Can a LLC purchase a time share? [merged]

[Kapolei]

Trading Places also has a 'hot deals' page where you can get very good deals 'last minute' without having to deposit any inventory.

http://www.tradingplaces.com/rentals/hot-deals-weekly-stays

The resort near me is 4 star and only available through an II trade.

 

[Kapolei]

I was looking at StoneRidge in Idaho for low maintenance fees ($260) for II trades. Anyone have experience with this resort?

 

[hammerhammer]

Buying in the secondary market with a LLC

I have read on here how most resorts will not sell to a LLC.

How about a secondary sale to a LLC?

Can the resort control who can buy the week on a secondary market?

I would set a LLC just for the purchase and pay all fees through said LLC.

Of course this is just so I can bail if need be with no issues.

 

[TUGBrian]

I believe the last line in your reply provides the explanation for why many resorts will refuse to transfer ownership to an LLC.

 

[DeniseM]

Absolutely - resorts can and do refuse to accept a transfer, if they feel that it might be fraudulent. For instance - if they feel that it might be a Viking Ship Company.

I am going to merge this with your other thread - on the same topic.

I recommend that you review all the responses that you got there.

 

[Saintsfanfl]

I have read on here how most resorts will not sell to a LLC.

How about a secondary sale to a LLC?

Can the resort control who can buy the week on a secondary market?

I would set a LLC just for the purchase and pay all fees through said LLC.

Of course this is just so I can bail if need be with no issues.

Why would you in advance think you would need to bail? I can think of many reasons why someone would want to purchase a timeshare through an LLC but most of them involve at least some element of fraudulent thought. Don't get me wrong, there is definitely a legitimate business need in buying a timeshare through an LLC as a business rental property but the illegitimate businesses have far outweighed the legitimate ones which is why many properties are suspicious.

 

[hammerhammer]

Why would you in advance think you would need to bail?

My first question was buying it from the resort in a LLC and now my question is secondary market.

Because I think an exit plan should be figured out before any large amount of money is spend or a large risk is taken on. Kind of goofy I know.

My thought is if a hurricane hits the resort I would not want to be assessed unfairly with out a way out (exit plan) of the property.

 

[DeniseM]

It doesn't make any difference - either way (developer or resale purchase) the resort title office can choose to accept the new deed, or not. So everything from the original question applies.

However, buying resale would be more problematic, because you would be at the last step of the transfer process before you knew if the resort would accept a deed from an LLC, and if they won't, it would leave you in limbo.

We have had people with this exact issue post on TUG.

This is the transfer process:

Sign contract and pay for timeshare.

Prepare new deed, and submit it to the County Records Office for recording.

Send the recorded deed to the timeshare title office - could be rejected at this step.

 

[bjones9942]

My first question was buying it from the resort in a LLC and now my question is secondary market.

Because I think an exit plan should be figured out before any large amount of money is spend or a large risk is taken on. Kind of goofy I know.

My thought is if a hurricane hits the resort I would not want to be assessed unfairly with out a way out (exit plan) of the property.

I really hope you give up on your idea to buy. As an owner who pays their fees, and possibly any special assessment when something goes awry, having to foot a portion of your bill because you bailed doesn't sit well with me.

 

[comicbookman]

My first question was buying it from the resort in a LLC and now my question is secondary market.

Because I think an exit plan should be figured out before any large amount of money is spend or a large risk is taken on. Kind of goofy I know.

My thought is if a hurricane hits the resort I would not want to be assessed unfairly with out a way out (exit plan) of the property.

So your exit plan is to commit fraud?

 

[Jason245]

So your exit plan is to commit fraud?

That is not fraud. It is a legal means to shield assets. That being said, it sux for other owners..

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[Jason245]

Absolutely - resorts can and do refuse to accept a transfer, if they feel that it might be fraudulent. For instance - if they feel that it might be a Viking Ship Company.

I am going to merge this with your other thread - on the same topic.

I recommend that you review all the responses that you got there.

I have yet to hear of a hoa successfully breaching a viking ship when that ship holds the dead. Nor have I heard of one successfully suing an owner for mf on something that was transferred(if they refuse to transfer in their system, that is their problem, ultimately if they sue, the defense is that the deed isn't owned by the person in their system and consumer financial protection would squash any debt collection and credit report ding on side of consumer if necessary and the person being collected on might even have a cause of action after the hoa is found unable to validate the debt and still continues collection efforts). I have also yet to hear of one viking ship create charged because the product was illegal.

I personally think that using viking ships is a terrible exit strategy, that being said, there is a very limited resale market, and most resorts and hoa do not provide sufficent support and tools for owners who want out. They exist because of a lack of options available for other real estate.





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[Jason245]

It doesn't make any difference - either way (developer or resale purchase) the resort title office can choose to accept the new deed, or not. So everything from the original question applies.

However, buying resale would be more problematic, because you would be at the last step of the transfer process before you knew if the resort would accept a deed from an LLC, and if they won't, it would leave you in limbo.

We have had people with this exact issue post on TUG.

This is the transfer process:

Sign contract and pay for timeshare.

Prepare new deed, and submit it to the County Records Office for recording.

Send the recorded deed to the timeshare title office - could be rejected at this step.

That rejection is only administrative and on resort sode. Interestingly, if they refuse, the llc could sue for access and at that point I would imagine the hoa backing down. ..

Most viking ships won't spend the money to do that, leaving owner on their own regarding subsequent litigation. .

Again I am not a proponent of viking ships, but I have yet to see a legal case lost regarding their use.

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[theo]

Respectful disagreement...

<snip> if they refuse, the llc could sue for access and at that point I would imagine the hoa backing down...

With all due respect, in at least one particular, specific instance with which I am personally familiar, you would imagine very incorrectly...

Our BoD has not just one but two long-experienced attorneys, one of them a former prosecutor. Both are now retired and I know for a fact that at least one of them would be absolutely delighted to do battle with any LLC or other would-be "ghost" owner --- pro bono and gladly.

I understand and acknowledge that you are not supporting or advocating Viking Ships; I get that. I also suspect strongly that no BoD or HOA particularly wants to publicly disclose in these open forums their successful strategies and / or practices for dealing with would-be "ghost" owners --- of whatever flavor.
It would, after all, be very naive to believe that Viking Ship captains and / or others trying to hide behind corporate veils or other identity disguises don't also read these forums, in addition to the many legitimate and responsible individual timeshare owners here. Frankly, I for one don't believe in ever "arming your enemy".
In summary, I respectfully submit that your not having "heard" pertinent success stories is completely irrelevant to the existence of those successes.

 

[Jason245]

With all due respect, in at least one particular instance with which I am personally familiar, you would imagine very incorrectly...

Our BoD has not just one but two long-experienced attorneys, one of them a former prosecutor. Both are now retired and I know for a fact that at least one of them would be absolutely delighted to do battle with any LLC would-be owner --- pro bono and gladly.

I understand and acknowledge that you are not supporting or advocating Viking Ships; I get that. I also suspect strongly that no BoD or HOA particularly wants to publicly disclose in these open forums their successful strategies and / or practices for dealing with would-be "ghost" owners --- of whatever flavor.
It would, after all, be very naive to believe that Viking Ship captains and / or others trying to hide behind corporate veils or other identity disguises don't also read these forums, in addition to the many legitimate and responsible individual timeshare owners here. Frankly, I for one don't believe in ever "arming your enemy".

You do realize that dri when buying ownership in the resorts they are trying to take over does not put those deeds in an individual name. I would love to see the court case of an hoa going after dri and refusing to let them use their intervals.

Viking ships don't want to use their intervals so it is a mute point, but an llc with purpose of using interval can get access to their deeded week and if your hoa refuses the resort can be sued and has a very weak grounds to prevent usage. If they paid the mf, I don't care how many attorneys you have, you will lose.. they own deed, they fulfilled their obligation, and your hoa has no grounds to withhold occupancy.

All of this of course is dependent on llc willingness to sue.



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[theo]

Apples and Oranges...

You do realize that dri when buying ownership in the resorts they are trying to take over does not put those deeds in an individual name. I would love to see the court case of an hoa going after dri and refusing to let them use their intervals.

Viking ships don't want to use their intervals so it is a mute point, but an llc with purpose of using interval can get access to their deeded week and if your hoa refuses the resort can be sued and has a very weak grounds to prevent usage. If they paid the mf, I don't care how many attorneys you have, you will lose.. they own deed, they fulfilled their obligation, and your hoa has no grounds to withhold occupancy.

I don't know (or care, frankly) anything whatsoever about DRI and / or its' (or other chain) corporate practices, assorted trusts and sub-trusts, The Club, points, etc. --- all of which are essentially irrelevant to the actual (non "chain") interval ownership discussion currently at hand.

To your less irrelevant other points however, I guess we can just agree to disagree. I will say only that we allow and have no ghost or LLC owners at our independent facility, we don't and won't entertain having any, and our most recent annual maintenance fee payment delinquency rate was under 3% (I don't believe it has ever been more than 5% during any of the years of our ownership, but I could be mistaken on that point). Foreclosure is relatively promptly pursued in instances of non-payment, a process certainly facilitated by relatively recent changes in the law regarding simpler, less expensive and more efficient non-judicial foreclosure proceeding options.

You can create and cite all the "hypotheticals" and "theories" you wish (a LLC seeking but being denied occupancy truly seems to require suspending disbelief, frankly) but I submit that nothing succeeds quite like proven success. We'll adhere to our adopted, successful practices and we will just stick to our guns, thanks. Sue us.

 

[Jason245]

I don't know (or frankly care) anything whatsoever about DRI and / or its' (or other chain) corporate practices, assorted trusts and sub-trusts, The Club, points, etc. --- all of which are essentially irrelevant to the (non "chain") interval ownership discussion at hand anyhow.

To your more relevant other points however, I guess we can just agree to disagree. I will say only that we have no ghost or LLC owners at our independent facility, we don't and won't entertain having any, and our most recent annual maintenance fee payment delinquency rate was under 3% (I don't believe it has ever been more than 5% during any of the years of our ownership, but I could be mistaken on that). Foreclosure is quite promptly pursued in instances of non-payment, a process certainly facilitated by relatively recent changes in the law regarding simpler, less expensive, more efficient non-judicial foreclosure avenue options.

You can cite all the "hypotheticals" and "theories" you wish (a LLC somehow seeking but being denied occupancy seems to require suspending disbelief, frankly) but I submit that nothing succeeds quite like proven success. We'll just adhere to our adopted and successful practices and just stick to our guns, thanks. Sue us.

Llc have right to rent the week they own.. again I have no skin in game, but your legal advise can come back to bite you.. especially if llc is willing to litigate.

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[theo]

Llc have right to rent the week they own.. again I have no skin in game, but your legal advise can come back to bite you.. especially if llc is willing to litigate.

For the record, I have proffered no "legal advice" of any kind while merely making a few first hand observations regarding existing practices at our resort.

Since we don't actually have any veiled LLC ownerships at our facility to (hypothetically) pay maintenance fees and then have a (mismatched i.d.; now suddenly a living person of heretofore completely unknown name) appear demanding occupancy, I won't hold my breath awaiting the arrival of this purely hypothetical litigant.

 

[comicbookman]

Llc have right to rent the week they own.. again I have no skin in game, but your legal advise can come back to bite you.. especially if llc is willing to litigate.

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Since the authority of the HOA to assess and collect MF's comes from the same place that gives them the authority to register owners, it is not just administrative. The seller has agreed to pay MF's and the HOA has agreed that the seller is the person who needs to pay. The seller does not have the unilateral right to substitute another person or entity. Consumer protection laws do not let someone out of an obligation because they decided to transfer it to someone else.

 

[DeniseM]

Viking ships don't want to use their intervals so it is a mute point, but an llc with purpose of using interval can get access to their deeded week and if your hoa refuses the resort can be sued and has a very weak grounds to prevent usage. If they paid the mf, I don't care how many attorneys you have, you will lose.. they own deed, they fulfilled their obligation, and your hoa has no grounds to withhold occupancy.

Your response doesn't make any sense - an LLC whose deed has been rejected will NOT pay any maintenance fees, because the deed will not be registered to them, so they will never even be billed for maintenance fees.

"Just sue them," is a simplistic answer that does not address the bigger issues of this situation - like the HOA's fiduciary obligation to protect the resort from scammers.

 

[raygo123]

Your response doesn't make any sense - an LLC whose deed has been rejected will NOT pay any maintenance fees, because the deed will not be registered to them, so they will never even be billed for maintenance fees.

"Just sue them," is a simplistic answer that does not address the bigger issues of this situation - like the HOA's fiduciary obligation to protect the resort from scammers.

There will be MFs, it is a matter of recognition. Property is property. When a sale is done, it is first registered with the county in which it resides. Ownership will transfer no matter what the HOA says.
The push is what happens from there. I understand what he is saying, and agree. If it is say fox run, an independent, it would be difficult to deny. Now that's not to say that the HOA has to permit him to use II for instance, or any benifits afforded the HOA. For systems like Wyndham, it is more cut and dry. No, they will not be able to trade at all.

Like what was said earlier, only good for fraud.

Unless you like going to the same place every year at the same time and place, forever.

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[DeniseM]

raygo123 - You simply don't understand how it works.

With out the approval of the HOA's title office, the deed will not transfer to the LLC in the resort's records.

If the deed does not transfer in the HOA's records, the LLC:

- cannot make reservations
- cannot use the timeshare
- cannot pay maintenance fees
- cannot deposit the week with an exchange company.

Why? Because in the HOA's records - it will still be in the previous owner's name, and they will not acknowledge the LLC as the owner.

It doesn't matter if it has been recorded with the county, because the county does not get involved in timeshare title disputes - period.

This is not speculation - we have had frustrated sellers report this multiple times. Some of them paid a Viking Ship big bucks to dump their timeshare, and then they were shocked when the HOA would not accept the deed transfer, and the original owner was still 100% responsible.

Others were trying to transfer their deed to a legitimate buyer who wanted to deed the timeshare to an LLC, and the resort refused, because of the LLC.

It is already happening - saying "they can't do that," is meaningless.

 

[CO skier]

Since the authority of the HOA to assess and collect MF's comes from the same place that gives them the authority to register owners, it is not just administrative. The seller has agreed to pay MF's and the HOA has agreed that the seller is the person who needs to pay. The seller does not have the unilateral right to substitute another person or entity. Consumer protection laws do not let someone out of an obligation because they decided to transfer it to someone else.

Linda Space would not agree with this kind of thinking.

"In May 2012, Ms. Space notified the Association of the sale. The Association refused to acknowledge the sale. The Association stated that they would continue to bill Ms. Space for maintenance costs and for owner assessments. The Association would also not acknowledge the ownership, and not convey the benefits of ownership, to the buyer of the property found by Ms. Space."

http://www.courthousenews.com/2013/04/05/56403.htm

So she sued the Christie Lodge to force them to recognize the sale, and the HOA backed down and accepted the transfer, because what they were attempting was illegal.

Every case is different, of course, and this one did not involve an LLC, but it does illustrate how timeshare HOAs can't reject a legal timeshare transfer based on their opinion of the buyer. LLCs are legal entities that may hold property.

The answer to the question, "Can a LLC purchase a timeshare?" is "Yes."

 

[DeniseM]

Every case is different, of course, and this one did not involve an LLC

1) You are using a non-LLC example, to prove your point?

2) Unless you have money to burn, how many people are going to sue a timeshare HOA, especially a big system with deep pockets?

 

[CO skier]

1) You are using a non-LLC example, to prove your point?

2) Unless you have money to burn, how many people are going to sue a timeshare HOA, especially a big system with deep pockets?

1) Yes, because in this case if the buyer had been a bona fide LLC (as the OPs would be) the result would have been the same, because what the Christie Lodge was attempting was illegal, regardless of what legal entity Linda Space would have transferred the property to.

2) I don't know. It just depends on how many people, who want to sell a timeshare to a LLC or hold a timeshare in a bona fide LLC, are willing to sue the timeshare HOA for attempting something illegal. There is no question that many HOAs are thinking, "Who will ever sue us over this?", but they are on shaky legal ground if they do get sued, as Ms. Space proved.