One of the most contentious issues they have in the US is the perpetuity contract, this becomes part of the owner’s estate, thereby the children and then grand children etc, inherite the timeshare and with it the ongoing maintenance / management fees. Spain banned this concept in the timeshare Law 42/98, which came into force on 5 January 1999.
Any timeshare sold in Spanish territories since that date is limited to a maximum of 50 years, the reasoning behind this is quite clear. The powers that be believe that it is inherently unfair for the children of owners to be saddled with a contract and debt which they have not freely entered into.
There are other countries within Europe who have had this enshrined in their laws for years. Madeira, an Autonomous archipelago which is part of Portugal, situated in the Atlantic southwest of Portugal and 400 Km north of the Canary Islands, has never allowed perpetuity contracts. They have alway limited them to no more than 50 years, this was very popular with owners as they knew exactly when they would no longer be liable for the annual charges.
Malta, situated in the Mediterranean 80 Km south of Sicily, also limited the length of the contract to 30 years. Speaking with many of those owners who purchased in the 1980´s, they are now elderly, some getting to the stage where they no longer travel, Their contracts are now ending or have ended, they also know they are not leaving a continuing debt for their children.
It just remains to be seen if other countries in Europe follow suit, ending the controversy of perpetuity contracts. Now to Irene´s article.
Spain has ended perpetual contracts and now Arizona Attorney General Mark Brnovich is working on the front end to stop outrageous oral representations. Together we are changing the timeshare world.
An Analysis of the Arizona Attorney General’s Diamond Resorts $800,000 Settlement and One Reason Why It’s About Time
By Irene Parker
January 13, 2017
Irina Allen is a Diamond Resorts owner who was encouraged, over time, to buy 139,000 Diamond points. The sales agent encouraged her to buy such a large amount of points in order to be able to rent to cover her maintenance fees.
Diamond has now changed their rental policy. Owners can only rent to friends or family. Owners are prohibited from using sites like RedWeek, VRBO or EBay, commonly used to rent vacation weeks and points.
Timeshare contracts are a developer based contract, according to timeshare attorney Mike Finn of the Finn Law Group. “It basically states the timeshare company can change just about anything for any reason at any time.”
This new Diamond policy preventing renters from renting outside of friends and family may not sound significant in a new rule book, but for families, advised by sales agents to buy a high volume of points, it proves a disaster. Rising maintenance fees exacerbate the problem.
Owners told me earlier member guides stated travel agents could be used to rent points and the language in one signed contract states: “some or all Points can be rented outside of the immediate family.”
High Volume Diamond owners feel they are being targeted. If unable to pay maintenance fees without renting, they could be forced to surrender their points or foreclose. Surrenders are not guaranteed. When that happens, the timeshare company takes back the “inventory” and resells for full value.
Renting for the purpose of covering maintenance fees is still being proposed as a sales strategy, according to posts on our closed member based Diamond Resorts Facebook page. According to the post below, one Diamond timeshare sales agent did not get the memo:
“We attended a sales presentation at Kaanapali Beach Club and were encouraged to buy points to rent. The agent said his wife is renting out their units and made a profit last year.”
I contacted the owner who posted the above contract. She was able to provide:
The agent’s name, James Ziskend;
Date – January 5, 2017;
Location – Kaanapali Beach Club Maui
She posted the comment asking if anyone thought this was a good idea.
One owner was astounded the agent tried to sell them more points to rent AFTER the family had been issued a “Cease and Desist”. He said they could not launch a website, but renting on sites like RedWeek would be allowed. “Mega-renters” are high volume owners who do use websites to rent points for commercial purposes.
But back to Irina