October 16, 2022
By Blaise Dietz, Timeshare Rental Pros
Why do some developers prohibit renting out points that a member can’t use? Unforeseen things can happen, as we all experienced during the Covid pandemic. There have been volumes of complaints in which members report that their sales agent encouraged them to buy additional points to rent, but then were issued a cease and desist letter, or had their account frozen, accused of commercial activity.
Introduction by Irene Parker
Some Developers impose draconian restrictions. Other Developers allow renting, with agents encouraging existing members to buy more point to rent to cover costs, when there turns out to be so many extra fees and obstacles that it makes renting to cover the cost of the timeshare is unfeasible. If the buyer counted on the ability to rent to offset costs, they instead end up with more points than they can use or afford, some driven to default.
Wyndham filed a lawsuit against a former employee who, while employed, promoted a sales and rental service side business. According to the lawsuit: Defendant also claims he can exploit these Developer’s Owner’s Developer property interests for profit. In the process, he demands the Developer Owner pay him the monies meant for Developer benefits or “rental services” otherwise attainable through Developer – depriving Developer from such payments. Case 6:22-cv-01609 Filed 09/07/22
Interestingly, the same lawsuit also provides commentary from Wyndham that listing unused vacation time for rental is allowed:
“Once they enter into a Timeshare Contract, Wyndham Owners have the option to purchase additional Wyndham benefits, including points, elevated membership status, and additional property interests, as well as the option to list unused vacation time for rental.” (Emphasis added)
The crackdown on renting began years ago to curtail Mega-renters. These are individuals or entities that buy huge volumes of points and deeds to rent for commercial activity. This cut into the inventory Developers need for promotions to get new bodies in the door.
Wyndham allows their members to rent via their two approved sites – Vacation Share and Extra Holidays. The sites are misleading because the ability to earn enough income to just pay maintenance fees is unfeasible.
An example: Extra Holidays is Wyndham’s rental platform:
Book a 7-day stay at Wyndham Glacier Holidays and then turn the listing over to Extra Holidays – Wyndham takes a 40% per commission. Okay, at 60% the math works in the member’s favor. Glacier Holiday rents for $300 a night or $2,100 for a 7-day stay. Wyndham keeps 40% as commission = $840
$2,100 – $840 = $1,160 is what the member expects to be paid. However, the check received is for $500, half or a third of $1,160?!
What happened?
Blaize Dietz of Timeshare Rental Pros answers this and our other questions:
Wyndham informed the member that they could only rent out three of the seven days.
From the Timeshare Rental Pros Learning Center
According to the American Resort Development Association, 87% of timeshare resorts offer some type of rental program, so most likely you can.
All the developers that we work with, do not allow you to rent your property for commercial gain or investment purposes and we will not be able to help you do that either. Timeshares are for vacation, not investments. You need to enjoy your timeshare whenever you can and when you can’t, we can help you recoup your maintenance fees every time we rent a property for you.
Timeshare Rental Pros
Timeshare Rental Pros will pay your maintenance fees, providing relief to those who pay maintenance fees on points they cannot use due to a number of unforeseen reasons. Sounds too good to be true? It isn’t – for those fortunate enough to have purchased a timeshare that allows you to rent your points or week to others. The member or owner pays no money to Timeshare Rental Pros. Not a cent – there are no hidden fees.
We asked Blaise: How many points do Mega-renters accumulate and how do they acquire so many points?
Blaise: Mega-renters have relationships with transfer agents and exit companies. Let’s say you have 20 Developer exits … transfer agents or exit companies will sell those 20 deeds to mega renters. They may acquire a massive number of points from one or more developers. One family accumulated 50 million points. The Developer filed a lawsuit against the family.
What will I be paid for my unused maintenance fees?
Blaise: Most developers will give you $.02 per point credit for maintenance fees. Timeshare Rental Pros will pay 300% to 500% more or $.08 per point. We have no advertising budget. Our business is built on word-of-mouth. We take unwanted timeshare points and book stays with online travel agencies. We ask how many points are being offered and when the points will expire. We pay the owner or member 72 hours later after accepting the points.
Guest Certificates
Blaize: To curtail renting, some resorts are issuing guest certificates. The number of certificates issued is allocated based on loyalty levels. One Hilton Grand Vacations owner reported that the highest loyalty level will be issued six certificates, and any bookings in the name of others will incur a $400 charge. Bluegreen Vacations is also planning to issue guest certificates.
How will guest certificates affect Timeshare Rental Pro’s business.
Blaize: Guest certificates are not bad. They will provide a path of clarity to define exactly what constitutes commercialization and also provide a process to authorize the stay. In other words, it offers guidance.
One last question – What constitutes commercial activity?
Timeshare Rental Pros and other legitimate rental platforms are hoping to establish some ground rules so that members can rightfully allow others to use their points for a fee, at least to cover maintenance fees for points they cannot use. There is an abundance of rental scams out there charging an outrageous amount of upfront money promising an equally outrageous amount that their rental can fetch. Honest rental service providers bring stability and liquidity to the timeshare marketplace – which should be considered healthy for any industry.
Thank you, Blaise – Let’s hope for better clarity and an enhanced vacation for owners and the industry as a whole.
Related articles: Go-KOALA
https://tarda.org/blog/41-experts/205-koalas-new-tiered-membership-program