Actions Your Board of Directors Should Consider Taking

Adopting and employing basic transfer policy requirements is a sensible approach to meeting what is already part of an Association’s fiduciary responsibilities. Once an Association has adopted a transfer policy, there are several important matters that TTR recommends your Board of Directors consider. These include:

  1. Whatever the transfer policies are that your resort has adopted, be sure that they are applied consistently with ALL transfer requests.  Discretionary or discriminatory application of your transfer policies is not advisable.
  2. When a suspected or actual Asset-Less Entity has been identified, the information supporting this classification and all correspondence received from the Escrow Company or transferee should be reviewed by the Board.  The Board can formally set a specific list of conditions that, if present, can be used to reject a prospective transferee and delegate the responsibility of final review to the resort manager based on those criteria. Such criteria might include:
    1. The potential transferee has recently taken title to an unusual number of timeshare interests and has not provided evidence that it has sufficient liquidity to meet the associated obligations.
    2. The potential transferee has been reported delinquent by other Subscribers, or has been foreclosed upon for failure to pay assessments and has not provided an adequate explanation of these conditions.
    3. The transferee has refused to provide the necessary information required on your resort’s Standardized forms.
    4. The transferee has not provided an adequate explanation as to why the address provided is an address commonly used by known unburdening companies for Asset-Less entities or individuals.
    5. The pro-forma conveyance documents are inadequate or defective.
    6. The Power of Attorney under which the transfer is being made is defective.
    7. The transferee has not provided an adequate explanation as to why public records show discrepancies in the address and telephone numbers that have been provided.
  3. Boards should decide on what actions to consider taking with unburdening companies that continue to record conveyances outside the resort’s transfer policy.
  4. Recognizing that there may be legitimate reasons for an owner to deed back their interest, some Boards of Directors have set a policy as to what reasons for deed back are acceptable, the cost to do so, etc.