Manhattan Club Owners - what's with developers having "first refusal"?

We have owned at the Manhattan Club for just about four years now. We were naive and not well informed about how to deal with timeshare sales, buying in at $27,000. We bought the executive suite for annual use, which includes one weekend per year and the option of breaking our week up in to a 3 day stay + a 4 day stay. That said, we were told during our closing that, if we ever chose to sell, the developer would have first refusal in buying our time back from us until every timeshare was sold. They said very convincingly this would probably occur within a year or so....NOT SO! Anyway, we were considering selling if we could get back what we paid but I am seeing people on Redweek offering up their units that have similar specs as ours for much less than we paid. How can there be such a variability on the prices people are charging and can anyone further educate me on what this "first refusal" catch is and when, if ever, this expires? Thanks very much in advance. P.S., it should be said that, since we bought at the MC, we have used exchanges and not stayed in our home unit since we pretty much can go to NYC any time we want to and doubt we'd want to stay a whole week due to the high costs there!

cyndia2 wrote:

That said, we were told during our closing that, if we ever chose to sell, the developer would have first refusal in buying our time back from us until every timeshare was sold. They said very convincingly this would probably occur within a year or so....NOT SO!

Anyway, we were considering selling if we could get back what we paid but I am seeing people on Redweek offering up their units that have similar specs as ours for much less than we paid. How can there be such a variability on the prices people are charging and can anyone further educate me on what this "first refusal" catch is and when, if ever, this expires?

First, don't expect to be able to sell your TS for what you paid for it. DVC and a few others hold there resale value better. People will sell their TS for whatever the market may bring. Some are more "desparate" than others, so they just want to get out from under the high MFs.

Regardless of what the salesperson told you, the "Right of First Refusal" (ROFR) does not mean the developer will buy back the unit at the price you paid. What it does mean that when you sell, you have to provide a copy of the sales contract to the developer and the developer has the right to buy the unit from you at that price (leaving your original buyer out in the cold).

So if you had a buyer that was willing to pay $10,000 for your unit, the developer can step instead and buy it from you for the $10,000. The developer would then turn around and re-sell it for a greatly inflated price.

You the seller still get your asking price, so it doesn't affect you. But the big problem is if you wanted to sell it to a friend at a discount, the developer can snatch it away at that discounted price. MC is not the only resort that does this. I know Marriotts has ROFR, but I've heard they are not excercising it as much, and only for high demand units.

As you said, you use it and enjoy it. I like most people, bought my first TS from a developer. If we didn't, we would not have traveled tothe places we did. You might want to start looking into exchanging for other resorts. Also, many people look for MC rentals. You might be able to rent to cover at least your MF.

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Is the developer at the MC currently exercising the ROFR? In this economy?

The way I understand it now, the Manhattan Club is REFUSING to buy back any of their timeshare units from current members. In fact, there is a "waiting list" for this and there are some owners who are trying to get out from under the exhorbitant maintenance fees (of $2,000 and up; ours is at $1,700 and we just want OUT) and are practically trying to give their timeshares away.

One valuable lesson we learned in all of us this was that maintenance fees are FOREVER. So, even if you buy a timeshare at $1.00, you are FOREVER responsible every year for some ungodly maintenance fees. As some owners have mentioned on our yahoo group list, for $2,000, you could go to London or Paris and have the time of your life! New York City is nice and all, but for $2,000 a week you could certainly find something equivalent to Manhattan Club and not have to deal with the impossibility of getting owners' reservations there. We so want out of there and are still trying to figure out a way to do it. Please let anyone know who is even tempted to buy in there that it is a total scam and to check out our message board on yahoo if they want proof!

Cyndia2-

Thank you for the reply.

Any other redweekers feel the same way?