In recent years, the successful litigation of major timeshare resorts has really opened the eyes of many consumers. But as fractional owners increasingly voice their displeasure with the way the purchase plays out, resorts continue to find new ways to retain their users and find new buyers. While one might assume timeshares have altered their strategy to better satisfy customers and keep up with travel trends, it couldn’t be further from the truth. In reality, they’ve simply altered the product itself to better benefit themselves. One of the first cases to confirm this pivot was a Marriott Vacation Club class action lawsuit in 2016.
Despite the need to create a more appealing product, we have to go back to the real estate market crash to really understand the depth of Marriott’s alleged deceit in this case. This period of time left the hotel chain with an inventory full of foreclosed and unused condos throughout the country that they needed to get rid of. Since the market was scarce and many current owners wanted to get out of contracts, Marriott adopted a points program that promised beneficial interest and land trusts to potential buyers. The problem was, a Florida company named First American Trust was the actual trustee of the land that held all of the timeshare properties.
Why this Timeshare Lawsuit has a Strong Case.
Despite only being able to offer licensing to use the timeshare properties (because they were owned by affiliate businesses), Marriott told potential buyers they could purchase a title that included interest in a land trust. In reality, the new points program simply gave “owners” access to condos that were held in the land trust. Throughout all marketing efforts, Marriott placed value on owning more points to gain even more access. This led buyers to believe the opportunity was valuable. By positioning the product this way, Marriott was able to not only charge buyers for points programs, but also closing costs, title policy premiums, real estate tax and recording fees.
Over the course of the buyer’s ownership experience, it appears Marriott did a poor job of providing transparency regarding the purchase. Although the points program wasn’t “illegal” itself, Marriott should have never charged buyers for something they’d never be able to acquire. After the purchase, members of the lawsuit claim they never really understood what they paid for. Even the ownership percentage of their trust fluctuated on a daily basis.
While Marriott was able to manipulate the system for quite some time, buyers eventually grew tired of the lack of disclosure. They decided that filing the Marriott Vacation Club class action lawsuit was the only way they could escape the scheme. Amongst a plethora of complicated evidence against the hotel chain, allegations essentially stemmed from the initial point of sale.
More Details on the Marriott Vacation Club Lawsuit.
While it became apparent that the complainants, buyers, had definitely been misled by Marriott, additional parties involved also administered misconduct. After an investigation, it was found that the former Orange County Comptroller, Martha Haynie, accepted and filed deeds that didn’t exist. This is what led buyers to believe title costs were valid. Because of this, she was also listed as a defendant in the lawsuit. First American Title’s role started when they charged Marriott to write title insurance policies without any type of legal title documentation.
Selling this type of product and going extra lengths to attempt validation is usually considered criminal activity. It’s why the Marriott Vacation Club class action lawsuit didn’t have to focus on much outside of Florida law violations. While it may have seemed like a good idea at the time, Marriott and those involved in the transaction faced racketeering charges.
Over the years, it’s been proven that some timeshare companies will do nearly anything to recoup losses. Participating in questionable sales tactics is how many have been able to remain afloat for so long. Hundreds of thousands of vacation owners have been told one thing and sold another. It’s why we’ve made it a priority to help you understand the traps of the timeshare trade.
This Marriott Vacation Club class action lawsuit should tell you that even the most prominent resorts may have something up their sleeve. So be careful what you’re signing up for and always confirm the terms.