had put his assets in a trust and given his wife an allowance to live on, she would be in pretty good shape today and all the children would get a little bit when she goes.

But he didnt think and he didnt plan for his eventual demise, when he took title to the assets he ultimately died with

Most of what I own is as sole and separate property and everything that is encumbered with debt is sole and separate, only the good stuff is owned with my wife. I count on my heirs to take what they want of the junk, and reject what they dont, but the plan is an orderly disposition of the timeshares before I die

and Denise that means for some of the timeshares, If the HOA doesnt take them back, I will just default (or my estate will). and yes I know that my fellow owners will be stuck for the mf (no different than with a viking ship LLC,) and no I dont care. They should think of that when I offer them back

 

[Sugarcubesea]

I'm sure you'll get more knowledgeable replies than mine. In theory, sure, yes, it could be deeded to a company. But you have to have approval from a resort to transfer, and more resorts are not allowing transfers routinely into company names for the very reason you've outlined.

It's because many of these timeshare scam places collect large upfront fees from people desperate to dump their timeshares, transfer deeds into what are termed "Viking ship" corporations, then default, leaving the resorts to hold the bag.

The 3 resorts that I own at will not transfer to an LLC. Just as a confirmation as what was stated above...

 

[theo]

The 3 resorts that I own at will not transfer to a LLC. Just as a confirmation as what was stated above...

This is a wise and prudent position for any and every timeshare facility to take IMO, unless (as Talent312 astutely noted in post #6 above), the LLC is willing to openly identify the LLC "officers" who then also overtly accept personal liability and financial responsibility. Otherwise, the LLC "players" could just conveniently and anonymously hide themselves behind the corporate veil. Only an inattentive and / or reckless HOA would knowingly and willingly allow interval transfer to an anonymous entity seeking to hide from financial responsibility.

 

[presley]

I'm curious why some Tuggers are against LLCs, but encourage refusing inheritance. The end result is exactly the same.

Not picking on anyone in this thread. It's just a pattern I've noticed over my time on Tug. There are many arguments posted against LLCs, but lots of encouragement for people to refuse to accept an inheritance. In all of those cases, the end result is the same.

 

[DeniseM]

I'm curious why some Tuggers are against LLCs, but encourage refusing inheritance. The end result is exactly the same.

Not picking on anyone in this thread. It's just a pattern I've noticed over my time on Tug. There are many arguments posted against LLCs, but lots of encouragement for people to refuse to accept an inheritance. In all of those cases, the end result is the same.

It is not the same:

When a timeshare is abandoned with an LLC, it is far more difficult for the resort to re-acquire the deed, because the deed is entitled to what is essentially a phony entity. It is more costly and time consuming for the resort to jump through legal hoops to get the deed back when it has been abandoned, because of the murky title. They can't just instantly take it back - they have to go through whatever foreclosure process is required in their state - with additional problems, because the timeshare is deed to a phony entity that is not going to respond or cooperate.

When an heir refuses an inheritance, this is a legal process that is filed with the court, and it is simple for the resort to re-acquire the deed, because it is basically offered back to them.

Also - You are talking about two different scenarios:

1. The owner of the timeshare abandons the deed, rather than making legal arrangements for it to be disposed of.

2. An heir inherits a property that they don't want.

Clearly not the same...

 

[theo]

Comparing appples and oranges...

I'm curious why some Tuggers are against LLCs, but encourage refusing inheritance. The end result is exactly the same.

Not picking on anyone in this thread. It's just a pattern I've noticed over my time on Tug. There are many arguments posted against LLCs, but lots of encouragement for people to refuse to accept an inheritance. In all of those cases, the end result is the same.

I respectfully submit the following, speaking only for myself:

1. No one is ever legally obligated to accept any inheritance, whether it's a timeshare or a boat or a Doberman Pinscher. That's just an objective statement of legal fact --- no more and no less. I for one have not actually seen any "encouragement" here on TUG to refuse (i.e., disclaim) an inheritance, something which is certainly always a personal decision to be made on an individual, case by case basis. Voluntary, mutually agreed "deedback" is sometimes an option with a timeshare, but only if / when there are real, identifiable people to actively participate in and complete that process.

2. As a BoD / HOA member, I support (and practice) outright rejection of transfer to a LLC unless there are real people plainly and overtly identified in the LLC who overtly accept liability and financial responsibility for the interval ownership(s). Otherwise, there is simply no accountability and no way to distinguish between a bogus Viking Ship operation of (fraudulent, unlawful) ill intent and a legitimate LLC business enterprise. Moreover, the foreclosure process is neither quick nor simple nor without financial cost and it is always considerably "muddied" even further when a completely bogus LLC is involved.

This is complicated matter with many different relevant facts and factors which, with all due respect, I think you are both confusing and greatly oversimplifying.

 

[DeniseM]

Let me save the "end-justifies-the-means" crowd some time:

-All resort HOA's should accept all deed backs, no matter what the consequences are to the stability of the resort.

-If this puts the resort into financial difficulties - who cares.

-I got out of my deed(s) and that's all that matters to me.

Yes, that was sarcasm…..

 

[glmyers]

Legal versus Illegal

I'm curious why some Tuggers are against LLCs, but encourage refusing inheritance. The end result is exactly the same.

Not picking on anyone in this thread. It's just a pattern I've noticed over my time on Tug. There are many arguments posted against LLCs, but lots of encouragement for people to refuse to accept an inheritance. In all of those cases, the end result is the same.

Not exactly the same, but there is much in common in that both cost the association money to resolve. If enough heirs refuse the property, the timeshare companies will get smart and file a claim against the estate for future maintenance fee obligations and work to prevent any part of the estate from being distributed apart from the timeshare. How estates are handled varies greatly from place to place, but nowhere are creditors claims simply ignored.

The biggest difference is transferring to an entity to abandon a timeshare and avoid the negative consequences of doing so is illegal in most cases. Refusing a portion of an inheritance is a legally sanctioned behavior.

 

[DeniseM]

Not exactly the same, but there is much in common in that both cost the association money to resolve. If enough heirs refuse the property, the timeshare companies will get smart and file a claim against the estate for future maintenance fee obligations and work to prevent any part of the estate from being distributed apart from the timeshare. How estates are handled varies greatly from place to place, but nowhere are creditors claims simply ignored.

Not true - the estate is only responsible for the current maintenance fees due - not for all eternity.

Once the current obligations are paid, the estate can be distributed.

 

[raygo123]

Right now on this site, two people are posting about their foreclosures. One gives at least weekly updates, and is encouraged to hang in there. Not only not paying MF, but owes on a loan.

Now, if LLC's, would have the effect of offering an LLC, with FULL ownership privilege, resale prices would skyrocket, and everyone would do it. Yes, you would have some turn into "Viking ships" , but would it really change what would of have happened anyway?

That's what I still would like to know, will, with Wyndham, still maintain VIP. Or the highest level with other systems? 10,000, or 10,000,000 points still one person going into foreclosure.

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[DeniseM]

Right now on this site, two people are posting about their foreclosures. One gives at least weekly updates, and is encouraged to hang in there. Not only not paying MF, but owes on a loan.

You are comparing apples and oranges:

A foreclosure, and abandoning a deed with a Viking Ship LLC are very different things, with different procedures, and different costs and consequences.

If an owner cannot pay their maintenance fee, foreclosure is a legal option.

It is not the same as abandoning a deed with a Viking Ship LLC.