TimeSharing Today | Sep / Oct , 2024
Many timeshare resorts across the country face a critical challenge : timeshare plan expiration dates . These plans , which serve as the legal framework for timeshare resorts , sometimes include provisions for termination at specific future dates . When a timeshare plan expires , the impacted resort ceases to function as a timeshare , leaving owners without clear guidance on what comes next .
When a timeshare plan expires , the typical result is that an existing condominium plan remains in place . In this situation , the 52 owners of each unit become “ tenants in common ,” jointly owning what was once a timeshare unit . Unfortunately , there is often no provision for how these owners can use or sell the unit , rendering the use or disposition of these ex-timeshare units nearly impossible .
Furthermore , other resorts face a situation where it no longer makes financial sense to maintain the facility , but a lack of termination procedures in the resort ’ s plan leaves owners stuck without any option but to face steep assessments for interests that they might no longer want .
Timeshare plan expiration dates , and agerelated maintenance issues , are particularly common in older resorts . Many of these plans initially include language terminating the timeshare plan 30-40 years into the future . Without a change in the law to address these procedural gaps in timeshare plans , owners face an impossible situation .
ARDA-ROC ’ s advocacy efforts
As the group dedicated to protecting the interests of timeshare owners in the U . S ., the American Resort Development Association- Resort Owners Coalition ( ARDA-ROC ) has been diligently working to address issues surrounding plan expiration dates by passing timeshare extension / termination legislation in state legislatures across the United States . Notably , Florida , South Carolina , Rhode Island , and Virginia have already enacted legislation in this area , and a bill is currently pending in Massachusetts , with more legislation planned .
ARDA-ROC ’ s efforts in this area began when members identified the need for a solution to this problem . The ARDA-ROC team looked at states where there are a large
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number of aging resorts and often do not have sufficient procedures for termination in their timeshare plans , and began lobbying there . As a result , ARDA-ROC helped to successfully pass its termination / extension language in Florida in 2015 , followed by Rhode Island in 2018 , and South Carolina in 2019 .
The team is also excited to share that Virginia passed its termination bill ( SB 600 ) earlier this year and that it will be in effect by the publication of this article . This bill is particularly unique , as it allows for partial termination of a timeshare plan , creating the possibility for some of a resort ’ s timeshare units to be preserved , while repurposing the other portions of the property for other uses .
Key provisions of many of ARDA-ROC ’ s bills
Every state is different and the situations that timeshare owners find themselves in varies both from state to state and from resort to resort . ARDA-ROC works with its members to determine the best approach and language to create or amend timeshare termination / extension law on a state-bystate basis . This being said , ARDA-ROC ’ s bills addressing expiration-related challenges and enabling repurposings or extensions , typically contain several key proposals :
1 . Voting Requirements : Establish new , more achievable voting requirements for owners who wish to terminate or extend their timeshare plans .
2 . Retroactive Application : Apply the legislation retroactively to existing association documents .
3 . HOA Representation : Allow the Homeowners ’ Association ( HOA ) to represent resort owners in post-termination activities and property sales .
4 . Liability Protection : Limit the period of liability for acts associated with terminating or extending a timeshare plan , safeguarding both the HOA and board members .
These provisions empower timeshare owners to take control of their resort ’ s future and ensure the necessary procedures are in place for whatever direction they choose to go in .
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OWNERSHIP & TRAVEL
ARDA-ROC leads industry in passing termination / extension Legislation
Real Impact of ARDA-ROC advocacy
Lemonjuice Solutions , an ARDA member that assists associations in wind-down and repurposing efforts , has a number of examples of successful ex-timeshare property repurposings .
Each of the below projects was unique and required a customized solution , with key factors like statutory and regulatory regimes , real estate values and markets , highest and best-use considerations , and how to maximize the sales price to ensure the highest amount of money for owner distribution , playing crucial roles in the approach .. In all of the below scenarios , owners were given options and outcomes that were vastly better than being tethered to a resort in rapid economic and operational decline .
In Lemonjuice Soultions ’ experience , the process of repurposing properties has been more efficient in states that have adopted ARDA-ROC supported termination legislation , like South Carolina and Florida , resulting in better outcomes for those owners .
The Yachtsman Resort
The Yachtsman Resort in Myrtle Beach , SC , has two 11-story oceanfront towers and 80 units . It was built in the 1970s out of precast concrete panels . Significant structural deficiencies were discovered with seven-figure repair costs . Active timeshare ownership had diminished to less than 35 percent of paying owners . The board speculated that imposing a special assessment would have put the remaining owners in a difficult situation and most would be unable to afford it . Unique title encumbrances prevented a simple vote for termination and sale . Lemonjuice loaned the funds to the Association to complete the repairs , utilized the federal court system to clear the title , and sold the property . Owners received an average of $ 3,200 per timeshare week with options to use their proceeds to acquire other timeshare or vacation ownership products .
Bay Club Resort
Bay Club Resort is a five-story , 60-