Four Seasons Scottsdale: Rentals Prohibited?

[bizaro86]

have been made aware this is most likely due to the new transient tax the city of scottsdale now applies to timeshare owners/guests and how its collected.

more details on this situation will be made available once we are able to sort out this specific transaction. The parties involved with assisting with this asked not to be named at this time while they make efforts to facilitate this transaction and sort out a few details to make clear to FSS owners who wish to rent moving forward.

If they want to insist rentals pay a tax (either through them or directly to the city) that seems fine. Not permitting rentals of a deeded property when that restriction isn't in the CCRs is bogus and almost certainly illegal.

 

[TUGBrian]

I dont disagree at the illegitimacy of the denial of an frbo listing...its absurd.

I am hoping it can be cleared up and will post more info early next week (soon as I can). It is truly my hope that this is just a big misunderstanding and some wires were crossed.


highlights the ugly truth about HOAs though, as they are free to interpret covenants as they see fit until someone ponys up and challenges it legally. which is usually cost prohibitive.

 

[TUGBrian]

I genuinely believe it will be sorted out, but sometimes the wheels of red tape turn slow.

and many times, folks dont like to admit they made mistakes publicly!

 

[dioxide45]

I do not understand how the tax issue would affect how owners can rent their units. They can collect the taxes at check in. Hawaii adds it to the bill.

Taxes don’t always work like that. In Hawaii case the resort knows how much to charge as it is based on the maintenance fees of the unit. In this case the resort has no idea how much the owner rented the week for.

 

[echino]

Taxes don’t always work like that. In Hawaii case the resort knows how much to charge as it is based on the maintenance fees of the unit. In this case the resort has no idea how much the owner rented the week for.

It's not the resort's business to know that. How much an owner charged for the rental, if anything at all, is not the resort's business. It's private information between the owner and the guests. The resort is not a part of this transaction.

I don't know of any timeshares that demand that information for private rentals, or that somehow insert themselves info owner's tax matters.

 

[sponger76]

It's not the resort's business to know that. How much an owner charged for the rental, if anything at all, is not the resort's business. It's private information between the owner and the guests. The resort is not a part of this transaction.

I don't know of any timeshares that demand that information for private rentals, or that somehow insert themselves info owner's tax matters.

Perhaps the tax instituted by the city of Scottsdale is based on rental amounts, and the city is putting the onus on the resort to ensure that it is properly assessed and collected? But then why aren't other area resorts facing this issue? I don't know, just spitballing here.

 

[echino]

Perhaps the tax instituted by the city of Scottsdale is based on rental amounts, and the city is putting the onus on the resort to ensure that it is properly assessed and collected? But then why aren't other area resorts facing this issue? I don't know, just spitballing here.

Hawaii taxes are also based on rental amounts. But since the resorts have no way of knowing the amounts in private rentals, they charge the tax based on a calculated fair value. Hawaii resorts are not trying to illegally obtain private information from transactions where they are not a party. They are also not trying to deny private rentals based on this excuse.

 

[emeryjre]

Westin Kierland and Sheraton Desert Oasis are both in Scottsdale
The collection of taxes on private rentals has not been an issue for them that I am aware off
I own and rent units as SDO
If I offer my unit for rent via VRBO, VRBO is required by the city of Scottsdale to collect taxes based on the rental amount and remit the collected tax to Scottsdale
VRBO complies and is not interested in fighting with the city of Scottsdale about the issue
The taxes are about 15%
I brought this up at Red Week and Go-Koala several years ago
Neither company was approached by Scottsdale to collect the tax on rental in Scottsdale
Since they have not been asked, they do not collect the tax
The city of Scottsdale has not asked me as a Timeshare owner to collect the tax and remit it to the city
The city has asked owners of private condos and single family homes that the city has identified as dedicated VRBO type rentals to collect the tax and remit it to the city

 

[echino]

The original problem is not related to tax in any way. The resort management is saying private rentals are not allowed other than via their preferred broker. They did not say anything indicating it's tax related. They said it's for protection of all owners. Once I pushed back, then they may have tried to invent an excuse and came up with a tax issue. But in any case I have not heard back yet with any resolution.

 

[emeryjre]

I am not familiar with Four Seasons Scottsdale in any manner shape or form
I am just trying to point out that two major timeshares in Scottsdale have no issues with the rental taxes collected by Scottsdale and provide a little more background on the situation
Good luck on finding an equitable resolution

 

[TUGBrian]

The original problem is not related to tax in any way. The resort management is saying private rentals are not allowed other than via their preferred broker. They did not say anything indicating it's tax related. They said it's for protection of all owners. Once I pushed back, then they may have tried to invent an excuse and came up with a tax issue. But in any case I have not heard back yet with any resolution.

as mentioned earlier and in the PM, it indicates they believe you are using redweek as a broker, and they know full well redweek does not collect said transient tax while licensed brokers do.

if that theory holds true, it explains the language used in the response you got and the cancellation of your reservation (if that is not the case, they would have had no reason to mention redweek not once but twice in the rebuttal indicating they do not permit them to broker rentals). it should also hopefully be cleared up when its pointed out you are not using redweeks brokerage service vs a private rental.

 

[steve1000]

I became an owner at Four Seasons Scottsdale last year and this year is my initial usage. I have been an owner at Four Seasons Aviara for many years. Four Seasons Aviara does not restrict rentals by an owner and I have rented my unit on several occasions. However, when I purchased at Scottsdale as part of the closing process I was provided a document called Purchaser's Acknowledgement Form that I was required to sign as part of the closing. One of the acknowledgements was that none of the following: the developer, Owners Association or Four Seasons Resort Management offered a rental or resale program. I don't know if the exclusive rental arrangement between Scottsdale and Tri-West is a recent development.

Another of the acknowledgements titled Accrual of Time states that:
"All confirmed exchange reservations must be completed within the calendar use year and can be used only by you as the owner of the Residence Club interval and your guests. Confirmed reservations cannot be deposited with Interval International and cannot be rented".

The above language seems to me to be confusing as the first sentence appears to apply only to confirmed "exchange reservations" (e.g. an "exchange" confirmation allowing a Scottsdale owner to book a confirmed reservation at Aviara). The second sentence does not limit its restrictions to "exchange" reservations. So, it could be construed to prohibit both rentals and II exchanges. However, I find it odd in that Four Seasons Scottsdale and Aviara ownerships are each part of Interval International. Both my Aviara and Scottsdale ownerships are enrolled in my II account which would seem to suggest that they are eligible to deposit into II for exchanges. FWIW, I have seen Aviara and Scottsdale rentals listed on RedWeek but I'm not aware of how they have been handled by Four Seasons Scottsdale or whether what they are telling you is a new stance that they are taking. I am not aware of ANY other timeshare that restricts owner rentals/II deposits and this makes me wonder whether such restrictions would be enforceable under applicable law (but establishing that could be costly).

I don't know when you purchased your Four Seasons Scottsdale week but you may have purchased your ownership prior to the implementation of the above "Acknowledgements/Restrictions" and, arguably, you may not be subject to them.

 

[echino]

as mentioned earlier and in the PM, it indicates they believe you are using redweek as a broker, and they know full well redweek does not collect said transient tax while licensed brokers do.

It does not matter what they believe. They do not have power to deny occupancy to my guests based on any of their beliefs. Again, they are not a party to the transaction between me and my guests.

I believe I can rent to whoever I want and use any third party. This is strictly between me and my guests.

And in any case, even when Redweek Verified and Peotected is used, Redweek is still not a broker (not that it matters anyway). The agreement is still between the owner and the guests.

Screenshot from a different Redweek Verified and Protected transaction, not Four Seasons.

 

[TUGBrian]

I dont think anyone disagrees with you... other than on the point where they can (and clearly have chosen to) interfere with your rental. the argument whether or not they legally have the right to do so is a whole nother ball of wax.

id most certainly define "redweek acting as the processor and facilitator of the transaction" as the broker in this story.

 

[tschwa2]

If you look at redweek rentals where redweek collects the payments they are collecting the taxes in addition to the service fees for Four Seasons in Scottsdale. They are not doing it for the one in California. While it is not the resorts business, the government who wants their tax revenue is likely putting pressure on the resort and any 3rd party rental platform. In districts that have these requirements, the requirement is usually that an owner would need to apply for tax id and remit the payment. SC is like this but so many of the rentals are for such small amounts that it isn't worth the government going after one off renters at this time. A resort like Four Seasons with much higher rentals might be too much of a target for the tax collectors. It's all Scottsdale resorts that use a 3rd party. I haven't the HOA's at any of the other resorts including Kierland which is a fairly high end but still lower than FS, being leaned on and leaning on owners but it may just be a matter of time.

 

[echino]

Actually yes, upon checking I see the Redweek DOES collect taxes on Four Seasons Scottsdale. This is an example, a Full Service posting:

 

[TravelTime]

Actually yes, upon checking I see the Redweek DOES collect taxes on Four Seasons Scottsdale. This is an example, a Full Service posting:

View attachment 79299

I agree with what you have been posting. I doubt their “new” rules for renting out your owner’s week are due to taxes. I suspect that you actually are entitled to rent your owner‘s week at FSS. The rules you posted do not say you can’t. The wording was somewhat confusing but it was confusing enough to me that I can‘t see how anyone could say for sure that you can’t rent it. Given you had renters and FSS canceled your week, I would hope they would compensate you if you can’t re-rent it. I know getting them to do that will be an uphill battle. It would be interesting if you did an investigative call to TriWest and inquired about purchasing an FSS week. Then ask if you can rent it out and see what they say. If you say renting it out is a deal breaker to purchasing a week there, I wonder what they would say.

 

[TravelTime]

I just found that Scottsdale is regulating timeshares and requiring a business license and insurance (plus taxes) just like they would for any AirBnb. Maybe FSS decided against individual owner rentals because they could get in trouble since it is unlikely timeshare owners will get a business license and insurance. It does not seem like taxes would be as much of a problem since that could be added to the bill based on some average weekly rate or Redweek could collect the taxes based on actual rental prices that they can see, assuming owners are not advertising on Redweek and then renting offline.

Vacation and Short Term Rentals

Learn the regulations governing short-term vacation rentals in Scottsdale, including neighbor notifications and insurance requirements.

www.scottsdaleaz.gov

Vacation rental or short-term rental means any individually or collectively owned single-family or one-to-four-family house or dwelling unit or any unit or group of units in a condominium, cooperative or timeshare, that is also a transient public lodging establishment or owner-occupied residential home offered for transient use (offered for rent for less than thirty days.) These types of rentals can be found in both single family and multi-family housing throughout Scottsdale.

Short-term/vacation rental owners must obtain and maintain an annual city license for each Scottsdale property. The annual license fee is $250 per property; funds received will go 100 percent to cover costs associated with licensing vacation and short-term rentals.

Scottsdale's licensing portal will open Nov. 28, 2022, and owners of existing short-term/vacation rental properties must obtain licenses by Jan. 8, 2023. New short-term/vacation rental properties must also comply with ordinance requirements and be licensed before being offered for rent in Scottsdale.

Scottsdale's ordinance requires that every short-term/vacation rental property be insured with liability coverage of at least $500,000 (either directly or through an online lodging marketplace).

All vacation and short-term rentals in Scottsdale are required to pay both Transaction Privilege Sales Tax and a Transient Tax (commonly referred to as a bed tax) – both of which are collected by the State of Arizona. In order to engage in, or continue a property rental business, a Transaction Privilege (Sales) Tax license with the State of Arizona Department of Revenue is required. It is the property owner's responsibility to make an application and obtain a license with the Arizona Department of Revenue.

Neighborhoods may be able to regulate short-term rentals through voluntary private agreements made between neighbors. These agreements, commonly referred to as private deed restrictions, are regulations that the City is not a party to nor can it enforce them or provide advice on how to implement them.

 

[echino]

I am sure Four Seasons has all the required licenses. The tax issue is not relevant to the problem though. They are denying occupancy to my guest, and they did not mention taxes as a reason.

 

[TravelTime]

I am sure Four Seasons has all the required licenses. The tax issue is not relevant to the problem though. They are denying occupancy to my guest, and they did not mention taxes as a reason.

Wouldn’t the licensing requirements apply to the individual owners and not Four Seasons? That is how I interpreted it from reading it but I could have read it wrong. But let‘s just say FSS is the one covering it for individual owners, wouldn’t that give FSS more ability to regulate what owners do for short term rentals? I am on your side but wondering if these new regulations are what could be impacting what they said.

 

[echino]

Wouldn’t the licensing requirements apply to the individual owners and not Four Seasons? That is how I interpreted it from reading it but I could have read it wrong. But let‘s just say FSS is the one covering it for individual owners, would that give FSS more ability to regulate what owners do for short term rentals?

No. They are saying owners are only allowed to rent via TRI West. If the licensing requirements apply to individual owners, then it would apply regardless if owners rent via TRI West or via Redweek. Yet they say TRI West is OK, but anyone else including Redweek is not.

I prefer not to try and guess their motivation.

 

[BJRSanDiego]

Taxes don’t always work like that. In Hawaii case the resort knows how much to charge as it is based on the maintenance fees of the unit. In this case the resort has no idea how much the owner rented the week for.

There is at least one Maui resort that does NOT collect the transient taxes on owners. But I know that there are others that do collect the taxes.

 

[djyamyam]

It does not matter what they believe. They do not have power to deny occupancy to my guests based on any of their beliefs. Again, they are not a party to the transaction between me and my guests.

Any update on your situation?

 

[montygz]

Looks like it could be an example of how the boom airbnb rentals have resulted in damage to the tiny timeshare rental market. Cities want their money. They love to tax visitors, who don't vote.

Many communities dislike the whole airbnb scheme as well. Restrictions on short-term renting ensnares timeshare owners as collateral damage.

If the Four Seasons wants to keep the city happy and keep owners happy with a way to rent, they may have created this restriction and scheme as a compromise. Perhaps they worked it out with the city to avoid litigation and fights with City Hall.

If a timeshare owner gets properly licensed by the city of Scottdale and wants to rent out their unit, you would think the Four Seasons could not block it.

It all sounds like something attorneys would have to settle.

 

[TUGBrian]

Any update on your situation?

while no actual resolution, I have been made aware that this is now in the hands of "senior management" at this particular resort.

it still seems to boil down to the fact that the guest indicated he obtained the rental via redweek when contacting the resort to confirm the reservation, and thus triggered the "if you are going to use a broker, it has to be triwest" rule that seems to be unique to FSS despite this actually being a FRBO situation that was simply listed on redweek, vs redweek acting as a broker etc.