2015 Florida Bill Increases Cap for Assessments at Buyer’s Expense.

Like we’ve covered in previous articles, timeshare assessments can be extremely gut-punching to most fractional owners. The unexpected fees are never convenient and rarely less than a few thousands dollars. For those that don’t understand the perpetuity of timeshare agreements, just know that buyers are basically at the mercy of the resort. They don’t really have a choice but to pay large amounts of money for vague expenses.  On top of contractual obligations, lawmakers haven’t been too keen on helping out the timeshare consumer. While sales regulations have most certainly improved, post purchase scenarios haven’t exactly been addressed. You see, most problems with ownership stem from clarity and a lack of disclosure. In fact, many of our clients tell us they would have never made the purchase if they knew what it actually entailed.  Devastating financial blows, like special assessments, can really leave fractional owners reeling. At the end of the day, this partly due to the laws in place that limit the consumer’s ability to challenge unexpected costs. So today, we wanted to highlight a Florida bill from 2015 that enabled resorts to charge more for assessment costs while limiting the buyer’s ability to get out of timeshare contracts in regards.

Proposed FL Bill Was Said to Benefit Consumers.

According to a number of sources, there were strong opinions for both the proponents and those opposed to the Bill. The advocates, including the timeshare’s Trade Association, the American Resort Development Association (ARDA) and lawmakers (sponsored by Kelli Stargel and Eric Eisnaugle) claimed they were simply making “technical” amendments to the Florida Vacation Plan and Timeshare Act in order to “modernize” the state law. The purpose of the Florida bill was to essentially aid multisite timeshare operators recoup money lost to taxes, approved renovations and emergency repairs or natural disasters. State Representative Eisnaugle even went as far as saying the bill protects consumers by giving them more control of contract terminations and extensions on a “60% vote.” This has yet to be confirmed as advantageous to buyers.

Challengers of the Bill Not Taken Seriously.

Once the Senate version (SB 932) passed the regulated industries committee and the House version of the Florida bill (HB 453) passed the government operations appropriations subcommittee, the floor was open for discussion. Those in opposition didn’t believe it was favorable to buyers. The CEO of the National Timeshare Owners Association, Gregory Crist, made it known he wasn’t buying what the “developer-sponsored bill” was selling. “[It] strips away at consumer protection mechanisms,” he said. An assistant professor of hospitality, Scott Smith, even went as far as saying the bill could “harm the image of the industry.” He went on to say, “I don’t see the logic in creating the exceptions which would allow greater increases.” Smith also pointed out that affordability is one of the “best selling points for timeshares.” If consumers are expecting high ceiling fees then how could they expect sales? What Smith didn’t seem to understand is that the industry is predicated on sales. Like aforementioned, they know how to position this information to their advantage. Legal teams and timeshare owners themselves also voiced their concern with the way “nonmaterial” was described in the Florida bill. They saw this as a way for developers to avoid the liability of contracts with errors. In other words, buyers wouldn’t be able to cancel an inaccurate timeshare contract. Once the rescission period passes, buyers are obligated to pay. Members of the House Civil Justice Subcommittee warned lawmakers that their stance on “nonmaterial” would come back to haunt them. Patrick Kennedy, a local attorney, is on record stating that the bill will “lead to increased litigation”. Even then, developers should have known lawsuits would increase. It’s kind of common sense. Especially if they were unwilling to give buyers a break when the resort makes a mistake. It was difficult for many involved to pick sides. Walt Disney said they supported the industry’s position but did not actively promote the bill.

The Outcome of Legally Limiting Consumer’s Rights.

Tension between product and the consumer was inevitable. But State Senator Stargel stuck to her guns. She believed it was her duty to protect developers from buyers that desperately look for loopholes to legally get rid of timeshare agreements. Apparently, minor contractual flaws aren’t her concern because of the danger that defrauded buyers present them with. She also made it very clear she wasn’t a fan of those helping buyers escape perpetuity. “Some attorneys were making a cottage industry, if you will,” she said. It’s interesting how her quote is past tense. Since the Florida bill passed, there hasn’t been much media coverage in regards. While it may be difficult to measure the actual pros and cons, the result is pretty obvious. We’ve talked to thousands of buyers that are eager to cancel timeshares because of their disgust with the practices used to close them on the purchase. While this bill from 4 years past may have allowed resorts to charge more for assessments, it hasn’t boded well for retention. 

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