Florida bill to loosen cap on time-share fees draws critics
"A bill making its way through the Florida Legislature that would loosen a cap on timeshare assessment fees and make it tougher for buyers to get out of contracts has drawn criticism from time-share owners' attorneys and advocates.
State Rep. Eric Eisnaugle, R-Orlando, and state Sen. Kelli Stargel, R-Lakeland, are sponsoring the legislation, which makes a number of technical changes to the Florida Vacation Plan and Timesharing Act.
The lawmakers and the industry's trade association, the American Resort Development Association, describes the legislation as a bill that modernizes state law. Gregory Crist, chairman and CEO of the National Timeshare Owners Association, sees it otherwise.
"This is a developer-sponsored bill that strips away at consumer-protection mechanisms," Crist said.
The House version of the bill (HB 453) passed the government operations appropriations subcommittee Tuesday; the Senate version (SB 932) passed the regulated industries committee Wednesday. In an email, Eisnaugle said the updates provide protections for consumers, including giving owners more control by allowing them to terminate or extend a time-share plan on a 60 percent vote.
The American Resort Development Association donated a little less than $500,000 in Florida for the 2014 election cycle, records show. That included $5,000 to Eisnaugle's Committee for Justice and Economic Freedom PAC, more than $300,000 to the Republican Party of Florida and about $150,000 to the state's Democratic party.
Eisnaugle's PAC also received $10,000 from Orange Lake Resort Alliance last year. Orange Lake Resorts is a time-share company that operates under the Holiday Inn brand. "We regularly contribute to both charitable and political causes that impact our communities and our business," an Orange Lake spokeswoman said in an email.
The Walt Disney Co., which has a time-share business at its resorts, said it supports the industry's position but is not actively lobbying for the bill.
The legislation would remove property taxes and certain types of common-area expenses from a current 125 percent cap on annual increases in assessment fees that consumers pay.
"I don't see the logic in creating the exceptions which would allow greater increases," Scott Smith, an assistant professor of hospitality at University of South Carolina, said in an email. "This could harm the image of the industry and remove one of the best selling points for time-shares, which is that they are 'affordable.'¿¿"
The bill's proponents say it will help operators of multisite time-shares recoup the costs of expenses out of their control, including taxes, emergency repairs and improvements approved independently by a particular property's board.
Meanwhile, attorneys and time-share owners have questioned a provision that reduces liability for time-share developers if they make errors in contracts. Errors or omissions that are considered "nonmaterial" would not allow purchaser-cancellation rights after 10 days. Stargel said the legislation is meant to keep time-share owners from getting out of their contracts by finding minor flaws in them. It is meant to cover only technicalities, she said, not major problems.
"Some attorneys were making a cottage industry, if you will, of helping people get out of contracts," she said.
Last month, some members of a House civil justice subcommittee expressed concern that there is no clear definition of "nonmaterial." That kind of murkiness will "lead to increased litigation," said attorney Patrick Kennedy, who represents time-share consumers."
