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Timeshare Tax Assessments on Florida Resort Spark Lawsuit vs Local Appraiser

image-of-entrance-to-old-town-kissimmee-florida-during-dusk-with-blue-car-to-explain-where-cypress-palms-timeshare-resort-is-located-for-tax-assessment-lawsuit

For more than a decade now, Katrina Scarborough has been overseeing the Osceola County Property Appraiser’s Office in Kissimmee, Florida. But after her latest reelection in 2016, she found herself under a bit of scrutiny regarding timeshare tax assessments. Cypress Palms, a local timeshare resort that’s affiliated with Wyndham Vacation Ownership (a subsidiary of Wyndham Worldwide Corporation), went after Scarborough in a lawsuit for her 2011 and 2012 appraisals of their property. 

According to court documents, the resort believed that the valuation of their timeshare estate was not even close to being accurate and that they had “paid the taxes which have been assessed in full, pursuant to section 794.171(3)(4), Florida Statutes.” Despite Scarborough’s timeshare tax assessments of $92.85 million for both 2011 and 2012, Wyndham challenged the obligations of Cypress Palms by alleging the resort only owed $24.74 and $16.76 million for the timeframe.

Wyndham Worldwide is one of the largest timeshare conglomerates in North America. Timeshare companies are known to profit tremendously by cutting expenses and invoicing their perpetual owners for as much as they can. High timeshare tax assessments like these have given resorts further reason to aggressively sell vacation ownership and solicit current customers with misleading offers while adding undisclosed fees to timeshare contracts. Even buyers that aren’t contractually obligated to pay for assessment fees have been known to be threatened by resorts with penalties if assessments aren’t covered.

The main assertion that Wyndham at Cypress Palms Resort makes is that both annual valuations shouldn’t have been based on direct sales, rather individual-to-individual resales. What makes this interesting, and deeper than it appears, is the potential cause for consumer resales. It seems like Wyndham Worldwide wants to be rewarded in timeshare tax assessments even though their buyers are unable to sell their interval for profit. The lawsuit also sought a refund of more than $2.3 million for taxes already paid.

Timeshare Tax Assessments Shouldn’t Include Owner Resales.

For those unaware, the resale market for deeded ownership doesn’t exist. Unless you own a Disney timeshare that carries a demand, you’ll spend thousands trying to find someone to take it off your hands. Resorts knows this – but so do people like Katrina Scarborough. When she and Patsy Heffner processed Cypress Palms’ timeshare tax assessments, they took this into consideration. 

The fact of the matter is, sales tactics of Wyndham (and most timeshare companies) allow them to sell weekly intervals to the tune of $20k while owners can rarely get out of timeshares for a penny. Because of this, Judge Scott Polodna agreed that the assessments by the Osceola County Property Appraiser’s Office “properly rejected the individual-to-individual resale market as a basis for value and correctly relied upon sales by Wyndham” in their assessments. In turn, he upheld Scarborough’s assessments and ruled that she adhered to the statutory requirements for timeshare valuations and professionally performed proper appraisal practices.

Florida Circuit Judges Rules in Favor of Timeshare Assessor

The Osceola County Circuit Court’s decision was the first time since the 80’s that a timeshare valuation case ruled in favor of the assessor. Even then, Florida legislature was combatting disputes between fractional owners and property appraisal firms. Since most laws favor resort developers, it’s common to see timeshare tax assessments reduced. In Osceola County alone, timeshares are said to be valued at more than $2.3 billion. The ruling shows that timeshare companies have to start paying attention to assessments and the reality of resales.

As the lawsuit came to an end, Scarborough shed light on the pride she takes in her job and the importance of accurate timeshare valuations. “Our office works hard to maintain fair and equitable assessments for all property owners in Osceola County. Because of the significant tax dollars at risk, we decided that it was necessary to fully defend our assessments. If the outcome had been different, there could have potentially been a significant reduction in the valuation of all timeshare resorts in the state of Florida.” Well said, Katrina.

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