Using LLC to purchase Marriott timeshare

[infamazz]

Does anyone know if Marriott has any policies that negate the benefits of purchasing a timeshare using an LLC (or corporation)? It seems like the sort of thing Marriott would try to discourage, considering the lack of recourse they would have against the ultimate owners.

I tried searching online, but couldn't find any reference to Marriott policies, or any testimonials from people who actually did purchase a timeshare using an LLC regarding problems they may have run into. If anyone has information, please let me know. Any help is greatly apppreciated! Thanks!

 

[cbdmvci]

Are you kidding me?

Are you seriously asking other Marriott property owners if it would be okay for you to buy cheap on the secondary market and then (if, say, you can't resell for a quick profit) stick the other owners with your unpaid maintenance fees with no consequences to you?

 

[infamazz]

Are you seriously asking other Marriott property owners if it would be okay for you to buy cheap on the secondary market and then (if, say, you can't resell for a quick profit) stick the other owners with your unpaid maintenance fees with no consequences to you?

No, I am asking so that, if in 20 years I lose my job, the world goes to he**, the maintenance fees are through the roof, and there is zero demand on the secondary market due to those astronomical maintenance fees, I can walk away. It's called smart planning. I intend to personally use my timeshare every year. I wonder, are you as altruistic as you claim to be? Do you own "investment timeshares"?

How about you stick to responding with useful advice rather than a self-righteous post. Go comment on a political blog if you feel like taking your misplaced anger out on someone. This isn't the place for it.

 

[Gophesjo]

Said the guest

Since its all about business for you, it is for us too! Join the Board, and maybe somebody will give you the free advice you are asking for.

 

[klpca]

I have no idea if Marriott allows and LLC to own the interval or not, but one thing to consider would be other fees associated with the LLC itself. In CA, LLC's pay an annual fee of $800 regardless of income. You can't predict the future, and if LLC's continue in popularity and other states continue to struggle to find income sources, who is to say that they won't start taxing LLC's just like California does. Perhaps you can find another way to plan for future uncertainties. Maybe renting would suit you better.

 

[infamazz]

Since its all about business for you, it is for us too! Join the Board, and maybe somebody will give you the free advice you are asking for.

I'm sorry. I thought that was the whole point about a public online chat room where people ask questions. I must have missed the memo. Would you please direct me to the part of the TUG website where it explains that payment of money is required in order to get helpful answers? Thank you!

Also, if you actually read my post, you will see that it is the opposite of business - the timeshare is for my personal use.

 

[infamazz]

I have no idea if Marriott allows and LLC to own the interval or not, but one thing to consider would be other fees associated with the LLC itself. In CA, LLC's pay an annual fee of $800 regardless of income. You can't predict the future, and if LLC's continue in popularity and other states continue to struggle to find income sources, who is to say that they won't start taxing LLC's just like California does. Perhaps you can find another way to plan for future uncertainties. Maybe renting would suit you better.

Thank you klpca. I would probably form the LLC in NJ where the hurdles to formation and ongoing fees are much lower, but your point is certainly something to think about. NJ certainly isn't above reaching into peoples' pockets by raising LLC and corporation fees to come up with extra money.

 

[cbdmvci]

...I can walk away. It's called smart planning.

I stand by my post.

"Walking away" means "planning" to use the screen of an LLC to screw your fellow owners.

 

[infamazz]

I stand by my post.

"Walking away" means "planning" to use the screen of an LLC to screw your fellow owners.

Fair enough. However, if we follow your line of reasoning, forming a corporation to run a mom and pop store is "planning" to use the screen of a corporation to "screw" potential future litigators too.

 

[MALC9990]

Since its all about business for you, it is for us too! Join the Board, and maybe somebody will give you the free advice you are asking for.

I could not believe that Marriott would be so inefficient as to allow a purchase by a LLC or other Legal Entity which would potentially drive a coach and horses through the processes in place to pursue someone who defaults on their MFs or even payments on a loan taken to purchase a TS week.

So even though all my weeks are owned at Non-US Marriott resorts which are RTU rather than deeded property ownership I took a look at some of my legal documents and whilst they make it clear that a "legal entity" can be the purchaser, it is also clearly stated that one person (the person signing the legal documents) will become the "Primary" person held responsible for the payment of all fees and dues and so if the "Legal Entity" defaults then that person will be pursued by MVCI for the outstanding fees and dues.

Now, in the case of these resorts, failure to pay MFs for two years results in forfeiture of the Right To Use and the week is lost back to Marriott permanently. Marriott become responsible for the Outstanding MFs and can put the week back into unsold inventory for selling again at developer prices. If the owner was outstanding on a loan for the purchase then that loan would still be due !!!

I would guess that at a deeded property resort - like most if not all in the USA, Marriott would take even more care to ensure that they have an individual that they can pursue for failure to pay MFs etc. I am also sure that they would not be so remiss as to allow someone to bypass their ability to foreclose on an individual when a resale transaction is being executed - surely they would pick this up at the point that the resale has to be clear by MVCI.

 

[infamazz]

I could not believe that Marriott would be so inefficient as to allow a purchase by a LLC or other Legal Entity which would potentially drive a coach and horses through the processes in place to pursue someone who defaults on their MFs or even payments on a loan taken to purchase a TS week.

So even though all my weeks are owned at Non-US Marriott resorts which are RTU rather than deeded property ownership I took a look at some of my legal documents and whilst they make it clear that a "legal entity" can be the purchaser, it is also clearly stated that one person (the person signing the legal documents) will become the "Primary" person held responsible for the payment of all fees and dues and so if the "Legal Entity" defaults then that person will be pursued by MVCI for the outstanding fees and dues.

Now, in the case of these resorts, failure to pay MFs for two years results in forfeiture of the Right To Use and the week is lost back to Marriott permanently. Marriott become responsible for the Outstanding MFs and can put the week back into unsold inventory for selling again at developer prices. If the owner was outstanding on a loan for the purchase then that loan would still be due !!!

I would guess that at a deeded property resort - like most if not all in the USA, Marriott would take even more care to ensure that they have an individual that they can pursue for failure to pay MFs etc. I am also sure that they would not be so remiss as to allow someone to bypass their ability to foreclose on an individual when a resale transaction is being executed - surely they would pick this up at the point that the resale has to be clear by MVCI.

That was literally exactly the answer I was looking for. I guess there's virtually no reason to set up an LLC then. Thank you very much! I really appreciate it!

 

[ampaholic]

Fair enough. However, if we follow your line of reasoning, forming a corporation to run a mom and pop store is "planning" to use the screen of a corporation to "screw" potential future litigators too.

Well, duh - all corporate entities exist to limit the liability of the shareholders. were you asleep in high school?

excerpt from: A Brief History of the Corporation: 1600 to 2100

by Venkat on June 8, 2011

On 8 June, a Scottish banker named Alexander Fordyce shorted the collapsing Company’s shares in the London markets. But a momentary bounce-back in the stock ruined his plans, and he skipped town leaving £550,000 in debt. Much of this was owed to the Ayr Bank, which imploded. In less than three weeks, another 30 banks collapsed across Europe, bringing trade to a standstill. On July 15, the directors of the Company applied to the Bank of England for a £400,000 loan. Two weeks later, they wanted another £300,000. By August, the directors wanted a £1 million bailout. The news began leaking out and seemingly contrite executives, running from angry shareholders, faced furious Parliament members. By January, the terms of a comprehensive bailout were worked out, and the British government inserted its czars into the Company’s management to ensure compliance with its terms.

If this sounds eerily familiar, it shouldn’t. The year was 1772, exactly 239 years ago today, the apogee of power for the corporation as a business construct. The company was the British East India company (EIC). The bubble that burst was the East India Bubble.

What you contemplate is nothing new.

 

[infamazz]

Well, duh - all corporate entities exist to limit the liability of the shareholders. were you asleep in high school?

excerpt from: A Brief History of the Corporation: 1600 to 2100

by Venkat on June 8, 2011

On 8 June, a Scottish banker named Alexander Fordyce shorted the collapsing Company’s shares in the London markets. But a momentary bounce-back in the stock ruined his plans, and he skipped town leaving £550,000 in debt. Much of this was owed to the Ayr Bank, which imploded. In less than three weeks, another 30 banks collapsed across Europe, bringing trade to a standstill. On July 15, the directors of the Company applied to the Bank of England for a £400,000 loan. Two weeks later, they wanted another £300,000. By August, the directors wanted a £1 million bailout. The news began leaking out and seemingly contrite executives, running from angry shareholders, faced furious Parliament members. By January, the terms of a comprehensive bailout were worked out, and the British government inserted its czars into the Company’s management to ensure compliance with its terms.

If this sounds eerily familiar, it shouldn’t. The year was 1772, exactly 239 years ago today, the apogee of power for the corporation as a business construct. The company was the British East India company (EIC). The bubble that burst was the East India Bubble.

What you contemplate is nothing new.

My point was merely to extend his line of reasoning to the use of all corporations to limits liability. He didn't look favorably on the potential use of an LLC to limit liability for timeshare owners, so I extended the reasoning to suggest that maybe he doesn't look favorably on any limitation of liability whatsoever.

If you read the whole chain of posts, you'll get a better understanding of what I was saying. I put the "screw" in quotation marks because it was his use of hyperbole, not because that's how I look at the use of an incorporated entity.

 

[Gophesjo]

I know your intended use is personal

I'm sorry. I thought that was the whole point about a public online chat room where people ask questions. I must have missed the memo. Would you please direct me to the part of the TUG website where it explains that payment of money is required in order to get helpful answers? Thank you!

Also, if you actually read my post, you will see that it is the opposite of business - the timeshare is for my personal use.

I participate on this Board not only to be served, but also to serve - as do most of the other regular posters... it is called community. Timesharing structuring and operations work best when they are also about community, rather than only about protecting the separate interests of an individual. Perhaps your initial post was misunderstood, but it sure looked like you only had your own interests in mind.

You certainly do not have to join TUG to participate on the Boards. I personally, however, am most interested in addressing mutual considerations with those with whom I will together benefit from our connectedness, not with those who want me to simply serve their interests - especially when (due to a lack of prior participation in discussions about, and or awareness of, issues discussed herein at great length) they seem to be posting questions that touch really sensitive matters for other TS owners.

I acknowledge that my comments were caustic and rude, and ask for your forgiveness - but also again hope that you will choose to serve both yourself AND US well by joining the Board.

 

[cbdmvci]

My point was merely to extend his line of reasoning to the use of all corporations to limits liability.

Such an extension is fallacious (and suggests a moral disconnect).

When a corporation limits its liability, it is doing so with vendors who are trying to sell it something, landlords that are trying to lease it something, or lenders who are providing it with money in exchange for interest. (That's their choice to so gamble, and/or some of these will often require a "personal guarantee" that can pierce the corporate veil.)

However, when you buy a timeshare week, you are joining in a cooperative effort to purchase (from a developer) and manage an asset collectively for the benefit of yourself and your fellow owners.

If you imagine some future personal straights so dire that you simply can't afford to meet your obligations to your fellow owners, than you would be probably be protected by the bankrutcy laws and your fellow owners would deal with it as they must.

But, call if hyperbole it you will, but if from the start you are imagining "walking away" and protecting your own assets at the expense of your fellow owners, than you are clearly imagining a way to screw your fellow owners.

 

[infamazz]

I participate on this Board not only to be served, but also to serve - as do most of the other regular posters... it is called community. Timesharing structuring and operations work best when they are also about community, rather than only about protecting the separate interests of an individual. Perhaps your initial post was misunderstood, but it sure looked like you only had your own interests in mind.

You certainly do not have to join TUG to participate on the Boards. I personally, however, am most interested in addressing mutual considerations with those with whom I will together benefit from our connectedness, not with those who want me to simply serve their interests - especially when (due to a lack of prior participation in discussions about, and or awareness of, issues discussed herein at great length) they seem to be posting questions that touch really sensitive matters for other TS owners.

I acknowledge that my comments were caustic and rude, and ask for your forgiveness - but also again hope that you will choose to serve both yourself AND US well by joining the Board.

To be completely honest, I thought I was a member of TUG. I'll have to look into how to become a member of the TUG Board. Also, I have posted in response to several other inquiries over the course of the year - many relating to the best places to go and things to do in Aruba - so I like to think I've helped others make their timeshare travels a bit better.

 

[Makai Guy]

To be completely honest, I thought I was a member of TUG. I'll have to look into how to become a member of the TUG Board.

TUG is more than this bulletin board. TUG's owner has always provided free access to the bulletin board to all, whether supporting members of TUG or not. But the funds to operate DO have to come from somewhere.

There's a Join TUG link in the red bar at the top of the page ..

 

[infamazz]

TUG is more than this bulletin board. TUG's owner has always provided free access to the bulletin board to all, whether supporting members of TUG or not. But the funds to operate DO have to come from somewhere.

There's a Join TUG link in the red bar at the top of the page ..

Thanks Makai! I'll certainly go and check that out!

 

[ampaholic]

Doug

I love the hat on your pooch - very Christmass-ey

 

[ampaholic]

Thanks Makai! I'll certainly go and check that out!

Hey, infamazz - don't feel pressured to become a member. We have many "perennial" guests. In the end they usually get treated just about like members, but even members can get "roughed up a bit" on occasion in the ebb and flow of "heated" opinions.

It's all good and clean fun - until someone's eye is put out - arrrrgggg. :rofl: