ROFR appears common

[lopertc]

Thank you. I'm not sure it's a great idea but I think it could be worth exploring. I'm an attorney but I focus on estate planning and criminal defense. (I know that's a weird mix)



I was playing with some language, I wonder if something like this would work:

"Seller shall submit a list of desired resorts and dates for the 2021 and 2022 usage years on or before May 1 of said year. Using reasonable effort, Buyer will attempt to book those resorts and dates (in order of Seller’s preference) on Seller’s behalf.

Buyer makes no warranty regarding availability of Seller’s desired units. If Buyer is unable to make a booking on Seller’s behalf but has exercised reasonable efforts to do so, Seller will still be responsible for the $x fee for that year.

If Seller fails to provide a preference list by May 1st, Buyer will still make a reasonable attempt to accommodate Seller, but the $x annual payment will still be due."



Maybe "shenanigans" is fair here, but there's no sort of avoidance of dues involved.

There's actually a precedent for this type of agreement with ROFR options in the NFL (that was the inspiration for this). Back in the mid-2000's, the Viking and Seahawks went back-and-forth.

The first was a guard on the Seahawks who they tagged with what is essentially a ROFR. The Vikings offered him a contract for $49 million, and had a clause that would immediately guarantee the entire amount if he was ever not the highest paid lineman on the team. Since the Seahawks already had a lineman making more money, matching the offer would have made it fully guaranteed, which wasn't palatable for them.

The next year, the Seahawks lured a Viking by offering to fully guarantee a contract if he ever had to play 5 games in Minnesota in a single season. Since the Seahawks would play a max of 2, and the Vikings would play a minimum of 8, you can see where that went.

As I'm thinking about it, I wonder if something more targeted at BG could work (I'm kind of having fun with this). Maybe a Buyer's promise not to resell the within 10 years, with the penalty being defined as an immediate forfeiture of 50% of Buyer's existing timeshare deeds with a 10 year prepayment of maintenance fees.

Im a nerd but your thoughts here are so interesting to me. I’ve been a private wealth advisor for past 15 years. I’ve worked with lots of attorneys especially in the estate planning area.
I think you could craft this yourself and find a good seller; it would totally work. I think the biggest problem would have been getting the right attorney to draft it at a cost that wasn’t above the benefit. You’ve got that part taken care of. Seeing the number of people out there trying to sell these I’m sure you can find your seller.

 

[lopertc]

May be legally possible but the complexity / cost of enforcement appear significant.

OP is an attorney

 

[superman_32877]

ROFR received on day 29 from the second eBay auction. I asked the selling agent if they have successfully transferred many BG properties and his response was: We have had a small handful of transfers they have allowed to go through. And we have been regularly listing Bluegreens for about 7 months now. The vast majority of them have been exercised on. But I believe we last had 1 go through in March so it is not impossible. Just very unlikely currently.

 

[GrayFal]

Bluegreen latest tactic.

Refused to take back accounts people don't want but exercising ROFR on any "free" sales or give aways.

 

[KipCation]

This is probably a bad question, but do you guys know what happens if you add some complexity to the sale contract?

What I'm thinking is this- let's say that A enjoys the system, but her 25k points (contract C) are getting expensive relative to her income, and she doesn't think she'll be traveling much in a few years. B is intrigued by the concept of ownership, but is more interested in the bonus time than the actual points for the time being. They agree that it's in A's interest to get out from under the timeshare sooner than later.

In that situation, maybe A agrees to sell the deed to B and buy back the rights to the points at a small premium over the next couple years. A few ways you might structure the contract would be:
1. A sells C to B for $0, B agrees to pay the transfer fee. No additional money changes hands, but B agrees to make bookings on A's behalf in exchange for $2750 per year for the first two years.
2. A sells C to B for $500, A agrees to pay the transfer fee. All the rest is the same.
3. A sells C to B for $3,500, A agrees to pay the transfer fee. As part of a separate contract, B pays A $500 for the option to sell A 25k worth of bookings for $4250 per year for 2022 and 2023. I suppose they'd need some sort of liquidated damages provision in there where A agrees to pay B $3,500 total if she breaches her agreement to buy back the points.

It seems like if Bluegreen exercises ROFR, the money paid out by BG is:
1. $0
2. $500
3. $3500

Sounds like you're overcomplicating things and at some point you have to involve BG in the 'sale' and BG probably wouldn't agree to terms of a sale with liquidated damages or other weird factors. At the end of the day, they still have to agree to every sale.

 

[KipCation]

My own personal ROFR experiences..

5k @ Shenandoah - $15.50 - buyer pay xfer fee. BG declined ROFR and I got points. 3/20/2020 (didn't close until Jan 2021 - allegedly due to covid, but turned out that sellers owed some fees)
6k @ Chibola- $26.00 - buyer pay xfer fee. BG declined ROFR and I got points. 3/24/2020 (closed in about 45 days)

 

[superman_32877]

My own personal ROFR experiences..

5k @ Shenandoah - $15.50 - buyer pay xfer fee. BG declined ROFR and I got points. 3/20/2020 (didn't close until Jan 2021 - allegedly due to covid, but turned out that sellers owed some fees)
6k @ Chibola- $26.00 - buyer pay xfer fee. BG declined ROFR and I got points. 3/24/2020 (closed in about 45 days)

I'm glad it worked for you! I still think it's mostly contingent on where the property is located; I lost another Boyne eBay auction to ROFR last week. Number 6 or 7 this year.

 

[Lucky13ESP]

Some more ROFR data for those interested, all were for Mt Run @ Boyne:

Date	Points	Winning Bid	TF	Sales Type	Xfer Fee	ROFR
12/21/2020​	7000​	$10.50​	E	A	Seller	Exercised
9/3/2021​	5000​	$1.29​	E	A	Seller	Exercised
9/14/2021​	12000​	$112.50​	E	A	Buyer	Exercised
9/23/2021​	7000​	$202.50​	E	Y	Seller	Exercised