Thinking about purchasing deeded week

[dioxide45]

I've not seen a sunset clause in an MVC Deeded week, which was the one that you bought in 2007 and then got paid out in 2020? The non-US ones have something similar in terms of the term of the Right To Use. MVC is also quite good when not deferring maintenance and weeks taken back usually end up back with the Developer or in the points system so don't rest with the HoA as a problem that they have to fund the Maint Fees for long term.

I believe all the Marriott Florida properties have a sunset clause on the deed. For Grande Vista the clause and date is is 10:00 a.m., on the first Saturday in 2056, at which date said estate shall terminate unless extended in accordance with the provisions of the Declaration of Condominium

Given Marriott likely has control of the majority of interests, or will in 2056, the determination of sunset and extension will be determined by them.

 

[daviator]

I believe all the Marriott Florida properties have a sunset clause on the deed. For Grande Vista the clause and date is is 10:00 a.m., on the first Saturday in 2056, at which date said estate shall terminate unless extended in accordance with the provisions of the Declaration of Condominium

Given Marriott likely has control of the majority of interests, or will in 2056, the determination of sunset and extension will be determined by them.

Probably another reason they've aggressively moved to the points program. You'd have to be crazy to "buy" a timeshare week with a sunset date approaching within your lifetime. The value would diminish with every year that passes. Whereas with the points program, it will probably be in MVCI's interest to just extend the deeds when that time comes, unless they can make more money by redeveloping or selling the properties, in which case they might do so. Not sure what that would mean for points owners... they would essentially have trust-owned deeds which evaporate overnight, leaving the program with (potentially) more points sold than it can deliver.

 

[chinh9]

How would it have more points than it can deliver? Wouldn’t a deeded week that expires add inventory and so there’s more inventory for points owners to book?

And I suppose add more inventory for them to sell as developer purchases?

 

[daviator]

How would it have more points than it can deliver? Wouldn’t a deeded week that expires add inventory and so there’s more inventory for points owners to book?

And I suppose add more inventory for them to sell as developer purchases?

Oh, you're at least partially right of course, I don't know what I was thinking. I guess I was thinking that the expired week would disappear, but of course it wouldn't – it would presumably revert to the developer. But it would essentially disappear from the Aboud trust (or the deeded week that was in the trust would become null and void) and so the number of points represented by the trust would go down.

MVC could create new deeded weeks (presumably with some new future expiration date) and add them back to the trust to balance the numbers, so long as the weeks' expirations are not tied to some larger event, like the expiration of a land lease on which the property was built, or something.

I don't own any weeks which expire, but this kind of begs the question, do you actually own a deeded week if it has an expiration date? It seems like what you really own is some sort of time-limited life estate in the deeded week rather than the week itself. Traditional timeshare weeks are true fee-simple deeded real estate, but these expiring weeks are not that.

And WHY are the weeks time-limited? Just to benefit the developer in the future? Maybe. But I wonder if there isn't some issue with the underlying property (like leased land) that doesn't allow them to sell fee simple ownership in the weeks.

 

[dioxide45]

There are some but not many and I'm not aware that any of them entitle the expiring owner to value at the ending.

While the owner isn't entitled to value at the end, when a resort sunsets and the timeshare plan is terminated owners become tenants in common with all other owners. Then when the property is sold, any residual income after fees and expenses are paid to the owners based on their ownership share in the resort. Quite often fees and expenses eat up a lot of the sale price. Think legal fees, mailing fees, consulting fees. I am sure MVC has their hand in that pot too.

Oh, you're at least partially right of course, I don't know what I was thinking. I guess I was thinking that the expired week would disappear, but of course it wouldn't – it would presumably revert to the developer. But it would essentially disappear from the Aboud trust (or the deeded week that was in the trust would become null and void) and so the number of points represented by the trust would go down.

MVC could create new deeded weeks (presumably with some new future expiration date) and add them back to the trust to balance the numbers, so long as the weeks' expirations are not tied to some larger event, like the expiration of a land lease on which the property was built, or something.

I don't own any weeks which expire, but this kind of begs the question, do you actually own a deeded week if it has an expiration date? It seems like what you really own is some sort of time-limited life estate in the deeded week rather than the week itself. Traditional timeshare weeks are true fee-simple deeded real estate, but these expiring weeks are not that.

And WHY are the weeks time-limited? Just to benefit the developer in the future? Maybe. But I wonder if there isn't some issue with the underlying property (like leased land) that doesn't allow them to sell fee simple ownership in the weeks.

The resort doesn't really revert to the developer, but the developer could buy the property out of the sale that comes after a sunset. They could then create a new timeshare plan (the old plan was terminated under the sunset) and convey those weeks back to the trust. There could still possibly be a period of time where more points were sold than the trust has available in it.

 

[daviator]

While the owner isn't entitled to value at the end, when a resort sunsets and the timeshare plan is terminated owners become tenants in common with all other owners. Then when the property is sold, any residual income after fees and expenses are paid to the owners based on their ownership share in the resort. Quite often fees and expenses eat up a lot of the sale price. Think legal fees, mailing fees, consulting fees. I am sure MVC has their hand in that pot too.

The resort doesn't really revert to the developer, but the developer could buy the property out of the sale that comes after a sunset. They could then create a new timeshare plan (the old plan was terminated under the sunset) and convey those weeks back to the trust. There could still possibly be a period of time where more points were sold than the trust has available in it.

I was again missing something obvious, which is that the entire timeshare plan was sunsetting on a given date. For some reason I was just thinking that ownerships were being sold with end dates but wasn’t thinking about the entire scheme ending. My bad. So some of what I said is completely inapplicable. But yes, absent contract language saying something different, if the deeded owners are really deeded owners, when the plan sunsets, they all become owners (tenants in common?) of the property as a whole, along with MVC. It’s very unclear what would happen with regard to the Abound trust and its interests; obviously MVC would have voting control of their interests in deciding what to do with the property, but if it was sold for cash, what happens to the trust's share of the cash? Does it reduce MFs for a single year? How is the reduction in points handled?

I think that unless the property had not been maintained or had unexpected and uber-expensive infrastructure issues that made it non- viable to continue, the most likely thing might be that MVC would buy it (for a pittance, I’m guessing), set up a new timeshare plan, and start over. Or just transfer ownership to the trust and make it a pure points property like most of their newer properties are now. Or if it’s a great location but the resort is falling down, maybe they tear it down and start over. In any case, I wouldn’t think existing deeded owners would get a whole lot out of the wind-down. I imagine the deck is stacked against them.

 

[Ckquis]

I inherited a week 15 years ago (not Marriott) that I used as a trader. It was great, but was bought out by new owner of resort last year. So going without for the moment. I would be interested to know what the first timeshare you all would buy now if you were starting all over. Or would you buy at all. I am 60 and hope to travel for quite awhile. We also like to go different places, so would likely be trader. We like Caribbean in fall or winter and mountains in August.

 

[ljmiii]

I would be interested to know what the first timeshare you all would buy now if you were starting all over. Or would you buy at all. I am 60 and hope to travel for quite awhile. We also like to go different places, so would likely be trader. We like Caribbean in fall or winter and mountains in August.

The first timeshare I would buy is the first non-DVC one I bought - an EOY Platinum deed at the Lagoon Tower at Hilton Hawaiian Village on Oahu...preferably Oceanfront. A close second would be the last one I bought - an EOY Platinum Plus deed at the Westin St John.

I'll let others speak to the mountain resorts but if you like the Caribbean in fall (November 1 to mid-December) Gold weeks at St Kitts, Frenchman's Cove St Thomas, and Aruba can be had for a very reasonable price (or free). The same is true for the Gold Plus weeks at the Bay Vista, Coral Vista, and Sunset Bay phases of the WSJ that cover the same timeframe (Virgin Grand has fixed weeks). Winter weeks are more expensive...but not unreasonably so compared to the cost of booking with cash or points (when available).

That said...we find owning EOY weeks at the places we like to stay the perfect combination of flexibility (we don't have to go every year) and ease of use (getting the dates, villa, and resort we want). And EOY weeks are usually attractively priced.

Trading to me is what happens when the plan fails. I've done it...but only when plans fall through. I understand others are quite happy trading successfully for the majority of their timeshare stays...but the uncertainty would drive me nuts.

 

[Ckquis]

Thanks! That’s another great alternative that I had not heard of to consider.

 

[Dean]

I inherited a week 15 years ago (not Marriott) that I used as a trader. It was great, but was bought out by new owner of resort last year. So going without for the moment. I would be interested to know what the first timeshare you all would buy now if you were starting all over. Or would you buy at all. I am 60 and hope to travel for quite awhile. We also like to go different places, so would likely be trader. We like Caribbean in fall or winter and mountains in August.

The landscape has changed so much in the timeshares world since I made most of my purchases. DVC resale was the same as retail, Bluegreen resale counted the same as retail and MVC was just weeks and essentially the same as retail. For me it' likely be multiple Grande ocean weeks which is a large part of my holdings currently.

 

[Larry M]

I've not seen a sunset clause in an MVC Deeded week, which was the one that you bought in 2007 and then got paid out in 2020?

Mine was non-corporate. The HOA ran it themselves and did not use a management company. Not sure of the original founding, but it comprised about 24 units on what was otherwise Wyndham property, and owners had access to Wyndham facilities.

EDIT: My contract seems similar to others that have been discussed here.

MVC is also quite good when not deferring maintenance and weeks taken back usually end up back with the Developer or in the points system so don't rest with the HoA as a problem that they have to fund the Maint Fees for long term.

I don't understand this. The HOA can foreclose and resell the unit. They should be able to turn it in a year and not have long-term issues.

The timeshare I owned prior to the one above started out as a Fairfield, back in the '80s, IIRC. I was given this one in the early 2000s. It became a Wyndham in 2006. I called Wyndham corporate and told them that the exchange terms were no longer like what we had been offered before. They transferred the call to the HOA. The HOA said that if I would sign a form and send $150 for lawyer fees, they would take the unit back. That was my introduction to TUG. I asked if this were a good deal or scam. They told me to take it quickly so the offer wouldn't be revoked. That's what I did, and why I bought the second one.

So I had a deeded week timeshare for about 18 years. Total expenses not counting maintenance fees were:
Expenses:
Exiting Timeshare 1: $150
Buying Timeshare 2: $1500
Income:
Sale of Timeshare 2: $5500

 

[Larry M]

Which resort was this?

Egrets Pointe on Edisto Island, SC. It was a small independent resort with about 24 units. I never completely understood the history; it was on the property of a Wyndham Resort and owners had access to Wyndham facilities, but was otherwise completely independent.

EDIT: My contract seems similar to other fixed-week contracts that have been discussed here.

 

[Larry M]

I assume this was one of the Royal resorts, I don't think that's a common expectation for RTU timeshares. For Aruba resorts I don't think it's completely clear what to expect on the ending of the RTU.

Actually, no. It was a small independent, but the contract seems to be very similar to other deeded week contracts. Probably a standard form.

 

[Hindsite]

I don't understand this. The HOA can foreclose and resell the unit. They should be able to turn it in a year and not have long-term issues.

For many of the resorts that have strong seasonality and a very low, low season, the low season units don't sell on well once they are returned. That's one of the reasons that many of the larger brands invented points systems, so they could offload sticky inventory as points and still sell the dream of getting peak season at peak resorts. II is also useful as a way of offloading slow moving inventory.

In the MVC, Sheraton and Westin systems the US points system can only take US weeks, so the Corporation owns 20-30% at some resorts that can't go into the points system, and they rent out, use them for sales promotions, try and sell them on or dump them to II to try and recover some value. Initially the HOA take the resort back under foreclosure and the delinquent maint fees are a line in the maint fees. Then, thankfully, MVC take over the weeks and have the responsibility of paying the maint fees and managing how they recover cost for them.

Other resort systems, like some of the former Diamond resorts, simply close for 4-5 months of the year to avoid the issue. I don't know of any MVC, Sheraton or Westin resorts that close down completely in the year. Some get very close by closing restaurants and pools for maintenance during low season, but the resort is open.