Original Message:
Re: selling time shares without using a title company (by Carvan A.):
jayjay wrote:carvana wrote:I personally do not consider a call to a resort "asking if the seller WAS the owner and if they had any liens or past due maintenance fees" to constitute "due diligence". A title search requires a visit (or call) to the court house and examining a title is a legal function. As has often been said, "The person who represents himself in a legal matter has a fool for an attorney". Typical title insurance on the sale of a timeshare is $130-$150 based on my experience. This is a small price to pay for peace of mind especially when one pays >$15,000 to a developer.Sorry, but I respectfully disagree. If one calls the resort to verify that the seller is the owner then that constitutes that he/she has a clear title. Otherwise the timeshare and title wouldn't be in the seller's name at the resort.
The seller could have previously transferred the title to an adult child and recorded the deed without notifying the resort of the title change. The original owner could then sell the property to you and a call to the resort would not disclose the change in owners.
Also, one can do a title search themselves by calling the county deed department where the timeshare/resort is located. No need to throw away good money for a title search when that's something you can easily do yourself.
It sounds like you are beginning to agree with me which is a good sign. In your earlier post you did not indicate your due diligence involved anything more than contacting the resort. Still, unless you are experienced in title searches you and the $10 clerk you are talking to at the court house could overlook something as significant as a Federal Tax Lien. Having to pay the IRS for someone else's tax debt to avoid losing your timeshare could sure ruin your day!
And, why would anyone feel the need to do a title search for a developer bought timeshare?
Many reasons. The most obvious that comes to mind is with the developer who borrows money and secures the loan with a deed of trust on the land he is developing. He later sells you a timeshare. You have a warranty deed and see no need for a title policy because afterall you are buying from a developer. Later the developer runs into financial trouble and the mortgagee forecloses on his deed of trust which is superior to your deed. You lose your timeshare. Certainly this is not likely to happen with a Marriott, Hyatt, Hilton, and so on but it has happened in the past with shady developers.
I applaud your past efforts here to alert folks to the dangers of paying upfront fees to marketing companies or dealing with "post card" companies. But, I think it is dangerous to suggest to folks that buying a title policy is throwing good money away. In the professional world - CPA or Attorney - that type of advice could be malpractice.