The Hospitality Lawg has covered timeshare resales in several posts, my personal favorite being Kurt Gruber's comments from last February on the Model Timeshare Resale Act. In that post, Kurt itemized the reasons why ARDA adopted a model act addressing regulation of the resale of timeshare interests by non-developer owners:
ARDA’s underlying reasons for adopting a model act addressing regulation of the resale of timeshare interests by non-developer owners include:
- Encouraging a safe, transparent secondary market for owners of vacation ownership interests and for legitimate resellers
- Discouraging and penalizing fraudulent resellers
- Supporting the value of the timeshare product
- Educating regulators and legislators on the problems and encouraging appropriate enforcement action
- Providing a clear statement of ARDA’s views on the need for consumer protection in the resale marketplace
Today, the American Resort Development Association’s Resort Owners’ Coalition (ARDA-ROC) followed up on that initiative by launching the Timeshare Resale Resource Center. According to the press release:
"the Resale Resource Center was born to provide objective information on the resale process, tips on selling, and consumer advisories on the various resale scams currently being investigated by state authorities."
I spent some time reviewing the Resource Center and found it offers consumers pretty solid advice. I was especially pleased to see that the Resource Center didn't demonize advertising companies that require an up-front fee. Several regulators, including the FTC, warn consumers to avoid up-front fees at all costs, without apparently understanding the basics of the timeshare resale market. As I wrote in the Resort Trades last January:
". . . there are [some] who argue that once the advance fee is collected, the incentive to actively pursue the resale is necessarily lessened. That may turn out to be the case, anecdotally or generally. It may also be the case that the commission structure suffers from its own imperfections, the most obvious being that commission-based resellers usually choose to focus their marketing dollars and time on only a select number of timeshare projects. As a result, many timeshare owners may not have effective access to commission-based resellers.
The point is not that one compensation method is superior to another. It is that, in the real world, not all timeshare product is fungible, so it is likely that both methods must co-exist so that both the timeshare owner and the reseller are satisfied with the transaction economics in any particular instance. However, this balance should be left to the market to determine, without interference from well-meaning but misguided public officials."