ROFR metric / Ongoing ROFR Activity

[sjsharkie]

My own thoughts is that when the contract is written up, that it needs to state that "time is of the essence" and that the agreed upon price of the sale increases as time proceeds. Say for instance...the buyer needs to provide funds and complete all of the necessary paperwork within 30 days of acceptance... and that any delays in providing the funds and complete the paperwork will result in a fee of $500 per week (or 10% a week, etc.). Perhaps also add an "out" that is the buyer does not act in good faith and complete the delivery of funds and documentation within (say) 40 days, that the agreement is terminated, or that if the buyer agrees to $1000 non-refundable relinquishment if they do not provide the funds and documentation.... Well, you get the thought train. I'm not a lawyer (but have successfully represented myself against a licensed attorney in front of a judge). Perhaps someone with more experience than me can suggest some ways to motivate Marriott to move in a more time-conscious manner.

I like the idea... you should try it and see if it works on your next transaction.

-ryan

 

[BJRSanDiego]

I like the idea... you should try it and see if it works on your next transaction.

-ryan

Ryan, I own a bunch of Palm Desert Marriotts. Last September I bought a Shadow Ridge Platinum Deluxe with the idea that I would later dispose of one of my "white/gold" weeks. So right now I have one too many timeshares. Maybe when I dispose of the extra lower-season weeks, I'll do that.

I am hoping that others with greater legal knowledge than I do will opine and give me some additional suggestions that might work. ROFR is one thing, but it is my opinion that Marriott needs to act in a timely fashion.

 

[dioxide45]

I know that ROFR is supposed to mean that Marriott simply takes over as the buyer of the existing contract, but as I understand it, they send out a new one when they exercise. Not sure how this is actually allowable under the provision of ROFR.

 

[Dean]

I have never seen anything about the requirement for closing under ROFR, only notification. 9 months is strange though, esp if no issues with dues being behind, divorce, bankruptcy or a trust involved. Sometimes a closing requirement is written into the contract though.

 

[5finny]

My own thoughts is that when the contract is written up, that it needs to state that "time is of the essence" and that the agreed upon price of the sale increases as time proceeds. Say for instance...the buyer needs to provide funds and complete all of the necessary paperwork within 30 days of acceptance... and that any delays in providing the funds and complete the paperwork will result in a fee of $500 per week (or 10% a week, etc.). Perhaps also add an "out" that is the buyer does not act in good faith and complete the delivery of funds and documentation within (say) 40 days, that the agreement is terminated, or that if the buyer agrees to $1000 non-refundable relinquishment if they do not provide the funds and documentation.... Well, you get the thought train. I'm not a lawyer (but have successfully represented myself against a licensed attorney in front of a judge). Perhaps someone with more experience than me can suggest some ways to motivate Marriott to move in a more time-conscious manner.

Maybe do it in reverse ?
Higher sales price with discount for prompt payment

 

[BJRSanDiego]

Maybe do it in reverse ?
Higher sales price with discount for prompt payment

Yes, I suppose that could work.

Marriott would have fun with that though - - say the sales price was $5K to pass ROFR and half off if paid in, say, 15 days. I suspect that they would analyze based on the half price figure and still take whatever time they wanted or needed. My wife used to manage an accounting department. Several suppliers gave a discount if paid in 10 days. They would take the discount and then pay at the standard 30 day period. Apparently no one complained and it was a standard practice with that company.

 

[sjsharkie]

Yes, I suppose that could work.

Marriott would have fun with that though - - say the sales price was $5K to pass ROFR and half off if paid in, say, 15 days. I suspect that they would analyze based on the half price figure and still take whatever time they wanted or needed. My wife used to manage an accounting department. Several suppliers gave a discount if paid in 10 days. They would take the discount and then pay at the standard 30 day period. Apparently no one complained and it was a standard practice with that company.

I agree. I think you need to be specific as in your original example. If you said 2/10 net 30 as terms, people just end up taking the discount anyway and paying somewhere around 30 days.

As Dioxide pointed out, Marriott replaces your contract with another set of terms (inserting non-disclosure, arbitration clauses, etc.). Technically, I don't think this is legal, but I don't know what would happen if you pushed back on it. I think if you make it more difficult by inserting an escalating price clause, it can only help your cause.

I'm not a lawyer, but I do deal with a lot of vendor contracts in my job. The question is not whether you can do it, but how you would enforce it if Marriott insisted on their own terms and timetable, ignoring the terms substituting as the buyer. Would you go through the trouble of going to court to uphold the contract and force Marriott's hand? In the meantime, the previous buyer has moved on, and the clock is ticking until the next set of maintenance fees are due...

-ryan

 

[nygiants11991]

Is there a chart to add what point purchased passed/failed ROFR? I just had two separate purchases that Marriott exercised their right.

 

[dioxide45]

Is there a chart to add what point purchased passed/failed ROFR? I just had two separate purchases that Marriott exercised their right.

www.rofr.net

 

[The Colorado Kid]

Marriott Surfwatch Hilton Head Island
Passed ROFR Feb 2021

2BR Silver Season
Oceanside
$1000 purchase price
Seller paying all closing/transfer fees
Seller paying 2021 MF
First use 2021
MF $1,464 Annual

 

[Mlvnsmly]

Marriott exercised on a gifted DSVII White season EOY 2BR LO.

 

[JanT]

Wow....really surprised about that.

Marriott exercised on a gifted DSVII White season EOY 2BR LO.

 

[altiste1]

By way of reality check...

Marriott 2BR Grande Vista Platinum week
Failed ROFR 3/10/21
Purchase price $1
Buyer was to pay all closing costs and fees.

Took Marriott 2 days to exercise.

Posted this on rofr.net

 

[dioxide45]

By way of reality check...

Marriott 2BR Grande Vista Platinum week
Failed ROFR 3/10/21
Purchase price $1
Buyer was to pay all closing costs and fees.

Took Marriott 2 days to exercise.

Posted this on rofr.net

That isn't unexpected. What is unexpected is that a seller was willing to take $1 for it when they could have sold it for a couple thousand.

 

[Mlvnsmly]

Marriott exercised on 4000 AP points at 2.75 per point. The broker says they were put through at 3.28 per point.

 

[Beachspace]

I don't have exact numbers but 'giving away' my 2 Bed Plat Marriott Harbour lake passed ROFR. It was $1 + Transfer fee + paying me back my $1500 in MF. So it was either listed as $1 or as $1576. either way, its thru and he'll get it in his name in about 3 -4 more weeks they said.

 

[MrsKruse]

Just got word that our Platinum Oceanside Week at Oceanwatch passed FROR for $8k. Hoping to close in the next few weeks Added it to the FROR website.

 

[nygiants11991]

Has anyone had experience with what is passing on points. In August 2020 I got 4000 points at $2 per point. I have tried since then to get more but every-time it has failed.

 

[frank808]

Has anyone had experience with what is passing on points. In August 2020 I got 4000 points at $2 per point. I have tried since then to get more but every-time it has failed.

Increase offer to $2.50 a point. Have read some post that points passed at $3 each.

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[altiste1]

Just curious if anyone has tried to get creative with the purchase price and the junk fee. For example, purchase agreement between buyer and seller says $4/point, which gets submitted to Marriott. Buyer and seller have a separate reimbursement agreement (which Marriott never sees and is not referenced in the purchase agreement) under which seller agrees to reimburse buyer the junk fee when paid. Benefit to seller: very quick sale. Benefit to buyer: savings of ~$2/point. Anyone tried anything like this?

 

[Dean]

Just curious if anyone has tried to get creative with the purchase price and the junk fee. For example, purchase agreement between buyer and seller says $4/point, which gets submitted to Marriott. Buyer and seller have a separate reimbursement agreement (which Marriott never sees and is not referenced in the purchase agreement) under which seller agrees to reimburse buyer the junk fee when paid. Benefit to seller: very quick sale. Benefit to buyer: savings of ~$2/point. Anyone tried anything like this?

It's illegal in all states I am aware of. What I have seen is the deal is set up where it could not be duplicated such as trading one timeshare for another. The one time I'm aware of (both non MVC), the company simply required a cash value for each item and acted accordingly.

 

[altiste1]

It's illegal in all states I am aware of. What I have seen is the deal is set up where it could not be duplicated such as trading one timeshare for another. The one time I'm aware of (both non MVC), the company simply required a cash value for each item and acted accordingly.

Why would it be illegal for two private parties to agree on a reimbursement of certain fees in the transaction? I can understand that a broker could probably not be involved, and the seller probably would not want to advertise such a structure. If you could point me to relevant statutes or case law, that would be helpful.

 

[frank808]

Just curious if anyone has tried to get creative with the purchase price and the junk fee. For example, purchase agreement between buyer and seller says $4/point, which gets submitted to Marriott. Buyer and seller have a separate reimbursement agreement (which Marriott never sees and is not referenced in the purchase agreement) under which seller agrees to reimburse buyer the junk fee when paid. Benefit to seller: very quick sale. Benefit to buyer: savings of ~$2/point. Anyone tried anything like this?

To put it nicely, this does not sound legal.

Getting caught..very small chance.

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[BigDawgTUG]

It's fraud. When you apply for the waiver of ROFR, you need to state the terms of the offer. If granted, the waiver expressly states that it is only valid for the offer that was presented. So, if you mischaracterize, as here, the terms of the offer, then the waiver would not be valid.

Here is the exact language from each waiver that I have received: "The waiver hereby granted applies only for the subject bona fide offer referenced hereinabove."

 

[Dean]

Why would it be illegal for two private parties to agree on a reimbursement of certain fees in the transaction? I can understand that a broker could probably not be involved, and the seller probably would not want to advertise such a structure. If you could point me to relevant statutes or case law, that would be helpful.

A timeshare is real estate and as I understand it, FL law states the contract must contain the agreement and that a side agreement is illegal. In this case you'd be trying to defraud MVC under their legal ROFR rights. I've heard the same is true in a number of states and have never seen an exception for a different state though this would be state law and one would have to look at the state in question.