Possible way to avoid resort transfer fees?

[vincepecoraro]

Would it be possible to take ownership of the unit in a LLC's name and then whenever you are ready to sell, just sell the LLC to your new buyer? The new buyer could update the contact info that Hilton has for the LLC, everyone could save a little cash, and we could avoid going through ROFR.

I am sure there could be some issues with this, but I couldn't think of any off hand. Please poke some holes in this idea. Otherwise, maybe this could be a new standard for secondary market sales.

 

[DeniseM]

This is a bad idea, because many scammers are using LLC's as a vehicle to abandon timeshares these days, and your management company is likely to be suspicious of this activity.

Some resorts are outright refusing to accept deeds in the name of an LLC, because of this issue.

 

[vincepecoraro]

It would probably work better if you only planned to own one unit. Each LLC would essentially require its own account and therefore its own $140 annual fee. It would also make it harder to pool your points if you had multiple units. You would have to make multiple bookings, which could get expensive.

However, a LLC is a legal entity and I don't think a timeshare company could prevent you from taking the ownership as a LLC. They may not like it, but they only receive ROFR on price, not the name of the owner.

 

[DeniseM]

However, a LLC is a legal entity and I don't think a timeshare company could prevent you from taking the ownership as a LLC. They may not like it, but they only receive ROFR on price, not the name of the owner.

They definitely can - if they think it's fraudulent, they can refuse to transfer the deed in their system to an LLC.

We have people who complain about this very thing here on TUG on a regular basis.

Short of suing them, how are you going to force them to accept it?

 

[vincepecoraro]

It is one thing not to put it in their system, it is another thing to not allow title to be taken in a LLC. The county controls the name on the deed. If a timeshare management company refuses to add the new owner into its system, then they are not doing their job as a management company.

In this scenario, they would not be able to bill maintenance fees on the unit, and you would have no obligation to pay them if the timeshare company refused service.

If the timeshare company thought the deed was a fraud, that is an issue that they need to take up with the county that recorded the deed.

 

[DeniseM]

That's simply not how it works:

The county records office does not get involved disputes between timeshare owners and resort management companies. They simply make a RECORD of the deed - that's it. They do not verify the info. As long as the deed is prepared in accordance to their rules, they will record it - that's all they do.

If the management company refused to accept a deed transferred to an LLC, your only recourse would be to sue them.

The management company IS doing their job, because they are protecting the HOA against fraudulent transfers to Viking Ship LLC's.

This is not a theory - it's already happening.

 

[raygo123]

It'd a record of what was submitted. That's it. If you want to make sure all is correct, die a title search.

Sent from my Nexus 7 using Tapatalk

 

[DeniseM]

It'd a record of what was submitted. That's it. If you want to make sure all is correct, die a title search.

Sent from my Nexus 7 using Tapatalk

That's not what the OP is trying to accomplish - they are asking if you can use an LLC to avoid transfer fees.

 

[vincepecoraro]

I know Hilton allows ownership in LLCs because it was an option for me when I made my purchase.

Assuming that you could validate ownership to avoid fraud and that the timeshare company will be a good actor in terms of entering owners into its system, I think this could work well. The low point units are the ones that are hurt the most by transfer fees, and something like this could benefit them.

On the high point value units, this could help with ROFR. However, this wouldn't benefit the current owners because ROFR doesn't get them a better price. It would just allow individuals to get a better purchase price on the high point value units.

 

[1Kflyerguy]

You would probably need a separate LLC for each unit, otherwise you have to find a buyer that wants your exact portfolio of timeshares, which might make the sale process much longer... How much does it cost to setup an LLC vs. the resort transfer fee?

Some of us have our Timeshares held in trust for estate reasons.. Not sure how the LLC would work with a trust.

 

[Talent312]

I know Hilton allows ownership in LLCs because it was an option for me when I made my purchase.

IIRC, with LLC, tructs or partnerships, HGVC still requires that individuals be identified as responsible for controlling the account and paying the fees, kind'a like signatures on a bank account.

I doubt that HGVC would agree to a transfer of control without seeing corporate documents approving the transfer, and would likely still charge a transfer fee. IOW, they're prolly well-aware of such shenanigans and have mechanisms in place to prevent it.
.

 

[ronparise]

You would probably need a separate LLC for each unit, otherwise you have to find a buyer that wants your exact portfolio of timeshares, which might make the sale process much longer... How much does it cost to setup an LLC vs. the resort transfer fee?

Some of us have our Timeshares held in trust for estate reasons.. Not sure how the LLC would work with a trust.

Thats the issue.Its hard enough to find a buyer for one, but a package is difficult. But there a problem with just one per LLC and that is your state probably has a fee each year to carry the LLC, Aand the transfer fee is a one time event it will probably be cheaper in the long run to just pay the transfer fee

There is a place for llcs and corporations and trusts but it usually is for business reasons or estate planning concerns.

Folks do however, like to buy big ticket items like yachts into LLCs to avoid the sales tax, (Not when they buy but rather when they sell,)