Mandatory Material Disclosure

[salmoneous]

Just thinking out loud here.. Most real estate laws require sellers to disclose any information that could have a material impact on the value of the sale. Are there such laws regarding timeshare sales in Florida? In a system like DVC - if the sellers know about upcoming resorts wouldn't that count as material must-disclose information?

 

[Chuck S]

No, I wouldn't think so, since all that is really guaranteed by contract is the right to stay at your home resort. And until a new resort actually opens or begins DVC sales, it is still speculation, even if the building is completed and standing, until it has been declared "DVC inventory"

 

[TheRustyScupper]

1) Yes, what Chuck said.
2) You are ONLY buying an interest in a lease at your own resort.
3) It is just that you are able to trade into others, for the moment.
4) Technically, DVD or DVC could cancel that ability (though I doubt it).
5) Thus, there is no material distortion.


NOTE: Since I am involved in LLC funding, I know A LOT about SEC filings and material representations (or lack thereof).

 

[drusba]

There are disclosure laws in Florida applicable to Disney as a timeshare seller. The disclosures it does make in all of its disclosure documents include all the ones required. Its plan to build another nearby resort is not something that has to be disclosed. In fact, what is provided is that if a timeshare seller chooses to disclose to potential buyers that it intends to build other timeshare properties, it must also say that the other timeshares need not be built. In other words, there is no requirement to disclose but instead a requirement not to mislead a buyer into believing that another property will defintiely be built if the developer chooses to disclose.