“I paid for title insurance for timeshare points when I bought points with Marriott Vacation Club. I remember paying Title Insurance 20 years ago when I bought my first timeshare. But I bought a fixed week with an actual legal description. Can Marriott charge me this fee?”
Can they charge the fee for title insurance? Yes, if the timeshare has a legal description, there is a history of property transfers, or if it is “real property”. Stewart Title explains “Title insurance protects against claims from defects. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the insurance policy.”
But when it comes to points, Marriott, Wyndham, RCI and others, have come under scrutiny for possibly violating the law by charging escrow and title fees. The sequence of errors starts with Marriott, for example, having sold points as if it were real property (timeshare). Next, the title company wrote insurance policies even though there was no legal title and no title history. Finally, the county, Orange County in this example, recorded deeds that did not follow any part of the Florida real estate law (legal description, transfers, etc).
Marriott (along with RCI, Wyndham, Shell, Disney, Hilton) and others in the timeshare industry have been selling points this way since 2010 and most buyers have just been assuming that because it was “Marriott” it must have been correct.
But, thanks to political influence and hefty cash contributions to key political players, Marriott was able to avoid a prolonged class action lawsuit September of 2017. The Florida legislature passed new timeshare laws that protect the big timeshare developers and make it harder for the owner to get out of a timeshare contract. The matter of title insurance and fees was dodged by crafty legislation as well.
The matter of title insurance for timeshare points is of particular concern for First American Title Insurance Company. The various timeshare points products being sold by timeshare developers have little to do with real property. Yet this title company charges title and escrow fees for properties with no legal description. Their “cover” is that all of Marriott’s 410,000 owners’ points are held in a timeshare land trust. Thus needing insurance. If you know anything about timeshare points this logic is irrational as it is immoral.
The plaintiffs in the dismissed case* may still get their day in court along with thousands of others who have been paying real estate fees for non real estate transactions. If they don’t someone else will.
**Details on the ANTHONY AND BETH LENNEN VS Marriott Vacation Club dismissed federal lawsuit**
Orlando Sentinel’s story July 2017 on timeshare law changes geared toward helping Marriott in a pending lawsuit.
July 2015 – Florida’s New Timeshare Law – An Opposing Viewpoint – Florida removes cap from annual fee increases.
November 2012 – Florida’s Timeshare Resale Law – Good Points Bad Points
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