Florida Law Altered to Shield Time-Share Company From Fraud Lawsuit

Orlando-based Marriott Vacations Worldwide Corp. (MVC) is a time-share behemoth, owning and operating 60 properties containing 12,800 vacation ownership villas with 410,000 owners in the United States and eight other countries. It is also a massive and illegal racketeering scheme, according to the allegations in a pending lawsuit filed in 2015.
But Marriott and other time-share companies who operate under similar arrangements may not have anything to worry about, in Florida at least, because of changes to the law passed by the state legislature and signed by Gov. Rick Scott in May 2016. What is particularly interesting about the recent legislation is that it appears to have been drafted and passed with the express purpose of shielding MVC from liability in the pending litigation.

What Brought About the Change?

As reported by the Orlando Sentinel, New York lawyer Jeff Norton sued MVC alleging that the company’s entire sales structure is an illegal racketeering scheme because it uses a points-based system that was built on top of a system that previously sold deeds to real estate, among other allegations. The suit claims that consumers were duped into paying the costs and taking on the burdens associated with property ownership without receiving the benefits that typically come with time-share ownership.

After the lawsuit was filed, two Florida state legislators introduced legislation that “clarified” the applicable law in a way that eviscerates the claims against MVC’s time-share practices. Specifically, as reported in the Sentinel:

“The change in the law spells out who is an “interest holder” in a points-based time-share plan, in a 130-word paragraph. The changes in the law say that historic time-share owners, who still own deeded weeks of time, are not “interest holders” in the company’s current points-based system. The new definition of “interest holder” was proposed in Senate Bill 818 just weeks after Norton argued its definition in briefs filed on the docket of the pending lawsuit.”

Because of these “clarifications,” MVC has moved to dismiss the lawsuit, arguing that the recent change in the law “effectively eliminates several of plaintiffs’ claims in whole or in part.”

Time-share disputes here in Florida are the source of an increasing amount of litigation, as owners have become more aggressive in trying to get out of their contracts and a growing number of firms are specifically offering timeshare cancellation services to accomplish that goal.

If you have issues, concerns, or questions regarding a Florida time-share investment, the attorneys at the Destin real estate firm of Moorhead Real Estate Law Group have extensive experience with all aspects of Florida real estate transactions. Please call our Downtown Pensacola office at (850) 202-8522 or tell us about your needs online.