controversial changes to Florida timeshare legislation approved

A number of significant and controversial legislative changes have been implemented in a bill just passed by Florida Senate to amend The Florida Vacation Plan and Timesharing Act. Amendments that were deemed by some as necessary to update Florida’s timeshare laws to adjust for newer market practices and models, but changes that are likely to have a ripple affect in the timeshare industry.

 

Many timeshare owners and timeshare advocate groups opposed the proposed bill, or more specifically how it was written, due to what they perceive to be mostly a relief to resort developers at the expense of timeshare owners. As stated by Gregory Crist, Chairman and CEO of the National Timeshare Owners Association, quoted by the Orlando Sentinel, “this is a developer-sponsored bill that strips away at consumer-protection mechanisms.”

 

Supporters, such as ARDA (American Resort Development Association), say the multiple changes to the Florida timeshare statute (Chapter 721), are an effort to “modernize” timeshare laws. Specifically, taking into consideration the newer real estate trust developments and multi-site timeshare plans not accounted for under still current law.

 

The highlighted areas of technical changes pertain mainly to revised timeshare annual maintenance fee requirements, revised disclosure requirements affecting rights for cancellation, and considerations for timeshare consumers to extend or terminate their timeshare plan under certain conditions. Despite opposing arguments and petitions, the timeshare legislation amendments passed the House of Representatives and the Florida Senate (HB 0453/Senate 932), and will go into effect July 1, 2015.

 

No timeshare owner wants to hear about the possibility of greater maintenance fees, which has already been a sore subject to many long-standing timeshare owners. However, the legislative changes will eliminate property taxes and certain common expenses from the protection of the normal cap currently existing within a Florida statute. Which proponents of the bill say will help to recoup costs outside of developers’ control, mainly for multi-site timeshare operators. Although, the fear of uncontrollable rising annual costs can create consumer anxiety that only leads to negative publicity in the timeshare industry.

 

Discontent owners looking to get out of their timeshare plan may feel initially encouraged by one change creating a provision to allow timeshare owners to potentially extend or terminate their timeshare plans under certain conditions, such as by a majority vote of the total voting interests. This amendment poses as a concern by critics regarding the appropriate balance of inventory by developers and the ultimate impact against standing timeshare owners. By nature, arguments still remain that developers are not as likely to simply vote an owner out of their timeshare obligation.

 

Another legislative amendment creating controversy stems from a protection factor pertaining to disclosure requirements in Public Offering Statements. The modification basically states that if a developer has “substantially complied” with the statute required disclosures, approved by the division, that “nonmaterial errors or omissions and violations” will not give a purchaser a rightful cause for cancellation outside of the normal rescission period. Such verbiage brought about arguments regarding the need for legislature to further define what is considered “non-material”. Ambiguity of this sort, attorney critics say, could leave too much room for further litigation down the line.

 

According to Florida Sen. Kelli Stargel, R-Lakeland, who sponsored the proposed bill along with State Rep. Eric Eisnaugle, R-Orlando, the legislation is meant to cover only the minor flaws and technicalities that would often help people to get out of timeshare contracts, not the major problems. Stifling attorneys finding small legal loopholes to hold developers accountable, creating justifications for late contract cancellations, could help to avoid secondary industry ramifications. However, conversely speaking, the new law seems to reduce the overall liability and accountability of developers with regard to adequate disclosures that could potentially open the door to other representation concerns. Timeshare purchasers will likely have to rely heavily on the state’s division “approval” and determination of what is deemed as appropriate and sufficient disclosures.

 

Although many of the newly passed amendments are perceived as developer driven, it’s hopeful that the updating of these regulations can prove to be beneficial in some respect to all parties. Still, concerned timeshare owners are clinging today to the desire to ultimately maintain their consumer rights and protection factors and to keep vacation ownership an affordable option for travel.