brianfox
TUG Member
- Joined
- Apr 14, 2007
- Messages
- 796
- Reaction score
- 445
- Points
- 423
- Location
- Thousand Oaks
- Resorts Owned
- Marriott Waiohai x3
I'm having an interesting discussion with a TUGger on a private conversation, and I don't think either one of us knows the correct answer.
Scenario:
Seller uses Redweek to sell their Marriott TS week.
Buyer agrees to terms and purchase agreement is signed.
Closing company is the one Redweek uses. Let's call it ABC.
Purchase agreement states:
Redweek gets a commission on the sale
Buyer to pay Closing costs ($500) to ABC
Buyer to pay Marriott Transfer fees ($95 ROFR fee and $25 Transfer fee)
Marriott swoops in and exercises ROFR.
In my opinion:
Marriott becomes the Buyer and is bound to the terms of purchase agreement.
Redweek still gets their commission
Marriott pays ABC $500 (whether Marriott closes internally or ABC remains closing company)
Marriott eats the ROFR and Transfer fees
Original Buyer get any deposits back and walks away with $0 out of pocket.
Regarding the disposition of the Closing company ABC, I've seen some TUGgers say that it's possible that if Marriott exercises ROFR, ABC can be pushed out of the deal and Marriott uses their internal closing department.
If this happens, does ABC get any money?
I would think that if the purchase agreement explicitly states that in the event of ROFR Marriott is on the hook for closing costs, then ABC gets paid by Marriott. I can't imagine a legal department dumb enough to draw up a PA whereby they get pushed aside and get nothing.
The TUGger I am having the discussion with notes a Closing company he has worked with that has a policy stating: if ROFR is exercised, then the BUYER THAT GOT SQUEEZED OUT OF THE DEAL must pay that closing company $50, presumably because they would not get any other money in the event of an ROFR. That sounds utterly crazy to me.
Scenario:
Seller uses Redweek to sell their Marriott TS week.
Buyer agrees to terms and purchase agreement is signed.
Closing company is the one Redweek uses. Let's call it ABC.
Purchase agreement states:
Redweek gets a commission on the sale
Buyer to pay Closing costs ($500) to ABC
Buyer to pay Marriott Transfer fees ($95 ROFR fee and $25 Transfer fee)
Marriott swoops in and exercises ROFR.
In my opinion:
Marriott becomes the Buyer and is bound to the terms of purchase agreement.
Redweek still gets their commission
Marriott pays ABC $500 (whether Marriott closes internally or ABC remains closing company)
Marriott eats the ROFR and Transfer fees
Original Buyer get any deposits back and walks away with $0 out of pocket.
Regarding the disposition of the Closing company ABC, I've seen some TUGgers say that it's possible that if Marriott exercises ROFR, ABC can be pushed out of the deal and Marriott uses their internal closing department.
If this happens, does ABC get any money?
I would think that if the purchase agreement explicitly states that in the event of ROFR Marriott is on the hook for closing costs, then ABC gets paid by Marriott. I can't imagine a legal department dumb enough to draw up a PA whereby they get pushed aside and get nothing.
The TUGger I am having the discussion with notes a Closing company he has worked with that has a policy stating: if ROFR is exercised, then the BUYER THAT GOT SQUEEZED OUT OF THE DEAL must pay that closing company $50, presumably because they would not get any other money in the event of an ROFR. That sounds utterly crazy to me.