Needless to say, things have changed substantially in modern society in the past year or so. These changes have, and continue to, broadly impact our human experience, collectively and subjectively, in ways that simply cannot be quantified. Nonetheless, at the risk of trivializing things, the effect of these changes correlate to, and are quantifiable by, reference to specific economies. Particularly in the hospitality industry, consumer spending is down dramatically. In this regard, hotel and resort occupancy rates as a percentage of inventory were down a devastating forty percent (40%) in 2020.
The economy of the family unit is very much a microcosm of the general economy. In this sense, “hospitality”, as an industry, compared to the timeshare sector thereof, is analogous to the relationship between total household spending relative to its discretionary spending.
Moreover, rational people, if they buy timeshares at all, would never expend non-discretionary income on a timeshare. Just as discretionary spending is the first thing to go when things get tight for the family, timeshare revenues in a receding economy will be impacted even more adversely than that of hotels and resorts in general.
All in all, a disruption this significant has been enough to force timeshare industry players into a kind of survival mode. Indeed, major industry developers have even been forced to fold their tents.
For those developers that are still in the game, ‘survival mode’ means cost-cutting through the elimination of back-end support, particularly in customer service and loss-mitigation. Of these developers, many of which were already giving short-shrift to customer grievances, the lack of responsiveness to consumer complaints has become truly alarming. This concerted effort to reduce staff and expenses after COVID is a problem about which legal professionals engaged in consumer advocacy have little control.
On the other hand, a kind of silver lining will appear to the optimist looking for opportunities to gig the adversary while buoying client morale. In this respect, a viable position letter articulating the client’s claims and defenses as to the timeshare obligation may give rise to an estoppel-by-silence [4]. The idea, of course, is to bind the opposition legally by simply exposing the facts and circumstances associated with a flawed sales transaction, for example. Now, an intentional lack of responsiveness, perhaps intended to vex the consumer, will actually inure to his benefit, impeding the subsequent enforcement of the timeshare contract claim.
Another problem arising in the post-COVID economy entails the refusal of many timeshare developers to adhere to the legal requirements associated with the termination of timeshare accounts and access. This appears to be a collusive endeavor of industry players comprising ARDA [5], through which they coordinate industry practice in the face of escalating consumer disaffection. Specifically, they tend to flout adherence to UCC Article 9 and the like, requiring notice and accounting in the reclamation of timeshare interests. Moreover, the standard practice now seems to be to simply sit on these accounts, not terminating them even through power of sale, much less judicially. In this way, they avoid two things: 1. The legal costs associated with compliance; and 2. The gratification of disaffected patrons who wish only to be rid of the burden of timeshare ownership.
Accordingly, the astute timeshare attorney may adjust the focus of legal representation in the interest of managing client expectations, especially in cases where clients simply cannot afford to continue these obligations without jeopardizing essential needs. In these cases, sometimes involving ‘managed’ defaults [6], the focus is on putting a layer of insulation between the client and the developer, dissuading enforcement actions while preventing direct contract from collections, etc. Also, where necessary and appropriate, the legal practitioner will endeavor to mitigate any derogatory credit reporting [7].
Challenges can give rise to opportunity, opportunity to growth, growth to gratification, gratification to complacency, complacency again to challenge – and so the cycle repeats itself. But for now, we must focus mainly the challenges – the lemons that we’ll squeeze into the freshest of lemonade.
- [4] Thomas v. Dickinson, 30 So.2d 382, 384 (Fla. 1947)
- [5] American Resort Developers Association
- [6] In cases involving consumers that hire non – law firms to ‘represent’ them, it’s our understanding that they are setting themselves up for collection activity and enforcement actions in many instances. So this is how attorneys distinguish what they do by way of legitimate legal representation relative to the shysters purporting to ‘represent’ hapless timeshare victims.
- [7] See 15 USC § 1681i
