Tuesday, October 11, 2005
Surge in timeshare activity highlights need for change
New York's timeshare sector has seen a significant uptick in activity during the past few years. Three timeshare projects are currently operating in Manhattan with a number of others on the drawing board. Existing regulations, however, are outdated or cumbersome, creating unnecessary obstacles for developers interested in converting residential or hotel properties for use as timeshares or in selling timeshares to New York residents.
Current regulations affecting the timeshare industry were drafted by the New York State Attorney General's office in 1985 and were modeled after regulations governing condo and co-op developments. At the time, there were only a few timeshare projects nationwide. Many of these regulations add unneeded and costly delays, and must be addressed to remove the roadblocks.
One unnecessary delay is added to the sale of timeshare units. A full 15 percent of the total units in the timeshare property must be sold before a timeshare developer can legally close on the first sale. No other state imposes a pre-sale requirement on timeshare units. While this requirement makes sense when dealing with whole ownership condominium or cooperative properties, as long as the timeshare unit is built and taking into account the magnitude of the purchase--$15,000 to $25,000--this rule deprives the customer of getting what he or she paid for on a timely basis.
The regulations also deal with timeshare structures that are now outdated, such as fixed week products. For example, they do not address timeshare point systems. Most of the major hospitality companies have some form of custom-tailored, point-based system that provides the customer with significant flexibility in vacation planning. Owners may utilize their points to reserve stays at other resorts in the vacation ownership system and in some cases, use the points to pay for traditional hotel rooms and even plane tickets.
Current regulations affecting the timeshare industry were drafted by the New York State Attorney General's office in 1985 and were modeled after regulations governing condo and co-op developments. At the time, there were only a few timeshare projects nationwide. Many of these regulations add unneeded and costly delays, and must be addressed to remove the roadblocks.
One unnecessary delay is added to the sale of timeshare units. A full 15 percent of the total units in the timeshare property must be sold before a timeshare developer can legally close on the first sale. No other state imposes a pre-sale requirement on timeshare units. While this requirement makes sense when dealing with whole ownership condominium or cooperative properties, as long as the timeshare unit is built and taking into account the magnitude of the purchase--$15,000 to $25,000--this rule deprives the customer of getting what he or she paid for on a timely basis.
The regulations also deal with timeshare structures that are now outdated, such as fixed week products. For example, they do not address timeshare point systems. Most of the major hospitality companies have some form of custom-tailored, point-based system that provides the customer with significant flexibility in vacation planning. Owners may utilize their points to reserve stays at other resorts in the vacation ownership system and in some cases, use the points to pay for traditional hotel rooms and even plane tickets.
# posted by John @ 12:54 PM 
