Laws regaurding renting or selling a timeshare

[easyrider Senior Member Find all posts View Profile Close easyrider]

In Washington and Oregon a person can sell or rent their own property including a timeshare. If I were to solicit others to rent their timeshare out or sell their timeshare for them I would need to be a real estate broker. I believe that is how it works in most of the USA.

Sales Licensing, by State | Timeshare News & Travel

In California, the California Timeshare Act means anyone selling or renting out a time share condo or vaction club, anywhere, that is not their own property, is illeagle unless they are a CA licensed real estate broker or working under a licensed broker.

All advertising of timeshares, including all websites, must show the sellers license status in the add. Unlicensed activities can result in administrative and criminal penalties.

Licensees who advertise on the Internet are required by law (B&P Sections 10235.5 and 10140.6 ) to indicate their license status.

In Washington I would be required to work under or become a licensed real estate broker. This would be a business that would buy, sell and manage real estate, including timeshare condos.

So I wonder if its really worth selling timeshares when the prices are only a dollar. How would I get a commision unless I charged a fee ? As far as renting and managing a timeshare condo property , that could be a percentage or fee as well. Anyone ideas ?

Thanks
Mr. Bill

[aliikai2 Super Moderator Find all posts View Profile Close aliikai2]

If you are trying to sell customers $1 units you can't make anything

Most brokers charge a minimum $1000-$1500 commission. So if your goal is to sell and rent other owners units, you do in fact need to be licensed and making a living is brutal in today's market.

Greg

So I wonder if its really worth selling timeshares when the prices are only a dollar. How would I get a commision unless I charged a fee ? As far as renting and managing a timeshare condo property , that could be a percentage or fee as well. Anyone ideas ?

Thanks
Mr. Bill

[easyrider Senior Member Find all posts View Profile Close easyrider]

Hi Greg
I like your website. Are these all of your own properties or are you a broker ? I had thought about buying properties I like and renting them out unless some one wanted to buy one. So I would be using my own inventory and wouldn't have to be a licensed broker. That is my first thought.
OR
I could take the real estate exam and become a broker but I think I would need a business license, bond and insurance or make a deal with a licensed broker and sell under that persons license. Im not sure what it cost or if its worth it.


Mr. Bill

[aliikai2 Super Moderator Find all posts View Profile Close aliikai2]

Yes

We own all our units or the points ownerships that we use to book our rentals. There are some that work through a broker and pay a fee for that ability, it tends to take the profit out of all but the highest rentals.

Greg

[ebram Senior Member Find all posts View Profile Close ebram]

Does a newspaper have to have a RE brokers license to advertise to sell a TS.

[easyrider Senior Member Find all posts View Profile Close easyrider]

Buying and renting my own inventory is probably right for me. As far as taxable income I guess these each have to be reported on a seperate rental schedule showing a cost breakdown to determind profit. What deductions could I take besides maintanence fees, resort fees, costs of advertising, percentage of buy in cost and expences related to renting such as joining a forum, phone, internet ect.

Would traveling to a resort become a write off if I needed to do so to meet clients to show a condo ? That would be a good one.

Mr. Bill

[easyrider Senior Member Find all posts View Profile Close easyrider]

Does a newspaper have to have a RE brokers license to advertise to sell a TS.

In Washington and most every where else a license number must be included on the add unless it is your own personal property to rent or sell.



Section 10131 of the California Business & Professions Code sets forth a general description of acts which require a real estate license:

Sells or offers to sell, buys or offers to buy, solicits prospective sellers or purchasers of, solicits or obtains listings of, or negotiates the purchase, sale or exchange of real property or a business opportunity.

Leases or rents or offers to lease or rent, or places for rent, or solicits listings of places for rent, or solicits for prospective tenants, or negotiates the sale, purchase or exchanges of leases on real property, or on a business opportunity, or collects rents from real property, or improvements thereon, or from a business opportunity.

Assists or offers to assist in filing an application for the purchase or lease of, or in locating or entering upon, lands owned by the state or federal government.

Solicits borrowers or lenders for or negotiates loans or collects payments or performs services for borrowers or lenders or note owners in connection with loans secured directly or collaterally by liens on real property or on a business opportunity.

Sells or offers to sell, buys or offers to buy, or exchanges or offers to exchange a real property sales contract, or a promissory note secured directly or collaterally by a lien on real property or on a business opportunity, and performs services for the holders thereof.

[easyrider Senior Member Find all posts View Profile Close easyrider]

So it seems the stratagy is to buy up good TS contracts now while they are cheap and rent them until the market rebounds, then sell them if you can.

Set up a trust and place all assets but the timeshares in that trust. Timeshare exit strategy being that when Im gone there is nothing or no one responsible for these contracts.

OR

Set up a corporation like a LLC and sell the timeshares to the corp and let the corp go belly up.

Any opinions on if this is a solid idea ?

Thanks
Mr. Bill

[aliikai2 Super Moderator Find all posts View Profile Close aliikai2]

So it seems the stratagy is to buy up good TS contracts now while they are cheap and rent them until the market rebounds, then sell them if you can.

Yes, unless the rental value is more than the profit from a sale

Set up a trust and place all assets but the timeshares in that trust. Timeshare exit strategy being that when Im gone there is nothing or no one responsible for these contracts.

No, and no to the LLC idea. . Some have very little value, and you may need to sweeten the deal to get rid of them, but you shouldn't have any of these unless you screw up when buying.

OR

Set up a corporation like a LLC and sell the timeshares to the corp and let the corp go belly up.
Any opinions on if this is a solid idea ?

I believe in karma, hosing the other owners at the resorts is going to come back to haunt you. Just don't buy any junk and you will have no issue selling or giving them away.

Thanks
Mr. Bill

fwiw,
Greg

[easyrider Senior Member Find all posts View Profile Close easyrider]

So far I have only one TS that may be a problem. It is the Eaglecrest in Redmond. I bought this to supplement the Worldmark memberships because it traded directly into the WM system. The cost to trade was about $25.00 and we ended up with 10,000 points so the points were only costing a little over 6cents a point. This gave us a solid rental on the Oregon Coast in the summer.

Now were up to almost 11 cents a point after we trade through II or RCI. I have a hard time renting this out even on holiday weeks. I did get rid of most of my Eaglecrest but the eoy odd is a dog, imo.

All the Mexico are RTU which should expire before me.

Greg, I noticed you have an Eaglecrest spring week for rent. It looks like if you rent it your just getting the MF back.

Im sticking to WM and some Mexico rtu's for now.

When I look at the same sellers on ebay after 8 years of looking I notice the LLC's change but its the same sellers. I wonder if that is how they dump inventory. If they charge 1000 people $1000 to take the TS from them they would gross $1,000,000. Then they could let the inventory go back to the resorts when they go belly up.

Is this what is happening ?

[easyrider Senior Member Find all posts View Profile Close easyrider]

I have called 5 different state licensing offices and have found out that a person is allowed to work their own inventory without a real estate brokers license but is limited to 1 sale per year. Renting your inventory is different from selling.

Most states have a disclosure form that is required when selling a timeshare. I'm not sure if this applies to personal inventory. If the disclosure form isn't filled out the buyer can ask for their money back. This disclosure includes a 7 day right of rescission in WA Sate.

There is very little regulation of Internet sales and rentals. While it is illegal and punishable for a person to solicit to buy, sell or rent another's timeshare without the required brokers license it would seem that this type of activity is punishable only if the person is caught.

There are no laws prohibiting a person from buying timeshares to rent if it is their own. There is also no laws prohibiting a person from acquiring as many timeshares as they want, most likely for a fee, and then going bankrupt. All of the owned timeshares would go back to the developers or home owners associations as a loss of revenue at the very least.

ARDA-ROC : Consumer Resources : Resales : Selecting a resale company

[easyrider Senior Member Find all posts View Profile Close easyrider]

Tye Matt with the Dept. of licensing concerning the California timeshare and subdivision portion of licensing has said that it is illegal and punishable to advertise to buy, sell, trade and rent timeshares that are not your own in CA. All advertisements must include license numbers that identify the seller or organization unless it is their own property. This includes Internet transactions.

Here is an article explaining "How to spot a scam", from Inside the Gate.

How To Spot A Scam | Timeshare News & Travel