Regarding Purchase.

[tango]

This would be my second post. If one were looking into the purchase of a resale at this time. Considering that yearly MF's are coming due. If the seller is wishing to sell now to avoid having to pay the MF, and hoping to transfer it to the buyer. What is the timing of this, considering that the whole sale will take several weeks to complete, and possibly much longer for the resort to recognize the transfer (eg: Marriott). Would the buyer be charged this through escrow? Is this MF considered for the upcoming year?
Or is it already too late for the seller to avoid paying the MF?
Am I even making sense?

 

[LAX Mom]

tango, welcome to TUG!!!

Most Marriott's will be sending statements for MF soon, due in early January if I remember correctly. If you were to purchase a Marriott tomorrow, you won't have the paperwork complete in time for the buyer to be billed for the 2009 MF due in Jan.

However, the payment of MF is open for negotiation between buyer & seller. It often depends on who gets usage in the coming year. Did the seller already use the 2009 week (reserve and deposit it with II)? Is 2009 available for the buyer to use? Does seller have a reservation already? Would you like them to make one for you?

Generally if the seller has used the 2009 week, I would expect them to pay the 2009 MF. If the buyer will have the use of that week, they might be expected to pay the 2009 fees at the closing.

 

[tango]

So in the case of an EOY even years. If next use is '10, then the seller would already be on the hook for '09's MF, and unless it were brought up in negotiation, the buyer could expect his next MF obligation to be in a year from now?

 

[Dave M]

Yes, but the key is in "unless it is brought up negotiation...." You might buy and, after closing, find that the old owner failed to pay the 2009 fee in early 2009. If so, you would have to bring the fee payment up to date before Marriott would let you use the week. Thus, it's best to be sure that there is an agreement as to who pays it. (Marriott fees for EOY weeks are generally payable every year at 50% of the EY rate.)

 

[Lawlar]

Escrow Can Help

The escrow company (I highly recommend that you conduct your purchase though an escrow) will verify that the maintenance fees are paid before it will close the escrow.

However, there is no absolute rule as to who is required to pay those fees. If the buyer wants the seller to pay the fees - in which case those fees are simply part of the purchase price - then escrow will not deduct the maintenance fees from the monies deposited into escrow.

You need to have a written contract for the purchase of the TS. That contract should specify who will pay the MFs and then the escrow will follow the terms of your contract.

 

[Stefa]

I recently sold an EOY with first use in 2010. The closing company, JRA, required us to specify in the contract who was to pay the 2009 fees. In our case we expected the buyer to pay them, but we had lowered our asking price accordingly.

 

[tango]

Great!
I'm learning slowly.

 

[Bill4728]

I've heard of too many buyers having problem with the seller not paying the MFs on time and causing problems for the buyer.

I'd insist that the seller must pay the MFs on time ( & show proof of payment) and that if I was using the 2009 week, I'd reimburse the seller at closing.

 

[LAX Mom]

Great!
I'm learning slowly.

Take your time and ask lots of questions!
TUG is a great resourse. It's best to figure out what is the best option for your family before you make a purchase.

 

[KathyPet]

I agree with Bill. If you are purchasing a week for 2009 year usage then you should reimburse the seller at settlement for the 2009 fees. If the seller is not giving usage until 2010 then the seller needs to pay the 2009 MF. Most bills are due anywhere from mid to late January for 2009. If you make a offer now it is almost impossible for the paperwork to be completed before the 2009 bill is due so the seller should pay it and then you can reimburse them at settlement if you are using the 09 week

 

[tango]

I would think that it would be less complicated to just have the discussion with the seller up front and agree that the purchase price (what ever it is) includes the fact that the seller pays the due MF's.