Understanding Legal Documents Hedge your bets! Session 9 Wednesday, October 30 8:00 AM – 9:00 AM Your Pit Boss for this session is Scott MacGregor Joan

Understanding Legal DocumentsHedge your bets!

Session 9Wednesday, October 308:00 AM – 9:00 AM

Your Pit Boss for this session is Scott MacGregor

Joan Wright, Esq.Allison, McKenzie, Pavlakis, Wright & Fagan, Ltd.

W. John Funk, Esq.Gallagher, Callahan & Gartrell, P.C.

Dave HeineCloseMyTimeshare.com & JustDeeds.com

Understanding Legal Documents Hedge your bets!!

Joan Wright Esq.

Hierarchy of Documents – BOD Compliance

1. Policies and procedures to identify and prevent transfer companies from getting ownership

a. Share information among resorts as to transfer companies and associated persons to prepare watch lists

b. Require personal information about the owners of the transfer companies and associated persons

c. Preclude transfers to transfer companies and associated persons because of history

i. If there is a question require personal guaranties from the owners of the entities and the owners transferring the interests.

Joan Wright Esq.

d. Require credit reports, financial statements and background checks.

e. Charge transaction fee to defray costs

f. Require all accounts to be current

g. Take control and risk litigation (risk is small against transfer companies and associated persons)

Joan Wright Esq.

2. Communication with Owners

a.Explain risk of transfer companies and associated persons

b.Distribute policies and procedures

c.Inform them that they will remain liable

d. Advise them by dealing with transfer companies and associated persons they are facilitating fraud

Joan Wright Esq.

3. Developing Alternatives

a. Resorts must develop programs to assist owners dispose of interests

b. Take back programs with advance payment of 2 years (or more dues) dues

c. Reputable sales companies

Joan Wright Esq.


Thank you.

Joan Wright, Esquire

Allison, McKenzie, Pavlakis, Wright & Fagan, Ltd.

402 N. Division Street

P.O. Box 646

Carson City, NV 89702

Tel: (775) 687-0202

Fax: (775) 882-7918

[email protected]


Trusts and other Flexible Use Options for HOA’s

•What is trust ownership?– Title to property held by a trustee

• New resorts, fee title to real estate• Conversion resorts, fee title to intervals

– Use of the property is governed by a trust

– Purchaser acquires a beneficial interest in the trust

– There can be one or more trustees – individuals or entities

W. John Funk, Esq.



•How did trust ownership evolve?– Response to difficulties and expense related to

deeded resorts• Legal expense involved in transfers – title

searches, lawyers’ fees, recording fees, transfer taxes

• Foreclosure expense – judicial or non-judicial

• Title nightmare if resort sold

W. John Funk, Esq.



•Why is trust ownership better?– Property held by trustee only, not multiple owners

– Transfers are handled internally at minimal cost

– Beneficial owners have essentially the same rights as deeded owners

• Use of property

• Voting (by giving direction to trustee)

• Obligations with respect to annual and special fees

W. John Funk, Esq.



•Why is trust ownership better?– Termination of rights can be by forfeiture– Trustee votes on behalf of interests for which no

direction is given in what trustee believes is in the best interest of the resort

– Can create variations of timeshare interests without changing the underlying resort documentations• Use rights (terms rather than perpetual)• Idle inventory put to use to create income

W. John Funk, Esq.



•For legacy resorts, how is a trust created?– Trust Declaration– Appointment of trustee– Transfer of interests into the trust

• Unsold or recaptured association inventory

• Owner transfers

W. John Funk, Esq.


Thank you.

W. John Funk, Esquire

Gallagher, Callahan & Gartrell, PC

214 North Main Street

Concord, New Hampshire 03301

Tel: 603 545-3607

Fax: 603 226-3334

[email protected]


Creating an Effective Transfer Policy

•Have a deeding and title expert reviewing your deeds to make sure they are correct.

– Properly signed– Witnessed as necessary– Notarized correctly

Dave Heine



•If signed by POA, is the POA– Specific to the transaction– Specific to the resort– Non Self Serving unless permitted in POA

Dave Heine



•Purchaser– None for prior transactions (heavy hitter)– Listed in the TTR– Coming from one of the known transfer

companies

Dave Heine



•Transfer Policies– Deed acceptance should follow generally accepted

title standards– Estoppels versus Financial information– If you align with a title company everyone else should

get financial information– Your preferred vendor should be the one with the

estoppel

Dave Heine



•Advantages of a preferred vendor– Consistent go to person– Understands your transfer policies– May have help formulate the policies– Will watch out for the resorts best interests.

Dave Heine


Thank you.

Dave Heine

CloseMyTimeshare.com

Vice President

924 West Colonial Drive

Orlando, FL 32804

e-mail [email protected]

www.Closemytimeshare.com

Phone: (407) 373-7474Direct: (407) 373-7457Direct Fax: (321) 281-6009Fax: (407) 373-7465