Marriott Destination Club points: What is the transfer information and transfer fees?
Trying to sell Marriott Destination Club points? High transfer fees make it very difficult!
Timeshare developers have a long history of creating processes and restrictions that appear to attempt to deter resales on the secondary market from occurring. One of the common mistakes that many timeshare developers make, is to view the resale market as a threat to the long term health of their product. In reality, a healthy secondary market helps to sustain the long term viability of a timeshare program, and helps to create a consistent range of resale prices.
What has actually resulted from developers creating a negative resale environment is that more timeshare owners are resorting to the timeshare relief models, or simply abandoning their ownerships. Abandoned timeshares create a financial strain on the timeshare association budget by mandating high legal fees to foreclose on these intervals, as well as creating more delinquencies and non-payments- which in turn are pushed onto the already over-burdened backs of paying owners in the form of higher maintenance fees. This snowball effect of abandonment and ever increasing annual fees threatens the overall viability of many timeshare regimes.
Tricks such as a developer's right of first refusal (where the developer has the right to match any purchase offer made for a timeshare interest to keep the buyer from obtaining the timeshare via resale), difficult estoppels processes, and high transfer fee requirements all can make it difficult for a timeshare owner to sell their vacation ownership interest.
With Marriott's Destination Club program, we can see this mistaken mindset in the extreme..As a potential result of these types of tactics, I am not aware of any resale transfers that have actually been completed involving Marriott Destination Club ownerships.
Follows is information I have received from Marriott Owner Modifications detailing the transfer process and the required transfer fees to complete a resale purchase. If you are a Destination Club owner, check with Marriott as well to reconfirm everything and I would recommend that you get the transfer information in writing from Marriott Vacation Club.
For this timeshare points program, it is important to understand that there are different underlying ownership types.. If the seller is a converted week's owner (often referred to as a legacy or enrolled owner), they are only able to sell their underlying week's ownership and the Destination Club privileges do not transfer on the secondary market.
Example: John A. purchased a platinum season 2br villa at Marriott's Grande Vista in 2008. In June of 2010, he enrolled in Destination Club (DC) points. In January of 2011 he contracts to sell his ownership. Upon conveyance, the buyer will only receive the original underlying ownership at Grande Vista and will not have access to any Destination Club reservations.
If the owner purchased from the developer after June 2010, they will most likely be a UDI points owner into one of the Destination Club trusts. These ownerships can be transferred on the secondary market, but are subject to mandatory "re-enrollment" fees that must be paid to Marriott in order for the buyer to make reservations.
These UDI ownerships are individually deeded in allotments of 250 points. Marriott refers to each of these deeds as a Beneficial Interest (BI). This means that it is not unusual for a DC owner to have twenty to fifty deeds!
Now comes the tricky part!
Marriott Vacation Club requires a re-enrollment fee be paid for each Beneficial Interest or deed transferred. The current re-enrollment fee is $200 per deed (with a minimum required charge of $2,000)..
Marriott is also charging a $25. transfer fee per deed, and a $95. right of first refusal waiver request fee per transaction.
In summary, using a specific example (I've been working on for a seller with 6,500 destination club points) the estimated closing costs are:
Deeding $650. + doc stamps (with attorney placing all legal descriptions onto a single recordable conveyance)
Re-Enrollment fee of $5,200.
Transfer fee of $650.
Waiver request fee of $95.
This creates the potential transfer costs for this ownership at $6,595. By requiring such a high transfer fee, Marriott Vacation Club makes it very difficult for a timeshare owner to attempt to resell their vacation ownership interest. If they can locate a willing buyer, the seller will likely have to offset the high transfer fees by reducing the asking price. In this economic environment where resale prices have already plummeted, forcing timeshare owners to further reduce their price just seems a bit like piling on!