Location
New Orleans, LA
Start Date
8-12-2011 3:30 PM
End Date
8-12-2011 4:30 PM
Description
Is it a condominium? Is it a hotel? Is it a fractional interest? Is the FF&E considered hotel furnishings or as a residential asset? Are intangibles part of the sale? These many questions drive the uniqueness of timeshares and the possibility of misunderstanding valuations. In my experience over the years reviewing thousands of timeshare assessments for equitablity, I have found multiple methodologies across jurisdictions that range from best practices to not so fair methods. By understanding the business of timeshares and how they fit in the jurisdiction has proven good insight to what could be the best practice for valuing timeshares that is fair and equitable to all parties. There are over 1,600 timeshare resorts across the United States encompassing in excess of seven million weeks or interests. This has caused diverse timeshare definitions among the taxing authorities which in turn creates varying degrees of valuation methodologies. One jurisdiction may value on a cost approach, while another utilizes a residential sales comparison approach, and yet another will be based on third party resales and/or developer sales. Also, depending on local laws and applications, these timeshares can be assessed by the week, the unit, the building, or as one economic unit. More often than not, timeshares have created a confused perception in the marketplace as well as among taxing authorities. A false perception of high market values coupled with non-recoverable, extraordinary marketing costs has produced equity issues within the property type. These issues may create inequities of timeshares being unfairly assessed in relation to other property types (i.e., residential condominium projects) or being classified improperly.
Recommended Citation
Linton, Renea, "Timeshare and vacation ownership property" (2011). IAAO Annual Legal Seminar. 7.
https://researchexchange.iaao.org/legal/legal11/sessions/7
Timeshare and vacation ownership property
New Orleans, LA
Is it a condominium? Is it a hotel? Is it a fractional interest? Is the FF&E considered hotel furnishings or as a residential asset? Are intangibles part of the sale? These many questions drive the uniqueness of timeshares and the possibility of misunderstanding valuations. In my experience over the years reviewing thousands of timeshare assessments for equitablity, I have found multiple methodologies across jurisdictions that range from best practices to not so fair methods. By understanding the business of timeshares and how they fit in the jurisdiction has proven good insight to what could be the best practice for valuing timeshares that is fair and equitable to all parties. There are over 1,600 timeshare resorts across the United States encompassing in excess of seven million weeks or interests. This has caused diverse timeshare definitions among the taxing authorities which in turn creates varying degrees of valuation methodologies. One jurisdiction may value on a cost approach, while another utilizes a residential sales comparison approach, and yet another will be based on third party resales and/or developer sales. Also, depending on local laws and applications, these timeshares can be assessed by the week, the unit, the building, or as one economic unit. More often than not, timeshares have created a confused perception in the marketplace as well as among taxing authorities. A false perception of high market values coupled with non-recoverable, extraordinary marketing costs has produced equity issues within the property type. These issues may create inequities of timeshares being unfairly assessed in relation to other property types (i.e., residential condominium projects) or being classified improperly.