ROFR - Where is it in the Contract?

[StevenTing]

I'm going through this mental exercise in my mind. I know that when you purchase directly from the developer, you sign lots of paperwork. I "think" one of those forms is the ROFR acknowledgement form or something like that. In short, when you buy from the developer, you agree to be subject to ROFR.

However, after the first resale, does the new buyer ever agree to ROFR? I don't see anything in the exchange documents. I'm just trying to see if there are any loop holes. Could the 2nd resale argue that ROFR no longer applies?

Once a week/points are sold, the only thing the new buyer signs is the contract for purchase and the deed and I don't believe the deed has any language for ROFR.

 

[vacationtime1]

It's in the deed or the CC&R's so it attaches to the real estate interest.

 

[JIMinNC]

Here's the language from the Maui Ocean Club Disclosure Statement that is part of the timeshare agreement

D. RIGHT OF FIRST REFUSAL To PURCHASE. In the event an Owner desires to sell, conveyor lease (or enter into other agreements relating to the use of a Unit if not designated as a "lease") for a term of three (3) years or more in the aggregate (and whether or not consecutive), or otherwise transfer ownership of such Owner's Ownership Interest in the Program and for so long as Developer has Ownership. Interests to sell in the Program or the Developer or an affiliate of Developer manages the Program, whichever shall be later, Developer shall have the right of first refusal to purchase or lease, as applicable, the Ownership Interest under the same terms and conditions (including financing terms) as may be offered to or by a bona fide third party. Accordingly, each Owner desiring to sell or lease his Ownership Interest must notify Developer in writing of his intent to list, sell or lease his Ownership Interest. The Owner's written notice to the Developer must include the proposed listing, offer price or rental rate and general terms of the proposed listing, sale or lease. Upon receipt of such written notice, the Developer shall have fifteen (15) days within which to notify the Owner in writing as to whether the Developer elects to exercise its right of first refusal set forth herein. If Developer elects to exercise its right of first refusal, closing shall occur no later than sixty (60) days after Developer notifies the Owner in writing (within such fifteen (15) day period) of its decision to purchase the Ownership Interest. If Developer elects not to exercise its right of first refusal or fails to notify the Owner in writing of Developer's election to exercise its right of first refusal within such fifteen (15) day period, the Owner shall be entitled, for a period of seven (7) months thereafter, to list Owner's Ownership Interest with a third party resale agent or sell the Ownership Interest to a third party for a price equal to or greater than the price offered to Developer without further notice to Developer. In the event, however, that such third party buyer is an entity other than natural persons or such persons' personal trust (such as a corporation, partnership, limited liability company or partnership or other business entity), the Owner shall then reoffer the Ownership Interest to Developer under the procedure set forth above to provide Developer with the option to exercise its right of first refusal once again.

 

[dioxide45]

It's in the deed or the CC&R's so it attaches to the real estate interest.

Correct. It is in the recorded underlying condominium documents. Every deed in the condominium (timeshare) references that CC&R. Thus, there is no way out of it unless the board gets a majority vote from owners while probably obtaining a quorum of the majority of owners. SOmething unlikely to happen.

 

[StevenTing]

Accordingly, each Owner desiring to sell or lease his Ownership Interest must notify Developer in writing of his intent to list, sell or lease his Ownership Interest. The Owner's written notice to the Developer must include the proposed listing, offer price or rental rate and general terms of the proposed listing, sale or lease. Upon receipt of such written notice, the Developer shall have fifteen (15) days within which to notify the Owner in writing as to whether the Developer elects to exercise its right of first refusal set forth herein.

Reading the bolded portion, it seems like we’re doing ROFR all wrong. We’re supposed to submit ROFR before we list/sell. Meaning, that it shouldn’t even make it to market if they exercise. It would save a lot of time if Realtors/Brokers submitted to Marriott first before posting the price.

And I guess we’re supposed to be submitting ROFR for rentals too.


I’ll have to find the CC&R’s of the points program.

 

[dioxide45]

I’ll have to find the CC&R’s of the points program.

I don't think there are any. The trust program uses the MVC Destinations Multisite Public Offering Statement. Notice the acronym for those last three words (POS)

I have a PDF of that POS document. I tried digging through it to see if I could find anything about ROFR, but it isn't a searchable PDF, so I haven't been successful yet. If you want me to email you a copy, let me know.

 

[Dean]

Reading the bolded portion, it seems like we’re doing ROFR all wrong. We’re supposed to submit ROFR before we list/sell. Meaning, that it shouldn’t even make it to market if they exercise. It would save a lot of time if Realtors/Brokers submitted to Marriott first before posting the price.

And I guess we’re supposed to be submitting ROFR for rentals too.


I’ll have to find the CC&R’s of the points program.

The ones I've seen require submission upon a bonafide offer. Generally the time to respond is based on the state (or Country) law requirements, 30 days in most states. If you submitted at the time of listing, I'm sure you'd be submitting twice unless they took it on the first notification because the price was low. There is also normally a limit on how long the decision is good, I think it's 4 months for NC IIRC.

 

[StevenTing]

The quote I was referring to was from the MOC documents and the term is 7 months. However, if I was planning to sell or rent, it would make sense to submit to Marriott first. I could save expenses related to a Broker and closing costs.

I don't think there are any. The trust program uses the MVC Destinations Multisite Public Offering Statement. Notice the acronym for those last three words (POS)

I have a PDF of that POS document. I tried digging through it to see if I could find anything about ROFR, but it isn't a searchable PDF, so I haven't been successful yet. If you want me to email you a copy, let me know.

I’ll see if I can find my copy. I’m sure I have it somewhere in my email as when I purchased my first set of developer points I did it all through email.

 

[dioxide45]

I think they are using the "rental rate" in terms of a least. Perhaps like a multi year or long term lease. People may try a lease to get around ROFR. I wouldn't think it applies to single year rentals. Marriott doesn't have to approve anything with them like transferring a week or points in their system. They don't check for ROFR when you add a guest name to a reservation.