Understanding Legal Documents Hedge your bets! Session 9 Wednesday, October 30 8:00 AM – 9:00 AM Your Pit Boss for this session is Scott MacGregor Joan Wright, Esq. Allison, McKenzie, Pavlakis, Wright & Fagan, Ltd. W. John Funk, Esq. Gallagher, Callahan & Gartrell, P.C. Dave Heine CloseMyTimeshare.com & JustDeeds.com

Understanding Legal Documents Hedge your bets!! Joan Wright Esq. Hierarchy of Documents – BOD Compliance

1. Policies and procedures to identify and prevent transfer companies from getting ownership a. Share information among resorts as to transfer companies and associated persons to prepare watch lists b. Require personal information about the owners of the transfer companies and associated persons c. Preclude transfers to transfer companies and associated persons because of history i. If there is a question require personal guaranties from the owners of the entities and the owners transferring the interests. Joan Wright Esq.

d. Require credit reports, financial statements and background checks. e. Charge transaction fee to defray costs f. Require all accounts to be current g. Take control and risk litigation (risk is small against transfer companies and associated persons) Joan Wright Esq.

2. Communication with Owners a.Explain risk of transfer companies and associated persons b.Distribute policies and procedures c.Inform them that they will remain liable d. Advise them by dealing with transfer companies and associated persons they are facilitating fraud Joan Wright Esq.

3. Developing Alternatives a. Resorts must develop programs to assist owners dispose of interests b. Take back programs with advance payment of 2 years (or more dues) dues c. Reputable sales companies Joan Wright Esq.

Understanding Legal Documents Hedge your bets!! Thank you. Joan Wright, Esquire Allison, McKenzie, Pavlakis, Wright & Fagan, Ltd. 402 N. Division Street P.O. Box 646 Carson City, NV Tel: (775) Fax: (775)

Understanding Legal Documents Hedge your bets!! Trusts and other Flexible Use Options for HOA’s What is trust ownership? –Title to property held by a trustee New resorts, fee title to real estate Conversion resorts, fee title to intervals –Use of the property is governed by a trust –Purchaser acquires a beneficial interest in the trust –There can be one or more trustees – individuals or entities W. John Funk, Esq.

Understanding Legal Documents Hedge your bets!! Trusts and other Flexible Use Options for HOA’s How did trust ownership evolve? –Response to difficulties and expense related to deeded resorts Legal expense involved in transfers – title searches, lawyers’ fees, recording fees, transfer taxes Foreclosure expense – judicial or non-judicial Title nightmare if resort sold W. John Funk, Esq.

Understanding Legal Documents Hedge your bets!! Trusts and other Flexible Use Options for HOA’s Why is trust ownership better? –Property held by trustee only, not multiple owners –Transfers are handled internally at minimal cost –Beneficial owners have essentially the same rights as deeded owners Use of property Voting (by giving direction to trustee) Obligations with respect to annual and special fees W. John Funk, Esq.

Understanding Legal Documents Hedge your bets!! Trusts and other Flexible Use Options for HOA’s Why is trust ownership better? –Termination of rights can be by forfeiture –Trustee votes on behalf of interests for which no direction is given in what trustee believes is in the best interest of the resort –Can create variations of timeshare interests without changing the underlying resort documentations Use rights (terms rather than perpetual) Idle inventory put to use to create income W. John Funk, Esq.

Understanding Legal Documents Hedge your bets!! Trusts and other Flexible Use Options for HOA’s For legacy resorts, how is a trust created? –Trust Declaration –Appointment of trustee –Transfer of interests into the trust Unsold or recaptured association inventory Owner transfers W. John Funk, Esq.

Understanding Legal Documents Hedge your bets!! Thank you. W. John Funk, Esquire Gallagher, Callahan & Gartrell, PC 214 North Main Street Concord, New Hampshire Tel: Fax:

Understanding Legal Documents Hedge your bets!! Creating an Effective Transfer Policy Have a deeding and title expert reviewing your deeds to make sure they are correct. –Properly signed –Witnessed as necessary –Notarized correctly Dave Heine

Understanding Legal Documents Hedge your bets!! Creating an Effective Transfer Policy If signed by POA, is the POA –Specific to the transaction – Specific to the resort – Non Self Serving unless permitted in POA Dave Heine

Understanding Legal Documents Hedge your bets!! Creating an Effective Transfer Policy Purchaser –None for prior transactions (heavy hitter) –Listed in the TTR –Coming from one of the known transfer companies Dave Heine

Understanding Legal Documents Hedge your bets!! Creating an Effective Transfer Policy Transfer Policies –Deed acceptance should follow generally accepted title standards –Estoppels versus Financial information –If you align with a title company everyone else should get financial information – Your preferred vendor should be the one with the estoppel Dave Heine

Understanding Legal Documents Hedge your bets!! Creating an Effective Transfer Policy Advantages of a preferred vendor –Consistent go to person –Understands your transfer policies –May have help formulate the policies –Will watch out for the resorts best interests. Dave Heine

Understanding Legal Documents Hedge your bets!! Thank you. Dave Heine CloseMyTimeshare.com Vice President 924 West Colonial Drive Orlando, FL Phone: (407) Direct: (407) Direct Fax: (321) Fax: (407)