Timeshare Resales: Timeshare Resales Article for sellers of timeshares

Published by TimeSharing Today Magazine

Mar/Apr, 1999, Issue #44

INDUSTRY GROUP BARS APPRAISAL FEE PRACTICE

After several years of periodic meetings and wrangling over content and language, the American Resort Development Association’s Resale Task Force has finally recommended Standards of Practice to govern all timeshare resale activity. Of particular interest to timeshare owners is the blanket prohibition against brokers’ requiring an appraisal as a condition of accepting a resale listing. This device has recently gained in popularity among Florida resale brokers who are prohibited by state law from charging an upfront fee for listing a timeshare for sale. Since that Florida law was adopted several years ago, many brokers have set up family members in the appraisal business or otherwise worked out referral fee arrangements with cooperative appraisers.

The Standards, which were subsequently adopted by ARDA’s Ethics Committee and Board of Governors, are intended to protect both buyers and sellers during the resale process. It is anticipated that violation of the Standards of Practice by ARDA member brokers would subject such brokers to sanctions and possible expulsion. While the Standards will have no effect on resale brokers who do not belong to ARDA or the scam operations that prey on desperate sellers, the Standards do create a template against which all resale brokers can be held.

The 16 sections of the Standards deal with such subjects as having a physical location accessible to the public, maintaining proper records and providing complete disclosure concerning the resort, the unit and the closing process.

Under the Standards, brokers are barred from charging an upfront listing fee only "where prohibited by law." Florida officials have previously taken the position that its statute bars unfront fees charged in connection with the sale of any Florida timeshare, even if the broker and the seller are located elsewhere. No other state has such a broad restriction on upfront fees, although one other state limits advance fees to the actual cost of advertising.

The ARDA standards do not address the practice of some companies (such as Swiss American Bank and Resort Investment Trust) that claim to be buying timeshares but require that a current appraisal be submitted by the seller before an offer can be made.